Oil shale industry

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Stuart oil shale pilot plant

Main article: Oil shale

Oil shale industry is a industry of mining and processing of oil shale—a fine-grained sedimentary rock, containing significant amounts of kerogen (a solid mixture of organic chemical compounds), from which liquid hydrocarbons can be manufactured. The industry has developed in Brazil, China, Estonia and to some extent in Germany, Israel and Russia. Several other countries are currently conducting research on their oil shale reserves and production methods to improve efficiency and recovery.^[1] However, Australia has halted their pilot projects due to environmental concerns.^[2] Estonia accounts for about 70 % of the world's oil shale production.^[3]

Oil shale has been used for industrial purposes since the early 1600s, when it was mined for its minerals. Since the late 1800s, shale oil has also been used for its oil content and as a low grade fuel for power generation. However, barring countries having significant oil shale deposits, its use for power generation is not particularly widespread. Similarly, oil shale is a source for production of synthetic crude oil and it is seen as a solution towards increasing domestic production of oil in countries that are reliant on imports.

[edit] History

Main article: History of the oil shale industry

Production of oil shale in millions of metric tons from Estonia (Estonia deposit), Russia (Leningrad and Kashpir deposits), United Kingdom (Scotland, Lothians), Brazil (Iratí Formation), China (Maoming and Fushun deposits), and Germany (Dotternhausen) from 1880 to 2000.^[4]

Oil shale has been used since ancient times. Modern industrial oil shale mining began in 1837 at the Autun mines in France, followed by Scotland, Germany and several other countries.^[5][6] The oil shale industry started growing just before World War I because of the mass production of automobiles and trucks and the supposed shortage of gasoline for transportation needs. In 1924, the Tallinn Power Plant was the first power plant in the world to switch to oil shale firing.^[7] However, following the end of World War II, the oil shale industry was phased-out in most of countries due to high processing costs and the discovery of large supplies of easily accessible and cheaper crude oil.^[4][6][5][8] Oil shale production however, continued to grow in Estonia, Russia and China. Following the 1973 oil crisis, the oil shale industry was restarted in several countries, but in the 1980s, when oil prices fell, many industries faced closure. The global oil shale industry mainly started growing during mid-1990s. In 2003, the oil shale development program was initiated in the United States, and in 2005, the commercial leasing program for oil shale and tar sands was introduced.^[9][10]

As of May 2007, Estonia is actively engaged in exploitation of oil shale on a significant scale and accounts for 70 % of the world’s processed oil shale.^[11] Estonia is unique in that its oil shale deposit account for just 17 % of total deposits in European Union but it generates 90 % of its power from oil shale. Oil shale industry in Estonia employs 7,500 people, which is about 1 % of national employment, accounting for 4 % of its gross domestic product.^[12]

[edit] Mining

Oil shale is mined either by traditional underground mining or surface mining techniques. There are several mining methods available, but the common aim of all these methods is to fragment the oil shale deposits in order to enable the transport of shale fragments to a power plant or retorting facility. The main methods of surface mining are open pit mining and strip mining. An important method of sub-surface mining is the room-and-pillar method.^[13] In this method, the material is extracted across a horizontal plane while leaving "pillars" of untouched material to support the roof. These pillars reduce the likelihood of a collapse. Oil shale can also be obtained as a by-product of coal mining.^[14]

The largest oil shale mine in the world is the Estonia Mine, operated by Eesti Põlevkivi.^[15] In 2005, Estonia mined 14.8 million tonnes of oil shale.^[12] During the same period, permits for the mining were issued for almost 24 million tonnes, with applications being received for mining an additional 26 million tonnes. Estonia has announced that it is going to adopt the "National Development Plan for the Use of Oil Shale 2008-2015", which would limit the annual mining of oil shale by 20 million tonnes.^[16]

[edit] Power generation

Oil shale can be used as a fuel in thermal power plants, wherein the shale is burnt like coal to drive the steam turbines. As of 2008, there are oil shale-fired power plants in Estonia with a generating capacity of 2,967 megawatts (MW), Israel (12.5 MW), China (12 MW), and Germany (9.9 MW).^[17][18] Also Romania and Russia have run oil shale-fired power plants, but have shut them down or switched to other fuels like natural gas. Jordan and Egypt have announced their plans to construct oil shale-fired power plants, while Canada and Turkey plan to burn oil shale at the power plants along with coal.^[17][19][20]

Thermal power plants which use oil shale as a fuel mostly employ two types of combustion methods. The traditional method is Pulverized combustion (PC) which is used in the older units of oil shale-fired power plants in Estonia, while the more advanced method is Fluidized bed combustion (FBC), which is used by Rohrbach Zement company in Dotternhausen, Germany, and in PAMA power plant at Mishor Rotem in Israel. The main FBC technologies are Bubbling fluidized bed combustion (BFBC) and Circulating fluidized bed combustion (CFBC).^[17][21] There are more than 60 power plants around the world, which are using CFBC technology for combustion of coal and lignite, but only two new units at Narva Power Plants in Estonia, and one at Huadian Power Plant in China use CFBC technology for combustion of oil shale.^{[18][19][22][23]} The most advanced and efficient oil shale combustion technology is Pressurized fluidized-bed combustion (PFBC). However, this technology is still premature and is in its nascent stage.^[24]

[edit] Oil extraction

Main article: Oil shale extraction

At present, the major shale oil producers are Estonia, Brazil and China, while Australia, USA, Canada and Jordan have planned to setup or restart shale oil production.^[17][19] In 2005, the global oil shale production was 684,000 tonnes. Although the largest shale oil producer in 2005 was Estonia, it is expected that as of 2007, China has overtaken the position of the largest producer in the world.^[12][25]

Although there are several oil shale retorting technologies, only five technologies are currently in commercial use. These are Kiviter, Galoter, Fushun, Petrosix, and Alberta Taciuk.^[26] The two main methods of extracting oil from shale are ex-situ and in-situ. In ex-situ method, the oil shale is mined and transported to the retort facility in order to extract the oil. The in-situ method converts the kerogen while it is still in the form of an oil shale deposit, and then extracts it via a well, where it rises up as normal petroleum.^[27]

[edit] Other industrial uses

Oil shale is used for cement production by Kunda Nordic Cement in Estonia, by Rohrbach Zement in Germany, and by Fushun cement factory in China.^[28][14] Oil shale can also be used for production of different chemical products, construction materials, and pharmaceutical products.^[19][12] However, use of oil shale for production of these products is still very rare and in experimental stages only.^[4][20]

Some oil shales are suitable source for sulfur, ammonia, alumina, soda ash, and nahcolite which occur as shale oil extraction byproducts. Some oil shales can also be used for uranium and other rare chemical element production. During 1946–1952, a marine variety of Dictyonema shale was used for uranium production in Sillamäe, Estonia, and during 1950–1989 alum shale was used in Sweden for the same purpose.^[4] Oil shale gas can also be used as a substitute for natural gas. After World War II, Estonian-produced oil shale gas was used in Leningrad and the cities in North Estonia.^[29] However, at the current price level of natural gas, this is not economically feasible.^[30][31]

[edit] Economics

Main article: Oil shale economics

Medium-term prices for light-sweet crude oil in US dollars, 2005-2007 (not adjusted for inflation).

Over a period of 150 years, various attempts at extracting oil from oil shale, have met with success, especially when the cost of shale oil production in a given region was less than the price of crude oil or its other substitutes.^[32] According to a survey conducted by the RAND Corporation, a surface retorting complex (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation) is unlikely to be profitable in the United States unless crude oil prices range between US$70 to US$95 per barrel as valued in 2005.^[13] Once commercial plants are in operation and experience-based learning takes place, costs are expected to decline in 12 years to US$35–US$48 per barrel. After production of 1,000 million barrels, costs are estimated to decline further to US$30 – US$40 per barrel.^[12] Royal Dutch Shell has announced that its in-situ extraction technology in Colorado could be competitive at prices over US$30 per barrel, while other technologies at full-scale production assert profitability at oil prices even lower than US$20 per barrel.^{[33][34][35][36]} To increase the efficiency of oil shale retorting, several co-pyrolysis processes have been proposed and tested.^{[37][38][39][40][41]}

A critical measure of the viability of oil shale as an energy source is the ratio of the energy produced by the shale to the energy used in its mining and processing, a ratio known as Energy Returned on Energy Invested (EROEI). A 1984 study estimated the EROEI of various known oil shale deposits as varying between 0.7–13.3.^[42] Royal Dutch Shell has reported an EROEI ranging between three to four on its in-situ development, Mahogany Research Project.^[43][33][44] However, water is needed for oil shale retorting process, which may pose a problem in areas with water scarcity.

[edit] Environmental considerations

Main article: Environmental impact of oil shale industry

The oil shale industry can have a negative impact on the surrounding environments, if the risks associated with it are not managed correctly. Environmental concerns raised over the extraction of shale oil have caused the oil shale industry in some countries to come to a halt.^[45][46] In 2004, opposition to the proposed Stuart Oil Shale Project in Australia resulted in it being put on hold.^[46][47][48] A United States law prohibits United States government agencies from buying oil produced by processes that produce more greenhouse gas emissions than would traditional petroleum including oil shale.^[49]

Surface-mining of oil shale deposits have the same environmental impacts as those of open-pit mining. In addition, combustion and thermal processing generate waste material, and the atmospheric emissions from the process include gases such as carbon dioxide, which is a major greenhouse gas. Experimental in-situ conversion processes and carbon capture and storage technologies may reduce some of these concerns in the future, but at the same time they may cause other problems, which include groundwater pollution.^[50]

[edit] See also

• Oil shale economics
• Oil shale reserves

[edit] Notes

[edit] References

• (2007) Survey of energy resources (PDF), 21, World Energy Council (WEC). ISBN 0946121265. Retrieved on 2007-11-13.