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Potential for Oil Shale Development in the United States Khosrow Biglarbigi Hitesh Mohan Marshall Carolus INTEK July 15, 2009 Calgary, Canada.

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Presentation on theme: "Potential for Oil Shale Development in the United States Khosrow Biglarbigi Hitesh Mohan Marshall Carolus INTEK July 15, 2009 Calgary, Canada."— Presentation transcript:

1 Potential for Oil Shale Development in the United States Khosrow Biglarbigi Hitesh Mohan Marshall Carolus INTEK July 15, 2009 Calgary, Canada

2 2 America’s Oil Shale Resource Technology Economics Environmental Path Forward

3 3 What is Oil Shale? Rock Kerogen Pyrolysis Upgrade °F Syn- Crude Naphtha Jet Fuel Diesel Nat. Gas Hydrogen

4 4 10 Trillion Barrels of Shale Oil Worldwide United States Zaire Russia Brazil Italy Morocco Estonia China Canada France Egypt Australia Israel Jordan Countries With Oil Shale Deposits

5 5 Most Concentrated Hydrocarbon Deposit 2 Trillion Barrels 6 Trillion Barrels Source: US DOE, 2004

6 6 The Mahogany Zone The Most Prolific Up to 1000 Ft Thick Up to 75 Gal/Ton Source: Redleaf Resources, 2008

7 7 Oil Shale Production Approaches Mining Retort Upgrading Resource Refinery Surface Process Drilling Heating Upgrading Resource Refinery In Situ Process Source: US DOE, 2004 Choke Point

8 8 Shell In-Situ Conversion Process Source: US DOE, 2008 High Value Products Pilot Test (Colorado) Light Surface Processing HEATER PRODUCER OVERBURDEN

9 9 Other Examples of In-Situ Pilot Tests (Colorado) IDT–EGL Resources Process Chevron Process Fractures Injector Producer Source: US DOE, 2004

10 10 Ecoshale In-Capsule Technology Source: Redleaf Resources, 2008 HOT GAS COOL GAS Pilot Test (Utah)

11 11 Alberta Taciuk Processor (ATP) Pilot Test (Utah) Preheat tubes Vapour tube Combustion zone Retort Preheat tubes Cooling zone Oil shale feed 750°C 500°C250°C Source: US DOE, 2006

12 12 Gas Combustion Retort (GCR) Australia (Project Scale Up) Brazil (In Production) China (In Production) Estonia (In Production) USA (In Pilot) Source: US DOE, 2007 Raw Shale Spent Shale RESIDUE COOLING COMBUSTION STRIPPING PYROLYSIS PREHEATING Oil Mist Extractors Raw Shale Spent Shale RESIDUE COOLING COMBUSTION STRIPPING PYROLYSIS PREHEATING RESIDUE COOLING COMBUSTION STRIPPING PYROLYSIS PREHEATING MIST FORMATION

13 13 First Generation Project Costs Item UnitRange Capital Cost$/BPD O&M Cost$/Bbl K-55K * * Barrel of Daily Capacity Source: INTEK, Inc., 2006

14 14 Economic Price for Oil Shale Technology True In-Situ Surface Mining Underground Mining 2007 Dollars Per Bbl In-Capsule $38 $47 $57 Rate of Return – 15% $0 $10 $20 $30 $40 $50 $60 $70 $35 Source: INTEK, Inc., 2008

15 15 Breakdown of Economic Price for Generic Surface Mining $47/Bbl Operating Costs 38% Risk Premium 9% Taxes 19% Cost of Capital 19% Transfer Payments 14% Source: INTEK, Inc., 2008

16 16 Oil Shale Environmental Impacts Air Quality Oil Shale Processing HC Gas CO 2 SO x NO x CO 2 Enhanced Oil Recovery Sequestration Other Industrial Uses Capture and Clean Existing Technology Process Plant Use Source: SPE #110590, 2007

17 17 Land Use 1 MMBbl/D Production for 40 Years – Surface: 31 Square Miles – In-Situ: 14 Square Miles A Small Footprint for a 2.5 MMBbl/D Industry: Source: SPE #110590, 2007

18 18 Water Requirements 1-3 Barrels of Water per Barrel of Shale Oil Challenges: –Water rights –Ground water protection –Water runoff Source: US DOE, 2007

19 19 Development Hurdles Access to Land –70% on Federal Land RD & D Environmental Permitting Fiscal Regime

20 Total Resource 6 Trillion Barrels High Quality Resource 2 Trillion Barrels Technical Recovery 1 Trillion Barrels Reserves 600 – 750 Billion Bbls The Prize $50 - $65 / Source: INTEK, Inc., 2008

21 ,000 1,500 2,000 2, Year Thousand Bbl/D Production Potential (Shale Oil in the U.S.) Base Tax Incentives RD&D Accelerated Scenario Measured Scenario Business as Usual Source: US DOE, 2007

22 22 Summary Over 6 trillion barrels of in place resource The most concentrated hydrocarbon deposits on Earth Conversion technologies are advancing rapidly Sustained production potential of up to 2.5 MMBbl/Day Substantial economic benefits Requires concerted effort by the private sector, governments, and local communities


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