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Shell Withdraws Oil-Shale Application

16 June 2007

Denver Post. Shell has withdrawn an application for a mining permit on one of its three oil-shale research and demonstration leases for economic reasons.

Shell has been working on its In-Situ Conversion Process (ICP) for oil shale for more than two decades—ever since the collapse of the first run at oil shale in the 1980s. Under the in-situ process, Shell drills holes into the resource, inserts electric resistance heaters, and heats the subsurface to around 343º C (650º F) over a 3- to 4-year period. During this time, very dense oil and gas is expelled from the kerogen and undergoes a series of changes, including the shearing of lighter components from the dense carbon compounds, the concentration of available hydrogen into these lighter compounds, and the changing of phase of those lighter more hydrogen rich compounds from liquid to gas.

To keep groundwater away from the process (which would affect the heating), and to keep byproducts of the process away from the groundwater flow, Shell proposes to freeze the groundwater to create a subsurface ice barrier. (The creation of subsurface ice barriers to prevent water flow is a mining technique.) (Earlier post.)

Shell spokeswoman Jill Davis said the withdrawal of a permit on one of its three oil-shale research and demonstration leases was done for economic reasons: Costs for building an underground wall of frozen water to contain melted shale have “significantly escalated.”

“We are being more cautious and more prudent,” Davis said. “Because of the nature of research you have challenges. With that in mind, it is taking a little longer to build a freeze wall than we planned.”

Shell’s slowdown does not mean the US Bureau of Land Management will delay plans to issue commercial leases as soon as 2008. “There is no slowdown from our perspective,” said Celia Boddington, national spokesperson for the BLM.

Shell is one of three companies awarded federal leases in Colorado to test new methods of extracting oil from shale rock by in-situ processing. (Earlier post.)

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Comments

I wonder what the net energy gain is from what has to be an very energy intense undertaking. It might very well take burning more fossil fuel than you will ever claim.

Lad,

Oil shale is indeed very energy intensive to mine in-situ. Witness the Canadian mining interests that are planning on changing to nuclear heat to reduce the consumption of natural gas in their oil shale mining.

Shell claims that the net energy return is 3:1 with their in situ system. I can't confirm that, of couse. I am highly skeptical that even if the system works, we'll get more than a few hundred thousand barrels per day out of it, perhaps less.

That they've cut back on this by a third is rather telling. They don't want to risk more money on this venture than they absolutely have to after it went bust 25 years ago.

It'd be interesting to see how much energy the ice wall requires. The entire process sounds preposterous and a black hole for $$.

Nothing particularly new about using ice walls. The mining industry has been using them for some time. I wonder if you could even use a heat exchanger to move heat from the ice wall to the in-ground heaters. As for the size of the investment and the returns, all of these comments were made about oil sands when they were first started. The only question I have is if this stuff is worth the environmental cost.

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