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Petrobras and Total to Evaluate Oil Shale Opportunities in Africa and in the Middle East

Gcr
General schema for a Gas Combustion Retort of the type used by Petrobras in its Petrosix oil shale production process. Click to enlarge.

Petrobras and Total E&P Activites Petrolieres signed a cooperation agreement to evaluate the exploration, development, and production of oil extracted from oil shale deposits in specific regions in African and Middle Eastern countries. Under the agreement, the companies will carry out studies, exchange information, and negotiate concession agreements.

Petrobras and Total’s technical teams will analyze the projects’ viability, including aspects such as the environment, and legal, technical, and economic issues. If viability is confirmed and approved by the respective executive boards, a project development evaluation will be undertaken, and Petrobras will be the operator.

The cooperation between the companies will also allow for technology exchanges. Petrobras owns an oil shale oil extraction process, Processo Petrosix, and has had an industrial-scale unit operating commercially since 1991 producing oil, fuel gas, liquefied gas and other derivatives. Total, meanwhile, has state-of-the-art oil upgrading technology and deep knowledge of the region where the projects of interest are located.

In a statement, Petrobras noted that the scenario of oil scarcity and high oil prices have attracted attention and investments to new sources of energy, including oil shale.

Several countries are considering resuming or expanding their oil shale production units. The cooperation agreement between Petrobras and Total follows this global trend and has significant representation to develop new oil production units with oil shale processing.

Earlier this year, Petrobras signed separate agreements with the Ministry of Energy & Mineral Resources (MEMR) of Jordan (earlier post) and with the Moroccan National Office for Hydrocarbons and Mines (ONHYM) to undertake studies for the use of Petrosix technology in Jordan’s Attarat field and Morocco’s Timahdit field.

Petrobras has been working with oil shale since 1954. In 2006, Petrobras’ average oil production from shale rock was 4,200 barrels a day at the Schist Industrialization Business Unit (SIX) in São Mateus do Sul, 140 kilometers from Curitiba. The plant is set in one of the world’s biggest reserves of this mineral, the Irati Formation, which covers the states of São Paulo, Paraná, Santa Catarina, Rio Grande do Sul, Mato Grosso do Sul, and Goiás.

Among the shale-derived products Petrobras currently manufactures are fuel oil, naphtha, fuel gas, liquefied gas, and sulfur, in addition to byproducts that can be used by the asphalt, cement, agricultural, and ceramics industries.

Oil shale is a fine-grained sedimentary rock that contains kerogen, an organic complex that can be converted to oil and other petroleum products. Unlike the bitumen derived from tar sand, the kerogen in oil shale is a solid that does not melt and is insoluble. In general, In general, releasing organic material from oil shale and converting it into a liquid form requires pyrolysis to convert the kerogen to a condensable vapor which, when cooled, becomes liquid shale oil. This process is called “retorting.”

Depending on the efficiency of the process, a portion of the kerogen may not be vaporized but deposited as “coke” on the remaining shale, or converted to other hydrocarbon gases. In some processes, residual carbon and hydrocarbon gases may be captured and combusted to provide process heat. For the purposes of producing shale oil, the optimal process is one that minimizes the thermodynamic reactions that form coke and hydrocarbon gases and maximizes the production of shale oil.

Maximum oil production requires pyrolysis at the lowest possible temperature (about 480 degrees centigrade) to avoid unnecessary cracking of hydrocarbon molecules, which reduces oil yields.

—Strategic Significance of America’s Oil Shale Resource

Petrobras uses a conventional production process in which the shale is mined, crushed and fed into a surface gas combustion retort for pyrolysis and processing. (The other major process option is in-situ production.) The Petrobras 11-m vertical shaft Gas Combustion Retort (GCR) is the largest surface oil shale pyrolysis reactor currently operating.

Greenhouse gas emissions and water consumption are both issues with oil shale processing. Earlier this year, Adam Brandt at the University of California, Berkeley calculated the energy efficiencies and greenhouse gas emissions of two different shale to liquid fuel processes: Shell’s in situ process, and the Alberta Taciuk Processor (OSEC). Neither is a direct match to the Petrosix process. However, Brandt found that both processes were very energy intensive and produced GHG emissions comparable to or possibly higher than tar sands emissions.

A study published earlier this year by the European Academies Science Advisory Council on the use of oil shale in power generation—based on Estonia’s experience— concluded that under current electricity production methods, oil shale contributes more to climate change than coal. However, with new production methods, it would fall to the same level as coal.

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Comments

RhapsodyInGlue

This is an example of one of the problems with negotiating global warming abatement that avoids the issue of caps on developing countries. Without caps on all countries, industry will do crazy things like oil from shale, dumping way more CO2 into the atmosphere than conventional oil, but oh it's ok because it's in a developing country. Never mind the oil will probably mainly be exported to feed the appetites of the developed world and not really contribute to raising living standards in the country where it's produced. If there is a loop whole for developing countries, it will just lead to the developed world exporting our worst industries to those areas not being watched.

Jim G.

I guess I'm not seeing folks in government, academia, industry or NGO's saying "dumping way more CO2 into the atmosphere than conventional oil ... [is] ok because it's in a developing country." I guess there's always someone with a weird idea out there, but I strongly doubt there's anything near a consensus view like that.

The US government, first under Clinton and then under W, have used the lack of binding rules on developing nations as a fig leaf to cover their refusal to pass the Kyoto agreement to the Senate for ratification. Then, as now, the US is the largest GHG emitter, and, if we have any intention of solving the problem, it's the largest emitters who are in the most immediate need of attention. In my opinion, this had nothing to do with considered opinions and everything to do with the fact that US industry doesn't want to do anything but saying so isn't going to sell as well as telling a more seductive lie. And now a good chunk of the presidential candidates are mouthing this line as well.

As the Bali process has been going on, efforts have been made to try to bring China, India, Brazil, etc. around to some kind of limitations. The argument from the Chinese and Indian governments is that is that strict rules will inhibit their development, and that it's unfair, etc. But we should expect that opposition just as we expect industry to push its ridiculous position. Whatever happens all countries will need to collectively meet some binding global target, and if we want to do that and develop, yes, we're going to need new technologies, rather than pyrolysis of shale rock. One of the things that binding emissions on rich nations will do is boost capital flow into those technologies.

Alain

As long as crude is as expensive (=valuable) as it is now, the industry will be willing to use higly inefficient (=carbon-intensive) ways of producing it.
The first thing we need to do is invest heavily in alternatives. Once the research- en capital investments are done in alternative energy, it will become so cheap that it will drive the value of crude down. Once it costs more to develop shale-oil than it's worth, they will obviously leave it where it is.
That's why we need massive investments of tax-money in the research and implementation of renewable energy.
We invest hundreds of billions in military equipment, which doesn't harm the economy, since it's a big boost for economic activity.
If we would invest the same kind of money in wind, solar, nuclear,... it would stimulate the economy much more than the needed taxations would harm it.
Firstly, the tax money would almost completely be invested in the own economy, and secondly the very cheap energy (because capital investment is already paid for) would stimulate the economy again, while driving down the price of crude.
This in turn would starve oil-dictators and terrorist-sponsors, while making shale-oil projects uneconomical.

The US, EU and Japan should start with such policy. Very fast other nations like China and India will follow. Though, it's necessary we start fast : once they have lots of coal-plants up and running, it will be much more difficult to shut them down. If at the moment coal is 10% cheaper than wind, they will do coal. Once their plant is built, the difference becomes much larger than 10%, since the capital investment for their plant is already made.
On the other hand, for wind the advantage is even bigger : since capital investment for wind is almost the only cost, once it's built there's no way coal can ever become cheaper.
The same logic goes for shale-oil. Now they will be making huge capital investments because oil-price is so high. The total cost of shale-oil will be high, and maybe uneconomical at a crude price of 60$. But once the investments are made, further expoitation will be economical at a much lower crude-price. So, even if the crude drops to 40$, it will still be economical do do further production, since the capital investment is already been paid for. It's important that the price of crude drops below these tresholds before the big investments are made, otherwise it will be much harder to stop them producing it (since they will want at least to pay back their investments).

That's why we need a Marshall plan - scale investment in alternative energy (nuclear included).
Just like that Marshall plan gave a huge economic, military and security advantage to the US at a relatively low cost (without it Europe would probably have become part of the USSR), the advantage of such a new plan will return much more (to the world) than it will cost.

Harvey D

Rhaspsodyinglue:

You don't have to look very far.

Just look what is happening in Canada with Tar Sands extraction in Alberta (mostly for export to USA).

Canada's per capita GHG has gone up 30+% in the last few years, it is one of the highest in the world and getting close to 25 tonnes/years.

The majority of Canada's GHG increase, for the last decade, has beeen from Alberta's Tar Sands operations. GHG is only part of the problem created. The gooey super chemical ponds will pollute most surronding lakes and rivers for centuries to come unless the extraction methods are changed rapidly

Harvey D

Alain:

Wouldn't massive production of alternative liquid fuels support and encourage the continued use of more inefficient ICE vehicles with all the negative side effects etc.

A super Marshall Plan to accellerate the production of much cheaper more efficient electric energy storage devices would promote the use of PHEVs and BEVs, thus reducing (even eliminating) the need for more fossil fuel with less GHG.

Part of this plan should address the production and distribution of more clean electricity for our PHEVs and BEVs and to replace current coal fired plants.

Alain

Harvey,
That's certainly correct if the price of the liquid fuel would be low. We certainly need to invest the taxes in production like electric cars,... but also in the massive production of liquid fuels.
But independent of the production cost of the liquid fuels, the price (via taxes) must be high enough to discourage wasting it.
The production capacity for liquid fuels can easily be converted to production of chemicals once the need for fuels decreases.

Stan Peterson

@Jim,

You are operating under a few misunderstandings.

Signing Kyoto is different from following Kyoto dictates.

The phony socialist Greens of the EU signed the Kyoto protocol and then promptly and cynically did nothing about it. They believe that lying is OK, as there is no such thing as concepts of honor or truth.

The entire world including the developing third world increased their anthropogenic CO2 emissions by 18% over 1990. The sanctimonious EU, increased its CO2 emission by 21% over 1990, or worse than China or India,even while hectoring everyone else about their self-proclaimed superiority.

The US which treats its promises as binding, bipartisanly refused to sign Kyoto; but actually sought to reduce it CO2 emissions. Many homes, and businesses were insulated, construction and appliance standards revised, and industry undertook massive reconstruction.

For example, the US steel industry has been totally rebuilt, and uses one third or less of the energy it used to need to make a ton of steel. Did you ever hear boasting about that? No? Why not?

The auto industry has built and rebuilt numerous factories to be much more energy efficient, and when I say that, it consists of both domestic and foreign firms manufacturing in the US.

The result is that the US has essentially ceased increasing CO2 to the atmosphere from its industry over the 1990 Kyoto targets. More change is coming too. The electrical utility industry has on order, enough new plants to cut by one third to one half its electrical generation from fossil fuels by 2020. Have you heard of that? No? Why not?

Not to mention that the Ground Transport sector, the consumer of the majority of fossil fuels, is beginning to convert and substitute electrons for hydrocarbons. That tidal wave of change is coming as well.

Finally, the US is not the worst polluter. That is a convenient canard. We produce the majority of the world's goods, but do not emit the majority of the world's pollution, nor anywhere near the majority of CO2. China does.

If we treated the land set asides, and land use restrictions we impose, as Kyoto concessions, the warped accounting of Kyoto would be different. What is the difference whether a human being plants a tree, or lets a seed fall to protected ground, and sprout into a tree? By the warped accounting of Kyoto, there is a difference to a UN bureaucrat.

A tree is not a tree, to them. A human-planted tree is a carbon sequester; a naturally spouted tree on land protected and reserved for forest, is not, and is irrelevant, to them. However... A tree is a tree. Period.

Therefor allowing natural reforestation to count, as well as human-planted trees, in CO2 emission accounting, the US is already actually decreasing its CO2 emissions below its former levels. The only country actually meeting the Kyoto targets!

Have you heard of that? No? Why not?

Harvey D

Stan:

Isn't USA exporting billions of tonnes of CO2 when you import $$$ billions of manufactured goods from China-India-Japan-Malaysia-Mexico-Canada + $$ billion of crude oil from Alberta tars sands + $$ billions of ethanol from Brazil etc?

Dont forget that the 2 million/barrel/day imported from Alberta created huge amount of GHG over there. The 100 new coal fired power plants in China are being built to supply manufactured goods to the world and mostly to USA.

It is so easy to shift a major part of our GHG to other nations and claim that we are doing well and even better than others.

The very huge USA yearly trade deficit says most of it.

If USA would compile all the GHG created to produce all imported goods, the USA per capital GHG would go from 22 tonnes/year to something as high as 30 or 40 tonnes/year.

Harvey D

Stan:

Isn't USA exporting billions of tonnes of CO2 when you import $$$ billions of manufactured goods from China-India-Japan-Malaysia-Mexico-Canada + $$ billion of crude oil from Alberta tars sands + $$ billions of ethanol from Brazil etc?

Dont forget that the 2 million/barrel/day imported from Alberta created huge amount of GHG over there. The 100 new coal fired power plants in China are being built to supply manufactured goods to the world and mostly to USA.

It is so easy to shift a major part of our GHG to other nations and claim that we are doing well and even better than others.

The very huge USA yearly trade deficit says most of it.

If USA would compile all the GHG created to produce all imported goods, the USA per capital GHG would go from 22 tonnes/year to something as high as 30 or 40 tonnes/year.

GreyFlcn

Even if you assume biofuels reduce greenhouse emissions (they don't).

But even if they did, their benefits would be more than canceled out by tar sands, oil shale, and coal-to-liquids.

Pretty much confirming the only NET way to reduce GHG in transportation is to start transitioning away from combustible liquid fuels.

Leaving it for only the few niche applications which electricity can't fill.

Only by removing the demand will you remove the value of liquid fuels.

joe

What about biochar? Biofuels can be made from non-food materials using pyrolysis methods, with biochar as a residue. The biochar can then be used as fertilizer on cropland with two benefits: increased soil fertility and the sequestering of many tons of carbon.

Karl

Stan,

Adding to what you were saying, even if a EU country complies with the Kyoto Protocol, most of the polluting industries are just moved out of the EU to China. The NY Times covered this problem: http://www.nytimes.com/interactive/2007/12/21/world/asia/choking_on_growth_9.html

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