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New Review Concludes Very Low EROI of Oil Shale Combined with High Carbon Intensity Likely Makes it an Unsuitable Alternative to Conventional Crude Oil

Cleveland1
A comparison of estimates of the energy return on investment (EROI) at the wellhead for conventional crude oil, or for crude product prior to refining for oil shale. Source: Cleveland and O’Connor. Click to enlarge.

A new report commissioned by Western Resource Advocates, a non-profit environmental law and policy organization, finds that oil shale’s Energy Return on Investment (EROI) is extremely low, falling between 1:1 and 2:1 when self-energy—the energy released by the oil shale conversion process that is used to power that operation—is counted as a cost. An EROI of 1:1 means there is no energy “profit” from the investment of energy. If internal energy is excluded, and only purchased energy is used as input, then the EROI calculated is in the range of 2 to 16.

While one could argue that the char and gas produced and consumed within the shale conversion process has zero opportunity cost—i.e., that energy would not, or could not, be used somewhere else in the economy, so it should not be treated as a “cost”—the authors note, “the internal energy is absolutely necessary to accurately assess greenhouse gas emissions”.

“Oil shale” is shale containing kerogen, a combination of chemical compounds that can be converted into synthetic petroleum. The two main processing options for oil shale are surface retorting and in situ extraction. In surface retorting, the shale is mined and brought to the surface, with the material then heated in a retort to extract the compounds that are processed into synthetic crude oil. In situ methods heat the material underground and pump liquids to the surface, where they then undergo further processing.

Cleveland2
A comparison of estimates of the energy return on investment (EROI) for refined fuel produced from conventional crude oil and from oil shale. Click to enlarge.

The authors of the report “An Assessment of the Energy Return on Investment (EROI) of Oil Shale,” Dr. Cutler Cleveland and Peter O’Connor at Boston University, reviewed the existing literature on the energy return on investment (EROI) for oil shale to reach their conclusions.

This [result] places the EROI for oil shale considerably below the EROI of about 20:1 for conventional crude oil at the wellhead. This conclusion holds for both the crude product and refined fuel stages of processing. Even in its depleted state—smaller and deeper fields, depleted natural drive mechanisms, etc.—conventional crude oil generates a significantly larger energy surplus than oil shale. This is not a surprising result considering the natural resource exploited in each process. The kerogen in oil shale is solid organic material that has not been subject to the temperature, pressure, and other geologic conditions required to convert it to liquid form. In effect, humans must supply the additional energy required to “upgrade” the oil shale resource to the functional equivalent of conventional crude oil. The extra effort carries a large energy penalty, producing a much lower EROI for oil shale.

—Cleveland and O’Connor

The authors noted that firm conclusions regarding the EROI of oil shale are difficult to establish for a variety of reasons:

  • There are very few reliable studies of current oil shale operations;
  • Many studies use a poor or undocumented methodology, and report what could be best described as “ballpark” estimates;
  • Some studies exclude important categories of energy inputs that generate inflated estimates of the EROI for oil shale (i.e., the system boundary problem); and
  • The very small number of operating facilities that can be assessed result in a lack of large “sample size” of operations from which to draw robust conclusions.

The low EROI for oil shale is closely connected to a significant release of greenhouse gases, the authors note, due to the large quantities of energy needed to process oil shale, combined with the thermochemistry of the retorting process.

Oil shale unambiguously emits more greenhouse gases than conventional liquid fuels from crude oil feedstocks by a factor of 1.2 to 1.75.

—Cleveland and O’Connor

Also, between 1 and 3 barrels of water are required for every barrel of oil produced in an oil shale operation.

A fuel with a modest EROI that emitted few greenhouse gases could at least be a candidate for an alternative source of energy. However, a very low EROI combined with a very high carbon intensity should remove an energy system from serious consideration as an alternative to conventional crude oil extraction and refining. Oil shale in the western United States appears to fall into this category.

—Cleveland and O’Connor

Resources

Comments

ejj

It may be unsuitable based on EROI, but until the standard accounting ROI is unsuitable for corporate survival (ie. companies can't turn a profit), they will continue to go after it.

HarveyD

Corporate America is based on maximum profit margins. Oil Shales will have no interest as long as much cheaper conventional crude oil and tar sands oil are available.

SJC

That is what they said about tar sands, but guess what?

TXGeologist

If internal energy is excluded, and only purchased energy is used as input, then the EROI calculated is in the range of 2 to 16.

While one could argue that the char and gas produced and consumed within the shale conversion process has zero opportunity cost—i.e., that energy would not, or could not, be used somewhere else in the economy, so it should not be treated as a “cost”—the authors note, “the internal energy is absolutely necessary to accurately assess greenhouse gas emissions”.

This is all one needs to see, here again a “environmental study group” fiddling with the numbers to produce a result they like its called cherry picking in science. The internal energy is irrelevant from a fiscal point of view there for irrelevant to a corporations accounting ROI. Shells in-situ process with purchased off peak power has a break even price of $45 bbl ish and a positive EROI. The ultimate EROI matters not if you can turn a profit on it. If you can make profits then a company will exploit the resource its that simple. Same can be said for Ethanol corn ethanol has an ultimate EROI of 1.2:1 when all the inputs of diesel, natural gas to distill and fossil based fertilizers are accounted for and billions of gallons are made a year for profit.

TXGeologist

It should also be noted that petrol refining has a 1.5:1 EROI that is it takes 1.5 gallons of crude oil worth of energy to make one gallon of petrol no one is complaining that the EROI is to low in that process, its immensely profitable to make and sell petrol.

TXGeologist

Another way of looking at it would be you are taking a energy resource that is unusable and unstorable in the current energy market and converting it to something that is storable and useable in the current liquid infrastructure. Yes you can store electricity but it is currently very expensive to do so, and bat tech is just not economical for mass ev or power leveling probably wont be for another decade. The cheapest off peak power comes from nukes or wind currently using Shell’s process even at a EROI of 1:1 which its not its over 10:1 from there test literature you are converting energy that would otherwise be dumped in the case of wind power it’s use it to useful liquid fuels at a ten to one ratio of purchaced energy. The hold up is not technology its environmental lobby groups keeping the leases from being commercially exploited. Shell’s process works and works well.

Engineer-Poet

Actually, Tex, the figures I've seen for crude-to-product are 82.9% for gasoline and 87.9% for diesel. That's considerably better than your claims. It's also relatively cheap to store electricity (from wind or anything else) using compressed air (google CAES).

Would it be too much to ask you to use more punctuation? I've seen longer run-on sentences, but not lately.

SJC

I find his punctuation fine and his information interesting. Welcome to the site TX.

Treehugger

Given the tone and the number of lies per line of TXGeologist post I bet it is again Stan Peterson. EROI of refining oil 1.5 ? are you crazy or what ? I bet you are manipulating data that you have no idea what it is.

Eve in the oil industry very few people believe that these crap of oil shale will ever be economically extracted. You need a breakthrough in technology that nobody have in sight.

Silverthorn

EP's comment above about crude-to-product yields is in line with my understanding as well. I also agree about relative easy of energy storage via CAES -- although the design that makes the most sense to me and would be most cost-effective seems to have eluded the established players. I may yet have to create a start-up...

TXGeologist is right, though, that the way to view shale oil is not as an energy resource, but as a way to produce storable liquid fuel from surplus energy from other sources: off-peak nuclear or excess wind or solar. Its yield per kwHr, based on estimations I've seen from Shell, is about 3x higher than for fuel synthesized from CO2 and water.

It makes sense to go that route, if you happen to believe that CO2-induced global warming is a giant hoax perpetuated through a conspiracy of government bureaucrats, climate scientists, and liberal "tree-hugger" environmentalists. Which perhaps TXGeologist does.

I don't, however. For me it isn't a matter of blindly trusting NASA researchers and the IPCC. It's a matter of physics that I understand. So oil from shale *should* be taxed with its high carbon cost. If it is, it becomes non-competetive with fuel synthesized from water and biomass. The latter yields almost as much fuel per kwHr as high grade oil shale, and is carbon-neutral.

doggydogworld

It is absurd to count self-energy as an input. It is certainly true that high self-energy consumption affects emissions, but EROEI is neither designed nor suitable for emission analyses. Reasonable minds will not only disregard this study but any others by this self-discredited group.

ai_vin

Sure you can include self-energy as an input, as it means a portion of the energy in the resource is consumed and can no longer be recovered.

Engineer-Poet

True, but it only counts if you are calculating the gross reserve (for fossil fuels) or flow rate (for renewables).

CelsoS

Wow, that is a really convoluted way of saying that shale oil extraction is very energy intensive and may have a big carbon footprint.

I have seen in many places what seems to be a total misuse of this EROI metric. People claim it's the proof of many things and than would refuse to reason about it.

Even though I'm not from the field, I understand it is a modeling of reality that selects potential thermal energy as a focus point and abstracts everything else.

It's use is conceivable for certain comparisons and should point to POSSIBLE best investments of energy to recover more energy, or the suitability of some material and it's related process as an "energy source".

As it abstracts cost (in $), form, convenience, locale, toxicity, etc. it has no value in evaluating those aspects and a more general purpose applicability.

Problem is not EROI (EROEI), but with the overloading of the "symbol" with differing definitions and expectations trying to find results far out of the limits of the model.

(As an exercise, just try estimating the cost in dollars of a certain amount of energy in BTUs coming from coal, grid-electricity, and oil to see the difference ... and then tell someone in a MARKET economy they are equal ... in BTUe).

One shocking example is the claim that corn-ethanol is useless and a farce cause it's EROI is just a disputable low amount... (0.5..2.0).

Even if it cost some more energy in the FORM or coal (or natural gas) that is LOCAL and COSTs less then alternative heat sources and delivers less energy in the FORM of an appropriate liquid fuel usable in an Otto cycle engine at a COST competitive with gasoline derived from IMPORTED oil, what does EROI has to do with this ? Nothing. EROI just shows you can't rely on corn as your primary source of energy. Is it news ? No!

The way this interpretative conclusion have been extended far away from the model, tomorrow somebody will start a boycott on AA batteries cause there EROI ...

That said, lets not forget we still need to conserve energy and find and harness appropriate primary energy sources.

wintermane2000

The proper way to look at it is what does it do to the overall ghg load of the nation to include x% shale oil? And what does it do for the country in the process?

Oil shale is only somewhat more icky then deep oil or heavy oil but its right here and far less likely to cause an oil spill. In the amounts we are likely talking about its unlikely to raise our total ghg much and yet it would provide a solid buffer to push back peak oils effect on the us 20-30 years.

That gives us alot more time to sus out the limits of wind/solar and to build whatever nuke power and sus out the final workings needed for fuel cells before a final oil failure hits the us.

It could also prevent the us from outbidding alot of 3rd world nations for dwindling supplies of oil and thus keep 5-700 million people from falling into war and famine.

Or it could just delay the fat lady a few more years.

Roger K. Brown


While one could argue that the char and gas produced and consumed within the shale conversion process has zero opportunity cost—i.e., that energy would not, or could not, be used somewhere else in the economy, so it should not be treated as a “cost”—the authors note, “the internal energy is absolutely necessary to accurately assess greenhouse gas emissions”.

This statement typifies the kind pseudo-intellectual nonsense which surrounds the use of EROI as an economic parameter. If you want to characterize the greenhouse gas intensity of oil shale production then you should directly calculate this intensity rather than kluging up some energy ratio whose relationship to the relevant physical parameter is not clear. However, the use of EROI lends an air intellectual profundity to discussions of "biophysical economics" so that people insist on using it whether or not it is appropriate to the particular issue at hand.

Although energy balance is obviously relevant to the economics of energy production EROI is not in and of itself an economic parameter. It is easy to invent an example where a process with an EROI of 1.5 economically outperforms a process with an EROI of 20. If you examine assumptions of such an example (or any example of energy production when properly considered) you will see that economics are determined by the total resource cost of producing a given quantity of net energy. All of non-energy related costs such labor, fresh water, land use, etc. must be considered. These non-energy costs are not secondary factors. There exists no limit in which they can be neglected.

If one makes the assumption that the non-energy related resource cost scales with the input energy with universal constant of proportionality, then you can show that EROI-1 (which I call NEROI, since it is the ratio of net energy output to input energy) can by used as a proxy for the resource efficiency of energy production. The use of EROI rather than NEROI shows that the people who do net energy analysis have not thought carefully enough about the problem to even get the arithmetic correct. Furthermore the assumption of a universal constant of proportionality between input energy and total resource cost is undoubtedly not correct.

Of course translating physcial resource costs (labor, fresh water, land use, etc) into a bottom line economic cost which allows comparsion between different energy producing processes involves you in the full complexity of how value is assigned to various resources in an overall economic system with many subtle interconnnections and interdependencies. This necessity is very distressing to people who have fallen in love with the idea of doing economic analysis by calculating dimensionless energy ratios, and so they insist on hanging on to the chimaerical simplicity offered by EROI.


Engineer-Poet

There's that, Roger. But there's also the fact that EROI is one of the terms that's relatively well-understood by the audience (unlike your variant), so using it helps convey information to an audience which may not be full of specialists.

I thought the article did a fairly good job of covering the GHG emissions issue relative to crude oil (1.2 to 1.75). You'll find that if you look back at it.

 

Henry Gibson

It is very easy for the oil companies and other oil speculators to put hidden money into research and publications that propose that oil is better than alternative fuels. If all the energy needed to produce ethanol came from the corn field, ethanol would not be produced. Even now fewer green house gases would be produced if all the corn field areas used for ethanol production were used for growing permanent large trees, and more petroleum was used for automobiles instead.

Much if not most manufacturing of products sold in the US has moved to China partly because China uses cheap coal and is not afraid of building nuclear power plants because the false fears promoted by US politicians paid by the oil companies do not exist in China.

The US cannot truly belive that it can rely on very expensive solar and wind energy and agricultural fuels and have its economy work.

What most people ignore is the cost of the fuel to the people and then the cost of the fuel to the US or other nations' national economy.

Since there is a tax on imported ethanol, there should be a tax of at least $50 on imported crude oil. This will make the production of liquid fuels from coal and oil shale forever cost effective.

CO2 is captured and sold and put into the earth by Dakota Gasification from the coal they burn to make natural gas and fertilizers. Production of commercial fuels from oil shale can do the same.

Since the US government has little knowledge of the oil spills and oil use and gas flaring and production use of crude oil before it gets into the US, the carbon footprint of imported oil is not known and cannot be determined. This makes any comparisons of the carbon footprints of the use of any fuels in the US with imported oil useless or even fraudulent. Even the efficienncy of its use has a great bearing.

Those who worry about carbon footprints should worry about co-generation which right now is the fastest and cheapest way to reduce the carbon footprint of any country.

France has proved that nuclear energy clearly reduces CO2 production, cost effectively. Using one pound of retired bomb uranium or plutonium prevents the release of about ten million pounds of CO2. ..HG..

TXGeologist

No I don’t think that climate change is a hoax as a scientist you have to look at what is accepted peer reviewed facts, that said I do believe that climate change is being used as a tool by the global statists to further they long standing agenda of redistribution of capital and wealth from the 1st world to the 3rd world. I have said time and time again that humans have 2 choices for any change to their existence mitigation and adaptation. Since the CO2 matters as an aggregate total us cutting our lifestyles while they increase output to take our place is just silly.

Our Energy Secretary the honorable Mr. Chu has said for the record that we must reduce our energy consumption (standards of living) to give the developing nations some “head room” to grow this is the official policy of the administration make Americans sacrifice so 3rd worlders can use the energy instead. This is the true reason for all the climate change efforts he just slipped up and said it on the record. No thank you sir Chu you and yours will be packing your bags soon as the great sleeping giant of Middle American wakes up from their American Idol induced slumber.

I stand corrected the current ratio for crude to petrol is 1.23 million btu input to 1 millon btu petrol output it used to be 1.5M to 1.0M. (Argonne National Lab 2004) Sorry for the sentence structure American English is not my first language I will have to pull out my grammar book.

This site interests me from the technology point of view as a Geologist most of us value our planet and her resources I am all for solar and wind which with any developing technologies should be subsidized there just not main stream yet. Nuclear power should be used in a big way, any Geologist worth their salt can tell you where to store high level waste post reprocessing look at France where all the waste from reprocessing is stored under 3 feet of concrete in a 40 by 40 meter room. Of course they should eventually entomb it in a geologically stable formation that has not moved and is impermeable to water for at least 500 million years I can think of 3 off-hand in Texas alone. The Canadians have built 4 Candu reactors in China and E. Asia that were less than 5 years first pour to fueling and the last 6 were on time on budget or before time and under budget per the contract.

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