OIL SHALE—1: US, world possess rich resource base

Jan. 19, 2009
Oil shale contains a massive energy resource that potentially can contribute greatly to the world’s energy supply.

Oil shale contains a massive energy resource that potentially can contribute greatly to the world’s energy supply.

This resource occurs worldwide, with the Western US having the largest amounts.

When processed, the kerogen extracted from the oil shale can become superior quality jet fuel, diesel, naphtha, and other high value products. Kerogen content in oil shale ranges from 10 to more than 60 gal/ton.

This article, the first of a four-part series, focuses on the oil shale resource base, especially in the US. The second article will detail proven and emerging technologies for producing the resource from the shale.

The third part will describe the economic viability of an oil shale industry, both on a project level and the potential benefits that the industry could provide to local, state, and national economies.

The final article covers the potential environmental impacts and mitigation strategies for an oil shale industry in the US.

Resource base

Oil shale is a hydrocarbon-bearing rock that occurs in nearly 100 major deposits in 27 countries. In-place hydrocarbons contained in the shales may exceed 10 trillion bbl.

The US, Russia, Congo (former Zaire), Brazil, Italy, Morocco, Jordan, Australia, and Estonia are nations having the most known resource (Fig. 1). Russia has an estimated 247 billion bbl, while Estonia has about 16 billion bbl.1 The US, however, has the most oil shale resources in the world.

Click here to enlarge image

One estimate is that oil shale in the US contains more than 6 trillion bbl of oil equivalent. The US’s oil shale is concentrated in an eastern range, Alaska, and in the western states of Colorado, Utah, and Wyoming.

Click here to enlarge image

An estimate is that more than 1.8 trillion bbl of oil equivalent is trapped in shale on federal lands in the states of Colorado, Utah, and Wyoming (Fig. 2). The western oil shale may have 800 billion bbl that is recoverable ultimately (Fig. 3).

Click here to enlarge image

US oil shales are carbonate rock, generally marlstone that is rich in organic sedimentary material called kerogen. Oil shales are younger in geologic age than crude oil-bearing formations, and natural forces of pressure and temperature have not yet converted the sediments to crude oil.

Oil shale generally lies shallower (less than 3,000 ft) than the deeper and warmer geologic zones required for forming oil. The origins of oil shale can be categorized into three basic groups:1

  1. Terrestrial that has organic origins similar to coal-forming swamps.
  2. Lacustrine that has organic origins from fresh or brackish water algae.
  3. Marine that has organic origins from saltwater algae, acritarchs, and dinoflagellates.

Resource quality

Various studies have extensively characterized US oil shales. Shales with yields greater than 25 gal/ton are viewed generally as the most economically attractive and, hence, the most favorable for initial development.

The table lists the richness of various oil shale deposits in three US areas.2 The oil shale from each region has unique characteristics.

Click here to enlarge image

Western shale contains the most concentrated hydrocarbon deposits on earth. About 1.8 trillion bbl of oil shale are thought to be in place in deposits greater than 15 gal/ton in Colorado, Utah, and Wyoming. Recovery of even a small fraction of this resource would represent a significant energy source to supplement oil supply for many decades.

Large areas of the US contain oil shale deposits, but those in Colorado, Utah, and Wyoming are the most promising for oil shale production in the immediate future. Various studies have identified and characterized extensively these western oil shale resources, particularly those in the Green River formation.

The western region underlies 17,000 sq miles or 11 million acres in Colorado (Piceance Creek basin), Utah (Uinta basin), and Wyoming (Green River and Washakie basins).

Results from more than 250,000 assays on core and outcrop samples for the Green River oil shale show that the richest zone, known as the Mahogany zone, is in the Parachute Creek member of the Green River formation.

Click here to enlarge image

This zone is found throughout the formation, is relatively shallow, and has consistent bedding. Because of this, the zone’s richness is well known, giving a high degree of certainty as to resource quality (Fig. 4).

US western oil shales have a higher concentration on a resource-per-acre basis than Alaskan North Slope oil or Alberta’s tar sands.3 The Piceance basin, which contains more than 80% of the recoverable resources of the Green River formation, underlies a 35 mile by 35-mile (1,225 sq miles) area of western Colorado.

Other significant, less concentrated deposits are in the Devonian, Antrim, and Chattanooga shale formations in several eastern and southern states and parts of Alaska.

Oil shale deposits underlie much of the eastern US, ranging from Mississippi to New York. These deposits are not as concentrated as the western shale deposits, and they contain a different type of organic carbon than the western shale. As a result, conventional retorting of eastern shale yields less oil and a higher carbon residue, compared with western shale.

Because of these differences, industry has focused its interest in oil shale commercialization on the richer, more concentrated oil shale deposits in the western states.

Nevertheless, eastern shale has the potential to become an important addition to US unconventional fuel supplies. Near-surface mineable resources are an estimated 423 billion bbl.4 Of the accessible deposits, 98% are in Kentucky, Ohio, Tennessee, and Indiana.

One area in particular, the Kentucky Knobs region, has accessible resources of 16 billion bbl at a minimum grade of 25 gal/ton.

With processing technology advances, for example the addition of hydrogen to the retorting process, potential oil yields could approach those of western shale.

Eastern shale has some advantages over the western shale. Five of these are:

  1. Eastern shale is closer to major demand centers and this would reduce transportation costs.
  2. Companies could move the liquid produced by barge to a refinery for processing. This would eliminate the need for local upgrading and for constructing large new pipelines.
  3. Because the resource is diverse, eastern shale development should have fewer associated environmental problems.
  4. Because the eastern area is more populated, the area should have fewer infrastructure and socio-economic problems than in the west.
  5. The eastern states also have numerous coal mines and industrial plants, so that public acceptance and permitting of oil shale facilities may be easier.

Oil shale deposits also occur in Nevada, Montana, Alaska, Kansas, and elsewhere, but these are either too small or too low-grade or have not yet been well explored to be considered for near-term development.

Click here to enlarge image

Fig. 5 compares resource concentration per acre. Colorado has 1.3 million bbl/acre compared with 70,000 bbl/acre on Alaska’s North Slope.3 More than 700 billion bbl of US oil shale resource occurs in concentrations richer than currently produced Alberta tar sand.

As industry demonstrates the commercial viability of oil shale, a subset, almost certainly in a range near 100 billion bbl, would become a prospect for reclassification to proved reserves.

A reasonable assumption is that first commercial oil production from oil shale will yield at least 30 gal/ton. Zones richer than about 40 gal/ton are generally too thin to be selectively recovered at a practical scale.

Beds with average 30 gal/ton commercial thickness are found throughout the Colorado and Utah resources. In previous activity, Unocal Corp. reported yields averaging 38 gal/ton, at least in the early stages, and is believed to have averaged about 34 gal/ton during the life of its project.3

Resource access

The US government owns and manages about 73% of the lands that contain much of the oil shale deposits in the west. These lands contain about 80% of the known recoverable resource in Colorado, Utah, and Wyoming.

Private company ownership of oil shale lands, in 1978, was about 21% in Piceance basin (Colorado), 9% in Uinta basin (Utah), 24% in Green River basin (Wyoming), and 10% in Washakie basin (Wyoming).5 6 State governments, localities, and native tribes also own oil shale lands.

Privately owned lease holdings are concentrated near the southern margins of Colorado’s Piceance Creek basin where the oil shale outcrops at surface. Oil leases on private lands have sufficient contiguous oil shale resources to support commercial-scale operations up to a maximum of 400,000 b/d.7 Mining and surface processing would limit the production from any one development to about 100,000 b/d.

In contrast, public lands are concentrated near the center of Piceance Creek basin where oil shale thickness increases from 200 ft at the basin margins to more than 1,500 ft near the basin’s deposition center. With increased thickness, oil shale richness correspondingly increases.

Federally owned land could easily support several large projects with a production capacity on each lease of 100,000-300,000 b/d.

Because of difference in thickness and quality, private developers will be reluctant to develop private lands first, so long as the possibility exists that the higher-grade resources on public lands will become available to potential competitors. Large-scale commercial oil shale development, therefore, is unlikely without the federal government making public lands available for lease or exchange. Trading federal lands with states or private resource holders would enhance logical development patterns.

Conflicts between surface and subsurface uses may occur through priorities of resource management plans or through legislated priorities such as threatened and endangered species critical habitat, wilderness areas, and the like.

The US Department of Interior’s process to develop an environmental impact statement for oil shale development on public lands will address these potential conflicts.

References

    Survey of Energy Resources 2007, World Energy Council, London, September 2007.
  1. Duncan, D.C., and Swanson, V.E., Organic-Rich Shales of the United States and World Land Areas, US Geological Survey, 1965.
  2. Bunger, J.W., et al., “Hubbert Revisited—5: Is oil shale America’s answer to peak oil?” OGJ, Aug. 9, 2004, p. 16.
  3. Geology and Resources of Some World Oil-Shale Deposits, US Geological Survey, 2006.
  4. Biglarbigi, K., et al., “Potential for Oil Shale Development in the United States, “Paper No. SPE 110590, SPE ATCE, Anaheim, Calif., Nov. 11-14, 2007.
  5. Biglarbigi, K., “Unlocking Ten Trillion Barrels of Global Oil Shale Resources,”SPE Distinguished Lecturer Program, 2008.
  6. Oil Shale Resource Factsheet, Department of Energy, Office of Petroleum Reserves, Office of Naval Petroleum and Oil Shale Reserves, 2007.

The authors

Click here to enlarge image

Khosrow Biglarbigi (kbiglari @inteki.com) is president and director of petroleum engineering at Intek Inc. He has more than 20 years of experience in evaluating conventional and unconventional oil and gas resources, economic analysis, technology assessment, and evaluation of alternative policy options to encourage development of these resources. Biglarbigi currently manages Intek’s technical and analytical support to the US Department of Energy Office of Petroleum Reserves, which supports the task force on strategic unconventional fuels. He also was the architect for DOE’s national oil shale and national strategic unconventional resources models. Biglarbigi holds an MS in petroleum engineering from the University of Tulsa.

Click here to enlarge image

Hitesh Mohan ([email protected]) is vice-president and manager of petroleum engineering at Intek Inc. He has 19 years of experience in the petroleum and mining industries and in the design and development of petroleum databases, development and application of oil and gas models to evaluate the oil and gas resource potential, recovery, petroleum exploration, energy economics, public policy analyses, and gas storage. He designed and developed DOE’s national strategic unconventional resources and North American supply and distribution models. Mohan holds an MS in petroleum engineering from the University of Kansas.

Click here to enlarge image

James Killen (James.Killen @hq.doe.gov) is program manager for the Office of Naval Petroleum & Oil Shale Reserves in the US Department of Energy.