Research of unconventional resources, 2006

Basic study on the oil shale development

Executive Summary

Korea imported 825 million barrels of crude oil in 2004 and is one of the major importing country in the world. Rising imports of crude oil and higher oil prices driven by rising demand, are already threatening the Korea economy.

Oil shale is a sedimentary rock that contains solid bituminous materials (called kerogen) that are released as petroleum-like liquids when the rock is heated by retort. An enormous resource base of oil shale exists worldwide and, particularly, in U.S., Australia and Russia. Oil shale lies undeveloped yet because it has been economically or technically infeasible to produce relative to conventional oil. However, as expected future oil prices continue to rise, technology improves, and development costs fall, this known, secure resource becomes competitive and viable. In this circumstances, US government announced they will augment domestic fuel supplies by 2 million barrels per day by 2020 through commercialization of oil shale resources and development of an oil shale industry.

This report presents an assessment of the viability of developing oil shale. For this purpose, major oil shale samples was obtained and analyzed. State-of-the-art technologies were investigated and a basic research on retorting was carried out.

Five oil shale samples including three US samples, Russia sample and China sample were obtained and analyzed quantitatively and qualitatively. Organic contents in oil shale were measured by proximate and elemental analysis. Environmental impacts of oil shale development were briefly assessed by analysis of heavy metal and chlorine concentration.

Kerogen contents in US oil shale are rich. Their Fischer yield are 13~18% and it could produce 0.9~1.3 barrels from 1 ton of oil shale. The oil shale of Slanets, Russia has higher quality compared than US and China with the exception of high chlorine content. Its Fischer yield reaches 18.5%. Fischer yield of China oil is only about 7%. However China oil shale has merits due to low mining costs (as a byproduct of coal mining) and accessibility from Korea. Oils from US and Russian shale would have a higher value than the Middle East crude oil. Sulfur contents are relatively low and Vanadium and Nickel are extremely small in shale oil. It helps the reduction in costs for hydrotreating process. API gravity and diesel cut of shale oil is more than 28° and 70% respectively, thus indicating excellent oil quality. Pollutants could probably be controlled to meet existing environmental regulations since heavy metals in oil shale, shale oil and spent shale are negligible and chlorine contents are also low with the exception of Russia shale sample.

Energy companies and petroleum researchers have, over the past 60 years, developed, tested, enhanced a variety of technologies for recovering shale oil from oil shale. Oil shale technologies including both surface and in-situ retort have been assessed in this report. The surface retorting technology that come into the spotlight is the Alberta Taciuk Processor (ATP) by Alberta Research Council in Canada. The process allows the energy self-sufficient transfer, retorting and combusting of shale. Some of the hot processed shale that is recirculated into the retort section, and providing the heat for pyrolysis by direct, solid-to-solid heat transfer. ATP increase kerogen oil and cumbustible gas yields, improves thermal efficiency, and minimizes residual coke remaining on spent shale, thus improving previous surface retort technologies in a variety ways.

The major advances in in-situ retorting are found in ICP (in-situ conversion) process developed by Shell. ICP could potentially produce high quality transportation fuels from oil shale in a technically, economically and environmentally sound manner. The ICP process involve placing electric heaters in vertically drilled wells and gradually heating the oil shale interval over 3~4 years until kerogen is converted to light hydrocarbon oils. The ICP process appears to improve heat distribution in the target deposit, overcoming heat control problems. The product quality is improved and subsequent product treating is less complex, as compared to oil produced by surface retorting or previous in-situ approaches due to the slow heating and pyrolysis process. Ground-freezing to establish an underground barrier around the retorting zone is another core technology of ICP process. It enables to prevent groundwater from entering the retorting zone and to keep hydrocarbons and other products generated by retorting from leaving the project site. Initial results from demonstration plant are very promising and Shell believes that the technology should be profitable at $25/bbl of crude although technical and environmental uncertainties still remain and the process is so capital intensive.

The effects of process conditions such as reaction temperature and input shale size on retorting efficiency in terms of oil yield and quality were investigated. The rate of kerogen conversion is the highest at retort temperature of 500 ℃ while much of kerogen are not pyrolyzed at 400 ℃. Oil and gas yield increase with retorting temperature. Distillation characterization studies reveal that the shale oil produced at 500 ℃ are heavier than that of 400 and 450 ℃. Therefore, subsequent refinery process design and light oil demands should be considered when determining reaction temperature. Until 5 mesh size of oil shale, recovery yield and quality of shale oil increases with input shale size.

In conclusion, the feasibility of oil shale development was validated and its development via acquirement of resources and related technologies could help solve the problem of nation's energy security promisingly.