Shell’s Shale Problems
I have been pretty skeptical of the potential of oil shale for a long time. It is very difficult for me to see how they are going to make a go of it, and I wrote as much here:
In those essays, I was primarily focused on the energy required to run the process, and I talked about Shell’s unique shale process. However, as I was passing through the Denver Airport on Sunday (actually, I ended up spending the whole day there!) – I spotted this story in the Denver Post:
Shale country tends to be dry country, and Shell’s process uses a lot of water. Some excerpts from the story:
In its quest to melt oil out of western Colorado’s shale, Royal Dutch Shell has been buying up land and water rights in anticipation of what is likely to be a thirsty new industry.
Some officials, however, worry that the demands of the oil-shale industry could drain every drop of the region’s remaining water.
“On the upper end, we’re looking at potentially several hundred thousand acre-feet of water — more than people think is commonly available to develop in the Colorado River,” said Dan Birch, deputy general manager for the Colorado River Water Conservation District.
Shell and other energy companies have amassed tens of thousands of acres of cropland, ranches and open space — including a state wildlife area — to gain water that would be needed to power the oil-shale process.
Count me among those who thinks this is a bad idea. We are pulling down aquifers now; I hate to see us accelerate that process to produce oil from shale. The energy return is already going to be very marginal. If it was any better than that for tar sands, they would already be producing oil from shale. But now add the fact that they are going to be using up water in dry areas, and it looks to me like a losing proposition.
While the claims of the oil potential there are pretty huge, so are the water requirements:
The Bureau of Land Management estimates the shale formation in western Colorado could yield as much as 1.8 trillion barrels of oil.
Getting that oil, however, could require three times as much water to operate power plants, according to some estimates.
“The volumes are pretty enormous,” said Bart Miller, water-program director for conservation group Western Resource Advocates.
“The net water requirements . . . were something in the neighborhood of 200,000 to 300,000 acre-feet annually,” Miller said. “To put that in context, that’s the consumption of about 2.5 million people.”
Further, that 1.8 trillion is certainly not a net value. The net value is going to be far less, as it is going to take energy to process the oil. Even if the EROEI was 2 to 1, and I doubt it is, that would mean it would take almost a trillion barrels – all contributing more pollution to the environment – to process the 1.8 trillion barrels.
I remain skeptical. Oil shale has always been just around the corner. I think it will remain around the corner. On the other hand, the people at Shell aren’t stupid. They are buying up those water rights for a reason…
- For those who want an inside edge in the energy sector.
- Written by veteran energy analysts and insiders with a track record of accurately predicting trends.
- 100% FREE!
- And Much More...
2014 EIA Energy Conference
July 14-15, 2014 - Washington, D.C.
Platts 4th Annual NGLs Conference
Sep. 29 - Oct. 1, 2014 - Houston, TX