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.OILSHALE AND SHALE OIL E.H. Crabtree, Director Colorado School of Mines Research Foundation~ Inc. . , (Presented at the American Mining dongress Meeting September 15, 1964, atPortland, Oregon)

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There has been so much written and there have been so many addresses and technical presentations on oil shale given at various meetings during the last few months that it is difficult-to present anything new. --Even to summarize the history, the current status, the problems$ and the potential of the industry would require much more time than we have tpday. So about all Ican hope to do is to present some of the highlights; knowing that some of these will be a repetition for many ofyou, buthoping that I can give you members of the mining industry a perspective of what the oil shale industry is today and where it-will probably be tomorrow. For us who have spent our professional lives in the .mlning . industry, oil shale is unique. We know where it is; we dont have to hunt for it. It Is measured in hundreds of feet ot thickness~ in thousands of square miles of area, and in billion~ of barrels of oil content. The prqblems are .technologicaland legal. lk~w will be the best way to mine the shale? How will be the best way to extract the oi~? Where will it be marketed? What will it cost? What will be the leasing and taxpolicies of both the State and Federal governments? ., . ~ . One of the_many questionsasked today is why do we need shale.oil? With a large portion of our domestic..crude production restricted, .,and with limitations pn imports frbm large foreign sources, wontt we have all the conventional petroleum required? The answers to these questions are more questions. Can we afford - to be dependent upon foteign supplies? Are our domestic rg.serves sufficient for our expanding needs? Mill the cost of findi-ngnew reserves eventually exceed thecost of-producing shale oil?

Recently, Assistant Secretary of the Interioy John Kelly : quoted Prqsident Johnson as follows: tt~ . . In the remainder of this .centuiyurban population will double, city land,will.double, and we-will,have to build homes, highways, and facilities equal to all thosebuil-tsince this country was first settled. .SOin : the next 40 years, we must rebuild the entire urban United Stateq,ti --, If this is true, a tremendous increase inso&oes of energy will,of.course, be required. With our present reserves of.petro-. leum and coal, and atomic,energy being rapidly developed, no, ~ shortage is anticipated~ But shale oil will be ccnnpetitivein : ,. . .-, ,.. . ,. t ,,. . .,, -.. .. .. . . . . ... .. . . . ... . .. . . . .. . . . . . . . . .. . . .. . .. . i.
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cost with conventional fuels and we believe that the time is near. Some people are concerned that production of shale oil will h~ve =n adverse effect on independent oil and gas producetis. If production of shale oil should eventually amount to 1.25 million barrels per day, this would be only 8 to 10 percent of the estimated petroleum requirements of the U. S. in 1974. While portions of this increased demand may come from new discoveries, extensions J of exist,ingfields, additions to producible reserves, or increased imports, it appears likely that shale oil should be able to satisfy a part of these requirements, and probably ,willbe essential,

The oil shale industry is not new. Oil shale was utilized in England to produce oil as early as the 14th century., Francp had an industry producing oil from shale for fuel some twenty years before the first oil well was drilled. On a,restricted scale~. liquid fuels-hate been produced commercially in several foreign countries for many years. Shale oil production was initiated in Australia in 1865. One operation there produced during the years 1940 to 1952. Illuminating gaswas produced from oil shale in Brazil as early as 1882 and,oil shale operations have been intermittent since then. At the present time, a major research program is- . under way and the prospects ,arenow good for commercial production within the next few years. In Canada, oil shales were usedto ,produce waxes and illuminating oils in the early 1800s, and exploration on a lar~e field in Saskatchewan and Manitbbais now being conducted. InFrance, three small plants operated during World . War II and one plant operated in Germany during the war, also. The worlds largest oil shale industry to date was started in Manchuria o in 1929, and it is estimated to be currently operating at a capacity of 40,000 bpd. Oil has been produced from shale in Scotland for the last100 years. Other significant deposits.occurin Sicily, South Africa, Sweden, Thailand, and some of the Communist countries. ,) ---En the United States, therewas considerable interest shown in oil shales in the 1920ts and severaloil shale companies ware formed. A few actually built small-scale plamt.s,which operated forshort periods of time. From 1926 to 1929,the Bureau of Mines operated a small experimental plant-at Rulison, Colorado, and from 1944 to 1956, operated the Oil Shale Demonstration Plant, ~ west of Rifle, Coloradol as part of the Governmentfs long-range program to make this nation self-sufficient in liquid fuels. During the 1950TS. the Union Oil C.omuanYouerated a mine andretorting plantnearGrand Valley. It ~as-re~ortedthat during continuous runs, rates of 1200 tons per day were..attained. The research demonstiatedthat liquid fuels can-be madefrom oi1.shale by several processes. The Bureau plant hasrecdntly been reactivated and is now.leased .bythe Department of the Interior to theColorado School of Mines Research Foundation. Development work is being conduct4d ; by the Socony Mobil Oil Company, Inc. and the Hi.tmb,le Oil and.Re, fining Company. At the pwesent time, the Colony Development Company is actively going aheadwithplans that may lead t.oconmieficial production, This company is owned jointly by The Oil Shale CorpOr: atipn, The Cleveland-Cliff* Iron Coypany and The Standard 0~1 . .:

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Company of Ohio. They are now building an access road to the property and mine.adit as well as clearing a site for theplant. The prototype plant which will use the TOSCO,proces.swill have ticapa~ity of 1000.tpd and is scheduled to start operation next spri,ng. If successful, there will then be a stepwise approach to a commercial plant to produce approximately 50,000 bpd with production anticipated sometime in 1967.

In the Eocene age, some 50,000,000 years ago, two or three vast fresh water lakes covered large parts of.Colorado? Wytoming and Utah: Life in these stagnant lakes consisted of small animals and plants (mainly algae) which accumulated on the bottom and .~ were solidified as organic matter in,the deposits of silts, marl= stones, and inorganic sediments. This organic matter is known as kerogen and the mixture comprises the oil shale ofthe geological sedimentary unit known as the Green River formation. Subsequent general uplift-ol formed aroundthe layers formed the today. tothbformation of these deposits, there was a the region, the.lakes drained, and-mountains basins. Erosion by streams of the sedimentary large through the formation . . canyons cutting . ..

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Since deposition of the organ~c-matter in the old Eocene iakes was~not uniform, the kerogen cqntent of the shale varies greatly. Some of the sediments may be as much as 3000 feet thick, virtually barren o.forganic material. In other portions of the formation, there aremany-hundreds of feet of Shale rich in kerogen, of a grade which may be commercial.,. Reserves of these sh-alesare tremendous - it is estimated by -the United StatesBureau of Mines that Colorado, where-the data is most complete, has in,excess of one trillion barrels ofoi.l in 1500 square miles, Utah has 430 billion barrels in 5400 square miles, and Wyoming may have a minimum of 43 billion barrels in an area of.9500 sauare miles. ~us. we have around 1.5 trillion barrels of oil contained in a f~rrna~ioncovering over-,16,000 square miles in area; in~ygradesof-shalet%-at may be commercial. If only 50 percent of this is mineable, and if we assume a 70 percent mine extraction andaa 90 percent retort recovery, we would havea potential production of almost one-half trillion barrels, or about 120 times our present annual consumption.. The total oil content of the reserves represents about 30times our preseqt known domestic reserves and~about3 times the known . foreignres-erves, . . On just one 5,120-acre Federally-owned tract in~he,central part of-the Piceance bas.iri, there is estimated.to be oil equiva~ lent to,40 percent of our nations totalknown reserves of petrol+ , ,! eumt :, :.. . . .: ,.. ,,, Some oft-hericher beds of%hale contatn up-to 60 to 70 , galloris.ofshale oil per ton. It.is estimated that the average grad.evw%ld be..q?,wg4..pgalLOyOS_Spe?pe?. ?o.%.~ .. . . .. . . .... ,.. . . .. . . . . . .. . .. , -.. , ,,,,, if!,, 3-

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In the Piceance Basin in Colorado where the largest reserves exist, the land is held by private companies infee, as unpatented In mini.ng.claims,and as public domain by the Federal Government, the latter categoryis about two-thirds of the area and about 90 percent of the.oil. A proposed Federal leasing policy is now being studied in order to make this public domainland available to private industry. . . Both the Bureatiof Mines and the Union Oil Company conducted experitiental mining operations in the 1950ts. These operations were ,in the Mahogany Ledge of the Green ~iver formation, a bed of shale containing from25 to 30 gallons of oil per ton and having a thickness of about 70 feet. In each of these .operations,the / room-and-pillar method of mining was employed. With the large thickness of some:of the beds, other methods of mining will have to be given consideration. Some companies are giving ser..i.ous consideration,to in situ combustion in which a numberof vertical holes,are drilled into the formation. Due to very poor natural permeability, communication between the holes is established by fracturing, after which thq oil shale is ignitect. The combustion front-is then moved by.air . and gas to the ejection holes for,oil recovery. . In some areas the.overburden may be thin enough to allow strip mining, or conversely, the mineable shale beds may be thick .. enough to allow stripping at a reasonable ratio, Three types of-retort are being considered today: The Gas Combustion retort, developed by the United States Bur6au of Nines; the Union retort, developed by the Union Oil Company; and the TOSCO process, developed by TheOil Shale Corporation. In each of theseprocesses the crushed shale is heated to arou~nd800-900 F. at which temperature the kerogen in the shale is converted to oil I vapor, which then passes to collection equipment. The objective ineach process,is to maintain a complete heat balance with no outside fuel being required. ,. ,. TiisGas Combustio~r6tortconsists ofa vertical cylinder into which the crushed shale is,introduced into-the top and combustion started. This process is based on the principle that the H shale ean be made-to geqerqte its own fuel in the form of non= condensable gases which are binm6d in the retort -tofurnish the heat necessary for converting the kerogen into shale oil. . . . ,. The process operates continuously,, me hot gases gtiner- -ated inthe combustion zone hea,ttheincoming shale. At 700F. ._ the kerogen begins toseparate from the shale in the form of a . vapor which is carried upward by the hot combustion gases. As , this warm vapofitransfers itsheat to the downcoming-cool shale, I,t-isturned-into a fine mist. ~is-mist,tugether with the
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gases, are then drawn out of the retort and through a centrifugal collecting system where the mist is condensed and collected as oil. The non-condensable gases are then passed back to the bottom of the retort tocool the d~wnward moving spen~.~hale~ which \ is then discharged to waste. :. 1, The Union Oil Company retort is a verti$afiunnel-shaped kiln. But instead of the crushed shale being fed into the top, as in the Gas Combustion retort, the feed is introduced into.the bottom through a rock pump. .Theunit employs countercurrent flow of shale and air and the residue .is discharged from the top and . the oil is drained from the bottom of the unit. The oil is distilled by a downward flow of heat furnished by combustion of the residual carbon on the shale clinker near the top.of the kiln. The heat available from the combustion of thestack gases exceeds the power requirements of the plant. Almost perfect heat exchange ,is obtained in the unit since the incoming air is preheated by the spent hot clinker and the products of distillation are condensed on the cool incoming shale. The TOSCO (The Oil Shale.Corporation) process uses,ceramic balls in a horizontal rotating kiln as a means of transferring heat to the oil shale. During the process the shale becomes heated . to the thermal.decomposition temperature of the organic.material in the shale which leaves the drum asa vapor. After cooling and condensation, the hydrocarbon product is separated into gas and oil. A by-product of the retorting operation isspent shale which contains carbon residue in sufficient amount when burned to provide part of the fuel forheating the ceramicballs. A directfired ball heater is used for reheating the ceramic balls that are circulated through the system. Combustion air for the ball heater is preheated-by,heat exchange with the spent shale. Reported ,, advantages of the TOSCO methdd are that a low pour point crude shale oil is produced and in the rettirtingstep no outside air . is used, thereby elimina-ttng con~amination and dilution of the products. Another obvious advantage of this process is that the fine material in the crushed pha.leis.not a detriment to theoperation and does not have *.obe discarded so-that the entire tonnage of material mined an-d crushed is retorted for the recovery of the shale oil,

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Some shale-oil has a high po~lrpoint,of around 90 F.. In order to make the .oilsuitable for-pumping in a.pipeline; the pour point must be.reduced by a .pr.oce@s called visbreaking. -. Thiscons~sts ofcoking a portiofiof-the.bll.The potential - ~?conomicposition of -shale oil has been~improvingsteadily wit!h .__ .. ,. ., -the progress being made in refining technology$partiqu~arly in hydrogenation methods to reduce the nitrogen content. Good gradesof gasoiine,,diesel fuels, i~.dustri,al fuel.oil, and l~~que- . tie-dfuelga,scan be.produced. Among the~ossibleby-praducts are coke, pitch,aaphalt, ammonia, paraffin wax, and organic . ~, ,. . :--: . . .

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chemicals, Ammonia, perhaps the single most important fertilizer chemical, could .be made from the nitrogenous constituent,of the shale oil. From some shales, sulfur might also be recovered in the refining operation. It is also possible that electric power could be produced from the product gas from the retorts. The Anvil Points Oil Shale Research.Center is an experimental ,centerlocatbd approximately 7 miles west of Rifle, Colorado. It comprises an experimental mine, a crushingplantt several retorts, and a refinery. # / Themine is located in the Mahogany Ledge some2200 .feet above the plant. The mine was opened up by driving large adits into the horizontal bed which atthis point is 73 feet thick. Mining has been conducted by the room-and-pillar method in two benches, the top bench having a height of 39 feet and the lower bench having a height of 34 feet. The mined shale was loaded with a three yard electric shovel into 15-ton diesel trucks and hauled approximately 5A miles downthe mountain to the plant. In a test run made during the government-:operationt -an average of 148 tons was produced per man shift. At the plant the shale is crushed in-isthree-stage crushing operation wh$eh is designed to produce ~ny desired size from one-half inch to three and one-half inches. -There are at the present time threegas combustion type retorts having-capacities of 6, 25 and.150 tons per day. Initial work is being done i~-the small retort. Future work will consistof further development of the process in the 25 ton per day retort, and,if..justified,in ,. the large retort. $, ,, Present at the Research Center ,isan experimental ~efih4t ery in which the heawy-oil ,isconverted t-ogasol$ne, diesel oil~i andotherfuels. The .present. research program . . does not.antici-:,,. .* . pate use,,dfthis ,facility. .: \ i. :. ..

 

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: ,, . . There are many $,egalproblems ~nfr&ting theindustry, ~. ,, ., such as the leasing policy ou public dapain lands, status of unpatented claims, depld~.ionallowance,,taxes, etea These prob- , lems will have to be recdndiled by the Federal and State govern}, merits before extensive..ex~l,loita~ion af.ttieoil shales can be .,, . . undertaken., ., ., 1, 2 .It is generally ag~eed thata 50,000rn.barrel-~er-day pla@ will be a .nlinirnum size opera~ion to be eeono@.,cand the optimum---- ., capacity .mayh twice this-. Tilecapital .costs,ofthese, opera-=, . . . tionswill be,,upto200 million dollarsfor the larger size . , !, plant. IxI ord,erto produce 1,,2~mill$on barqe~s per dqy,jas , . mentioned gwev}ously,. .~5,000 to 50,000 barrels per day plants wotildbe required. Currently, ~ee land is selling forum to . ~ $1000 per acre ikd perhaps h~khe~. Costs of nrodiictionhave.been - .

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It is difficult, if not impossible, to generalize on the potential economics of an oil shale operation. Many economic studies of the industry have,.of course, been made, Depending fuponthe figures plugged into the formulae, net returns on the investment after taxes o,ffrom 5 to 20percent may be calculated. At the present time, especially with the Federal domain lands and unpatented claims, there are many unknowns,.and until Govern- rnentpolicies are established and more technological development work is completed, meaningful figures representing payoutperiods and returns on investment can only be approximated, Included in these present unknowns are what.will be the cost of a government lease;.what will be the royalty rate; what will be the depletion ~ allowance, and where in the.process of extraction.and refinement will thisbe applied: whatwill be the grossproduction and ad valorem taxes. Even for those compknies that already own large tracts of fee land, some of these questions are important.

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From a technical standpoint,.we need to know what will be the bestrnining method. When one considers that around 60,000 to 80,000 tons of shale per day will be required to produce 50,000 barrels of oil per day for a minimup size operation and that this will probably haie to be underground mining, and that this scale of operation is twice the size of Climax or San Manuel, we have lots of room for dre~ing,of new methods and new equip--merit.Since at least one of the presently considered retorting methods can not treat fines, how can we crush these tremendous tonnages to 2 od 3.inchesand produce., ~,.,,rni.nimum amount of,minus ~t or 3/8**material? what will be the optimum size of the retorts? Mightwe just break the ore in stopes underground, establish . combustionin place, and thereby ihprdv.eextraction and at the same-time avoid a large part of the residue disposal prpblem? . . ,4 ,. ihesearesome of the questions being studied bythe ,. ., st~tes, the Federal Government, and the members of the industry . : ~, .,, today. -The objective is to create a new industry which may . ., :, handle tonnages .ofmaterial several times that of Utah copper, . . i, will have capital inwstments measured in billions of dollars, 1 ., and which will supply en~gy when needed to supplement our curj. ,.., <, rent soimces.
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