Skip to comments.A Real Energy Strategy for America: Shale Oil
Posted on 06/09/2008 6:03:48 AM PDT by K-oneTexas
A Real Energy Strategy for America: Shale Oil by Jonathon Moseley
May 31, 2008
If shallow talk could solve Americas energy crisis, politicians in Washington would have all the answers. But Americans are still carrying a crushing burden while little changes. Fortunately, there are many real solutions available for the U.S. economy even if the politicians dont seem to know it.
Americas dependence on foreign oil is more than a threat to our economy. It has become a threat to Americas national security. American money is being funneled to Americas enemies around the world and is strengthening our enemies while weakening America.
The Mid-West hides the largest untapped oil reserve in the world estimated at 1 to 2 TRILLION barrels of oil trapped inside shale (rock). This could be more than 8 times Saudi Arabias proven oil reserves of 261 billion barrels. In fact, an article in The Denver Post estimated this to be more than all the other oil reserves on the planet earth.
If only we could discover out how to extract this oil from its shale prison economically and with environmental safety, America might have the largest single source of oil in the world. So, why isnt the U.S. running on home-grown U.S. oil? There are four reasons all false.
Official Washington decided a long time ago that extracting oil from shale is too expensive. However, oil was trading for as little $19 per barrel at the time. Shale oil becomes competitive when prices stay consistently above $40 per barrel. In recent years, oil has risen from $19 per barrel to over $130 per barrel. It is now high time to unleash this vast resource.
The technology to extract usable oil from shale deposits has been proven. Shale oil currently supplies about 90% of the electricity and 76% of the total energy for Estonia, in Eastern Europe, on the Baltic Sea. An oil shale demonstration plant in Queensland, Australia produced 700,000 barrels of oil between 2001 and 2003.
Early reports dating to the Carter Administration incorrectly claimed that the retorting process would require large amounts of energy and water. Repetition of this false information in government studies has discouraged the immediate use of shale oil.
The Unocal commercial demonstration plant project in the Colorado Piceance Creek Basin actually produced more water than it consumed, as former Paraho Corporation head Larry Lukens found from talking with Unocals engineers. Colorado oil shale contains, on average, 2-5% by weight of water. That water is liberated from the rock during the retorting process. Unocal actually had to construct evaporation ponds to get rid of all the excess water generated.
Similarly, the waste rock, still containing some oil residue, becomes a fuel in its own right. So the process actually produces its own energy. Larry Lukens estimates that a 100,000 barrel a day plant would actually produce enough surplus energy to generate 500 megawatts of electrical power which can be exported to other uses or nearby cities. Once jump-started, the shale oil extraction process actually feeds itself. After all, it is oil we are extracting
The fourth obstacle is the popcorn myth. Environmental opponents claim that disposing of the left-over gravel will be a problem. However, rock does not expand. Instead, when rock is ground into smaller sizes, air pockets are introduced. The solution is to compact the gravel debris back into place with heavy machinery. The gravel is also good for building roads.
It is time to take the lessons from these demonstration projects and build much-more efficient retorting plants to harness Americas vast shale oil reserves now that oil is trading at $120 per barrel and up. This should be given a crash-program status as the highest priority, like landing a man on the moon and the Manhattan Project. The only real problem is the lack of political will to truly achieve energy independence.
Progress on shale oil could be stimulated by (a) private business, (b) a consortium of State governments for States containing shale oil deposits, (c) Congress, or (d) the President through leadership of the bully pulpit and through action in the Executive Federal Departments. Any Presidential or Congressional candidate could also call attention to this opportunity by issuing a John F. Kennedy style challenge to the nation.
Jonathon Moseley is the Executive Director of the U.S. Seaports Commission for the nonprofit US Intelligence Council
Private business should do this, if it is to be done at all. The fact that they haven’t suggests to me that it’s more hype than anything else, much like the other pi in the sky solutions to the energy crisis.
I wonder if anyone has considered the idea of drilling into the shale to see if there are pockets of pumpable oil, possibly even a massive reserve somewhere down there?
We may eventually go this route. In any event it looks like we are in for a painful decade or so while the energy situation shakes out.
Local water supplies for processing?
No way they will let THAT happen.
We have either a quart bottle or two trillion barrels of oil locked up in shale. Something like that.
Well, perhaps not, you idiot, but it sure as hell would help those of us who aren't on the take to survive $4/gallon gas. If you clowns would simply sign a bill to allow development of those resources, that sucking sound you'd hear would be the spot price of oil falling back to about half its current price. DRILL NOW!
Why even talk anout oil from shale while there are tens of billions of barrels of oil domestically that are merely set off limits for oil exploration by the U.S. Congress?
The high price of oil and gasoline is not the problem, it’s a symptom.
The socialists want the oil industry to fail so the federal government will then be able to ceize control of all oil compamies in the name of national security. It’s a set up.
We should not even be speaking of “shale oil”, we should instead be thinking of ways of kicking the liberal, socialists Democrats and the “environmentalists” to the curb.
There lies the problem. No matter how environmentally conscience the companies are in extracting the product, it won't be good enough for the eco-terrorist and activist judges.
This video is of the fella who accidentally stumbled upon a way to release hydrogen from salt water.....and ignite it.
University researchers have repeated these experiments time and time again.....to their amazement.
I'm no chemist, but it appears that the low powered freq agitates the hydrogen molecules to a point where they are released using salt as a catalyst.
The hydrogen burns clean and HOT. Saltwater is limitless!!!!
It's all about money folks, the producers and energy companies make too much money on oil.
Coal, natural gas, shale oil, wind, solar, hydrogen, nuclear, hydro, bio-fuel.
Energy crisis? There's no energy crisis, this is yet one more scheme to separate YOU, from your money.
What’s stoppoing YOU from producing your engine that runs on hydrogen extracted from sea water?
The lack of record billions in profit realized from shamming Joe six pack from the sale of energy.
Extracting oil from shale is a very expensive process. Would you invest Billions of dollars in a business that has a good chance of being nationalized in less than a year? We are overrun with socialists.
Shell has invested a lot of money in shale but they are being blocked by Washington.
Welcome to the free market. This is due to one thing and one thing only and that’s a energy policy hostile to oil for the last 30 years.
I agree wholeheartedly, but where I differ a bit, I feel the energy producers have in fact capitalized on this market speculation with little loyalty to America and her economic health and security.
It is ALL our responsibility to guard the security of this nation. We all share in the blame game. Consumers should do their part as well, however congress has allowed the liberal enviro nuts to run energy policy, but on the same token, corporate America has turned a blind eye as well just so the dollars will just keep on flowin.
shammimg? Do you not know why oil and gas prices are so high? U.S. domestic oil production has fallen 40% since 1985, at the same time domestic oil consumption has risen 30%. Get it? There’s no sham, supply is being restricted.
How does a industry with companies that have a typical profit margin of only 9% to 10% recording billions of dollares in profit because the are huge companies hamper you from producing your hydrogen from seawater engine.
You forget that nearly all of the richest oil shale like Green River reside on Government land.
Estonia, one of the few other countries with significant oil shale deposits has used oil shale to produce most of their petroleum for over a decade. They are now building a power plant in Jordan that runs on oil shale.
Jordan's first oil shale power plant expected in 7 years
Read this article: http://www.freerepublic.com/focus/f-news/2028280/posts
The majority of the price rise is due to speculation combined with a falling dollar and surge in demand from countries like China and India, who subsidize their oil.
If anything the rise has spurred exploration by oil companies, problem is they do it overseas because they can’t do it here in most places, though apparently they are being successful in the Bakken field in the upper plains states.
No, it was $30. but the price will have risen some since it is energy intensive (3.5 units output for 1 unit input).
Seebach: Shell's ingenious approach to oil shale is pretty slick
Shell's method, which it calls "in situ conversion," is simplicity itself in concept but exquisitely ingenious in execution.
Drill shafts into the oil-bearing rock. Drop heaters down the shaft. Cook the rock until the hydrocarbons boil off, the lightest and most desirable first. Collect them.
They don't need subsidies; the process should be commercially feasible with world oil prices at $30 a barrel. The energy balance is favorable; under a conservative life-cycle analysis, it should yield 3.5 units of energy for every 1 unit used in production. The process recovers about 10 times as much oil as mining the rock and crushing and cooking it at the surface, and it's a more desirable grade. Reclamation is easier because the only thing that comes to the surface is the oil you want.
This was hyped on a thread yesterday.
Washington should not block them, but they should not subsidize it either, which is what the article suggests.
Mosley left out Reason 5, the real reason for not exploiting shale oil. It would be contrary to the wishes of one of the constituency groups of the democrat party.
Well? Tell me how oil companies recording billions of dollars in profits stops YOU from developing a hydrogen from seawater engine.
Shell has been studying oil shale for years, and was ready to bid on leases which were to have been made available next year. But, Colorado's illustruous junior DEMOCRAT senator, Salazar, made sure the leases will be unavailable for years.
GOT $ 5/ gallon gas ? Thank a Democrat !
No, in fact the government should be making a killing leasing the mineral rights.
Or we could just drill some of the oil deposits in Alaska, or off the coast of California, Washington, Texas, Florida, ...
Sorry for not following you down your rabbit trail...have fun though.
Shell, Unocal, and Chevron each have processes to extract kerogen from shale, and two of these processes are field-tested and known to produce in the $35-$45/bbl-equivalent range.
What is needed is a president who will declare domestic production to be a matter of national security (which of course it is, DUH!), and thereby sweep the NOPATs into the dustbin of history.
And folks are poised to vote for more Dems this Nov. 2+2 does not equal 4 for lots of people. Like I said a rough 10 years, maybe more.
What does that mean?
That you don’t have an answer to my question?
How is Joe sixpack getting scammed out of his money?
How are the oil companies having money keeping you from developing a hydrogen from seawater engine?
If you are going to throw accusatory, empty, asinine statements out you should atleast notice that you are unable to substantiate them in a serious question and debate.
No, it was your sophomoric attempt to paint me into your lil corner so you could heap all your sarcastic rhetoric down on my head.
RELAX fella! It's an opinion forum....you have yours and we all have ours.
If you don't like my opinion, find another, don't blow a gasket and risk a stroke.
The energy companies are a portion of the equation. They've done little to help forge a way through this.
All I see from the major oil companies is the blame game.
It's all a matter of public record. Huge salaries, perks, bonuses and HUGE RECORD PROFITS.
Sorry that hurts your feelings.
I’m having a good day, you didn’t hurt my feelings at all.
I have my facts and you have your opinions. I suspect that you may be like some others that I know that will not allow facts to interfere with what they WANT to believe.
Yes, the oil companies are part of the equation. The oil companies are the ones who would provide oil and gasoline at a reasonable price if only Congress would let them.
Now, please elaborate on how the oil companies are shamming Joe Sixpack out of money. (Any emotion you detect in my typed words are fabricated from your end)
You choose to turn a blind eye....that’s ok. Most who are affiliated with a particular industry tend to hold a self preservation mentality...thats ok too. It is however, embarrassing to witness oil company execs shifting around in their chairs attempting to dodge questions regarding their exorbitant compensation packages. Funny really. It was reported yesterday that it cost approximately two dollars a barrel to pump from the ground in Saudi. Do you dispute this? Who gets the other $137. dollars a barrel? http://www.consumersunion.org/profitscover.pdf Major oil companies have ♦ achieved more than $100 billion in excess profits from 2000 to 2005 as a result of anti-competitive practices; ♦ strategically underinvested in refinery capacity to tighten supplies and gain market power over gasoline prices; ♦ carried out a deceptive and misleading PR campaign telling a huge profit story to Wall Street and a small profit story on Main Street; ♦ sought to blame factors other than their own behavior for higher consumer gasoline prices. I submit that the major oil companies have in fact been an integral variable in the latest surge in prices at the pump. Do they shoulder ALL the blame? Certainly not, theirs enough blame to go around. Congress, consumers, foreign interest, market forces and players all play a part to be sure, but American owned oil needs to exhibit some level of loyalty to America and her economic health rather than playing the blame game all the while raking in billions in excess profit to the detriment of the American consumer. You have your opinion, I have my facts. boom!
U.S. domestic oil production has fallen 40% since 1985 because of environmental restrictions and areas of potential oil fields put “off limits” by Congress. Since 1985 U.S. oil consumption has risen 30%.
China and India have hundreds of millions of consumers with recently enhanced lifestyles, oil consumers. World demand for oil has risen dramtically.
Oil companies typically show a profit margin of 9% to 10%. Is this out of land with other industries? Oil companies would much rather expand their businesses and production and provide their product to the consumer at a more reasonable price. This would be much more profitable for them.
You have many empty speculative remarks that are meaningless. Not fact based. I try to stay with facts, when I project, as to what the outcome of the attack of the privately owned oil companies by the socialists might be, I’ll say it is projection.
My meager Mutual Funds may have energy in them, that would be my only affiliation.
Oil is the lifeblood of the American economy, the American economy is what funds the American military. The American military currently cannot be defeated, the economy can be harmed by limiting it’s lifeblood. I want the oil companies to succeed and be profitable. They are huge, that is why their earnings may seem overwhelming to you. Do you want them to be able to expand their oil exploration and be more profitable? I do. (That’s a real question I hope you answer for me.)
How much it costs to pump oil from the ground in Saudi Arabia should be meaningless to us because there are estimated to be 112 billion barrels of oil in areas that are now placed off limits domestically.
Blame the “environmentalists” and Democrats in Congress for this. I have environmentalists in quotes because I believe they do not care any more about the environment than anyone else they are merely using it to advanced their socialism.
What is my “blind eye” not seeing?
I am reading the consumers union thing you sent me.
I am at the point where it mentions that oil companies have refused to build refineries for 30 years.
WOW! I’m telling you, the motive behind propaganda like this is to nationalize the oil industry. What else could be the explanation?
I am not anti-business. I am however weary of corporate Americas relentless pursuit of the bottom line to the extent that it has harmed the middle class standard of living substantially over the last decade.
Corps have been shifting manufacturing all over the world in an attempt to get the cheapest labor force, circumvent the cost of basic worker benefits, rid themselves of any or all environmental safeguards and worker safety regulation.
True, Congress has made doing business here in the states burdensome, but with over 60 thousand lobbyist in Washington alone, I can't help but to think corporate America indeed has the upper hand when it comes to policy favorable to their interest.
Tell me, do the American people have sixty thousand lobbyist roaming the halls of Congress with pockets stuffed full of cash and perks to sway policy????
I'm thinking we have a government for and by the corporate / foreign lobby. Again, sad.
I'm thinking your facts are a bit skewed.
Over the past 12 months, for example, ExxonMobil has made pre-tax profits of $164 billion on sales of $369.5 billion.
This would be 45% margin.
Taxes are not part of business profits. They are an expenses and include things like the pass through excise taxes and royalties.
No business in any industry includes taxes as part of their profits. That is an attempt to make oil industry seem more profitable when the reality is more of the revenue goes to taxes than nearly any other industry.
In 2000 alone, 94% of all U.S. corporations paid less than 5% of their total income in corporate taxes, the GAO said in a report. Among the largest corporations — the 1% of all corporations that owns 93% of all corporate assets — 82% paid less than 5% of their income in taxes.
Yea, that's fair. Small to medium business and the middle class are left to pick up the tab for the willy nilly spending of our federal government.
Show me some oil companies that get to pay those rates.
Revenue $404.6 Billion
Profit $40.6 Billion (10.0%)
Taxes $102.5 Billion (25.3%)
Sales-Based taxes $31.728B
Other taxes and duties $40.953B
Income taxes $29.864B
2007 Financial & Operating Review
- - - - - - - - -
Revenue $194.5 Billion
Profit $11.9 Billion (6.1%)
Taxes $30.4 Billion (15.6%)
Taxes other than income taxes $18.990B
Income taxes $11.891B
2007 Annual Report
- - - - - - - - -
Revenue $220.9 Billion
Profit $18.7 Billion (8.5%)
Taxes $35.7 Billion (16.2%)
Taxes other than income taxes $22.266B
Income taxes $13.479B
2007 Annual Report Supplement
- - - - - - - - -
Revenue $62.8 Billion
Profit $4.0 Billion (6.3%)
Taxes $8.5 Billion (13.5%)
Consumer excise taxes $5.163B
Other taxes $0.394B
Income taxes $2.901B
2007 Annual Report
$42 billion a quarter? Okay. I think I remember hearing something like $14 billion last quarter. I’ll be checking.
I’m all for drilling more oil and producing more fuel, and I know it will be the oil companies doing it, if Congress let’s them.
I went to the Exxon Mobil finacial report for year 2007.
Sale and other operating revenue $390 billion,
Net Income $40 billion, 10%
Where the money goes is laid out, dividends, shareholders, reinvestment, much more.
The oil companies profit margin is not out of line compared to other industries.