STRATEGIC IMPORTANCE & STATUS OF OIL SHALE DEVELOPMENT

1. STRATEGIC IMPORTANCE & STATUS OF OIL SHALE DEVELOPMENT Presented to Grand Junction Chamber of Commerce March 26, 2008 R. Glenn Vawter Executive Director National Oil Shale Association National Oil Shale Association

2. Presentation Outline • What is oil shale and why is it important? • What is different from the oil shale boom and bust of the 1980? • What is the status of oil shale development? • What are the major challenges to commercializing oil shale? • Summary and Conclusions • What is the National Oil Shale Association (NOSA)? National Oil Shale Association

3. WHAT IS OIL SHALE? Oil Shale is a resource that produces petroleum-based fuels. It is found in many places in the world but the largest deposits are found in the United States. The three states of Colorado, Utah and Wyoming contain an amount of shale oil that is comparable with the conventional oil reserves in the Middle East. National Oil Shale Association

4. World Oil Shale Map National Oil Shale Association

5. Oil Shale History • Scotland 1850’s • U.S. starting in 1890’s • 1920’s Boom • 1940’s Anvil Points • 1960’s Union & Tosco • 1970’s Major Gov’t Push • 1980’s The Exodus • 2005 Energy Sec Act • 2008 National Oil Shale Association

6. Why is it Different this Time Around? • The Stigma of the last booms and busts • What happened in the 1980’s? • What has happened since them? • The current approach has a better chance • Research based new technologies • No rush to meet production goals • Oil Prices on the rise (but is it enough?) • BLM proposing to lease the best resources • But there is no certainty of success National Oil Shale Association

7. U.S. Energy Dilemma and Peak Oil • U.S Consumes 20.8 million bpd Produces 7 million bpd (EIA, 2007) • Dominated by transportation sector • National security and defense concerns • Consumption growing in China and India • Some Experts predicting Peak Oil production • Renewables and bio fuels will not be enough to see us through to a new energy future National Oil Shale Association

8. How is Oil Shale Processed • Oil shale must be heated to from 600 to 900 deg F to recover shale oil and gas. • It cannot be pumped directly from the ground like conventional oil and gas • There are two basic method for recovery • Above ground retorting • Insitu retorting • New and more benign technologies are being developed for both methods National Oil Shale Association

9. Above Ground Oil Shale Processes • Oil shale is mined, crushed and processed through a surface retort • Oil is upgraded for refining into gasoline, jet and diesel fuel • Spent shale is disposed in land a land fill National Oil Shale Association

10. Oil Shale Exploration Company Above Ground Retort National Oil Shale Association

11. Insitu Oil Shale Technologies • Conducts processing in formation at depth • Heating either by injection or indirect heating • Production through conventional oil wells

12. EGL, Exxon, Chevron and Shell Processes Shell EGLExxon Chevron National Oil Shale Association

13. Oil Shale Development Status • R,D&D Leases issued in 2007 in CO and UT • Shell, EGL, Chevron and OSEC conducting R&D • BLM issued Impact Statement in 12/07 • BLM drafting oil shale regulations • No push to commercialize soon National Oil Shale Association

14. Colorado BLM R,D&D Leases National Oil Shale Association

15. What are the Major Challenges • Technical • Political • Regulatory • Environmental • Social • Resource competition • Investment • Energy source National Oil Shale Association

16. Summary & Conclusions • Oil shale is a huge resource that has the potential for reducing importation of foreign petroleum. • The economic, environmental and political challenges are equally huge. • Industry is spending millions on research. • Our nation needs domestic sources of transportation fuels. • New technologies afford a better opportunity for success than experienced in the 1980’s. National Oil Shale Association

17. NOSA Strategy • We are a not-for-profit organization that stands for responsible development of oil shale to benefit the long term energy needs of the nation. • Our goal is to become the source of information officials and the media will come to when questions about oil shale arise. • Provide objective and accurate information • Communicate information in an effective manner National Oil Shale Association

18. Contact Information National Oil Shale Association P.O. Box 3080, Glenwood Springs, CO 81601 Phone: 970-389-0879 Fax: 970-945-2423 Email: natosa@comcast.net Web Site: www.oilshaleassoc.org National Oil Shale Association