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Potential Development of United States Oil Shale Resources

INTEK. Potential Development of United States Oil Shale Resources. March 28, 2007. Khosrow Biglarbigi INTEK, INC. Presented at the 2007 EIA Energy Outlook Conference, Washington, D.C. Key Discussion Items. Importance of shale oil Size and quality of resource State of the technology

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Potential Development of United States Oil Shale Resources

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  1. INTEK Potential Development of United States Oil Shale Resources March 28, 2007 Khosrow Biglarbigi INTEK, INC. Presented at the 2007 EIA Energy Outlook Conference, Washington, D.C.

  2. Key Discussion Items • Importance of shale oil • Size and quality of resource • State of the technology • Economics • Environmental challenges • Land use • Air quality • Water quality • Path forward

  3. World Oil Supply and Demand Growing World Demand • Demand Growth of 15MMBbl/D (by 2025) • OPEC Excess Capacity of 1 MMBbl/D (in 2005) • Where Would the Balance Come From? Diminishing OPEC Excess Capacity Million Bbl/D Source: Energy Information Administration (AEO 2006)

  4. Reason for Concern at Home:Ever Rising Oil & Refined Products Imports U.S. Consumption Imports U.S. Production* * Includes crude, NGLs, and refinery gains

  5. The Opportunity: Most Concentrated Hydrocarbon Deposits on Earth • Over 6 trillion barrels of resource nationwide • Nearly 2 trillion barrels in rich deposits in Western states • Colorado, Utah, and Wyoming

  6. Western Oil Shale Ownership(80% on Federal Lands) 1400 1200 Non Federal Federal - 210 1000 800 Resource (Billion Barrels) 600 990 400 60 90 200 220 170 0 CO UT WY

  7. Oil Shale Conversion Technology Surface Process Premium Refinery Feed Oil Upgrading Resource Retorting Ore Mining In-Situ Process Premium Refinery Feed Oil Upgrading Resource In-Situ Conversion

  8. Key Present Activities • Department of the Interior (DOI) • RD&D leasing program • Commercial leasing program • Industry activities • Unconventional Fuels Task Force • EPACT 2005 • Section 369

  9. Leasing Program • DOI awarded five (5) RD&D leases in 2006 • Shell Frontier • Chevron U.S.A. • EGL Resources • A sixth lease is being finalized for award (OSEC LLC) • Lease size and duration: • Initially, 160 acres (per) • Option to expand to 5,120 acres (if technology is successful) • The RD&D phase is for ten (10) years • Development of commercial leasing program underway • PEIS to be released by late summer

  10. Location of Oil Shale R&D Leases

  11. Example In-Situ Conversion Technology • Developed by Shell Petroleum • Currently in “pilot” phase in north-western Colorado • Shell to apply technology at three other sites in Colorado Shell’s ICP Process

  12. Other Examples of In-Situ Conversion Technology Pilot tests under development in Colorado EGL Resources Process Chevron Process

  13. Example Surface Retort Technology • Initially designed for extracting bitumen from tar sands • Selected for oil shale conversion in Australia (SPP) • OSEC to apply ATP for its RD&D efforts in Utah Alberta Taciuk Processor (ATP)

  14. Other Surface Retort Technology Gas Combustion Retort • Originally developed by • Cameron Engineering • Bureau of Mines • Most successful • High thermal efficiency • High retort efficiency • Variations of GCR • Petro-six operating in Brazil • Paraho Process being tested for a major project abroad

  15. Companies Planning Activities • Oil Tech Inc. • Petro Probe Inc. • Phoenix Wyoming Inc. • Syntec Energy LLC • Temple Mountain Energy Inc. • Western Energy Partners LLC • Red Leaf • Purple Mountain Ventures • Raytheon • Board Energy LLC • Earth Search Sciences • Reynolds Raw Materials • Wright & Talisman • American Oil Production LLC • Anadarko Petroleum Corp. • Argyll Energy LLC • Carbon Recovery Corp. • Chattanooga Corp. • Electro-Petroleum Inc. • Exxon Mobil Corp. • Great Western Energy LLC • Imperial Petroleum Recovery Corp. • Independent Energy Partners Inc. • Kennecott Exploration Company • Mountain West Energy Inc. • Nevtah Capital Management Inc. • Natural Soda Inc.

  16. The Unconventional Fuels Task Force • Federal agencies • Department of Energy • Department of Defense • Department of the Interior • Participating states • Colorado • Kentucky • Mississippi • Utah • Wyoming

  17. The Energy Policy Act Directed The StrategicUnconventional Fuels Task Force to: • Develop a program to coordinate and accelerate the commercial development of strategic unconventional fuels • Make recommendations for promoting unconventional fuels development • Recommend whether and how America should: • Partner with Alberta on development of U.S. tar sands, and • Partner with nations with significant oil shale resources • Task force findings and reports coming soon

  18. Oil Shale Economics * * *Inclusive of mining, retort, & upgrading First Generation Projects • Cost as a function of technology and resource quality • Expected to decrease with experience and lessons learned • Canadian oil sands a good example:

  19. Projected Production Potential (BOE)(Shale Oil in the U.S.) RD&D Tax Incentives Base

  20. Example Benefits of Oil Shale DevelopmentCumulative (Over 25 Years) 1 – Federal Revenues are the sum of Federal Business Taxes plus Royalty payments 2 – State Revenues are the sum of State Business Taxes, production taxes, plus the state portion of Federal Royalty payments 3 – Public Sector Revenues are the sum of Direct Federal and Direct State Revenues

  21. Projected Potential Employment

  22. A New Model Developed by NPOSR

  23. Oil Shale Environmental Challenges • Land Use • Disturbance depends on process • 31 square miles per 1 MM Bbl/d capacity (surface) • 21 square miles per 1.5 MM Bbl/d capacity (in-situ) • Less than 0.5% for a 2.5 MM Bbl/d industry • For 40 years • Air Quality • Heating shale can generate gases including SO2, NOx, CO2, particulates, and water vapor • Technology exists to control / reduce emissions • And to sequester Green River Formation 17,000 Sq. mi.

  24. Environmental Challenges • Water Impacts: • Estimates range from 1-3 barrels of water per barrel of shale oil • Colorado river systems flow: 10-22 million acre feet/yr • 2.5 MM Bbl/d oil shale industry: • Requires 0.2-0.4 million acre feet/yr • Challenge • Water runoffs (surface) • Ground water protection (in-situ)

  25. Summary • Over 2 trillion barrels of in place resource • The most concentrated hydrocarbon deposits on Earth • Conversion technologies are advancing rapidly • A unique opportunity to provide long term sustained production of up to 2.5 MMBbl/Day • Substantial economic benefits to the Nation • Requires concerted effort by the private sector, Federal & State governments, and local communities

  26. Acknowledgements U.S. Department of Energy Office of Naval Petroleum & Oil Shale Reserves Office of Petroleum Reserves Task Force for Unconventional Fuels Department of Energy Department of Defense Department of the Interior State of Colorado State of Kentucky State of Mississippi State of Utah State of Wyoming

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