SCENARIO

In 2009, Shell announces "Renewable American Oil"

Shell will build a series of large wind farms in Colorado.  They will sell "peak power" to the grid and sell "spinning reserve" the rest of the time,  (*Spinning Reserve" is off-line power that can come on-line very quickly in case of an unexpected problem. Usually a large power plant goes down.  Rarely needed, but essential for grid stability).

They will use most of the wind output to heat oil shales for decades, produced a mix of natural gas and a waxy oil.  They create "spinning reserve" by offering to turn off the heaters and divert the power to the grid on a moments notice.  Another income stream.

They also offer to buy any momentary surplus power from any other wind turbine producer on a minute by minute basis for 1.25¢ /kWh (up to a limit), preventing any shut-in & wasted wind power.

Shell oil shale output stabilizes at 120,000 barrels/day + NG in 2022 and turns a decent profit despite spending 1/6th of the total project cost on PR.

Any comments ?

What's PR?  Spending 1/6th of the entire cost on public relations seems like too much.
Not if it prevents a Windfall Profits Tax !

And what is NOT to love about this project ?  IMHO, Shell PR & DC lobbyists would be drooling over this !

The average American would think that it is producing 10% or 15% of the oil that we need.  The "Light at the end of the tunnel".  Proven reserves would skyrocket (since this was making a profit), it is just that the production rate was quite low and it scalability depending upon wind saturation of the local grid.  Return on capital would also be low but profitable.

Seems a great use of windpower,but, considering transmission losses and conversion of electric to thermal energy has conversion costs too, whats the real EROI? I suspect a lot less than 1.
  Weren't these shale experiments funded from Deoartment of Energy grants?
   And a small aside-the Cistern and Muldoon fields in Fayette County Texas were produced with windmills as pumps years ago. They were very shallow Yegua(Eocene) fields. It strike me that very shallow fields in other areas could profitably be produced with windmills to and save the energy conversion losses. Won't add much to the US reserves, but it might make some good ol' boy a buck or two.  
I know that Eastern Colorado is basically one big wind resource, and spots of Western Colorado have good wind as well.

I am unsure where the oil shale is.  Perhaps they could be dual siting with no transforming or transmission losses, perhaps not.  Worst case 5% to 6% T&T losses.

If Shell got a 5% return on their invesntment when all is said & done, the political & PR return would make it a wise investment.

The oil shale is in north western Colorado, SE Utah, and Wyoming in the Green River formation. Folks have ben trying to figure how to economically produce the stuff for twenty or thirty years.
    It can be done, but not cheaply. Thar's plenty o' grease in them thar hills,  but not cheaply extracted. At least global warming can't raise the oceans that high.
Re: "Shell oil shale output stabilizes at 120,000 barrels/day + NG in 2022..."

Sorry, Alan, I can't stop laughing.  

SCENARIO

News release 2017 -- After decades of effort to develop the oil shales of the Western Slope of Colorado, Shell announced today that it will discontinue it's work there due to lack of a profitable return on such production....

And thanks for your kind e-mail yesterday about Thailand.

best, Dave

News release 2017 -- After decades of effort to develop the oil shales of the Western Slope of Colorado, Shell announced today that it will discontinue it's work there due to lack of a profitable return on such production....

I have got a story on this in the queue. Should be posted today or tomorrow. Your "news release" probably isn't far off the mark, although I don't expect this experiment to last that long.

RR

You fail to fully understand the "American Way".

SCENARIO

(AP) October 30. 2017

The Shell CEO, Ibriham al-Tikriti, explained before Congress that the shale oil production was too low for the valuable electricity inputed, that $2,120/barrel was just not enough to give an adequate return on capital and that oil taxes of $16/gallon should be waived for any "Renewable American Oil" (TM) or ShellExxonMobilBPChevronTexacoConocoPhillips would have to, reluctantly, sell their electricity on the open market and pump whatever oil continued to seep out during the next year or so before abandoning the project.

The loss of the 120,812 barrels/day would reduce US oil production by 4.8%; oil that the US could scarcely buy elsewhere with it's limited foreign currency reserves "especially after the recent limited wheat harvest".

He pointed out that the other oil company, Aramco North America, has shown no interest in developing a comparable project.

He called questions about his salary and perks "irrelevant" and "pandering".

Yes, , I've still got a lot to learn. Don't we all?

Shell's in situ oil shale idea is to finish off the job nature walked away from and make newborn oil appear in selected patches that have been electrically frozen off (to keep ground water from flushing away the liquid) and electrically superheated (to transform the kerogen).  It's then pumped out normally - no site restoration needed (since the earth was not disturbed, unlike Alberta) - and the crew moves on to the next four-year-roasted patch.  The advantage over conventional drilling is that companies know exactly where the kerogen is - no mystery at all.   The disadvantage is the freezing and superheating routine, but that doesn't seem weirder than the science fiction stuff going on in the tar sands.  Shell's problem is of course to keep science fiction cheap.  Almost all the electricity in this area now comes from coal strip-mined and burned on the spot, which is pretty cheap and very dirty, but there is also wind if you want to pay a premium for it.  Wyoming has plenty of wind.  It just costs more than coal.  I don't see why Shell would need to get in the electricity business itself when other people will sell it wind power now - but it needs to make a profit of any kind first.

The other problem is that oil shale country looks like this:

There is no water, and features on the map like "Green River" would simply be called large creeks anywhere else, and every drop is already spoken for, many times over (and global warming is just going to make this worse).  If Shell could conjure up a lot of water without taking it from Los Angeles, Phoenix, Las Vegas, and local tourism one might begin to see how it could eventually follow (thirty-five years behind)  in the footsteps of the tar sands.

Shell's in situ oil shale idea is to finish off the job nature walked away from and make newborn oil appear in selected patches that have been electrically frozen off (to keep ground water from flushing away the liquid) and electrically superheated (to transform the kerogen).

Ah, you guys are stealing my thunder. ;^) I have had a story sitting in the queue on this for 2 days, but there were several stories ahead of me. I think mine will be the next to be posted, and I took a close look at Shell's process.

RR

What do you mean "sitting in the queue?" Don't tell me you guys are holding back on us. 2 Days?

More importantly, is this a voluntary cut in production, or is  it a sign of "peak stories?"

Yeah, there is a story queue where stories sometimes sit for a couple of days after they are submitted. That can happen when several stories are submitted close together, to give each person's story some time in the spotlight. I submitted the story on oil shale on Thursday evening, but Stuart, Dave, and Khebab already had stories in the queue. I think mine is up next.

RR

The NREL maps for solar thermal and PV both look relatively favorable for NW Colorado and environs.  The solar sources would provide additional electricity in the late spring and summer, when many wind resources decrease.

At any rate, Shell plans to use the natural gas produced to provide the electricity once the project gets going.  At that point, coal fired generation would not provide a significant amount of the electricity needed.  

The natural gas generation would be a good fit for any intermittant renewable, as a peaker turbine can come online rather quickly, to be followed, perhaps by a combined cycle gas plant.

Perhaps Shell's use of renewables in the production of cooked kerogen and natural gas could be used to offset CO2 emissions elsewhere, making the renewables more attractive.