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269 comments on DrumBeat: July 18, 2008

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Leanan on July 18, 2008 - 9:26am Permalink | Subthread | Parent | Comments top

The WSJ has an article on oil shale:

Squeezing Oil From a Stone

It's behind a paywall, but someone liberated it here.

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Datamunger on July 18, 2008 - 10:15am Permalink | Subthread | Parent | Comments top

That article says:

Oil shale rock burns on its own when lit with a torch.

Has there been research on using it more or less as it is to generate electricity rather than separating oil from rock for transportation purposes?

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westexas on July 18, 2008 - 10:29am Permalink | Subthread | Parent | Comments top

I gave a talk at Sandia Labs on Monday, and I asked one of the Sandia guys this exact question, since I had read that Shale Oil is used, in I believe one of the former Soviet Republics, as a boiler fuel. He said that it was, in some cases, possible, but that like coal, there are different grades of Shale Oil quality, and it has to be a fairly high quality kerogen deposit in order to make it worthwhile to use as a boiler fuel.

In any case, I suspect that this may be the future for Shale Oil--stripmining high quality deposits to use to generate electricity. However, the volume of waste ash will be tremendous, and I think that this is really dirty stuff that I suspect will make some grades of coal look clean.

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probeprobeprobe on July 18, 2008 - 10:35am Permalink | Subthread | Parent | Comments top

Was your talk in Albuquerque? I would love to see an overview of what you said and have some feeling for the response. I live there and know several Sandians...technocornucopians and speculator-blamers all. I don't bring up peak oil lest I lose my friends...I figure they're smart, eventually it will sink in.

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westexas on July 18, 2008 - 11:10am Permalink | Subthread | Parent | Comments top

Well, I wouldn't call "all' of them technocornucopians. My talk (in Albuquerque) was videolinked to two other national labs, and it is reportedly being widely viewed on the national laboratory intranet. They are working on posting it on the Internet. We had a very good turnout, and I would say the primary response can be characterized as shock.

BTW, we were given a tour of solar research facilities, and it was very impressive, especially the concentrated solar research facility. I just wish that they had more funding for solar research. FYI--as you probably know, it's not exactly easy (for obvious reasons) to get in. My wife and I had to clear a background security check and we could not bring any electronic devices of any kind in to the facility.

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probeprobeprobe on July 18, 2008 - 11:52am Permalink | Subthread | Parent | Comments top

Thanks...I'm glad you talk shocked people and is being widely viewed...that can only be a good thing! I often wonder what kind of progress could be made if all research at the national labs related to nuclear weapons/bunker busters/infrared crowd control guns/ spy satellites....all the military industrial complex bs was halted and they focussed solely on alternative energy research.

Yes I have seen the solar concentrator, you can get a good view from a plane coming or going from the Abq airport. Security clearances are a common topic of conversation amongst the Sandians I know - who's up for review, how long it takes etc. And I really don't know what any of them do other than the basics - computer programmer, mechanical engineer etc...I would lose my mind working there!

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eric blair on July 18, 2008 - 12:08pm Permalink | Subthread | Parent | Comments top

impressive, especially the concentrated solar research facility.

Are you willing or able to spill the beans when the masses will see an actual sterling cycle engine that is 'afforable' (cheaper than solar panels as an example)

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Olle on July 18, 2008 - 10:30am Permalink | Subthread | Parent | Comments top

R&D is not needed. Estonia get 75% of their electricity from burning shale:
http://www.estoniaenergy.com/

For now I guess coal is cheaper (in the US) and the environmental effects of burning shale is of course enormous, but it is easily done on an industrial scale.

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Datamunger on July 18, 2008 - 10:48am Permalink | Subthread | Parent | Comments top

Thanks for the info ( WT also).

That led to checking the EIA's country profile for Estonia. They are a net exporter of electricity (most from oil shale) and that business is quite profitable and a substantial source of government revenues.

http://www.eia.doe.gov/emeu/cabs/Baltic/Electricity.html

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Darwinian on July 18, 2008 - 10:45am Permalink | Subthread | Parent | Comments top

The stuff is marl, not shale, with kerogen, or former organic life, embedded in it. It will burn if heated with a hot enough torch, but it does not burn very well and much of it does not have enough kerogen to even burn at all.

Marl is a kind of very dirty limestone.

Marl or Marlstone is a calcium carbonate or lime-rich mud or mudstone which contains variable amounts of clays and aragonite.

And the volume of tailings, or ash if you burned it, is greater than the original volume. This is because the tailings are not nearly as compact as the original marl.

Ron Patterson

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westexas on July 18, 2008 - 10:56am Permalink | Subthread | Parent | Comments top

My Sandia source thought that the stuff in FSR's (apparently Estonia) was higher quality than most US Kerogen sources.

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Olle on July 18, 2008 - 11:15am Permalink | Subthread | Parent | Comments top

The Estonian shale has an average heating value of 9.0 GJ/ton. Is there any numbers for the US?

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r4ndom on July 20, 2008 - 1:23pm Permalink | Subthread | Parent | Comments top

Sounds like a pre-mixed Portland Cement source...

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NeverLNG on July 18, 2008 - 10:57am Permalink | Subthread | Parent | Comments top

"Oil" shale?

Geochemists can speed that process by heating the rock to several hundred degrees Fahrenheit until the kerogen turns into flowing crude oil.

Sounds pretty simple. And they also point out that oil shale burns with a flame.

Is the energy density of oil shale really high enough to justify mining, heating, extracting, refining -- not even counting the cleanup costs, which we can safely assume any corporation will outsource to the public purse?

Surely the basic calculations have been done many times -- can it be that the process can be profitable if environmental degradation is ignored, and the energy companies are just waiting for the right combination of political will and public desperation to go ahead?

Or is it just another ponzi-type scheme to bilk investors out of money? Maybe the best use for that stuff would be in oil-shale lamps for illumination?

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Darwinian on July 18, 2008 - 12:13pm Permalink | Subthread | Parent | Comments top
Geochemists can speed that process by heating the rock to several hundred degrees Fahrenheit until the kerogen turns into flowing crude oil.

Sounds pretty simple.

No, it is not that simple at all. The kerogen must be heated for at least two years. The original plan called for it to be heated for three years. A "freeze-wall" must also be constructed by freezing the parameter around the area to be heated. This is to protect the groundwater from being contaminated as in the Wall Street Journal link posted by Leanan above.

Shell shelved its plan to do this until they could do more research.Shell shelves oil-shale application to refine its research

"We are being more cautious and more prudent," Davis said. "Because of the nature of research you have challenges. With that in mind, it is taking a little longer to build a freeze wall than we planned."

The delaying of the freeze-wall test means a plan to hire 600 new workers and build temporary housing for them will be on hold.

As I understand it that research is still going on and the project has not been restarted as of yet.

Ron Patterson

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elwoodelmore on July 18, 2008 - 12:15pm Permalink | Subthread | Parent | Comments top

the current research is focused on how to create a freeze floor and freeze ceiling to complete the freeze house. someone in the earlier research program discovered the need for this by accident.

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Datamunger on July 18, 2008 - 12:58pm Permalink | Subthread | Parent | Comments top

Makes the tar sands sound by comparison like "easy oil".

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westexas on July 18, 2008 - 1:08pm Permalink | Subthread | Parent | Comments top

Note that the Shale Oil play is widely described as having hundreds of billions of barrels, up to a trillion barrels, of "proven" reserves, which is a very interesting use of the term proven.

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Consumer on July 18, 2008 - 1:37pm Permalink | Subthread | Parent | Comments top

Just think how much "proven" geothermal energy there is at the earth's core. Who's up for some drilling?

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NeverLNG on July 18, 2008 - 5:24pm Permalink | Subthread | Parent | Comments top

You obviously don't know anything. You only have to go down to the earth's mantle to get hot. Piece of cake.

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Consumer on July 18, 2008 - 5:50pm Permalink | Subthread | Parent | Comments top

http://www.damninteresting.com/?p=567

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NeverLNG on July 18, 2008 - 7:04pm Permalink | Subthread | Parent | Comments top

More seriously, the EROI of drilling for heat energy would seem to be slightly unfavorable.

I guess the Russians didn't find any abiotic oil down there, either.

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Dennis Brumm on July 18, 2008 - 5:37pm Permalink | Subthread | Parent | Comments top

Perhaps if we all came together in one place, ate beans, and lit our farts in unison, it would solve a lot of the world's energy problems, too.

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sgage on July 18, 2008 - 6:30pm Permalink | Subthread | Parent | Comments top

Dammit Dennis,

You weren't supposed to mention it in public until our patent came through!

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Dennis Brumm on July 18, 2008 - 8:06pm Permalink | Subthread | Parent | Comments top

We gotta hurry. At work in Argentina is the competition. Uh, I think.

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sgage on July 18, 2008 - 8:13pm Permalink | Subthread | Parent | Comments top

OMG! However, they are missing the crucial "ignition" concept that assures us of prior intellectual property. But I agree, it is only a matter of time before they hit upon it...

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ICouldBeWrong on July 19, 2008 - 2:37am Permalink | Subthread | Parent | Comments top

Hi guys, love you all. I believe 100% in peak oil, but I've sold out of all my oil contracts now and will short any rally to $136 or back up to $147. I think the commodities cycle has peaked for a few years (Similar to mid '70s).

I guess no one will care about my opinion, that's cool, but just felt posting this was the right thing to do, as I way of saying thanks for all the good info.

Long Yen. Short Equities. Short Commodities.
Peace, Love, Survival.

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Undertow on July 19, 2008 - 8:55am Permalink | Subthread | Parent | Comments top

But you could be wrong of course :-)

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ICouldBeWrong on July 19, 2008 - 11:35pm Permalink | Subthread | Parent | Comments top

Yes I could be wrong.

From a fundamental analysis viewpoint I believe oil at over US$100 per barrel is bad for the world economy, consumers have less discretionary income after paying for gas and businesses have higher expenses, which will result in lower profits. This puts downwards pressure on global share prices which reflect discounted future cash flow. Additionally the Ponzi scheme that is fractional reserve banking began unravelling in 2000 with the dotcom bust, artificially low interest rates by central banks (including Yen Carry Trade) helped to prevent a collapse from 2003-2007 but now interest rates can't really get much lower (at least in US/Japan and even Europe).

So it's time for a global stock market crash, and we've been in one since about mid last year ('07), a year is enough time for reduced economic activity to begin putting pressure on energy prices. So it's time for oil to go down due to demand destruction.

But that's all becoming common knowledge, so let's talk about technical analysis.

The chart you've shown is what really concerns me. Can you see the straight line support that was broken when oil feel below $136? (Look at the low points in the chart before the recent selloff started to see it, it extends back to Jan if you extend the chart). Additionally looking at a month view of oil extending back several years shows oil is as overbought as it's ever been (using RSI), so that's another reason for it to crash.

Now broken support becomes resistance so that's why I'm planning to sell at $136.

Now maybe I'm wrong and supply destruction from peak oil will be greater than demand destruction from the ongoing economic collapse, but AFAIC those are the two major forces at work. Either way I'd like to be short equities, and long yen. I admit shorting commodities is riskier.

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ICouldBeWrong on July 20, 2008 - 6:42am Permalink | Subthread | Parent | Comments top

Also the SPR appears to no longer being filled. Congress has halted deliveries. Reserves appear approximately constant at 706 million barrels.
http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve
http://www.spr.doe.gov/dir/dir.html

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269 comments on DrumBeat: July 18, 2008

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