Shale Oil Reserves

Jul 21, 2008

Shale Oil Reserves

We recently posted about peak oil, the theory that oil production will hit a peak and from then on diminish as world demand continues to grow. The problem with peak oil is that it does not take unproven oil reserves into account. This means peak oil is only based on known oil reserves that can currently be mined for fuel oil production. There are many other reserves of oil on our planet that contain a wealth of oil production potential.Â They are just harder to get to and harder to produce oil from.Â Oil has always come easy, so we have never been forced to seek out these more difficult-to-get deposits.

The most expansive known oil reserves currently exist in the middle east. Countries surrounding the Persian Gulf are estimated to have reserves that could last another 150 years at current production levels. Saudi Arabia alone has 264 million barrels of estimated oil reserves. There is another country with know, but not yet proven oil reserves, estimated at 800 million barrels; The United States.

Oil shale is coal like rock hundreds of feet beneath the earth’s surface that contains high amounts of oil.Â unlike liquid oil deposits, shale oil is very difficult to extract. This is the reason it is not considered a proven reserve and is not taken into account by the concept of peak oil.Â Companies have been researching ways to draw oil from shale for over a decade now.Â High costs and lengthy production cycles have been the major deterrents from exploring the resource. Recent advancements in technology and increased demand for relief from foreign energy dependence seem to have made production of oil from shale within reach.

The process is outlined in the image below.

Kerogen, the organic matter within the shale containing the oil, must be heated to 700 degrees in order to separate the oil from the rock. A wall of frozen ice must be put in place around the reserve to keep ground water from running into the shale which would dissipate heat and raise pollution concerns. The shale needs to be heated for two years at 700 hundred degrees before oil can be pumped to the surface.

With the process within reach by many large oil companies, you may wonder why production hasn’t started during the current energy crisis. The answer is poor planning.Â Commercial production with current technology is ten years off.Â A history of low oil costs for the U.S. has prevented serious exploration from beginning until now. This vast resource will come into play too late to help curb our energy crisis. The environmental worries are secondary (as always) when it comes to energy production. 800 million barrels pouring off pollution into our atmosphere seems to be the least of anyone’s worries even during a time of “green” consciousness.Â It looks like peak oil may come,Â but if oil shale is pursued, it might be our great grand kids who face it.

Shale Oil Reserves

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