GAO: Oil shale in American West equals the rest of the world’s proven oil reserves

CNS News reports:

The Green River Formation, a largely vacant area of mostly federal land that covers the territory where Colorado, Utah and Wyoming come together, contains about as much recoverable oil as all the rest the world’s proven reserves combined, an auditor from the Government Accountability Office told Congress on Thursday.

The GAO testimony said that the federal government was in “a unique position to influence the development of oil shale” because the Green River deposits were mostly beneath federal land.

“The Green River Formation—an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming—contains the world’s largest deposits of oil shale,”Anu K. Mittal, the GAO’s director of natural resources and environment said in written testimony submitted to the House Science Subcommittee on Energy and Environment.

“USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions,” Mittal testified.

“The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered,” Mittal told the subcommittee. “At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.”

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Kristor writes:

And that doesn’t count the recent discoveries of American natural gas reserves sufficient to power our entire economy for 250 years. Energy is about to get very cheap.

Roger G. writes:

The following is off the top of my head. I think it’s worth posting because you’re sure to have another, more knowledgeable reader who will correct any mistakes of mine. As you know, I’m a chemical patent attorney, and from time to time I’ve dealt with hydrocarbons.

A few months ago I emailed you about the economic boom going on in northwestern North Dakota (and centered in Williston, ND) because of the bakken formation. It has about 24 billion barrels of recoverable oil—a year’s supply for the world. This is shale oil—regular oil that used to be economically unrecoverable, but available now because of horizontal drilling and hydraulic fracturing technological advancements.

Unfortunately I think the Green River deposits are oil shale, not oil. I believe they are kerogen, which is a precursor of oil, and more closely related to coal. I vaguely remember writing a patent application years ago for a treatment involving coal, and we wanted to be sure we were covering everything it might be used for, and we threw in kerogen.

Kerogen can be converted to oil, but with present technology this is not commercially feasible. That of course will change, as happened with shale oil.

The bakken is going crazy. Employers are begging for employees, and there is nowhere to live. Look at this posting by Target Logistics, a fantastic company. This job list is growing all the time, they can’t find enough people, and all these positions come with room and board.

John P. writes:

These findings have been much in the news here in Canada as they represent a threat to the future profitability of the Alberta oil sands. The discovery of large quantities of shale oil and gas is one of the reasons I believe predictions of the collapse of the current system are premature. As long as there is cheap energy they can keep it running - somehow. What is an amusing irony to all this is that the greens will fight tooth and nail to prevent these resources from being developed, as they have done in Quebec (which also has some shale gas.) Thus they will cut off the only source of power that will keep their socialist utopia afloat.

God works in mysterious ways!

Ray G. writes:

I know, it’s your favorite guys … the Powerline guys:

“Of all nations, the US has the most recoverable natural resources for energy.”

An Indian living in the West writes:

There are numerous problems with oil shale not the least of which is the EROEI (Energy Returned on Energy Invested). This is a measure of how much energy is required to extract energy. So for example, the easy oil that was drilled out of East Texas, Louisiana and in the early days on oil drilling in Iraq (1920s), you expended 1 barrel of energy equivalent to get 40 plus barrels out. This was obviously an energy bonanza.

The oil shale situation is completely different. Until recently, you couldn’t even get 1 barrel of energy out for every barrel of energy invested in the process. This obviously makes it an uneconomical and losing proposition. Some recent techniques are making the extraction more economic but we are a long way away from extraction of 40 barrels or even 10 barrels of energy for each barrel invested.

Therefore, the key issue with oil shale is overcoming these kinds of problems with better technology. This may well happen sometime in the future but we aren’t there yet. Also, even when it does become possible, the cost of extraction will continue to be several multiples of what it will cost in Iraq or the Caspian. For instance, some of the oil fields in Iraq are so productive that you can extract a barrel of oil (high quality low sulphur “light sweet” crude) for $2 a barrel (when you consider than Brent price is $110 a barrel, this is obviously a bonanza). On the other hand, some of the companies drilling in ultra-deepwater or producing crude oil from shale oil are spending nearly $92 a barrel to extract a barrel of oil which then sells for $110. This is obviously a much costlier proposition and ultimately makes an enormous difference to the economics of drilling and extraction.

Posted by Lawrence Auster at May 13, 2012 07:42 AM | Send

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