Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

Why do we continue to import oil from hostile countries and drill for oil in deep ocean environments when the United States Rocky Mountains currently have the largest hydrocarbon reserves on the planet? Are politicians gaming the population with the fear of dirty oil production sites and land based catastrophes that have yet to happen? Would politicians rather import 12 million barrels of crude oil a day from all over the world than to use oil in our own country (EIA)? It is hard to imagine the United States being a totally self-sufficient country when discussing energy consumption. Imagine if not only the United States were completely independent from foreign oil, but that we also had enough surplus oil to export to other countries and satisfy global hydrocarbon demands. Now imagine every American citizen receives a monthly hydrocarbon compensation of several thousand dollars in oil revenue sharing. While this may sound like a pipe-dream, it is entirely feasible although not probable. The United States currently has the largest oil shale reserves on the planet. The recoverable amount of unconventional oil is estimated anywhere from 1.5 2.8 trillion barrels of oil (Utah Heavy Oil Program, 35). Thats a lot of oil. In perspective, the top seven countries of proven conventional oil reserves; Saudi Arabia, Canada, Iran, Iraq, Kuwait, Venezuela and United Arab Emirates, have an oil reserve of slightly less than 1 trillion barrels of oil combined (CIA Factbook). Hydrocarbons make up 85% of the United States energy consumption. The United States energy consumption is currently around 100 quadrillion British Thermal Units (BTU) per year.

Fig. 1 Energy Demand Projections US Department of Energy

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

Hydrocarbon extraction from shale, tar sands, heavy oil deposits, and other non-traditional deposits are currently in their adolescence. However, with proper funding and oversight it is entirely possible to extract these resources with minimal impact to the environment and at current market rates per barrel. A conventional hydrocarbon is one that is tapped and piped up from a liquid reserve without heating or diluting. An unconventional hydrocarbon is anything that requires more than tapping and funneling the reserves out. More than 65% of the worlds oil falls into the unconventional category and the majority of this oil is in the United States (Utah Heavy Oil Program, 32). Oil shale is the younger form of crude oil in the current state of carbonate rock. Time and pressure have not yet transformed the sediments of the carbonate rock to crude oil but that does not mean there are not hydrocarbons available. The carbonate rocks in the Green River Formation of Colorado, Utah and Wyoming are composed of hydrocarbon material called Kerogen. Kerogen can be converted into quality jet fuel or diesel fuel. Oil shale richness is the level of extractable hydrocarbon per ton of carbonate rock. Rich or high quality shale has a ratio of 25 gallons of oil per ton of carbonate rock (Denning). The total resources of the United States are approximately 2 trillion barrels of oil locked away in carbonate rock. Of that 2 trillion barrels, as much as 750 billion barrels has a richness of 25 gallons per ton of shale and is considered extractable with existing technologies. The Green River Formation, along with several other geologic formations, store the richest of the United States oil shale reserves. The U.S. government controls 72% of all U.S. oil shale acreage (Denning).

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

Fig. 2 Unconventional Hydrocarbon Reserves - US West Oil extraction today is done by tapping an already fluid source of hydrocarbons. This makes sense. It is relative easy in terms of extraction and the liquid crude or flowing natural gas is quickly refined and ready for consumption. Oil shale is basically hydrocarbon trapped inside sediment or rock. The only way to extract the hydrocarbons is with heat and to excrete the oil from the porous rock. In order to produce enough heat to extract oil from rock you need a lot of energy. It seems counter intuitive due to the fact that the process uses a large amount of energy to extract energy providing hydrocarbons. As I mentioned, this process is in its adolescence, but not its infancy. A previous extraction method used steam to heat the rocks and sweat the hydrocarbons out. Two heat wells were drilled on opposite sides of a pocket reserve and a producing well was drilled in between. Steam was pumped down the heat wells and the oil flowed from the rocks to the center reclamation well. This process not only used large amounts of energy but also water.

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

Fig. 3 Steam Extraction These methods of extraction result in high cost and little reward and therefore keep the shale hydrocarbons even more elusive. However, recently defense contractor Raytheon Corp and oil services giant Schlumberger have developed a Radio Frequency (RF) and critical-fluid (CF) extraction technology that is cost effective and environmentally sound. The RF/CF process works by boring wells into the shale strata using standard drilling equipment. Next, RF transmitters are lowered into the shale and begin to transmit at Super High Frequencies (SHF). The SHF transmissions heat the carbonate rock and begin to cause the hydrocarbons to liquefy. Then, CF liquid carbon dioxide is pumped into the well to mix with the oil and travel to an escape or extraction well. The carbon dioxide is separated from the oil and the oil is transported for refining (Moon).

Fig. 4 Radio Frequency / Critical Fluids Extraction Raytheon Schlumberger Raytheon estimates the ratio for energy expended versus energy reclaimed to be approximately 1:4 or 1:5. Previous steam reclamation efforts had a much worse ratio of 1:1.5 to

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

1:3 (Raytheon). So therein lays the question, why drill in the most complicated and delicate ocean environments when there is an estimated 2 trillion barrels of oil in the Rocky Mountains? The recent Gulf of Mexico Deepwater Horizon oil spill was an unfortunate and avoidable accident that not only cost 11 rig workers their lives, it also impacted millions of families and the environmental impact will be seen for decades. The impacted area of the Deepwater Horizon spill is estimated at 68,000 square miles and released approximately 180 million gallons of oil into the Gulf of Mexico (Krauss). It is hard to imagine even the most dramatic scenario with oil shale production coming even remotely close to this disaster. Global demand for hydrocarbons will remain at the current levels even while alternative energy sources are invented and developed. As we reduce our use of oil, more energy demands will arise and these new demands will begin to negate efforts of oil consumption to an extent, or completely. Projected demand in comparison to prospective supply clearly shows a growing gap between oil demand and oil supply. The essential policy question for the United States is how will this gap be filled? Conservation and development of alternative energies is a critical step to the United States energy policy. However, a severe disruption of hydrocarbon supply would undoubtedly cause widespread chaos even to an unrecoverable point. Energy is probably the most common necessity that is unconsciously exploited on a daily basis. The debate for switching to alternative energies is valid and interesting. However, the amount of time it would take to completely replace the hydrocarbon infrastructure that supplies everything from fuel for automobiles and planes, commercial and residential utilities, and the huge list of petroleum based products, would be mind boggling and a tremendous undertaking costing billions if not trillions of dollars. Completely moving away from hydrocarbon based energy is more of a fairy tale then a reality. Simply put, hydrocarbons will be a major source of our energy for decades if not centuries. With the current state of the United States economy, I am sure we could find an environmentally harmonious way of utilizing and profiting from oil shale. Securing a steady and reliable source of energy is a critical component of the United States energy policy and national security. Reducing dependence on foreign oil and preventing another energy crisis is a desirable by-product of developing this reliable energy source. Everyone who followed the United States Presidential election debates in 2009 can probably

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

remember Energy being the number 1 or number 2 topic of debate. This was primarily due to the volatile nature of gas prices and natural gas prices at the time. All the politicians had their redundant talking points. These were; reduce foreign oil dependency, alternative energies, wind, tide, solar, geo-thermal, etc. It is interesting that now that gasoline prices have been relatively stable for the past 24 months, energy is no longer at the top of any politicians list. The next crisis will surely raise the topic up a few pegs, but then again it all depends on how extreme the crisis is. No politician lets a good crisis go to waste. The problem is the aforementioned unconscious exploitation of energy. If a true energy crisis were to last for several months or years you would see the conventional breakdown of society in my opinion. About one century ago all food was created by Mother Nature and derived through photosynthesis. Plants grew from the sun and livestock ate the plants. Butchers butchered meat by hand and farmers picked and planted crops by hand and with animals. Today approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the United States (Pfeiffer). This ratio is derived from the fact that every step in the modern food chain is hydrocarbon powered. The size of this ratio stems from the fact that every step of modern food production is fossil fuel and hydrocarbon powered. Production facilities are obviously using fossil fuel power, distribution takes place using petro powered trucks, and the refrigeration and preparing of food in your home or restaurant follows suit. In the United States the average piece of food travels more than 1500 miles before it hits your plate (Pfeiffer). M. King Hubbert was a geoscientist who worked for Shell oil in the research labs in Houston, Texas. Hubbert is most known for the theory he authored named, Peak Oil. Hubbert predicted that around our current time the world oil production would summit and enter terminal decline. The theory is based off simple facts and numbers and is actually quite difficult to argue against. Simply put, supply and demand will reach a climax and supply will no longer be able to keep up with consumption and growing populations. Do we need any more reasons to become energy self-sufficient? What are we waiting for? Politicians are surely using this upcoming crisis to get elected, right? Probably, yes. But, there is another reason unlocking unconventional hydrocarbons is potentially negative. With the current phenomenon of global warming, introducing an essentially limitless supply of hydrocarbons is probably not the best idea. Having an additional 2

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

trillion barrels of oil at our finger tips is not the best solution to weaning our addiction to oil and hinders the progression of alternative energy. This would be like allowing an alcoholic access to an open bar ever night with no supervision or consequences, other than the consequence of their personal health. Eventually, they will drink themselves to death. However, using unconventional hydrocarbons for strategic reserves is not a bad idea. We should be able to tap into these reserves at a moments notice with negligible ramp-up time. At our current state we are not there. As technology advances and hydrocarbons are able to be burned more cleanly and efficiently, maybe we will have a tremendous resource to take advantage of. Until that day, it is likely these hydrocarbons will remain elusive and we will continue down the terminal decline path of Peak Oil. We will be doing our planet justice, but let us hope mankind can endure the next energy crisis.

Partridge August 2010 The Strategic Importance of United States Unconventional Oil Reserves

Works Cited CIA Factbook. The World Factbook: Oil Proved Reserves. Publications. Accessed August 14, 2010. https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2178rank.html Denning, Dan. Oil Shale Reserves: Stinky Water Sweet Oil. The Daily Reckoning. Accessed August 14, 2010. http://dailyreckoning.com/oil-shale-reserves/ EIA. Oil: Crude and Petroleum Products Explained. Petroleum Statistics. U.S. Energy Information Administration. Accessed August 13, 2010. http://www.eia.doe.gov/energyexplained/index.cfm?page=oil_home#tab2 Krauss, Clifford and Robertson, Campbell. Gulf Spill is the Largest of its Kind, Scientist Say. The New York Times. August 2, 2010. Web. Accessed August 14, 2010. http://www.nytimes.com/2010/08/03/us/03spill.html?_r=3&hp Moon, Ted. Oil Shale Extraction Technology Has a New Owner. JPT Online. February 2, 2008. Web. Accessed August 13, 2010. http://www.spe.org/jpt/2008/02/oil-shaleextraction-technology-has-a-new-owner/ Raytheon. Raytheon Technology May Unlock Enormous Oil Shale Reserve. Raytheon Newsroom. Accessed August 13, 2010. http://www.raytheon.com/newsroom/feature/oil_shale06/ Utah Heavy Oil Program, Institute for Clean and Secure Energy. A Technical, Economic, and Legal Assessment of North America Heavy Oil, Oil Sands, and Oil Shale Resources. September 2007. http://www.inscc.utah.edu/~spinti/Public/