November 2008

Volume 1— Issue 3

National Oil Shale Association

Dr. Foster Wade, Deputy Assistant Secretary for the U.S. Department of the Interior rounded out the session. He described the status of the oil shale activities being undertaken by the Bureau of Land Manage-ment.

Dr. Wade gave an update on the Proposed Oil Shale and Tar Sands Final Programmatic Envi-ronmental Impact Statement issued in September 2008.

He further gave the status of development of proposed regu-lations to set out policies and procedures for the implementa-tion of a commercial leasing program for oil shale. Draft regulations are currently under review. He said he believed developers needed to have the regulations so they could make informed decisions about pro-ceeding with R,D&D projects.

Pending the outcome of congres-sional action, the regulations should be issued very soon, according to Dr. Wade.

28th Annual Oil Shale Symposium

International Oil Shale Projects

The 28th Oil Shale Symposium hosted by the Colorado School of Mines in Golden, Colorado this October was very success-ful judged by the number of attendees and the response to questions by those that at-tended. Participants from some 15 international countries and 28 states made up the over 350 that attended three days of technical and policy sessions.

OPENING PLENARY

Governor John Huntsman of Utah was the keynote speaker. He emphasized the importance of oil shale in Utah in a “complex mix of energy sources”, and the need for liquid fuels in our soci-ety. He related the need for “clean oil shale development” that included a diversified portfo-lio of affordability, independence and sustainability.

Within the realm of sustainability Governor Huntsman stressed the need for study of the level of land use, water usage, air emis-sions, carbon capture and se-questration, infrastructure and

socioeconomic needs, and cost.

The governor urged the partici-pants to “Think Bigger and Bolder”. He applauded the ef-forts of two Utah firms Red Leaf and OSEC and urged support for USTAR.

Harris Sherman, the Director of Natural Resources for the State of Colorado was the next presenter. He gave the views of Governor Ritter which empha-sized caution in the development of oil shale in his state. Mr. Sherman stressed the need to see the results of oil shale re-search and development before moving ahead with commercial development. He indicated there had been no progress on the five BLM R,D&D leases, and that development should not go ahead until we have all the an-swers (others disputed this).

Mr Sherman’s address then focused upon the challenges facing oil shale development in Colorado, including water sup-ply, water quality, wildlife issues, energy requirements, cumulative impacts, and community chal-lenges.

The Oil Shale Symposium highlighted oil shale projects around the world. Significant progress was reported in China, Estonia, Brazil, Australia, Morocco and Jordan. Many other countries were represented at the conference indicating the increasing in-ternational interest in oil shale. Of particular interest is the ongoing progress in Estonia where “Eesti Energia (EE) is the leading energy utility in the Baltic States as well as the biggest oil shale utilizing company world-wide.” “Most of the oil shale mined in Estonia today is utilized as a feedstock for the production of electricity. Approximately 20% of the oil shale is used for shale oil production.” “The Narva Oil Plant operates two unique solid heat carrier installations—the only functioning plants of their kind in the world.”

Special points of interest:

Tony Dammer retires from DOE and given Spent Shaler Award along with 11-others at 28th Oil Shale Symposium

Final oil shale leasing regu-lations still pending

NOSA holds annual meet-ing and celebrates first successful year of opera-tion

Oil Shale Symposium planned for Estonia in June 2009—Pg 4

Inside this issue:

CO2 Sequestration/carbon management

2

OSEC Update 2

Western Energy Corridor Initiative

3

Colorado water supply study

3

Oil Shale Leasing PEIS and Regula-tions

3

Innovative technolo-gies and Ideas

4

NOSA Information

4

OIL SHALE UPDATE

Carbon Management and CO2 Sequestration

Kevin Bacon of SI-International presented a paper Oil Shale Sourced CO2 Sequestration Options in the Uinta & Piceance Ba-sins—Utah and Colorado. The presentation outlines a data base that compiled data from 23,000 oil and gas wells. From these data a suit of maps was prepared that identify basin wide geologic formations most suitable for CO2 sequestra-tion. This work is a preliminary assessment of the viability of sequestration of CO2 in the formations underlying oil shales in Colorado and Utah. The work focused on the area surrounding the White River oil shale mine in Utah. And the work was offered as a guide for application to other geologic formations for future geosequestration projects related to oil shale, and other industries that produce CO2 such as refin-eries and thermo-electric power plants near the Unita and Piceance Basins of Colorado and Utah.

Alan Burnham of Ameri-can Oil Shale LLC (AMSO) presented a paper titled CO2 Sequestration in Spent Oil Shale Retorts at the 28th Oil Shale Symposium in Golden, CO. The paper indicated the three possible ways of re-ducing CO2 emissions for insitu oil shale projects. Disposal in deep geo-

logic formations Sale for enhanced oil

recovery Mineralization in spent

retorts The presentation then fo-cused on the last of the three options, and indicated that spent retorts might be able to store all the CO2 produced from insitu retort-ing, because There is enough poros-

ity There are brines avail-

able in the area from natural gas wells and onsite aquifers—one might concentrate them with distillation or ROM

High residual tempera-tures will enhance min-eralization kinetics

The presentation then went into the calculation of avail-able porosity in retorted insitu oil shale retorts. It concluded that for a 27 gal/ton oil shale carbonate min-eralization would take about half of the available poros-ity. Thus all of the produced CO2 could be disposed of in a spent insitu oil shale re-tort. According to Dr Burnham there is work to be done to confirm these initial find-ings. Determine whether

thermodynamic and kinetic conditions make CO2 mineralization in spent retorts a viable option

Field test opportunities exist in late 2010 (end of AMSO pilot test) and 2014 (end of AMSO semi-works test)

AMSO will examine the availability of nearby markets for the use of CO2—EOR

If neither of these op-tions appear viable, seek a deep injection sequestration option.

Oil Shale Exploration Company (OSEC) Update

hour and produces over 3,800 barrels per day of shale oil. Oil shale from the White River Mine, located in Northeast Utah, was tested during the mid 1980’s using the Petrosix process in Bra-zil. The test results were positive.”

Dan Elcans of OSEC states, “The Petrosix retort technol-ogy is owned by Petrobras and has been operational in Brazil since 1992.”

The following are excepts from the OSEC publication American Energy Independ-ence Through Global Inno-vation.

“After careful study, OSEC currently intends to use the Petrosix Process (a pat-ented retort process) as the technology to process the mined oil shale into shale oil at its Utah properties.

The Petrosix process has been under development since the 1950’s and is one of the few retorting proc-esses in the world that can show significant production of shale oil and effective on-stream factors. The world’s largest operational surface oil shale pyrolysis reactor is the Petrosix thirty-six foot vertical shaft kiln which is located in Sao Mateus, Bra-zil. This retort processes 260 tons of oil shale per

Page 2 OIL SHALE UPDATE

.

Colorado Water District issues water study

Programmatic EIS and Regulations for Oil Shale Leasing

Western Energy Corridor Initiative

Indirect oil shale industry related population increase for the maxi-mum case was estimated to be 94,200. That equates to an addi-tional estimated 21,100 acre-ft/yr totaling 133,725 acre-ft/yr of water demand for a 1.55 million b/d shale oil industry.

The conclusions reached in the study on oil shale are as follows:

Great uncertainty and chal-lenge if commercial oil shale industry emerges

On the high end (1.5 million b/d) oil shale water demand could exceed available com-pact water

Non compact sources of water will be investigated in Phase II (e.g. waste waters)

labor and other services as a result of this development.

Therefore, this initiative is fo-cused upon an effort to coordi-nate, integrate, and organize the scientific and engineering efforts required to conclusively evaluate the potential impacts of this potentially large develop-ment activity.

Entities from government, in-dustry, national laboratories and educational institutions are investigating how to proceed with this initiative.

The Western Energy Corridor, which extends from Alaska through western Canada and the United States, contains some of the world’s richest deposits of hydrocarbons and energy minerals, including tril-lions of barrels of oil equivalent in place (BOE) of conventional oil, natural gas, coal, oil shale, oil sands, heavy oil and ura-nium. Development of the world-class unconventional hydrocarbon resources within this corridor, could help allevi-ate U.S. energy supply vulner-

ability, providing a strategic source of energy, including liquids fuels and other products far into the future.

Concurrent development of unconventional fuels and other energy and mineral resources will create increasing competi-tion for limited resources of water, and impacts to air, habi-tat, and wildlife in the region. Local communities, infrastruc-tures, and economies will face increasing demand for roads, electricity, law enforcement,

from the public by BLM . As of the writing of this report final regulations had not been issued. A Congressional moratorium prohibiting BLM from com-peting the PEIS and regula-tions was allowed to expire September 30, 2008. No other Congressional action has been taken to date.

The Proposed Oil Shale and Tar Sands Programmatic Environmental Impact Statement was issued in final form in September 2008. BLM selected Alter-native B as the Proposed Plan Amendment. Alterna-tive B makes 1,991,222 acres of oil shale lands available for commercial leasing in Colorado, Utah and Wyoming. One million

acres of these designated lands are in Wyoming, 631,000 acres in Utah, and 360,000 acres in Colorado. “Additional NEPA Analyses will be required before leases will be issued for commercial development.” Draft regulations to estab-lish a commercial oil shale leasing program were is-sued and comments sought

Page 3

Volume 1— Issue 3

Due to the large potential water demands for oil shale, it became the focus of the report.

Assumed production levels ranged from zero (2007-2017), zero to 550,000 b/d (2018-2035), and from zero to 1.55 million b/d (2035-2050) with a mix of sur-face and insitu retorting.

Direct water consumption was assumed to be 1.5 and 2.9 bar-rels of water per barrel of shale oil produced respectively for insitu and surface retorting.

Total direct water demand therefore equates to a maximum of 112,625 acre-ft/year for the maximum case described above.

The Colorado Water Conserva-tion District has recently issued for comment a report titled Energy Development Water Needs Assessment (Phase I Re-port). URS Corporation pre-pared the report for the District with the assistance of an advisory group from industry, government and private citizens. The report covers the needs for water in North Western Colorado through 2050 for natural gas, coal, uranium, oil shale and elec-tric power generation. The study estimated the direct de-mands as well as the water re-quirements for communities. Phase II will estimate water avail-ability.

White River in Rio Blanco County

Innovative Technologies and Ideas

A partial list of projects receiving attention during this period follows:

Shell Mahogany Project

Electric heated in-situ process pilot tested in the field. Freeze wall test in progress on private land.

Chevron

CO2 injected in-situ process planned for testing at its RD&D lease in Colorado.

AMSO

Indirect heated in-situ process with a unique ground water protection strategy planned for testing at its RD&D lease in Colorado.

OSEC

Surface retorting and under-ground mining project in Utah with mine opening planned in the near term. See more infor-mation on page 2.

ExxonMobil

In-situ Electrofrac process under development with field tests planned in the future.

Raytheon/Schlumberger

Microwave in-situ technology tested at laboratory scale with field tests in the planning stage.

EcoShale

Modified insitu retorting proc-ess being tested in Utah

Shale Technology Interna-tional

Paraho surface retorting tech-nology with pilot plant in Colo-rado.

Independent Energy Part-ners

Geothermic fuel cell process with work being conducted at PNNL.

PyroPhase

Radio frequency insitu process

NOSA Celebrated One Year Anniversary The mission of the National Oil Shale Association

(NOSA) is to educate the public about oil shale. NOSA is a not-for-profit 501(c)(6) corporation. The Association was formed in the 1970’s when it ac-

tively engaged in oil shale education. Now NOSA has been reinstated in response to a re-

newed interest in oil shale. The organizers of NOSA have extensive experience in oil shale and energy de-velopment.

There are two classes of membership: Sustaining and Associate Members. Sustaining Members are profit making firms and Associate Members are individuals and not-for-profit groups.

NOSA’s Web Site at www.oilshaleassoc.org provides copies of the Bylaws and a membership application form.

Monarch Mining

Surface retorting process using proven mining methods and surface retort. Work conducted at Idaho National Laboratory.

University of North Dakota

Process uses water and ethyl alco-hol in a surface reactor to recover shale oil.

CRE Energy

Process uses a rotary kiln fired with hydrogen to reduce CO2 emissions.

QER Australia

Surface mine and retort evaluating future commercialization approach at Stuart plant near Gladstone.

For more information see links page on www.oilshaleassoc.org and individual project web sites.

Glenn Vawter, Executive Director National Oil Shale Association

P.O. Box 3080 Glenwood Springs, CO 81601

Phone: 970-389-0879 Fax: 970-945-2423

natosa@comcast.net www.oilshaleassoc.org

Gary Aho, Chairman

National Oil Shale Association

Unocal Oil Shale Plant circa 1982

Estonia Announces International Oil Shale Symposium

Tallinn, Estonia—June 8/10, 2009

In association with the Colorado School of Mines

http://www.oilshalesymposium.com

The information presented in this document has been prepared by the staff of NOSA and is intended to give a snapshot of the status of oil shale technology and projects, and is not endorsed by the principals of those technologies or projects. NOSA has drawn upon publically available information.