Nov 2, 2011

Shale Oil in North Dakota Vs. Oil Shale in Israel

Chuck MisslerBy Dr. Chuck Missler
Koinonia House

Twitter Facebook RSS Contact Amazon

North Dakota has many claims to fame. Its town of Rugby marks the geographical center of North America. It was voted the safest state to live in two years running (2004 and 2005), and it is one state where unemployment has dropped significantly. Low unemployment is rare these days, to put it mildly, but not in North Dakota, where unemployment hovers around 3.5 percent. The extensive shale oil available deep under the cold ground of North Dakota has produced an oil boom that has drawn in workers as the American economy feels the pinch of hard times. Creating jobs by finding a good source of domestic oil serves as rather a double bonus.

Shale Oil

The Bakken FormationThere are oil shales and there is shale oil, and one should not be confused with the other. The Bakken Formation that runs deep under North Dakota holds about 3.65 billion barrels of shale oil - liquid oil trapped in layers of shale. The oil boom there has filled up towns, complete with traffic where five years ago one stoplight sufficed.

According to Harold Hamm, the chief executive of Continental Resources Incorporated, "The Bakken is the biggest hydrocarbon find in years - it basically doubles U.S. hydrocarbon reserves." The CEO claims these shales hold more oil and gas than the Prudhoe Bay field in Alaska. Either way, there's a lot of oil in them thar rocks.

It's long been known that liquid oil could be found deep in the shale formations in North Dakota and Montana, but getting at it was the trick. Natural gas companies use a practice called fracking, or hydraulic fracturing, which the shale oil companies have adopted. First, a vertical well is drilled deep below the surface. Then, the drill bits are turned to make horizontal wells. Once those initial holes are made, the oil companies shoot water, sand, and chemicals in with such force that the fissures in the shale formations are cracked open so that the oil can be pumped out.

Oil production in the state has gone from 3,000 barrels per day in 2005 to nearly a quarter of a million barrels per day in 2010. That's nowhere near enough to satisfy America's 19 million barrels per day oil habit. It does fill out the U.S. oil supply, however, and has caused enough of a glut to bring down gas prices in places.

The new oil industry has also created jobs. A lot of jobs. North Dakota State University estimates that the oil industry in the state has gone from employing just over 5,000 workers in 2005 to more than 18,000 in 2009. Hamm says that number is now 30,000, and some 100,000 could be employed if oil production increases to a million barrels of oil per day.

Oil Shale

While shale oil is a liquid, oil shale is not. Oil shale is a rock that contains a waxy substance called kerogen which can be heated up until it liquefies into what is a precursor to crude oil. There are massive oil shale reserves containing an estimated 800 billion barrels of recoverable oil in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. However, mining oil shales has, until recent years, proved hardly cost effective. As the oil prices have gone up, however, oil companies have been more willing to look again at oil shale.

Accessing oil shales has usually involved mining the shale and super heating it to retort it – to separate the oil from the mineral content of the rock. The leftover shale is then returned to fill up the mines from which it was taken, or is used for building roads et al. The effort involved is fairly large, and there is concern about the environmental impacts that surface and underground mining of oil shales have on local water sources and air quality.

The in-situ method of collecting oil shale does not present the same danger to water resources as surface and underground mining. However, the technology is still young. In-situ production requires the drilling of heater holes, in which the shale is super heated to 650-700F while still in the ground over a 3-4 year period, and the liquid hydrocarbon that results is pumped out.

Yet, despite its challenges, Israel may have finally found its oil source in the form of oil shale. Israel Energy Initiatives (IEI) has proposed to use the in-situ method to extract oil from the Valley of Elah, best known as the location where David slaughtered Goliath. According to Dr. Harold Vinegar, Chief Scientist of IEI, there may be as many as 250 billion barrels of oil available in the oil shales, rivaling the 260 billion barrels to be found in the Saudi reserves.

The Israeli project appears somewhat optimistic. Oil shale is not readily produced in commercial quantities, and the in–situ form of production is still in the research phase. Oil shales have not been a highly cost-effective means to get oil.

Perhaps Israel has the problems worked out already. Dr. Vinegar said, "IEI will heat the shale over a long period of time in order to produce high quality liquid fuels from the oil shale…We won't be using pressurized water or chemicals and our approach will leave the region's aquifer in its natural, pristine state. The aquifer is separated from the project's operations by an impenetrable 200-meter-thick barrier of rock."

Ultimately, we in the West need to find ways to escape the overwhelming addiction we have for oil, especially since domestic production is not sufficient to satisfy our hunger for it, and we still depend on our precariously balanced resources in the Middle East.

At the same time, there are jobs opening up in North Dakota. And if the prospect of dark winters with little light seems depressing, remember one last little bit of trivia; North Dakota grows more sunflowers than any other state.

Related Links

Oil Shale Initiative in Valley Where David Slew Goliath Could Turn Israel into an Oil Giant - PR Web
North Dakota's oil boom poses political dilemma - Reuters
U.S. sees renaissance in oil exploration - The Spokesman-Review
New drilling techniques spark oil boom - UPI