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What are shale oil, shale gas and oil shale?

24th of 9, 2012
S.Batkhuyag. President Monationenergy (NGO), Doctor Of Science, Professor

G.Yondongombo. Executive Director Monationenergy (NGO), PhD

Oil shale is one of the most prolific hydrocarbon resources on earth. Massive deposits are found in a number of countries around the globe, including Australia, Brazil, China, Estonia, Israel, Jordan, and the United States. Preliminary geologic surveys and evidence from oil shale outcrops indicate that Mongolia may also have oil shale resources of a size and quality that are commercially viable. Today, only China and Estonia produce oil shale commercially. With the high price of oil, decline in world conventional oil reserves, and increasing competition for oil resources worldwide, many countries and oil companies are turning their attention to this significant source of oil as the next generation of petroleum supply. Mongolia may be favourably positioned to benefit from the development of oil shale.

The United States is recognized as having the largest oil shale deposits in the world, the richest of which are located in a reasonably small area of Colorado, Utah, and Wyoming, collectively referred to as the Green River Basin. Estimates of the total resource that could be conceivably recovered, exceeds 2 trillion barrels (277 billion tons) -- eight times the size of Saudi Arabia’s reserves. In recent years, interest in development of the U.S. oil shale resource has increased significantly. Major oil companies, such as Shell, Exxon, and Total, along with numerous independent energy companies are developing new technologies. Through the Energy Policy Act of 2005 the U.S. government opened lands for oil shale research and development leases, for both subsurface (insitu) and surface production technologies. In 2008 the U.S. Department of the Interior finalized Rules and Regulations for the potential leasing of approximately 2 million acres in Colorado, Utah, and Wyoming. Though they have been challenged on legal grounds, the regulations have set the stage for eventual commercial development.
 
Mongolia, like the United States, may have an opportunity to develop its potential oil shale resources. This is a resource of significant national importance, the development of which could provide Mongolia with energy security in addition to export market opportunities and secure high paying employment, including engineering and technical jobs, for many people. As with the United States, Mongolia requires all types of energy resources, both conventional and unconventional petroleum, to meet their respective needs. Often the distinction between certain resources are obscured or misunderstood.
 In the United States and elsewhere in the world a great deal of attention has been given to shale oil and shale gas production. These resources should not be confused with oil shale, as will be explained later. A host of European countries are looking at the development of shale gas as a means to secure a measure of independence from natural gas imports. The United States has found more than 100 years’ supply of shale gas in the Marcellus and Barnett formations. Using similar technological advances, shale oil reserves such as the Bakken and Niobrara reservoirs are producing substantial quantities of oil.
 
None of these resources has the size nor production potential of oil shale. The potential for oil shale production is tremendous worldwide and for detractors and skeptics, it should be noted that it was not long ago that shale gas and shale oil were thought to be both technically and economically unproductive.
 
Aside from the fact that we are discussing oil and gas, as mentioned, this is where the comparison between shale oil/shale gas and oil shale ends. In recent trade journals and newspaper articles there has been confusion regarding the difference between oil shale and shale oil. In certain articles the terms are used incorrectly and often interchangeably, further confusing their distinction. There is a world of difference between the two resources; comparing them is not unlike confusing oil with coal, both of which are hydrocarbons, but strikingly different in composition and methods of production and synthesis.
 
By definition, oil shale is a petroleum precursor, which is organic matter in the rock called kerogen. By applying heat, it can be transformed into oil and gas. Shale oil, or “tight oil” is a conventional crude oil created naturally and trapped in shale deposits -- requiring modern drilling and recovery technologies to produce. Shale gas is similarly produced from shale deposits. Advances in drilling and secondary recovery technology in the past decade have allowed companies to produce conventional oil and gas from heretofore uneconomic shale formations.
 
Oil shale (kerogen) deposits are entirely different from shale oil deposits. They have not sustained the time and temperature required to turn the kerogen to crude oil. Only applied heat will convert oil shale to crude oil. What mother earth failed to accomplish with time, can be obtained by the application of man-made heat.

The oil shale production process involves only the application of heat. Unlike shale oil production, there is no requirement for elaborate long-reach horizontal drilling or fracturing of the rocks to allow flow paths through which the oil and gas will be produced. There is no water or chemical reagents used to facilitate the fracturing of the reservoir in the production of oil shale. In fact, subsurface water is produced and can be cleaned and used for other purposes.

 The crude oil produced from oil shale is high in light ends and is a source of quality products such as diesel, jet fuel, motor gasoline and natural gas liquids. Like China and other neighbouring countries, Mongolia is blessed with this resource and if produced in a responsible way, it can be a major part of the energy portfolio of the country.

Further information on oil shale can be found through the National Oil Shale Association at
            www.oilshaleassociation.com
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