Will Kerogen Make America an Oil-Exporting Nation?
Kerogen is an organic matter that can be converted into oil if heated long enough. It is not liquid petroleum, but organic matter from prehistoric marine plants and animals. It is buried between layers of rock. It is not shale oil, which is actual oil trapped in layers of shale rock.
Kerogen is not yet commercially viable. But, Congress made exploration of Kerogen a national priority in the "Kerogen, Tar Sands, and Other Strategic Unconventional Fuels Act of 2005." As a result, the challenges in producing oil from the kerogen-rich shale are being overcome by new technologies. This has the potential to make the United States an oil-exporting nation and eliminate its dependence on foreign oil.
The United States has the largest reserve in the Green River formation in Colorado, Utah, and Wyoming. This reserve is estimated to hold between 1.3 and 3 trillion barrels. Even if only 800 billion barrels can actually be recovered, this is still three times greater than the 262.6 billion barrels in Saudi Arabia's oil reserves. U.S. kerogen reserves could supply American oil needs, about 20 million barrels a day, for 100 years.
Almost three-quarters of the kerogen reserves are owned by the U.S. government, thanks to the 1910 Pickett Act. This set aside reserves in California and Wyoming to supply oil for the U.S. Navy, which was switching from coal to oil to power its ships. The Navy developed the Naval Petroleum and Kerogen Reserves Program through 1925. It was expanded by President Roosevelt for World War II. The nation’s first strategic reserve, Elk Hills in California, produced oil for the Navy. It was then sold to Occidental Petroleum for $3.65 billion in 1998.
This was the largest privatization in U.S. history. But the shale reserves are still owned by the U.S. Bureau of Land Management.
Nature takes millions of years of pressure and heat to convert kerogen to crude oil. Man can speed up this process by mining the shale in open pits. It's then heated in a process called retorting. The oil then must be separated from the rock and collected. This process is expensive, creates open pits that can be seen from space, and results in tons of toxic sand that must be safely deposited.
Shell has developed a process to heat the shale rock underground that accelerates this natural process. This in-situ conversion process heats the shale from 650 to 750 degrees Fahrenheit for two to three years. This releases the kerogen oil and gas, which is then pumped to the surface.
Kerogen extraction is more expensive than conventional oil, costing $40-$80 a barrel to recover. That makes it only cost-effective when oil sells at $100 a barrel. It's energy intensive, but no more so than extraction of shale oil and other "tight" oil. It's true that 25 percent of the energy produced must be used to extract the next barrel. This ratio though is already being used with conventional steam extraction of "heavy" oil. The end product is much lighter and cleaner than most crude oil.
Environmental groups are more concerned about the amount of water needed to produce kerogen. This is of particular concern in the West. Between one to three units of water are needed to produce one unit of kerogen. But Jeremy Boak, Director of the Center for Kerogen Technology and Research at the Colorado School of Mines, says this is roughly only one-tenth the water needed to produce biofuels, which require heavily-irrigated corn as its base material.
Although promising, in-situ extraction still must solve massive technological problems. The biggest is making sure the oil doesn't leach into the surrounding water table. The best way to do this is to freeze the water around the extraction site. You can easily see that keeping water frozen around an area that's been heated to 750 degrees is a technical and expensive challenge.
Last but not least, shale oil extraction could threaten wildlife habitat, increase air pollution, and generate toxic waste. Global warming is also an issue. Each unit of kerogen produced generates up to 20 units of CO2, compared to 4 units of CO2 for every unit of crude oil. The most important determinant then is an improvement in extraction technologies, rather than oil prices. (Sources: Natural Resources Defense Council, Kerogen by the Numbers, August 2008.)