Kerogen shale is known as the fuel of the future!
The problem is, it’s held that title for decades, never coming to fruition.
This oil shale (not to be confused with shale oil) is a fine-grained sedimentary rock suffused with kerogen, a precursor to oil.
Kerogen contains oil and gas. But it has to be mined, crushed, and heated to a very high temperature for the oil and gas to be released.
The process is extremely energy- and water-intensive – not very economically viable. Plus, burning kerogen produces a lot of carbon dioxide.
That’s why big oil companies like Chevron (NYSE:CVX) and Royal Dutch Shell (LONDON:RDSa) have abandoned oil shale projects in Colorado in recent years.
But new technological advancements mean this future fuel may finally be a part of the present.
Estonia: The Kerogen King
This tiny Baltic nation prides itself on its technological prowess. Its home to the creators of Skype and is the first country to hold elections with online voting.
Estonia has been using its advanced technology in the energy sector, as well. In fact, it’s been working with oil shale for nearly a hundred years.
You see, the country sits on the seventh-biggest kerogen deposit in the world. For many decades, it’s relied on kerogen shale for more than 90% of its electricity needs. In fact, Estonia is a major electricity exporter.
It uses about 85% of the kerogen it mines for electricity, burning the rock directly. The remaining 15% is turned into oil and related products. By 2016, Estonia hopes to produce diesel for vehicles from kerogen.
The interesting fact here is that the country’s CO2 emissions have remained stable over the past 20 years, even though Estonia continues to mine more and more of the oil shale. And, surprisingly, its per capita CO2 emissions are lower than those in the United States!
The country is able to pull this off thanks to special technology developed by the state-owned energy company Eesti Energia, also known as Enefit.
The latest version of its technology, developed in conjunction with Finland’s minerals processing technology company Outotec Oyj (LONDON:0MGI), is called Enefit280.
Enefit280-equipped plants use 100% of the mined shale, producing shale oil, retort gas, and electricity. This essentially water-free, carbon capture-ready technology also generates electricity from excess heat and retort gas, further offsetting CO2 emissions.
The only residue left is a non-hazardous ash. Estonia even repurposes this ash by using it in cement and other construction materials.
Open Source Energy
But the country isn’t stopping there. Innovation continues and kerogen technology is getting more and more efficient.
Enefit says it’s improved on the process of extracting energy from kerogen.
“Through co-generation of oil, gas and power all at once, we can halve our CO2 emissions,” said the CEO of the company, Hando Sutter, to the Financial Times.
The first of this new generation of shale oil power plants will be commissioned later this year. And the company is planning to bring in new partners.
France’s Alstom (PARIS:ALSO) will also build a plant for Enefit in Narva, in the eastern part of the country. It’s a combined oil shale and biomass power plant that will meet tough, future EU environmental requirements. The €640-million plant will be the biggest energy investment by Estonia since its independence.
This technology could be highly beneficial to the United States’ quest for energy independence.
Underneath Colorado, Wyoming, and Utah lies the Green River Formation. This formation of over 1,000 feet of sedimentary rock contains the world’s largest deposit of kerogen shale.
Estimates for it have been as high as three trillion barrels of oil, with half of it being recoverable. That is double the world’s known oil reserves!
There’s also additional kerogen around the world. There’s an estimated five trillion barrels of kerogen oil sitting in deposits in 29 other countries.
And now the technology exists to extract these riches economically and burn it cleanly.
Exporting Its Technology
As you can imagine, Enefit is most anxious to export its kerogen technologies to other countries with big oil shale deposits. At the top of the list are the United States, China, Russia, Jordan, Brazil, and Morocco.
Enefit is working in conjunction with Outotec to adjust its technology in order to process the local variations in oil shale properly.
The first successful export of its technology will be to energy-poor Jordan. The company expects to receive the okay this year to build a 540-megawatt power station near a kerogen deposit. The project should cost about $2.2 billion and will be financed with help from China. If all goes as planned, the plant will start generating electricity in 2018.
Enefit is making moves in the United States already, too. In 2011, the company bought a significant oil shale deposit in Utah, which is believed to hold 2.6 billion barrels of recoverable oil.
The project is still in the permitting phase and is conducting engineering and environmental studies, so construction isn’t likely to occur soon, considering there are probably plenty of environmental fights ahead.
It will be interesting to see if the Estonians will be successful in exporting their technology to the other nations with big kerogen deposits as they have been at home.
Or if oil shale will remain the unattainable fuel of the future.
And the chase continues,