Oil Shales & Gas Shales

Many shale gas issues resemble those of oil shale

It sounds like a pretty good proposition: “Finding Billions in ancient mud?”

In his speech to delegates at the Global Shale Gas Forum in Berlin, Germany, Dr. Jeremy Boak, Non-executive Director at San Leon Energy Plc., and Director at the Centre for Oil Shale Tech & Research, Colorado School of Mines, pledged to speak about shale gas, shale-hosted oil and oil shale.

First, Boak demonstrated the diversity of the stratification layers: oil shale, shale-hosted oil and then shale gas in the deepest parts of the Green River Formation basin (in the US Rocky Mountains) - in his slide presentation, showing the “petroleum system perspective.”

“What is oil shale?” he asked. “It’s an organic rich sedimentary rock formed in lake or marine environments, produces oil upon heating or upon deeper burial.”

Boak spoke about oil shale resource estimates across the globe, like at Green River, which has an estimated 1,499 billion barrels (the current estimate for Colorado alone); China, meanwhile could have 328 billion barrels.

“We don’t know how much we’ll ever really get out of the ground,” said Boak, who showed a list of various other potential reserves. “San Leon is looking to produce shale oil in situ,” he said, listing Estonia, Brazil and China as the three places in the world that mine and retort oil shale.

He said, “Shell has been a leader in a process that involves drilling and heating up to mature the kerogen resulting in high recoveries and light hydrocarbon product yielding high quality transportation fuel. When you slow down the process, you get a better product.”

“Shell continued on with it for 25 years and it is used for jet fuel, diesel and residential fuel.”

ExxonMobil has an even more creative approach, according to Boak, using their patented “ElectroFrac” process (which is trademarked). “They themselves call it a giant toaster. They feel that with an electrode you can get much better heating efficiency.”

He reported that shale-hosted oil plays are being developed at Bakken, Niobrara, Atoka/Cherokee/Desmoinesian in the western United States.

“These various formations show quite a range of brittleness,” explained Boak, “In addition there are mineralogical differences; temperature is another factor – at deeper levels the rock properties vary fairly substantially. It’s an important strength in considering what your samples are.”

Based on experiences with oil shale, Dr. Boak aimed to hypothesize how European shale gas could develop as an industry. He harkened back to the history of US oil from 1862-1919, which showed growth rates of 9-10% a year; shale oil, meanwhile, could have 14-15% growth per year if a current trend continues until 2030.

Shale gas production 1990-2007 had a 15% growth rate, according to Boak. “Given the proper infrastructure, an energy sector can grow substantially,” he said.

Boak addressed some environmental issues connected to oil shale and shale gas drilling and how to communicate with the public on these.

“In the western US, it’s about water quantity and quality - how much are you going to use. Carbon footprint is also an issue. There are the social and economic impacts: communication with people can be productive,” he said. “It’s the average person you need to get through to, not Greenpeace. People do actually listen to you if you talk about what’s good and what’s bad.”

“The way to talk about this to the public is to say that there are three things that can go wrong from the small amount of contaminants: we can’t have surface spills, need to have some understanding of what’s in the frac fluids to know what it is and what they need to do to mitigate it.”

“There’s a lot of regulation to tell you what not to do,” he added.

Casing failure, was an aspect according to Boak, that had already been largely addressed but he said it was important to continue to look at it and engage the public on it.

“Are we fracturing upward to an aquifer?” he asked. “Here’s what happened with those failures and here’s the minimal chance of that happening.”

Finally, Boak spoke of San Leon’s shale gas partnership with Talisman Energy on a 600,000 acre area in Poland. “The seismic is being done this year and three wells will be drilled in 2011-12,” he reported.