Oil shale economics
As a developing fuel source the production and processing costs for oil shale are high due to the small nature of the projects and the specialist technology involved.
[4] According to the New Policies Scenario introduced in its World Energy Outlook 2010, a price of $50 per tonne of emitted CO2, expected by 2035, will add additional $7.50 per barrel cost of shale oil.
[4] According to a survey conducted by the RAND Corporation, the cost of producing a barrel of oil at a surface retorting complex in the United States (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation), would range between $70–95 ($440–600/m3, adjusted to 2005 values).
[8] However, Shell reported in 2007 that the cost of creating an underground freeze wall to contain groundwater contamination had significantly escalated.
[13][14] According to the United States Department of Energy, in 1980s the costs of a 100,000 barrels per day (16,000 m3/d) ex-situ processing complex ranged from $8–12 billion at 2005 prices.
[15][16] On 2 May 1982, known as "Black Sunday", Exxon canceled its US$5 billion Colony Shale Oil Project near Parachute, Colorado because of low oil-prices and increased expenses.
[15][18] In a 1972 publication by the journal Pétrole Informations (ISSN 0755-561X), shale oil production was unfavorably compared to the liquefaction of coal.
Lack of reliable studies of modern oil shale processes, poor or undocumented methodology and a limited number of operational facilities are the main reasons.
Development of oil shale resources will require significant quantities of water for mine and plant operations, reclamation, supporting infrastructure, and associated economic growth.
These numbers include water requirements for power generation for in-situ heating processes, retorting, refining, reclamation, dust control and on-site worker demands.
Hence, a 2.5 million barrels per day (400×10^3 m3/d) oil shale industry would require 180,000 to 420,000 acre-feet (220,000,000 to 520,000,000 m3) of water per year, depending on location and processes used.
Though scarce, water in the western United States is treated as a commodity which can be bought and sold in a competitive market.
[28] Royal Dutch Shell has been reported to be buying groundwater rights in Colorado as it prepares to drill for oil in the shale deposits there.
[31] At $10,000 per acre foot, capital costs for water rights to produce 2.5 million barrels per day (400×10^3 m3/d) would range between $1.8-4.2 billion.
Depending on reaction conditions, the co-pyrolysis may lead to higher conversion ratios and thus lower production costs, and in some cases solves the problem of utilization of certain wastes.
