...
WATER REQUIREMENTS
DRAFT 6-5-59
FOR T!!E INDUSTRIALIZATION OF OIL SHALE 1960 - 1975
for the
COLORADO WATER CONSERVATION BOARD
-
,.. ..
,...
by
Cameron and Jones, Incorporated
Engineers-Consultants
WATER REQUIREMENTS
DRAFT 6-5-59
FOR THE INDUSTRIALIZATION OF OIL S!IALE 1960 - 1975
July 1, 1959
CAMERON AND JONES, INCORPORATED ENGINEERS-CONSULTANTS
(LETTER OF TRANSMI'rl'AL)
DRAFT 6-5-59
I
-TABLE OF CONTENTS
LETI'ER OF TRANSMITTAL
SUMMARY
ESTIMATE OF PETROLEUM SUPPLY AND DEMAND TftROUGft 1975
INFORMATION ON OIL SftALE Oil Shale Reserves ftistorical Sketch current World Picture
Recent Activities in the U.S. Economics
Why
no U.S. Shale Oil Production?OIL Sl!ALE INDUSTRY DEVELOPMENT PATTERN Phase I - Experimental
Phase II - Prototype
Phase III - Primary Expansion Phaae IV - Secondary Expansion
WATER REQUIREMENTS P'OR SHALE OIL PRODUCTION Water Requirement for Phase I
Water Requirement for Phase II Water Requirement for Phase III Water Requirement for Phase IV
BIBLIOGRAPftY DRAFT 6-5-59 Page i i i i
SUMMARY
Shale oil production in the United States is expected to begin during the period 1960-1965 and increase steadily to about 1,250,000 barrels per day by 1975. Estimates of U.S. oil demand and supply for the period 1960-1975 are as
follows:
US OIL DEMAND AND SUPPLY Millions of Barrels Daily
1960 1965 1970 1975
Demand 10.0 12.0 14.0 16.0
Domestic Production 8.3 9.2 9.4 8.8
Imports, etc.* l . 7 2.8 4.5 6.0
Shale Oil 0.025 0.15 1. 25
*
Other supplies include synthetic fuels from c~l. oil frombituminous sands, and petroleum from sources now considered uneconomic
Actual petroleum. demand and supply may differ from our estimate such that shale oil production could begin either earlier or later than predicted. Even so, in t...~e absence of national emergency i t is believed that the pattern of develop-ment will be the same - first, prototype production followed by moderate expansion and finally, significant production quantities.
Water requirements for shale oil production will be amall until 1970, but will reach about 250,000 acre-feet per year by 1975. The tabulation below presents estimated water usage attributable to shale oil production, including municipal use. A recommended minimum firm water supply capability for shale
through 1975 lso ia given.
OIL SHALE WATER REQUIREMENTS
Acre-feet per year
1960
1965
19701975
Diverted
Negligible
1300 27,000 252,000Returned
x
550 11,000 93,000Conawned
x
750 16,000 159,000Supply Capability
2500 5000 40,000 250,000It is anticipated that the firat oil shale development•
will
bein the Parachute-Roan Creek ar a and along the Colorado
River betwe n Rifle and I>ebeque.
After 1970
theoil •hales in
the Piceance Creek area and in Uintah County, Utah will become
.
important.
Some developnent in the•e latter areaa could
begin earlier.
It is e•timated that of the
1,250,000barrel•
per day of shale oil production predicted for
1975over
90%will be in Colorado.
The population aerving the shale indu•try will
belarge
by
1975.The tabulation below givea estilaatea of persona
directly or indirectly related to the sh&le 1nduatry.
SHALE INDUSTRY POPULATION
Shale employees
Conatruction force, Av.
Service peraonnel
New houaehold•
New population
1960 19651970
1975
100 900 6,900 51,000* 1,200 3,000 18,000 360 7,100 53,500 630 12,500 93,000 2,300 45,000 340,000*
Includes shale related industries.
,
The principal by-products of shale processing will be
anunonia, sulfur and coke. Petrochemicals and by-product
fuel gases will not be important during the first 15-20 years. Retort and refinery gases will be consumed by the
industry for refinery fuel and power generation. After 1970
the manufacturer of explosives, sulfuric acid, cement and other materials consumed by the industry and its community will begin.
The investment in mines, retorting plants, refineries
and pipelines through 1975 will exceed $6 billion. This
magnitude of investment is well within the capabilities of
the petroleum industry. An additional investment of
unde-termined magnitude will be made in housing, service facili-ties and other improvements.
WATER REQUIREMENTS FOR THE INDUSTRIALIZATION
OF OIL SHALE 1960 - 1975
It is generally accepted that shale oil will be needed in the fairly near future to supplement domestic petroleum. The principal deposits of oil shale in the United States are
in western Colorado and the water used by the industry will
be taken from the Colorado River and its tributaries. I t is
of vital importance that the development of an adequate water
supply system for an oil shale industry not be neglected. It is the purpose of this study to establish the water needs of a shale oil industry in the United States from its
inception through the initial period of grOW"th. This report
also attempts to establish approximately when corcunercial shale oil production will begin and the rate at which i t will grow thus providing a timetable for planning adequate water sup-plies for the industry.
Estimate of Petroleum Supply and Demand Through 1975 Future petroleum demand and availability is a subject of continuing study by oil company economists, government
agencies, and others. Currently several estimates are
pub-lished each year by experts in this field. From a study of
the most recent estimates, and consultation with the authors, we have derived a concensus prediction of petroleum demand and domestic petroleum production through the year 1975.
Our demand and production estimate is presented by Figure _I_.
FIGURE
USA PETROLEUM SUPPLY AND DEMAND
20 18 YE..M( N50 1<15, /b
"""
19, !i ''170 lf75 /'f ---IZ 10 8 01950
1975
NILL/ON.: OF f'JARR!:L:; f'[R Df/VPr:Tl(Oi.£Ul'I ::U"1E 5- .:. 1t1Po~r5 SHiii.£
Oc'1ANO b.8 8.8 /0,L /2.) 14.0 lb,O I C'- - - -l(O[;;,.,.,:T,NJ - _ffi_ OIL 5:9 ::,9 Z6 /.i!. ><.' 17 'f2 2.B ooz.,; 9-9 '9.5 0
,
,,-o
ee 6.o I.ZS'O I I/
. I 'Dor-us TIC 1wc Due.· r10N
I I' / /.
'/
. / ,' f ' I ', I I I 1tU,o/·
I , /91,S I I I '/ I I / , /,'
I/ I_.' ,, / I I·' / I /970 20 18 16 14 IZ /0 8 6 4 0 !97S....
It is the conclusion of the experts that petroleum de-mand in the United States will continue to increase for the next 15 to 20 years. The rate of increase will be slightly less than that of the past 10 years, but will reach a level of 16,000,000 barrels per day in 1975. Petroleum demand in the United States in 1958 was 9,313,000 barrels per day.
Petroleum production in the United States has shown a steady increase, but has not kept pace with demand. I t is predicted that production will continue to increase until the period 1965 to 1970, then begin a gradual decline. The rea-son for this decline will not necessarily be that the industry cannot find more oil, but that the cost of alternate sources, such as shale oil, will be less than the cost of finding new and replacement petroleum.
The gap between demand and production since 1948 has been filled by imports and this practice probably can be followed through 1965 without our becoming overly dependent on overseas oil. However, when production levels off, then begins to de-cline, the deficit between production and demand will increase at more than twice the present rate, reaching about 7,000,000 barrels per day by 1975.
I t seems reasonable that shale oil production to supply a part of this large deficit will begin between 1965 and 1970. A pioneer production unit to establish the technology on a commercial basis probably will be built prior to this time. Assuming a logical pattern of development for the shale in-dustry, unaffected by war or other emergencies, shale oil production should reach about 1,250,000 barrels per day by 1975.
Oil Shale Reserves
Shale oil has long been looked upon in the United States and elsewhere as the logical supplement to petroleum. Oil shale reserves are large and widely distributed. The shale oil
potential of the United states exceeds the combined petroleum reserves of the Middle East and Venezuela and is many times greater than the most optimistic prediction of ultimate petro-leum discoveries in the United States. Without question, shale oil, when needed, can contribute significantly to our energy supply.
Svenska Skifferolje AB, the swedish Shale Oil Company, has roughly estimated the world's oil reserves in shale. Table_!_ gives their estimates by country in which oil shale is known to occur.
TABLE
WORLD SHALE OIL RESERVES
Oil Content COUNTRY
Australia and Tasmania Belgian Congo
Brazil Bulgaria
Burma and Thailand Canada China England Estonia France Germany Italy Madagascar Manchuria Russia Scotland South Africa Spain SWeden United States Yugoslavia Metric tons 30 1000 ,iOOO 15,000,000,000 50,000,000,000 30,000,000 2,500,000,000 5,000,000,000 400,000,000 200,000,000 1,500,000,000 200,000,000 300,000,000 5,000,000,000 30,000,000 30,000,000 1,000,000,000 90,000,000 5,000,000 40,000,000 410,000,000 90,000,000,000 200,000,000 Barrels . 200 ,·000 , 000 103,000,000,000 344,000,000,000 200,000,000 17,200,000,000 34,000,000,000 2,800,000,000 1,400,000,000 10,300,000,000 1,400,000,000 2,000,000,000 34,000,000,000 200,000,000 200,000,000 6,900,000,000 600,000,000 40,000,000 300,000,000 2,800,000,000 618,300,000,000 1,400,000,000
TOTAL RESERVES about 172,000,000,000 l,200,000,000,000 Source: Svenska Skifferolje AB
The estimates by svensk~ Skifferolje are very conserva-tive since many of the larger deposits have been inadequately surveyed. As more information becomes available, these reserves will increase. For instance, United States reserves alone now
are estimated at 1.3 trillion barrels or about 200 billion metric tons. I t seems within reason that the world's recoverable shale oil reserves may ultimately prove to be in excess of 500 billion
metric tons or over 4 trillion barrels.
For comparison, the table below gives recent petroleum reserve estimates for the United States and for the world as a wnole.
TABLE
PETROLEUM RESERVE ESTIMArEs
BILLIONS OF BARRELS
U S A World
Proved Reserves, 1959
Ultimate Future Production
37 150-200
Source: Oil and Gas Journal, Chase Manhattan Bank,
Wallace Pratt
Historical Sketcn
275 900
Throughout the world, shale oil has been produced when
petroleum has been scarce or expensive. In fact, shale oil
predates the discovery of petroleum and shale industries have operated in Europe for more than 100 years.
For the past 50 years or so, owing to the abundance of low-cost petroleum, shale oil has been relatively unimportant
except in special circumstances. Ho,;ever, during ~orld War II,
shale oil supplied critically needed fuels for Japan, Sweden Australia, and other countries cut off from their normal sources
of oil.
Shale oil has never been of great importance in the United
States, despite our large reserves. Small quantities of oil
were distilled from cannel coal and oil shale in the Appalachian region early in the history of our country, but shale oil has never been produced commercially from our western shales.
Current world Picture
The oil shale industries of the world are resurgent. Sweden now is expanding its output of shale oil production by 80"~. Oil shale is the principal source of Sweden's sulfur and anunonia as well as its only domestic source of oil.
I
~
Spa1.n has a new oil sl1a.1e op2rati:::m geared pri£tyipally to
the productLon of lubricants. ~ussia reportedly is expanding
snale oil and sI,ale gas output in sattelite Estonia. A new
lC,OCiO barrel per day p.1ant has been announced at Kochtla Jarwe
and Russian technical journals for several years have been reporting on research in the field of oil shale.
For about 10 years, Brazil has conducted research and development work leading toward utilization of its extensive
oil shale resources. A large commercial operation within the
next few years seems likely.
Elsewhere, new oil shale projects have been announced or investigations are in progress - Thailand, Australia, Belgian
Congo, Yugoslavia - almost everywhere that oil shale is know
to exist.
Recent Oil Shale Activities in the United States
The current era of interest in oil shale in the United States began during World War I I , and has continued without
interruption. Activities mainly have been research and
development on improved mining, retorting, and refining methods and in the acquisition of oil shale properties.
With the exception of the Naval Oil Shale Reserves near Rifle, the most accessable oil shale lands are privately owned. A majority of the maJor oil companies have shale holdings.
Several are increasing their reserves, some of which already may be measured in the billions of barrels.
During the past 15 years, the Federal Government, private coIT,panies, and individuals have spent about $50 million on oil
shale. More than half these expenditures were by private
companies and individuals. Research cy both government and
in-dustry on new methods of shale oil production and utilization has obtained outstanding results.
'rhe technology is straight forward. The shale first must be mined, then subjected to a heating process (retorting) to distill from it a crude oil, and finally, the oil must be
re-fined to usable products.
A low-cost mining method adapted particularly to certain favorable characteristics of the Colorado oil shale deposits has been developed and demonstrated in two large-scale experi-mental mines, one operated privately. A large mining concern
is conducting additional experimental work on the method.
Two outstanding new retorting processes have been
demonstrated on a pilot plant scale, one resulting from the government's research program, the other, privately financed. The latter process is in an advanced stage of developnent having been successfully operated at a capacity approaching
that of a commercial-sized retort (1000 tons per day).
Shale oil refining research has been aided greatly by new processes developed to refine high-sulfur crude oils. Refining methods are conunercially available to convert crude shale oil toga oline, jet fuel, diesel and other fuels
equivalent to the highest quality products manufactured from petroleum.
Economics
Many statements have been made regarding the competitive position of shale oil products when produced cormnercially. All are b.sed on estimates of cost, usu lly derived from
pilot plant data. Since shale oil is not produced commercial-ly in this country there is a certain degree of uncertainty in appraising its economic attractiveness.
Careful engineering studies of t~e large scale appli-cation of the new methods developed for oil shale utilization indicate that shale oil ~y cost no more and perhaps less than new domestic petroleum. I t is estimated that crude shale oil could be produced and sold profitably for a "well-head" price of no more than $2. 50 per bar.r·el. By comparison the posted prices of Rocky Mountain area crude oils range from $1.81 -3.10 per barrel. Quality and location determines the price level for a specific crude oil.
Owing to sh le o l's 1 ge initial investment and he
n c ssity to utilize new tech ology, production n a comm_rcial
b sis will begin only whe pres ntly d veloped petrole
pro-uctive c pacity is being u ect to the maximum practical extent
an tl ere is prot ction from competition by imported 01.l.
I t 1.s believed t ~ the d_velopment of n
will proceed in four di tinct hases. This patt
will b follow d regardless of hen the industry
phases are as follows:
Pha e I Ph se I I Expe imental Prototype l hale industry rn probably starts. These Ph se III -Phase IV Primary Expana~on Secondary Expans'on
~ ~, I - Experiment 1 The experimental ph se started a.bout
15 year ago and is now in its fin 1 stages. During this period
atisfactory methods for each tep in the production of shale
fuel have been developad. Some additional experimental work is
being done now, but the technology essenti lly is mar ing time.
Little dditional experimentation is necessary before building
a protot pe co rcial plant.
Ph se I might be termed the "pre-prototype" phase, which
will continue until the need for beginning conunercial shale oil
production becomes evident to oil company management.
Phase II - Prototype The prototype phase involves building
the first commercial scale plant (or plants). This might also
be termed the pioneer phase.
Since the technolog'J to b_ used is new,
many
significantimprovements are to be expected as a result of ·his first
experi.ence at full-sc le production. This lso i the period
of maximum technological risk. The objective of tne prototype
ph se is not to produce large quantities of oil, b~t to firmly
establish the technology and economics of shale fuels produc-tion before making the large investment required for shale oil to contribute significantly to our oil supply.
To keep the investment for Phase II to a minimum, the pro-duct of the first plant(s) will be marketed insofar as possible
by existing transportation systems. (Unfortunately, the local
market cannot absorb the output of even the smallest prototype
plant). Studies have shown _ at 25,000 barrels per day of
sh le oil can be fairly economically transported to market in
.::a11.£ornia by way of connections to an existing pipeline.
Other crude oil pipeline systems in the area also could be
~sect to transport shale oil to refineries in Colorado, Utah
and l'iyoming. 'rhese existing pipelines now convey about _ _ _ _
barrels per day of petrole~~ and at maximum capacity can move
barrels per day. It seems reasonable that at least
25,000 barrels per day of carrying capacity can be allocated to shale oil when tne time arrives,
I t is thought that the Phase II plant(s) will not include shale oil refining facilities except for a means of reducing the pour point and viscosity of the crude oil to meet pipeline
specifications. The processes by which shale oil will be
re-fined already are in commercial use, and need no demonstration
such as is the case for mining and retorting. Furthermore, the
investment for refining facilities is large, about equal to that
for oil production, It is probable that the ultimate refining
of the product of Phase II will be at existing refineries in the market area.
Other supporting facilities of the prototype plant(s)
also will be kept to a minimum. Electric power generation
using by-product gases will not be a part of the first plant(s). Instead, electricity will be purchased from public utilities serving the area.
The existing local labor supply will be utilized to the
maximum extent. I t is estimated that qualified personnel to
the extent of about one-half of the staff can be employed
local-ly. Supervisory personnel, technicians, and certain skilled
operators and craftsmen will need to be brought in, but essen-tially all can be housed in the towns and communities between Glenwood Springs and Grand Junction.
In summary - Phase II, the prototype plant{s), located in
the Grand Valley-Debeque area of western Colorado, will produce
about 25,000 barrels per day of crude shale oil. We expect
this develoµnent to occur between 1960 and 1965. The crude oil
will be moved through existing pipeline systems to refineries
in logical market areas. Local labor supply can be used for a
large percentage of the staff. Existing communities and
sup-porting facilities will largely meet the needs of the prototype phase.
Phase III - Primary Expansion After sufficient operation of
the prototype mining and retorting units to establish the
sound-ness of the methods and to bring forth the improvements which
are certain to result, shale oil production can
beexpanded with
confidence and at minimum cost.
Again transportation of the
oil to market will
bethe controlling factor.
The size of the
primary expansion of the industry is likely to be the capacity
of smallest economic shale oil pipeline to the Pacific Coast,
which we estimate will be about 150,000 barrels per day.
Although larger quantities of oil may be pipelined at a lower
cost per barrel, it unlikely that
a larger line would belayed
at this stage of developnent.
Several mines, retorting plants, iUld one or more refineries
will be required for Phase
III.The principal product will
bea high-quality partially-refined shale oil, needing a minimum
of additional refining.
The availability of low-coat by-product
fuel gas from retorting makes it more economical to refine the
shale oil at the site of production rather than at existing
refineries in the market area.
The expansion of production to 150,000 barrels per day is
a aignificant undert&king in terms of capitAl investment and
hwnan effort.
Production, refining, and transportation
facili-ties alone will cost at least
$750million.
Housing and
com-munity facilities for an additional population of approximately
45,000
persons will be required.
Most, if not all, of the Phase
IIIdevelopnent will occur
along the Colorado River between Rifle and Debeque and in the
Parachute and Roan Creek areas.
The comnunities from Glenwood
Springs to Grand Junction will share in the population growth.
The by-products of shale oil production and refining are
fuel gases, ammonia, sulfur and coke.
The low-heating value
retort gases will be used to generate electricity and supply
other process energy requirements.
Saneelectricity may
begenerated for local consumption in the surrounding cormnunities.
There will
beno excess energy from retort gas for industrial
use.
Excess refining gases will be used as a domestic fuel gas
for the local communities, supplemented by natural gas from
nearby gas fields.
By-product ammonia,
250-300tons per day,
can be marketed in the Rocky Mountain area as a fertilizer.
The coke and sulfur will have no local market and must be
ship-ped outside the area.
The usage of petroleum products in the area will gr0\411 in
proportion to population, and industrial uses of fuels,
particu-larly diesel, will increase greatly.
However, the local market
..
still will be small compared with production, probably less
t n 10%.
The principal supplie consumed in shale oil production
and refining are drill-bits, explosives, lubricants,
water-treating chemicals, cAt lysts, and miscellaneous maintenance
material•.
Essentially all such materials during Phase III
will be manufactured outside
th_area.
Construction materials
such as steel, cement, lumber and other manufactured items,
though required in quantity, also will largely
beshipped in.
In sunnary - During Ph~se
III,the production of shAle oil
will increas to about
150,000barrels per day.
The product
will
bea
rtially-refined oil of excepti.onal quality. Mo
tof the oil will be mark ted
on thePacific
COclstthrough a
aingl pipeline constructed specifically for shale oil.
The dev lopoent of Phase
lIIshould begin after a year or
two of prototype plant operation, and
becanpleted within five
years or about
1970.The industrial developnent will be limited to shale oil
production, r fining, and transportation facilities, and
essen-tial supporting utilities.
Neither manufacturing plants
utili-zing by-products of shale nor industry producing s pplies for
the shale mines and plants are foreseen during this period.
A
population increa e
of 40,000to
45c000over Phase
IIseems lik ly, with
themajority living in existing communities
from Glenwood Springs
toGrand Junction.
fhase
IV -Secondary Expansion
The growth of the sh le
in-dustry following
Pha e IIIshould be rapid.
Thetechnology
will be firmly establi hed.
The demand for petroleum fuels
is expected to
besuch that ra .e of gr01,1th of shale oil
pro-duction will
belimited only by the ability of the industry
to expand.
The five-ye r period following Phase
III
should see an
increa e of hale oil production to about
l·-1/4million barrels
per day.
This
isthought to
the maximum rate at which the
industry c n grow with normal
conomic incentives.
The effect
of sane national emergency which migh accelerate growth is not
considered.
.•
..
The investment for shale oil production faci ities of
significant output is sizeab A 25,000 barrel per day
plant may cost from $30,000,000 to $50,000,000 depending
on location, retorting process sel cted, and the degree of
refinfping conducted at the production site. In addition,
pipelines must be provided to move the oiL either to
exist-ing trunk pipelines or to
a
market area.While the minimum investment for economic l production
cost is high, the unit investment eems reasonable canpared
with current exploration nd developnent costs for petroleum.
One estimator
1:/
pl ces the inv'eotment in new and replacemenpetroleum productive c pa.city in the United States between
1955 and 1960 at $7,500 per dajly barrel. Shale oil
capaci-ty cert inly is less than this figure.
~Y
No Commercial Shale Oil Production?Since the lifting of World War II restrictions, there h s
been no shortage of petroleum products for the Arrerican consumer
Until 1948, the United States produced more oil than i t con wned.
and was a net exporter of petroleum and petroleum products. As
foreign crude oil became availab~e in quantity at low cost, we
have gradually increased impor-s until, on balance, we are
a
net importer to the extent of 15 to 20% of our petroleum
de-mand.
Shale oil is not being produced cormnerci lly because
there is no market for dditional oil supplies. The Nation 1
Petrolewn Council estimates that we now could increase
petro-leum production from present sources by at least 2,000,000
barrels per day, were there a market. This production is
available with little additional investment, but i t cannot com-pete with foreign imports.
l} Sehr der
The further expansion of the industry after 1~7 5 .... ,. not considered in this study, but sufficient shiile reserves exist for a much larger production rate. I..Q ~epeat:., i t should
n o t ~ im2lied ~ 1-1/4 million b a r r e l s ~ day is ~he maximum §ize the industry will attain.
The Phase IV expanoion will require an investment in the
range of $5 billion not including community facilitiea, sup-porting industry and other improvements. An addition~l popu~ lat:i.on of about 300,000 will be needed.
The Chas~ l't.anhattan Bank
1/
has estimated that petroleum industry expenditures for exploration and production in the United St~tes for the p ... riod 1961~65 will be $27.5 billion. 1'he invesbnent of $5 billion during a 5 year period for shale oil produ-tion facilities does not seem unre ~onable.The Parachute-Roan Creek ~rea and the main stem of the Colorado River between Rifle and Debeque will continue to b0
the center of activitie~ and m1.)gt of the production during
Phage IV will be from shale outcrops along the river and tribu-tory strea.ms: however, productlon of oil from the deep shal-ti in the PiGeance Creek ~rea to U1e: north and from the shale@ in northeii.stern Utah should begin. Total production from these
new areas
may
b~ 250,000 barrel~ perday.
The largest !l!Arket for the oil will continue to be the Pacific Coast. Petroltc?um demand in the five stat~s comprising the West Coast are~ is grO"w'ing more repidly than the country
~s a whole, and domestic production already is in decline. By 1975 demand
may
reach 3 million barrels per day. According to one authorityl/
production in California, the only West Coast st~te having significant production will have dwindledto less than 400,000 barrels per day by 1968.
The Pacific Coast oil deficit, now 375,000 b rrels per d d,
ia supplied by overseas importa, &nd oil pipalined from Can~da
and the Rocky Mountain area.
By
1975, when over 2.5 millior:barrels per
day
of outs:ide supply are rt.:quired, i t seems likely that a shale oil market exceetli.1g 500,000 barrels per day will exist.The other .major market fox shal oil from Phase IV pro-bably will be the Middle Weot. Petroleum and petroleuzn product., now come to this area, largely by pipel 1.ne, from TeJ<~ci.s, Oklahomii, the Rocky Mountain area, and Ci>l.nada. Production in the area
]J
Posue a.nd HillY
Petroleum Week,May
15, 1959 p. 100principally in Michigan and Illinois, is small compared with
demand. The output of a 1200 mile, 500,000 barrel per day
shale oil pipeline to the Chicago area should be easily ab-sorbed 15 to 20 years from now.
Local demand for shale oil products will have increased several-fold on account of the increase in population and the
level of industrial activity. This demand will be in the range
of 50,000 barrels per day.
We anticipate significant changes in the technology as a
consequence of Phases II and III. The methods used for Phase
IV production will require less investment per unit of produc-tion, will make better use of the raw material, giving higher
yields of superior products and most likely, will utilize the lower
grade shales not now considered economical. However, the
probabi-lity of using in-situ combustion, atomic explosion or some other revolutionary method during this period seems remote.
We believe that refining technology and economic conditions will improve such that in the new refineries built during Phase IV, the crude shale oil will be hydrogenated directly rather
than being coked before hydrogenation. This step will result
in a significant increase in the yield of liquid product and,
of course, will eliminate coke as a by-product. I t also will
still further reduce the availability of by-product gases from
retorting and refining. It is probable that a supplementary
energy source, such as coal or natural gas, will be used to sup-ply a part of the energy requirements of the shale oil plants.
The principal by-products of shale oil production and
refin-ing durrefin-ing Phase IV will be anunonia and sulfur. Coke production
probably will have increased slightly over the level of Phase III but i t is doubtful that refinery gases will be an important
pro-duct for outside use.
It has been suggested that shale oil production would
pro-vide raw materials for a petrochemicals industry. While several
shale oil fractions, in particular the lighter hydrocarbons from hydrogenation refining, are suitable petrochemical raw materials, it is doubtful that they will be used as such in western Colorado. First, petroleum consumed as petrochemicals amounts to only about
2 percent of the petroleum demand and raw materials from current
sources seem adequate for the foreseeable future. Second, western
Colorado is far from chemical markets and is handicapped by high
freight rates. If shale oil is used as a petrochemical raw
material i t is likely to be converted to chemical products at pipeline terminals in the market area.
•
The use of oil shale directly, as a chemical raw material is a distinct possibility in the future, but the technology to derive valuable chemicals from shale rua.s not yet been fully
developed. The lack of readily usable processes and
plenti-ful raw materials from other sources milke i t doubtplenti-ful that oil shale will be used for chemicals production to an appreciable extent during the next 15 years.
The growth of shale oil production to the proportions en-visioned in Phase IV will bring with i t some related industry.
Tonnage quantities of explosives will be required. Ammonium
nitrate, which can be manufactured from by-product ammonia,
seems likely to be the principal shale-blasting agent. As much
as 500 tons per day will be consumed for shale mining alone.
This amount will support a large-sized ammonium nitrate plant.
Sulfur~acid for general industrial use may also be manufactured
from by-product sulfur.
Cement is perhaps the largest tonnage manufactured material
required by shale industry and its community. The usage of
cement in the area will be sufficient for a plant of economic
size. Raw materials are available. Spent shale may be used
as an ingredient.
Water treatment and the building industry will greatly
increase the demAnd for lime in the area and this industry should expand considerably.
Many small service and manufacturing operations will be
conducted to serve this $5 billion industry and the 400,000 or
more population in the area. There will be more new businesses
of this type than were the development to occur in a more
popu-lated area. Very little supporting industry of the kind· required
now exists.
To summarize - Srua.le oil production during Phase IV from
1970 to 1975 will increase to about l-l/4 million barrels per day.
This is leas than 8% of anticipated petroleum demand in 1975.
The product, principally hydrogenated shale oil, free of contaminants and equivalent to the highest quality crude petro-leum, will be transported by large-capacity pipelines to markets
on the Pacific Coast and in the Middle West. The gasoline and
other fuel requirements of the local community also will be
served from a complete shale oil refinery in the area.
In addition to shale oil facilities costing an estimated $5 billion a moderate supporting industry will begin during
this period. Explosives, sulfuric acid, lime, and cement
are most likely to be manufactured. Numerous manufacturing
and service facilities of lesser magnitude also will be start-ed.
It is unlikely that oil shale by-products will be utilized locally except for explosives, sulfuric acid and possibly cement manufacture.
A population of ne rly 300,000 in addition to the Phase III development is foreseen making the total population for shale
and related industries about 340,000. Rio Blanco County and
Uintah County,Utah will share this population gr()'l,rw'th. Water Requirements for Shale Oil Production
The production of the crude shale oil requires very little ·
water. Consumption of water for mining is chiefly for drilling
blast-holes and as a dust palliative. Retorting uses only
bear-ing-coolant water and a small amount of steam for heating and
cleaning purposes. Processes have been developed which do not
require water for cooling and condensation of the oil.
Person-nel, of course, require drinking and sanitary water, Overall
water requirements for crude oil production, both mining and retorting, are less than 10 gallons per barrel of oil, of which a small amount can be reused or returned to the stream.
Shale oil refining requires relatively large quantities of water both as a process coolant and for the generation of steam. Since steam is consumed in the manufacture of hydrogen,
where the refining processes use hydrogen as a reagent, this
particular requirement is la.cger than in conventiona·l re fineries. Steam also is used to drive pumps and compressors.
Cooling water requirements for refining are large even·when
exchanging heat between hot outgoing and cool incoming process
streams. In the refining process some of tne oil fractions are
heated to elevated temperatures several times and the products must be condensed and/or cooled between process steps as well
as when refining has been completed. Water usually is the most
economical coolant for this purpose.
Cooling water may be used once or recirculated. through basis, most of the water would be returned to essentially without loss, but at a higher temperature.
On a once-the stream
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C A M E It O N A N D J O N E S N C O l t , O l t A T E D
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recirculation system uses some type of evaporative cooling to re-cool the water and very little is returned to the stream.
Once-through usage requires a large year round water
supply and if the stream contains considerable impurities, the
expense of treating may be significant. For a recirculating
cooling water system, only make-up water is required, usually no more than 10% of the quantity needed on a once-through basis.
Because of seasonal fluctuations in stream flow and the
probability of having to chemically treat the water/ to make
i t usable, we have assumed the use of recirculating cooling water systems for our estimate of water requirements.
Electric power plants are another significant consumer
of water. Here again, cooling and condensation is the largest
requirement. For average steam-electric plants using
recircula-ted cooling water, 7 pounds of water are consumed for each kilowatt-hour of electricity generated.
The total water requirement for shale oil production and refining including electric power generation, may vary from 50 to 100 gallons per barrel depending on the refining process
used. Perhaps 10% of this water would be returned to the stream.
Shale-related industry, which will not become important until the beginning of Phase IV, the seconda.ry expansion of shale oil production, will require additional quantities of
water. For instance, a 500 ton per day anunonium nitrate plant
will require 6,000,000 gallons of water per day. I t is
impos-sible to determine water usage by the many small supporting
plants, but i t is certain that requirements will be significant. A large usage of water attributable to a shale industry will be in the homes and cities of the workers and supporting
personnel. The per capita usage of water in western conununities
is higher than in areas where lawn irrigation is not practiced. A water-u"' factor of 300 gallons per person per day is assumed
in this leport. On the average about 2/3 of this water returns
to the stream.
water Requirement for Phase I ~ The usage of water for shale
during the experimental phase before any commercial production
begins,has been variable, but insignificant. There is no
r e ~ to believe that future experimen~l work, if any, will require water supplies additional to those already developed. However, since prototype production is expected to start be-tween 1960 and 1965 a water supply capability of at least 2500 acre-feet per year, iY--not already in existance, is suggested starting in 1960.
•
•
Wate:r. .Re}..i -~ _ _!-J:eme~L. £0"" Pl-i se J .r... The production of 25, 000
barreJs of shale oil cta~J. . .2 uring the prototype phase is
estimated t.o requ,re lJOO u~,e-feet of water per year of which 550 acre-feet wold be :r:et rned. Municipal water for the new
population is included T-bles .:.;:..._and~ summarize supporting
data for this est.unate
I t should be noted thax ever half th~ personnel for Phase
II presently reside .:i.n tl'e area. The relatively small new
popu.1.ation J.s expecteu to .1.ive in existing communities:
tnere-fore, i t is unlikely thax. additional water supplies will need
o oe d .veloped for mtm1.cipal use during this phase.
Industrial usage for Phase II also is small, but whether or not a firm year-round supply is availab~e depends on who
builds the plant(s) and their location. It is possible that water usage by the p~ototype plant{s) could be larger than estimated if the oil is more highly refined at the site of production, than assumed. As much as 1750 AF/yr would be
required
for a
production rate of 25,000 barrels per day ifa
hydrogenated coke distillate were the product. I t would seen prudent to assume this larger water usage.
For planning water supplies i t is suggested that a fac_or of 2o0 be used to insure an ample margin for larger production quantities than assumed. On this basia the water supply
capability for Phase II should be 5000 acre-feet per ye«r. Water Requirement for Phase III The production of 150,000
barrels per day of partially refined shale oil is eatin~ted to require 27,000 acre-feet of water per year for municipal and industrial use of which 11,000 acre-feet would be returned to the stream. Tables ~ and _.:/. give supporting data. These figures are inclusive of any water diverted for use during Phase II.
Since a Dasie assmption is thac all the shale oil will be refined in tne area, the estimate of water use probably is
maximllill for this oil production quantity. For plani.ing water
supplies i t is suggested that a f~ctor of 1.5 be used to cover
error in estimation and larger p.roduction quanti·cies than
assumed. Applying a factor of l.J, the water supply capability for Phase III should be 40,000 acre-feet per year.
Water Requirements for Phase IV From Tables ~ - and_</_ i t may
be seen that estimated water
use
for the production of 1,250,000 barrels of refined shale oil per aay is 252,000 acre-feet of which 93,000 acre-feet wouldoe
returned. These figures are forI
~
..
industrial and mtnicipal use and shale-related industry. mated for previous phases of assumed to be refined in the maximum for the oil quantity
for both shale oil production Usage is inclusive of that esti-develoµnent. All shale oil is area, thus water use should be assumed.
For planning water supplies, we suggest taking the water usage estimated without application of a factor to account for errors. The period in question is sufficiently far in advance to allow re-appraisal when the actual pattern of development becomes evident. Our current recommendation for a water
sup-ply capability for oil shale developnent for the period 1970 to 1975 is 250,000 AF/year.
C A M E l t O N A N D J O N E S , N C O l t P O l t A T E O
I
A-hie.
.3Summary of Water Use Data
for Commercial Shale 011
Deyelopm.ent
(figures rounded) Primacy Prototype ~ pansion Secon ary ~~ ion Timing 1960-65 1965-70 1970-75Shale Oil Production,B/D 25,000
Water Requirements, AF/Yr
Shale Oil Production and Refining Diverted
Consumed
Shale-Related Industry Diverted
Consumed
Municipal (New Population) Diverted
Consumed
Total Municipal and Industrial Diverted
Consumed Location
Garfield-Mesa County Ric Blanco County Uintah County, Ut h 550 500 750 250 1,300 750 all C A M E R O N A N O J O N E S , 150,000 1,250,000 12,000 11,000 15,000 5,000 27,000 16,000 all 127,000 114,000 10,000 5,000 115,000 40,000 252,000 159,000
80%
12% 8% I N C O l P O l A r E D~ b / e -
r
summary
of Populationfor
connercial
Oil Shale Developmen~(figures rounded)
Primacy
Prototype
Expansion
Secondary
Bxpansion
Timing 1960-65 1965-70 1970-75Shale Oil
ProductionB/D
Permanent Shale Personnel Production,.!/
Construction,
'lf
other
Industrial
Total Employed
Service
Personnel,
New,1/
ftouseholds, New,
.1./
New Population,
.V
Location
Garfield- Mesa
CountyRio Blanco
County
Uintah County, Utah
25,000 900 900 360 630 2,300 2,300 150,000 1,250,000 6,900 1,500 8,400 7, 100 12,500 45, 000 45,000 50,000 9,000 1,000 60,000 53,500 93,000 340,000 275,000 40,000 25,000
1/ 500 production
workers
from existing local population~ Prototype construction personnel local or temporary:~
construction personnel
for expansions
permanent.1/
Trades and
professionsnot directly
employed in the shaleindustry. Calculated as
90%
of shale personnel added tocommunity.
4/ Calculated as 1.2 employed personnel per household
~ Calculated as 3.6 persons per household.
