Glenn Reynolds says there’s good news on oil shale, and points to an article that says the Feds have given three oil companies the go-ahead to work on shale.
They should have talked to this Israeli company instead:
HAIFA, Israel, Nov. 7 (UPI) — The Israeli process for producing energy from oil shale will cut its oil imports by one-third, and will serve as a guide for other countries with oil shale deposits, according to one company.
A.F.S.K. Hom Tov presented its oil shale processing method on Tuesday, outside Haifa and just down the street from one of the country’s two oil refinery facilities.
“Because the patents for this process belong to (the company), Israel is the most advanced in the world in the effort to create energy from oil shale,” Moshe Shahal, a Hom Tov legal representative and a former Israeli energy minister, told United Press International.
How much is this all going to cost?
$17 a barrel.
It would cost about $17 to produce a barrel of synthetic oil at the Hom Tov facility, meaning giant profit margins in a world of $45 to $60 per barrel crude. Yearly earnings are forecasted to be between $159 million and $350 million, Shahal said.
Of course, the sweetest part in all of this is that if the Israeli-patented process goes global, the Arab nations lose a significant part of the oil threat. Canada and the U.S. have large, untapped oil shale reserves.
Score another one for Jewish scientists.
Update: Unrelated to the above, but good news nonetheless: Oil prices are nearing a 17-month low, and have dipped below $55 a barrel. It’s weather-related and stockpile-related, but it’s good news.
I knew I should have waited ’til the weekend to fill up.
Somehow I think $17 a barrel is too optimistic. Twice that much would still be great, however.
Whatever it costs to produce, it will sell at the same price as OPEC oil on the “open” market.
The power of this alternate source lies in breaking the monopoly, in freeing the west from dependence on Russia and the Arabs.
Now if we can develop equally effective technology for coal, both India and China will also be free of the need to pander to them, as well.
There is still a serious problem of environmental damage, and that even before the chemistry starts. The shale is dug out of the earth, and whether we want it or not, the landscape and the soil are destroyed. And the processing itself is not without its impact.
But yes, it’s still better than hanging on a thread of OPEC good will. Especially seeing who rules OPEC…
I would rather not have to buy oil from the Arabs if I had my choice !
It costs OPEC $5 a barrel to pull it out of the ground. Thats alot of profit.
This breakthrough is significant as it will force OPEC to lower their prices – just as it did in the early 80’s when the US was at the height of their search for alternative energy sources (which tanked after the oil prices dropped).
W/R/T coal from India and China – wherever there is coal, there often is low-grade petroleum-bearing shale, although the reverse is not true.
I hope that the estimate of breakeven is close to $17/barrel, because current technology has a breakeven point of about $40/barrel.
Kol tov to Hom Tov.
chsw
It’s not totally clear that the $17/bbl is the full cost, including mining of the shale, or whether it is only the cost incurred at the processing plant.
In any event, this bears close watching.
“Canada and the U.S. have large, untapped oil shale reserves”
Hurray for Canada !!
In Alberta (Canada), it is costing just under $20 to get a barrel of oil out of the tar sands up there. To my knowledge, getting oil out of tar sands is cheaper than getting it out of shale (sand vs rock). If they can do it for $17/barrel, this is a huge step forward.
I’m taking a wait-and-see stance, but I fervently hope that this is true.
It cost around 30 dollars to produce shale oil back in the early 80’s. That comes out to about 64 dollars per barrel today.
And yes, it is much easier to get oil out of Tar Sands than it is to get it out of shale oil.
The nice thing to know is that the US and Canada have more oil reserves in this area than Saudi Arabia. But then as Snoopy said, there are enviromental hazards…
SnoopGoon, the land can be reclaimed as is done with strip mines and clearcut forests. IMHO, the biggest environmental hazards are often the environmentalists.
chsw
This is one of the more significant and hopeful stories imaginable. According to one story, half of Colorado’s oil shale potential (not all of it is recoverable) exceeds Saudi Arabia’s proven oil reserves, and Colorado isn’t our only source of the shale. If this pans out the power and money of the Arabs and Iranians will decrease significantly. Maybe they can drink their oil.
And Israel has the patent? If I were a cynic I’d say that might lead to a softening of the European governments and media in their attitudes towards Israel. But as those of you who’ve read my comments know, I’m innocent and credulous. cynical people, though…As Golda Meir once said about the Europeans, it’s hard to hear them speak because their throats are choked with oil.
I hope this works, but I’m a skeptic. I think that, should this oil appear on the market in significant quantity, OPEC will simply reduce its price enough to drive the shale and tar sands producers out of the market.
If we really have passed peak oil, then any attempt on the part of OPEC to reduce prices won’t work. They won’t be able to increase production enough.