Potential small-scale development of western oil shale

Several studies have been undertaken in an effort to determine ways to enhance development of western oil shale under current market conditions for energy resources. This study includes a review of the commercial potential of western oil shale products and byproducts, a review of retorting processes, an economic evaluation of a small-scale commercial operation, and a description of the environmental requirements of such an operation. Related studies, which are reported elsewhere, include an evaluation of the market potential of numerous oil shale products and byproducts, a cost analysis of several oil shale mining alternatives and unconventional uses for oil shale, an evaluation of innovative mining concepts, a process engineering study of a small scale plant, a study of propellants for enhanced oil shale fracturing, and an evaluation of methods for economic enhancement of shale oil upgrading. Shale oil used as a blend in conventional asphalt appears to have the most potential for entering today's market. Based on present prices for conventional petroleum, other products from oil shale do not appear competitive at this time or will require considerable marketing to establish a position in the marketplace. Because shale oil-blended asphalt may significantly extend the life of roadway pavements, the value of the shale oil will be considerably more than that of conventional petroleum asphalt. The primary reason that shale oil improves the life of an asphalt blend is the presence of nitrogen compounds in the shale oil. Other uses for oil shale and spent shale, such as for sulfur sorbtion, power generation, cement, aggregate, and soil stabilization, are limited economically by transportation costs. These costs restrict use to a transportation distance of 700 miles. Such uses may improve the economics for a small-scale operation by reducing spent shale disposal costs and providing some additional income. The three-state area consisting of Colorado, Utah, and Wyoming seems reasonable for the entry of shale oil-blended asphalt into the commercial market. Assuming a 7.5% increase in pavement life cycle, the amount of shale oil material required in the area is estimated at 1,500 to 2,500 barrels per day (b/d). From a review of retorting technologies and the product characteristics from various retorting processes it was determined that the direct heating Paraho and inclined fluidized-bed processes produce a high proportion of heavy material with a high nitrogen content. The two processes are complementary in that they are each best suited to processing different size ranges of materials. An economic evaluation of a 2,000-b/d 3hale oil facility shows that the operation is potentially viable, if the price obtained for the shale oil residue is in the top range cf prices projected for this product. This evaluation is based on an estimated capital cost of $82,097,600 and an operation cost of $11,013,360 per year for the retorting facility. At $700 to $1,000 per ton of shale oil residue, the estimated discounted cash flow-return on investment (DCT-ROI) is in the range of 18 to 2 6%. This return on investment results in about a 4- to 5-year return of capital. The most significant parameters to affect the rate of return are the price of the asphalt blend and the plant throughput. Hence, if the production capacity or the asphalt price drops below the projected values the viability of the oil shal«t facility becomes tenuous. On the other hand, if the price increases above these values or the plant capacity is expanded to meet greater demand with little additional capital expenditures the facility becomes much more profitable. Environmental requirements for building and operating an oil shale processing facility are concerned with permitting, control of emissions and discharges, and monitoring. Federal, state, and local agencies require permits to ensure protection of the air, water, and land. Prior to construction, a year of monitoring may be necessary to establish baseline conditions and provide input to an assessment of environmental impacts. Costs for permitting are estimated at approximately $500,000. Control of emissions and discharges can readily be achieved with existing technology. Monitoring costs during operation are estimated to run around $200,000 per year.