Total reserves: 3 trillion barrels of oil equivalent (BOE)
Given the political anxiety surrounding the prospect of importing oil, U.S. policymakers will be understandably tempted to reach first for the closest, richest oil resource. For many, that would suggest shale oil. The vast deposits located beneath Colorado, Utah and Wyoming alone could generate up to 800 billion barrels of oil. But policymakers should resist that urge.
Oil shale is created when kerogen, the organic precursor to oil and natural gas, accumulates in rock formations without being subjected to enough heat to be completely cooked into oil. Petroleum engineers have long known how to finish the job, by heating the kerogen until it vaporizes, distilling the resulting gas into a synthetic crude, and refining that crude into gasoline or some other fuel. But the process is expensive. The kerogen must either be strip-mined and converted aboveground or cooked, often by electrical heaters, in the ground and then pumped to the surface. Either process pushes production costs up to $90 a barrel. As all crude prices rise, though, the added expense of shale oil may come to seem reasonable--and it is likely to drop in any case if the shale oil industry, now made up of relatively small pilot operations, scales up.
The problem is that the external costs of shale oil are also very high. It is not energy-dense (a ton of rock yields just 30 gallons of pure kerogen), so companies will be removing millions of tons of material from thousands of acres of land, which can introduce dangerous amounts of heavy metals into the water system. The in-ground method, meanwhile, can also contaminate groundwater (although Shell and other companies say this can be prevented by freezing the ground). Both methods are resource-intensive. Producing a barrel of synthetic crude requires as many as three barrels of water, a major constraint in the already parched Western U.S. With in-ground, the kerogen must be kept at temperatures as high as 700°F for more than two years, and aboveground processes use a lot of heat as well. Those demands, coupled with kerogen’s low energy density, yield returns ranging from 10:1 (that is, 10 barrels of output for every one barrel of input) to an abysmal 3:1.
Total reserves: 1.5 trillion BOE
Coal can also be converted into a synthetic crude, as the German army, desperate for fuel, demonstrated during World War II. The method of transformation is simple: Engineers blast the coal with steam, breaking it into a gas that can then be converted, by the Fischer-Tropsch process, into gasoline and other fuels. Many energy companies are promoting various coal-to-liquid processes (CTL) as a way to replace oil, especially in the U.S. and other coal-rich nations.
The appeal is obvious. At a conversion rate of just under two barrels per ton, the world’s 847 billion tons of recoverable coal theoretically represent roughly 1.5 trillion barrels of synthetic oil, or a substantial piece of the final trillion.
Like shale oil, however, CTL has significant shortcomings. Its energy return is unimpressive; a barrel’s worth of invested energy nets just three to six barrels of CTL. Moreover, coal contains about 20 percent more carbon than oil does, and converting it to liquid raises the ratio even further. CTL fuels have a carbon footprint nearly twice as large as that of conventional oil--1,650 pounds of CO2 per barrel of CTL, versus 947 pounds per barrel of conventional.
Even if producers installed a vast and expensive system to capture and sequester the CO2 produced during the conversion process, says Edward Rubin, a professor of environmental engineering at Carnegie Mellon University, coal production uses so much energy that CO2 emissions from CTL fuels would still be as great as those of conventional oil. At best, making fuel from coal would get us no closer to a more climate-compatible energy system.
All of that aside, even the supply of coal is not infinite. Researchers at the Rand Corporation concluded in 2008 that replacing just 10 percent of U.S. daily transportation fuel with CTL would take 400 million tons of coal annually, which would mean expanding the American coal industry, which is already straining environmental limits, by 40 percent. Although such an undertaking might be politically feasible in China or other nations, Rubin says, “I have a hard time seeing that in this country.”single page
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