Oil Shale Economics - Energy Usage

Energy Usage

A measure of the viability of oil shale as a fuel source is the ratio of the energy produced to the energy used converting it (Energy Returned on Energy Invested - EROEI). The value of the EROEI for oil shale is difficult to calculate for a number of reasons. Lack of reliable studies of modern oil shale processes, poor or undocumented methodology and a limited number of operational facilities are the main reasons. Due to technically more complex processes, the EROEI for oil shale is below the EROEI of about 20:1 for conventional oil extraction at the wellhead.

A 1984 study estimated the EROEI of the different oil shale deposits to vary between 0.7–13.3:1. More recent studies estimates the EROEI of oil shales to be 1–2:1 or 2–16:1 – depending on if self-energy is counted as a cost or internal energy is excluded and only purchased energy is counted as input. According to the World Energy Outlook 2010, the EROEI of ex-situ processing is typically 4–5:1 while of in-situ processing it may be even as low as 2:1. Royal Dutch Shell has reported an expected EROEI about 3–4:1 on its in-situ test project.

Internal energy (or self-energy) is energy released by the oil shale conversion process that is used to power that operation (e.g. obtained by combustion of conversion by-products such as oil shale gas), and therefore reducing the use of other fuels (external energy). There are different views as to if the internal energy should be added to the calculation as cost or not. One opinion is that internal energy should not be counted as an energy cost because is does not have an opportunity cost, unlike external energy used in the process. Another opinion is that internal energy is used for performing useful work and therefore should be added to the calculation. It might also be argued that internal energy should be included as energy invested because it contributes to CO2 emissions. However, EROEI then becomes a measure of environmental acceptability rather than economic viability.

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