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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (99534)7/9/2009 2:32:44 AM
From: Elroy Jetson2 Recommendations  Read Replies (1) of 116555
 
The "kerogen" extracted from "oil shale" is low in hydrogen, and needs to be chemically processed with hydrogen from natural gas or hydrolyzed water in order to upgrade it to a type of crude oil.

Let's say we use "the magic solution" to provide the energy for this, in this case "the magic solution" proposed is electricity from nuclear power. The electricity creates hydrogen from water and combines it with oil share kerogen to make synthetic crude oil. In any event this and other parts of the kerogen upgrade process requires an enormous amount of water near the oil shale, where water is in short supply.

Shell has used a method they call THAI (Toe to Heel Air Injection, a complex process which extracts the kerogen from each grid by freezing the walls and heating the center of the grid using natural gas. Instead we could use "the magic solution" as the power source.

One must immediately question whether using energy directly from "the magic solution" would not be far more direct and efficient, than converting this energy into synthetic crude oil.

Why bother going to the trouble of repeatedly drilling expensive wells and using energy from "the magic solution" the create synthetic crude oil piped through long new pipelines and requiring large amounts of water, presumably piped in a thousand miles from water-rich regions just to make something which is a close equivalent of electricity from "the magic solution"?

If someone called Oil Shale a hoax, they're not far off. Miners used to burn shale oil in these areas because wood was scarce in those regions. On an industrial scale, what do you do with the waste equal to twice the size of the original shale, and so light that it floats on water after it is burned?

Chevron worked on Oil Shale for years. And the longer we learned, the worse the economics became. At current levels of energy use, the U.S. has a 350 year supply of something that will never make sense to use as a fuel source.
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