Shale Oil

Content maintained by Leesa Carson

• Shale Oil
• Resources
• Exploration
• Production
• World Ranking
• Industry Developments

Oil shale is organic-rich shale, which yields substantial quantities of oil (normally referred to as shale oil) and combustible gas by heating (retorting) and distillation. The organic material in oil shale is called kerogen, which under appropriate conditions in the Earth's crust can be a precursor to conventional oil reservoirs. One tonne of commercial grade oil shale may yield from about 100 to 200 litres (L) of oil.

Oil shales of commercial interest are predominantly in a series of narrow and deep extensional-basins near Gladstone and Mackay in central Queensland (Qld). These are thick Tertiary lacustrine (lake-formed) deposits which are relatively easy to mine and process compared to carbonate-rich oil shales (marls) elsewhere in the world. The Permian Galilee and Bowen Basins in Qld contain oil shale associated with coal measures. Oil shales occur in the Cretaceous Toolebuc Formation of the Eromanga Basin in north west Qld. Minor deposits are located in northern Tasmania (Tas) (Latrobe tasmanite deposit), Eyre Peninsular in South Australia (SA) and an oil shale - heavy mineral sand deposit in southern Western Australia (WA).

Resource estimates were reviewed to take into account the historical nature of the estimates and losses resulting from processing. Australia's shale oil resources estimates are for recoverable shale oil. Paramarginal and Submarginal Demonstrated Resources of shale oil are 213 Gigalitres (GL) (1340 million barrels) and 2074 GL (13 050 million barrels) respectively. This could increase significantly if research and development into processing shale oil results in the development of a commercial plant.

An Inferred Resource is estimated to amount to 1272 GL (8000 million barrels). This figure excludes the 'total potential' shale oil resources of the Toolebuc Formation of around 245 000 GL estimated by Geoscience Australia's predecessor, the Bureau of Mineral Resources, and the CSIRO in 1983⁽¹⁾. The research project undertook detailed geological, petrophysical and geochemical examination of the oil shales of the Toolebuc Formation. The objectives of the project included investigating and developing methods to assist government and industry to assess the potential of the sedimentary sequence as a possible future source of oil shale and developing an understanding of geological controls and the distribution of oil shale within the Toolebuc Formation. A resource assessment of around 245 000 GL was based on a productive oil shale covering an area of 484 000 km2 that ranges in thickness from 6.5 to 7 metres (m), has a specific gravity of 1.9, and yields an average 37 L of oil per tonne.

Exploration is predominantly focused near Gladstone and Mackay in central Qld and in north west Qld. South east of Devonport in Tas, Boss Energy Ltd is continuing to undertake exploration work to define the resource extent of the Latrobe oil shale deposit. Data associated with shale oil exploration are not available.

There is no oil being extracted from oil shale in Australia. From 2000 to 2004, the Stage 1 demonstration-scale processing plant at the Stuart deposit near Gladstone in central Qld produced more than 1.5 million barrels of oil using a horizontal rotating kiln process (Alberta Taciuk Process). No oil has been produced since 2004. The facility is currently being dismantled.

The demonstration plant achieved stable production capacity of 6000 tonne of shale per day and oil yield totalling 4500 barrels per stream day while maintaining product quality and adhering to Environment Protection Authority emissions limits. The oil products from the demonstration plant were Ultra Low Sulphur Naphtha (ULSN) 55% to 60% and Light Fuel Oil (LFO) 40% to 45%. The ULSN, which can be used to make petrol, diesel and jet fuel, has a sulphur content of less than 1 part per million (ppm). To put this into perspective, from 1 January 2008, the regulated maximum content of sulphur in premium unleaded petrol will be reduced from 150 ppm to 50 ppm.

The 2007 Survey of Energy Resources by the World Energy Council (WEC) reported that total world resources of shale oil are estimated at 2.8 trillion barrels (around 550 000 GL). The largest known deposit is in the western United States (2.6 trillion barrels), with other important deposits in the Russian Federation, the Democratic Republic of the Congo, Brazil, Italy, Morocco, Jordon, Australia and Estonia. Only Estonia, China and Brazil produce shale oil. The same WEC survey reported that total oil production for 2005 was 859 ML, with Estonia producing 433 ML, China 226 ML and Brazil at 200 ML.

In November 2008 Qld Government amendments to the Mineral Resources Act 1989 (Qld) placed a 20-year moratorium on oil shale mining in the Whitsunday region around Proserpine. Existing exploration leases remain, but the grant of new tenures and a variation of existing entitlements has been suspended pending the review of the desirability of oil shale exploitation.

In August 2008, the Qld Premier announced two years of research into whether oil shale deposits can be developed in an environmentally acceptable way. A report is due by August 2010.

In Qld, companies have either scaled back investment or projects are under review, these include:

• Queensland Energy Resources Ltd (Stuart Project, Qld): construction of a small-scale technology demonstration plant using Paraho vertical shaft kiln processing system.
• Blue Ensign Technologies Ltd (Julie Creek Project (south), NW Qld): testing of the thermal solution technology (Rendall Process), a thermal conversion and hydrogenation followed by supercritical solvent extraction and designing a demonstration plant.
• Greenvale Mining NL (Alpha project, Qld): reviewing the viability of Vertical Retort Torbanite (VRT) processing technology being developed by a South African based company.
• Xtract Energy Plc (Julie Creek Project (north), NW Qld): developing Xtract technology, a hydrogen and supercritical solvent extraction process.

Boss Energy Ltd is reviewing treatment processes of tasmanite oil shale at its Latrobe project, northern Tas.

1. Ozimic, S. and Saxby, J.D., 1983. Oil Shale Methodology: An examination of the Toolebuc Formation and the laterally contiguous time equivalent units, Eromanga and Carpentaria Basins. Bureau of Mineral Resources and CSIRO research project.