Shale Oil Impact in Russia

Shale oil, known also as kerogen oil or oil-shale oil, is an unconventional oil produced from oil shale by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock (kerogen) into synthetic oil and gas. The resulting oil can be used immediately as a fuel or upgraded to meet refinery feedstock specifications by adding hydrogen and removing impurities such as sulfur and nitrogen. The refined products can be used for the same purposes as those derived from crude oil. The largest known reserves are in the US. Russian Prime Minister Vladimir Putin has urged his country’s gas industry to rise to the challenge of shale gas as the United States and some European countries forge ahead with developing the controversial energy source. US shale gas production may seriously restructure supply and demand in the global hydrocarbons market, Putin said yesterday in his final address to the Russian Duma before he takes over as president on 7 May.

“Our country’s energy companies absolutely have to be ready right now to meet this challenge,” Putin said.

Putin said Russia must be prepared for “any external shocks” and “a new wave of technological change” that was “changing the configuration of global markets”.

“I fully agree with the proposal of deputies that we need to create a better system for long-term macroeconomic, financial, technological and defense forecasting. This is especially important, given that the 21st century promises to be an epoch [of] new geopolitical, financial, economic, cultural and civilization centers,” he told Russia’s lower house.

Bloomberg reported that the United States overtook Russia as the biggest producer of natural gas in 2009 as it extracted fuel trapped in shale (see background). That has slashed gas prices and led nations from China to Poland to explore exploiting shale gas, potentially cutting their reliance on Russian gas.

France banned shale gas drilling out of ecological concerns. US energy giant Chevron suspended shale gas exploration activities in Bulgaria and Romania following ecological protests.

Global technically-recoverable oil shale reserves have recently been estimated at about 2.8 to 3.3 trillion barrels of shale oil, with the largest reserves in the United States, which is thought to have 1.5—2.6 trillion barrels. Worldwide production of shale oil was estimated at 11,600 barrels per day (in 2002. The leading producers were Estonia, Brazil, and China.

Mining oil shale involves a number of environmental impacts, more pronounced in surface mining than in underground mining. They include acid drainage induced by the sudden rapid exposure and subsequent oxidation of formerly buried materials, the introduction of metals including mercury into surface-water and groundwater, increased erosion, sulfur-gas emissions, and air pollution caused by the production of particulates during processing, transport, and support activities. In 2002, about 97% of air pollution, 86% of total waste and 23% of water pollution in Estonia came from the power industry, which uses oil shale as the main resource for its power production.

For further information see EurActiv.

Article by Andy Soos, appearing courtesy Environmental News Network.