By C. Paul Davis, Senior Vice President, Titan Oil Recovery Inc. There is a term that is being used quite frequently in today’s oil industry called “unconventional oil.” The term is used more often these days and has become a common topic of Dr. Daniel Yergin, chairman of IHS-CERA. Yergin is the well known and respected author of his new book, The Quest (2011). He is also the Pulitzer Prize author of another best seller, The Prize (1991). Both of these books are great reads and both provide a wonderfully detailed history of the oil industry from the very beginning up to today. I have read both books and I recommend them highly. “Conventional oil” is essentially the oil that is found, recovered and used by most of the world since the very first oil well was drilled by Colonel Edwin Drake in Titusville, PA, in 1859, some 153 years ago. Since that day in 1859, an estimated 1.5 trillion barrels of conventional oil have already been produced globally and most oil experts agree that, at least, another 1.0 trillion barrels or so of conventional oil still remains to be recovered. Since the global average of approximately 35% of the original oil discovered is normally recovered using industry standard primary and secondary oil recovery processes, this leaves about 65% of the remaining oil, or an estimated 6.0 to 7.0 trillion barrels of oil trapped. This oil is considered basically unrecoverable using the typical and widely accepted and applied primary and secondary oil field processes. However, for many decades, various enhanced oil recovery (EOR) processes have been used successfully to recover a portion of the remaining 65% of the trapped oil. Some of these EOR processes include: 1) gas injection (CO2, natural gas and nitrogen); 2) chemical injection (polymers, surfactants and alkaline solutions); and 3) thermal methods (cyclic steam injection, steam flooding, in-situ combustion and hot water floods). These three methods routinely recover approximately another 10% (although this can be significantly higher in some circumstances) of the original-oil-in-place, still leaving about 55% of the remaining oil trapped and unrecoverable. Over the past 80 years, there have been a lot of time, effort, and money spent by many people, universities, and companies trying to invent a new MEOR technology that works and can recover an additional meaningful percentage (up to 10%) of the remaining 55% of trapped oil at an affordable cost. Having spent more than 10 years and over $30 million developing, testing, and successfully commercializing its own proprietary microbial enhanced oil recovery (MEOR) technology called the Titan Process®, Titan Oil Recovery is one of these companies. Based on nearly four years (July 2007 to December 2010) of applying its technology to over 16 oil fields with over 100 safe well treatments achieving a 83% success rate, Titan believes another 10% recovery of oil at less than $10 a barrel is definitely possible because the cost per recovered barrel has actually been as low as $6. A copy of Titan’s application report is available on request. Yergin’s new direction away from the peak oil debate is a rather interesting development. His new position is that if we add the total amount of oil that can be recovered from new emerging oil sources, like oil sands (or tar sands) and oil shale where an immense amount of oil can potentially be found and processed that the world will have at least 15 trillion barrels of recoverable oil remaining and not the 1.0 trillion barrels that many experts have come to believe. For sure, 15 trillion barrels of oil would last the world a very long time. Some people are actually saying that the United States, in time, has the opportunity to become energy independent and also, in time to again become the largest producer of oil in the world based on unconventional oil (and gas). Wow! If this proves to be doable and affordable, then maybe, just maybe he might be right. Let’s all hope that he is right. When one thinks about oil shale, one usually thinks about the United States, Estonia, China, Brazil, Germany, Israel and Russia. Here the oil is held in very low permeability shale -- essentially eliminating any natural flow of oil. However, the United States holds the greatest promise for additional oil from various shale formations. The Bakken, Pierre shale, Niobrara, Marcellus and Eagle Ford are some of the largest known resources. Initial global estimates for oil shale range from 2.8 to 3.3 trillion barrels of oil. New technologies are at the forefront oil shale production – things like multi-stage fracing (using water, sand, and proprietary fluids) and horizontal drilling to release oil trapped in the shale are relatively new developments that appear to hold great promise--if they can be applied safely. However, these new technological solutions face some serious challenges and concerns since they are not well understood by the general public, the media, and often even the regulators. Some of the challenges that unconventional oil will have to address and solve to realize Yergin’s new perceived world of oil in the U.S. and the world, include:

  • The cost to produce a barrel of oil. All of the new processes (equipment, services, facilities and raw materials) tend to be very costly (multi-billions of dollars in total) to implement and the ultimate cost to produce a barrel of oil is also very high. Costs can range to over $70 a barrel in some circumstances.
  • The amount of water required for many of the processes (such as fracing) is quite high and very expensive unless water can be reclaimed and reused.
  • The energy retuned on energy invested (EROEI) is indeed a real challenge. If it costs and takes more energy to produce than the energy that is derived, why do it?
  • Pollution of the atmosphere, lakes and streams is critical. So, pollution and environmental damage must be eliminated, mitigated, or adequately remediated -- all high cost factors.
  • Disposing of the waste generated during the two processes (oil sands and oil shale) is a major task and can add significant cost.
  • The impact of environmental destruction is potentially enormous. The companies involved are legally required to return the land to its former condition. This sounds like a very difficult, costly, and almost impossible challenge.
  • The damage to wildlife inhabiting the land where many of these processes are performed is a major concern to environmentalists and people who live there, and rightfully so.
I for one would like unconventional oil to become what Yergin envisions for the future. Let’s hope he is right. For now, I suggest that we concentrate on recovering a significant portion of the 6.0 to 7.0 trillion barrels of trapped conventional oil safely and at an affordable cost. EOR is a part of the solution to the world’s energy needs and we need to pursue technology that is affordable, safe, and available today. So for now, recovering oil energy from conventional sources still continues to be the number one challenge of the 21st Century.