Category Archives: Energy Policy

This blog is part of a series about Enefit, known at home in Estonia as Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

Contaminated groundwater, 600-foot high piles of oil shale waste that spontaneously ignite, and the emission of “lots of carbon dioxide”; all of this comes from a company that claims to be “highly dedicated to lessening the environmental impact of our production processes.” A look at the facts reveals that, despite its claims, Estonian oil shale company Eesti Energia’s operations have been anything but environmentally friendly.

For several decades Eesti Energia, an Estonian government-owned corporation, has been extracting oil shale, and using it to generate Estonian electricity at a stunning environmental cost. In the United States, Eesti Energia is known as Enefit. In 2011, Enefit bought the largest privately held oil shale reserve in Utah, and since then it has been experimenting with oil shale found on that land.

Since Eesti Energia has brought its oil shale technology to our shores through Enefit’s Utah project, we think a quick review of the company’s environmental record is in order. That way, Utahns can see what could be in store for them.

 

 

A polluted lake near an “ash” mountain in NE Estonia. Source: EcoCrete Project

First off, let’s see what the Estonians think of oil shale. A member of the Estonian Parliament described oil shale waste as a problem “for which there is no solution at present.” Researchers at Estonia’s Tallinn University of Technology and the Estonian Fund for Nature describe the oil shale industry’s environmental impacts as “huge.”

Scientists at Tartu University and the Institute of Ecology even wrote a paper in which they explain how Estonian oil shale’s waste is hazardous.

“[The] Processes of oil shale mining, combustion in power plants, and thermal processing in chemical plants generate a huge amount of solid waste…Semi-coke dumps surrounding the plants of oil shale thermal processing. Semi-coke is a residue classified as environmentally harmful due to its components like sulphides, volatile phenols, benzo(a)pyrene, etc.”

– “Artificial Mountains in North-East Estonia: Monumental Dumps of Ash and Semi-Coke.” Tartu University and the Department of North-East Estonia. 2005.

In fact, these waste products are so unstable, they have been known to spontaneously combust and contaminate groundwater and soil. As of 2005, 27 percent of oil shale landfills in Estonia had self-ignited.

“Observation of groundwater and soil illustrate that the environment close to burning landfills is contaminated with molybdenum, copper, sulphate, arsenic, oil products, and PAHs…”

– “Life Cycle Analysis of the Estonian Oil Shale Industry.” Estonian Fund for Nature and Tallinn University of Technology. 2005.

In spring 2012, The Baltic Course magazine reported that one of these massive oil shale waste piles caught fire during the winter, and still continued to burn. The magazine also noted there is, “no universal solution to extinguish such a fire.”

In addition to water and ground pollution, Eesti Energia’s CEO, Sandor Liive admitted producing energy from oil shale creates significant global warming pollution, or “lots of carbon dioxide,” as he puts it.

“The risk concerning the price of carbon dioxide is relatively high for Eesti Energia because our production involves the emission of lots of carbon dioxide.”

–  Sandor Liive, CEO Eesti Energia. Interview with Eesti Paevaleht. BBC Monitoring Europe. 04 July 2011.

 

 

Arial photo of a pile of oil shale ‘ash’ in Estonia. Source: EcoCrete Project.

Eesti Energia isn’t the only company experimenting with the rock that admits oil shale has negative environmental impacts. In 2012, Anton Dammer, a former Senior VP at oil shale company Red Leaf Resources, testified to Congress:

“I worked in Estonia for several years…The old antiquated surface retorts that [Eesti Energia] use are pretty nasty business…They produce a lot of semicoke. You know, they call them the Estonian Alps…I can’t tell you exactly all the technical details of it, but it’s – it’s much improved, but you would never want the retorts that are operating – operating in Estonia to come to the United States.”

– Anton Dammer, Senior Vice President of Red Leaf [Resources]. CQ Transcript, House Committee on Science, Space and Technology, Subcommittee on Energy and Environment. 10 May 2012.

Eesti Energia’s environmental track record shows its claims of environmental friendliness ring hollow. Oil shale production’s health and environmental risks present a clear case against allowing oil shale companies increased access to public lands. Until they can prove they have a commercially viable technology that won’t pollute our communities’ air and water supplies with harmful waste, they shouldn’t receive more handouts.

Full story: Eyes on Enefit: Oil shale extraction an environmental threat

This blog is part of a series about Enefit, and Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

History has shown that for more for more than a century, oil shale isn't a commercially viable energy source in the U.S. Oil shale is actually a rock that doesn’t contain oil at all (pdf). It’s kerogen, or fossilized algae, locked in shale rock. In order to turn oil shale into oil, the rock has to be superheated for months or even years, and then processed. That takes a lot of energy, money and potentially a lot of water.

Yet, that hasn’t stopped industry executives and supporters, like ECCOS, from promoting oil shale as being on the verge of economic viability.

So it was surprising to read an interview (pdf) with the CEO of Eesti Energia (parent company to Enefit) which is regarded as the world leader in oil shale, admit that oil shale isn’t profitable.

“True, most of the investments are made under various subsidy schemes because even current free market prices are not high enough to make investments financially profitable.” – Sandor Liive, Esti Energia CEO, Eesti Paevaleht website via BBC Monitoring Europe, July 4, 2011

It’s great to see this type of candor and acknowledgement that Eesti Energia has been able to produce commercial oil shale in Estonia due to significant government subsidies. Now it looks like Eesti Energia is asking for more subsidies. But it turns out that not everyone thinks that’s a good idea, as some elected leaders in Estonia are raising questions about oil shale investments:

“The upcoming sharp increase in the power tariffs will almost double the prices of daily goods and services from January 2013, but this is not enough for Eesti Energia. While this year the company received 150 million euros in state subsidies, it is demanding another 200 million in 2013…Eesti Energia…pay[s] a few tens of millions of euros in oil-shale resource fee every year, but earn hundreds of millions of euros in net profit…benefitting from publicly owned oil-shale.” – Edgar Savisaar, Chairman of Estonian Centre Party, Text of report from Aripaev website via http://www.bbn.ee October 18, 2012

FYI, 200 million euros is the equivalent of approximately $264 million.

You can read previous installment of Checks and Balances Project’s Eyes on Enefit series here.

Full story: Eyes on Enefit: Oil shale CEO says investments in oil shale aren’t profitable

This blog is part of a series about Enefit, and Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

Despite posturing by Enefit’s corporate officers, internal documents and tests show that the company’s attempts to extract and process oil shale in Utah have run into trouble.

Enefit Chairman Harri Mikk has said that their technology “does not need to be proven.” (ed. note – Harri Mikk resigned from the board effective Dec. 31, 2012)

This past June, Enefit CEO Rikki Hrenko made the following statement:

“And most importantly for our project in Utah, and for our activities here in the U.S., we also have demonstrated proven commercial shale oil production.”

But Eesti Energia’s CEO, recent test results, and internal documents tell a very different story.

In late 2012, Estonian newspaper Postimees reported that the company had experienced delays and setbacks with its new Enefit 280 technology.

Sandor Liive, chief executive officer of Eesti Energia [Estonian state-owned power company] said that the company has failed to put their new [oil shale] production plant into operation due to technological problems and, therefore, the launch of the plant has been postponed until the new year. – BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees, November 30, 2012

 

"But it is not a big surprise that a new technology does not work right away,” said Sandor Liive, CEO Eesti Energia – BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees, November 30, 2012

According to the Postimees, the delay puts on hold the company’s plans for similar facilities in the United States and Jordan.

Enefit’s new oil shale technology had only been tested in a lab until recently when, after technical delays, the Enefit 280 plant began producing oil from oil shale in December of 2012.

Back here in the United States, the Salt Lake Tribune reports that Enefit is experiencing difficulties applying its technology to Utah oil shale deposits, and specifically that the company hasn’t been able extract oil from the oil shale ore mined in Utah as easily as executives had hoped and promised. Tests have proven Utah’s oil shale to be “stronger and drier” than Estonian oil shale.

Following the tests, Enefit CEO Hrenko said that “…the results were positive…” yet an internal company document, obtained by an Estonian newspaper, stated that “the tests are not promising.”

The Vernal Express also reported that:

Enefit’s Utah project has proven to be “unexpectedly difficult to do,” and that tests indicate that Utah oil shale requires more energy to break down than expected, resulting in higher carbon dioxide emissions.

What Enefit called, “a simple mining project” has experienced significant delays and requires additional funds. Eesti Energia now projects Enefit’s Utah project will need an additional 37 million Euro in investment. And, Estonian mining experts say oil production from Utah oil shale is still decades away.

The financial and environmental risk posed by this still unproven technology demands that companies like Enefit fully prove the viability of their technologies before they are given access to more public land for oil shale extraction.

Read the first installment of Checks and Balances Project’s Eyes on Enefit series.

Full story: Eyes on Enefit: Untested technology, unproven results

From the website, "Oilprice.com" comes the announcement of a trend I have mentioned before…more and more "fracks" per wellbore to release more natural gas. I will let the article, which I have edited for length, speak for itself.

Make sure you read through to the last paragraph, and then imagine the possibilities…

          ——————————————————————

Lower costs. Higher oil and gas recoveries.”

That's how Dan Themig, President of Packers Plus – a privately owned, Calgary-based fracking (completions) company – describes an interesting new development in fracking…a development that spells bigger profits for energy producers…

You see, Themig's new QuickFRAC® product is one great example of a new trend in fracking – one that gets away from the traditional horsepower model and into one a “Recovery Factor” (RF) model. (The RF approach looks to increase the amount of oil and gas recovered from a well. It's estimated that most wells recover just 5% -20% of the Original Oil in Place – also known as OOIP.)

The size of individual fracking operations has increased 10 times in the last decade, as the industry has grown and learned how to more effectively apply the technology.

Themig says the “sledgehammer approach” of more horsepower (in the form of pumping trucks at surface), more fluid and more proppant has been the industry norm for the last five years, but now the industry is getting smarter in order to increase production from wells.

“We want to reduce the amount of fluid used and maybe the amount of proppant. We can reduce the time and number of stages and get a more effective Recovery Factor.”

This is the size of a frack job in 2004.

This is the size of a frack job in 2008.

In the new, ever-longer horizontal wells being drilled, fracking is done in multiple stages – often every 100 metres.

QuickFrac can do multiple stages of fracks at the same time.

Themig says that completing several fracking stages at once saves so much time, QuickFRAC can save 10% on overall well costs for a producer – often a $500,000 saving per well.

Having several fracks go into the formation at the same time also increases the amount of oil recovered from the well, Themig says. That’s because the rock holding the oil is being hit by huge pressures and vibrations on different sides at the same time, which creates more fractures in the rock.

“We drilled a $5 million well and decreased costs 10% by doing 24 stages in 10 hours,” Themig says. “Previously that would have taken 4-5 days using cement liners in the wellbore, and two days with our regular StackFRAC® technology.”

“And we increased the Recovery Factor by 30%-40%.”

Themig says The Future is using longer horizontal wells, and doing more frack stages per well, and QuickFRAC is positioned to help the industry make the evolution easy and profitable.

“The number of fracks are now far more than we ever thought it was going to be. In 2001 we thought 5-6 fracks be enough to frack a well. Then the industry moved to 12-15 per well now to over 30. Some customers want 40-60 fracks – consider how long it would take to do 60 fracks that are 4 hours each. The future looks like 60-100 stages in a lot of wells, depending on geologic needs.”

by. Keith Schaefer

http://oilprice.com/Energy/Energy-General/A-New-Trend-in-Fracking-Emerges-The-Recovery-Factor.html

Sooo…if complete destabilization of the ground upon which you stand appeals to you….welcome to "SuperFrack"…coming soon to a watertable near you.

Full story: And now…announcing ” SuperFrack”!!