Energy solutions for producing shale oil: Characteristics of energy demand and economic analysis of energy supply options

Abstract

Increasing energy demands and oil price volatility have made oil shale attracted more and more attention. However, the shale oil recovery requires huge thermal energy and brings serious environmental problems, such as air pollution. In this paper, to reduce fossil fuel consumption, solar energy, a renewable energy, is introduced. The heat demand and the production yield of the shale oil recovery are obtained through the transients models developed in this paper. Then, three possible energy supply options for the shale oil recovery, i.e. natural gas, the solar thermal energy and the combination of these two, are analyzed and optimized in terms of the net present value and the return on investment over lifetime. The results show that for the shale oil recovery, Option 3, solar energy and gas boiler back up, is the optimal one, which has a return on investment value of 3.12 and can generate $ 72.4 M net present value more return than the Option 1, which uses natural gas only in the project lifetime.