Turning shale and asphalt into oil

by Stuart Winer, Israel 21C

An Israeli company intends to revolutionize oil production by recycling oil shale rock into high quality fuel. Haifa-based A.F.S.K Hom Tov recently demonstrated its patented method of extracting high quality oil and natural gas from a mixture of bitumen and oil shale rock. Bitumen - or asphalt - is the residue obtained by distillation of crude oil.

Experts predict the process will return oil at just $25 dollars a barrel and the additional natural gas produced would further boost the financial feasibility. With crude oil prices currently floating over the $50 a barrel mark, this proposed method is generating interest around the world. "The world is looking for a replacement for oil supplies," says attorney Moshe Shahal, a former Israeli energy minister and today the legal representative for Hom Tov.

... "The Hom-Tov process is energy self-sustained," says Professor Zeev Aizenshtat, an energy resource expert and professor of chemistry and applied chemistry at the Hebrew University of Jerusalem. Aizenshtat has followed the development of the Hom-Tov process for more than a decade and now acts as an expert consultant for the company.

According to Aizenshtat, reprocessing bitumen to extract oil residues requires very high temperatures that burn off valuable lighter oils leaving mostly gases that are hard to store or transport to clients.

... Hom-Tov first suggested using the shale process in 1992 and in 1994, Shahal, then Israel's energy minister, ordered an investigation of the process to check its financial viability. Although the results proved that oil could be made at just $16 a barrel, at a time when oil was selling at $20 a barrel made the profit margin too low to justify setting up a plant. A decade later, as oil prices reach record highs, Hom Tov relaunched its method for producing cheap oil. AFSK Industries was established 30 years ago and in 1994 established AFSK Hom-Tov to promote the unique extraction process. Yisrael Feldman, A.F.S.K. Hom Tov CEO, and creator of the revolutionary technique, estimates it will cost $700 million to set up a production plant in Israel's Negev region that could produce 2.3 million tons of oil and natural gas from 6 million tons of shale and 2 million tons of bitumen. With those costs, a barrel of oil would be just $25.

"We won't see that price for [crude] oil again," Feldman asserts.

Last year, energy consultants Eco-Energy reviewed the Hom-Tov process and concluded that the proposed plant would return profits of over $200m, given current oil prices. Shahal estimates it would take just three years to build the proposed full-size production plant and Hom-Tov is now applying for construction and mining permits. The project has already attracted serious interest from foreign investors. Ofer Glazer Holdings recently bought a 70% controlling share of the company for an undisclosed amount and Shahal says both US and European oil companies are ready to back the proposed Israeli plant along with similar extraction sites in Jordan and Morocco.

For Israel and other countries that have negligible domestic oil resources the process will relieve dependence on imported oil. Israel's Ministry for National Infrastructure is keen to follow developments as initial estimates show that Israel has enough shale to provide a third of its own energy demands.

"It gives Israel the opportunity to produce up to 30% of its fuel needs," Shahal told ISRAEL21c. "It all depends on the size of the plant. Israel is rich in shale deposits and there is enough to keep production going for another 70 years." Oil shale is in plentiful supply in the Negev desert and is already being mined by phosphate factories that must dig past the shale to get to the lower mineral reserves. Oil shale is a naturally occurring rock containing about 20 percent organic material. Geological pressures form the shale over time from organic matter deposited in lakes, lagoons and estuaries, and it is found in abundant supplies in many countries around the world. Oil shale can also be burnt directly as fuel and has been used as such in power stations for over a hundred years notably in Estonia, Russia, China and Brazil.

Distilling oil shale yields petroleum oils and the United States Energy Information Administration estimates the recoverable oil from oil shale rock in the US alone at over a trillion barrels.

However, the petroleum extraction process requires very high temperatures and pressures and in the past oil shale petroleum was never able to compete with the much more easily mined crude oil. With global energy concerns rising together with oil prices, oil shale is drawing renewed interest and several US and European oil companies are researching new in-situ mining methods to extract oil directly from the subterranean shale.

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