Shale oil marketing strategies outlined With derivation of liquid hydrocarbons from oil shale having moved beyond the early development stage, attention is now turning to marketing these products. George E. Ogden, manager of marketing development for Occidental Oil Shale Co., outlined some of the marketing considerations for the Division of Fuel Chemistry at the Miami Beach meeting of the American Chemical Society. Most shale oil technology developed to date has been based on above-ground retorting. But the present development trend is changing in favor of in situ retorting. Also, it was assumed originally that considerable prerefining of shale oil would be performed at the shale retort itself. But Ogden says that demands for oil in the near future will diminish and probably eliminate the need for prerefining at the retort. Shale oil is not directly substitutable for conventional crude oils, but there are enough similarities to permit a relatively easy integration of shale oil with other feedstocks in a refinery. The major difference between shale oil and conventional crudes is shale's high nitrogen content, which must be reduced to avoid problems with catalytic conversion in the refinery. Feeding raw shale oil to a refinery means that nitrogen reduction would occur in the refinery itself. In that case, additional refinery technology would be required; but that technology is well established and available. In addition, blending the shale oil with conventional crudes decreases the nitrogen impact on the refinery. As a shale oil industry starts up, it most likely would utilize existing processing facilities, Ogden notes. No dedicated plants are anticipated, a situation that simultaneously presents both advantages and disadvantages. No great expenditures for dedicated shale oil plants would be
required beyond the retort, but considerable transportation costs would be incurred in getting the oil to the refinery. Most of the refining capacity in the U.S. is centered in lower California, the Gulf Coast, and in the Chicago and Philadelphia areas. There is some capacity in the Rocky Mountain region, and this might be the first place that raw shale oil would be sold, simply because of its proximity to the shale operations in the West. Enough refinery capacity is available in the Rocky Mountain area to absorb up to 200,000 bbl per day of shale oil. The key factor in marketing shale oil is transportation. Other than a market of opportunity in the Rocky Mountains, the only realistic markets are Los Angeles, Chicago, and the Gulf Coast. Chicago has a distinct edge in that, although it may not offer any great transportation cost advantages, neither does it exact a significant penalty, as do both Los Angeles and the Gulf Coast. If shale oil is not upgraded at the mine, as formerly assumed, there will be an additional refinery cost in integrating shale oil with conventional feedstock. Ogden estimates this will cost about $2.50 per bbl—a cost that seems high but which, he notes, isn't too bad in light of the outlook for hydrocarbon markets of the 1980's. Another negative factor is a low gasoline yield compared to that from conventional crudes. This disadvantage is tempered by the likelihood that gasoline demand will stabilize and probably fall slightly in the 1980's, making chemical feedstocks and high distillates correspondingly more important. Such a development would be in shale oil's favor. All in all, the marketing scenario that Ogden has posed indicates that chemical feedstocks are the most remote market. Industrial and utility boiler fuels are attractive but highly vulnerable to environmental and other regulatory manipulation. Even so, the first major use of shale oil products probably will be as boiler fuels in the Great Lakes region. •
EVANS
GLYCOL DIMERCAPTOACETATE HS—(CH2C02CH2)—SH Cross-Linking agent and specialty monomer by addition across unsaturation — by reaction with aldehyde, ketone and acid chloride groups.
I I HC
CH
II
II
+
HS(CH 2 C0 2 CH 2 ) 2 SH
HC CH
I
I
I
I
I
HC—S—(CH 2 C0 2 CH 2 ) 2 —S—CH
HC
CH I 0
I
II
HC—C—CI
0
II I CI—C—CH+HS(CH 2 C0 2 CH 2 ) 2 SH
0 X 0 I II • II I HC—C—S—(CH 2 C0 2 CH 2 ) 2 —S—C—CH I I
n X — C — X + n HS—M—SH
-S—M—S—C —S—M—S—C—S—M—S—C I I I X X X
Samples available on request.
These areas are potential markets for shale oil
H I
Oil-fired power generator
M q
Petrochemical industry
•
Refining complexes
c=\AArv!
C H e m e n c s . ir\c. 90 T o k e n e k e R o a d , D a r i e n , CT. 06820 Phone: 203-655-8741 C a b l e : E V A N S C H E M / TWX: 710-457-3356
Oct. 2, 1978C&EN
19
