New Fuels from Kerogen
Kerogen is a naturally occuring solid organic substance that was formed from algae, plants, and animal remains. When heated in a contained environment, kerogen forms an oil which can be used to produce high quality fuels and other products. Kerogen-bearing rock has historically been called oil shale, but actually the rock doesn't contain any oil, and is often confused with the "tight oil" or "shale oil" which has recently been in the news. The International Energy Agency uses the more precise term -"kerogen".
Queensland deposits contain enough kerogen to produce over 20 billion barrels of oil - or about 50 years fuel supply for all of Australia. As the worlds oil supply, much of which is located in unstable, even dangerous places, continues to be depleted, it makes no sense to keep importing most of our oil when we have our own supplies here under our feet.
QER has demonstrated technology to produce oil from kerogen while minising and carefully controlling any emissions. Kerogen-rich rock is mined by proven, existing open-cut mining methods. The ore is fed into a competely enclosed processing plant where it is heated to around 500 degrees. The kerogen goes through a process known as pyrolysis by which it is converted into an oil mist which is gathered into liquid oil. The oil is then refined into different kinds of fuels.
QER has produced retail quality, ultra-low sulphur diesel and aviation fuel from kerogen shale at its technology demonstration plant near Gladstone.
The next step is to do so on a commercial scale.
Kerogen Oil Production History
The kerogen oil industry has operated in numerous countries around the world for more than 100 years, but its earliest beginnings go back as far as 1694 when kerogen oil was first produced in Scotland. Today, commercial kerogen based fuel industries are active in China, Estonia and Brazil.
In Australia, the first kerogen oil development started in 1865 at Mount Kembla in New South Wales, followed by the opening of a number of other mines in the kerogen rich deposits just west of Sydney. The technology used was very basic, and these mines operated until the turn of the 20th century when the importation of cheaper crude oil forced their closure. The industry underwent a resurgence during World Wars I and II when supplies of overseas oil were threatened, pointing to the strategic importance of the resource to our island nation. After the wars, high production costs led to their closures
In more recent times, the oil crisis of the 1970s triggered investigation into alternative sources as a means of supplementing conventional oil supplies. A number of multinational oil companies and government agencies made large investments in kerogen shale research and development, particularly in the United States. Several companies including Exxon, Union Oil and Occidental ran pilot and semi-commercial plants with oil shale mined from the Green River Formation in the Colorado-Wyoming-Utah regions. Although they achieved some success, these plants were high-cost compared to the production of conventional oil. When oil prices declined dramatically in the 1980’s, these plants were closed.
Australian resources company, Southern Pacific Petroleum NL (SPP), led by Sir Ian McFarlane, successfully continued to identify and explore Australian kerogen deposits. By the early 1980s, 10 kerogen deposits had been discovered in Queensland by SPP, including the Rundle deposit near Gladstone and its southern neighbour, Stuart. These resources are now controlled by QER, which in 2004 acquired the majority of SPP’s assets, including ownership of the Stuart technology demonstration plant in Gladstone.
Australian kerogen shale development efforts over the past two decades have provided QER with a substantial knowledge base to support development of new and sustainable processing technology. Coupled with QER's own successful trials of the Paraho process conducted in Colorado and operating the Paraho IITM technology demonstration plant near Gladstone, this knowledge has formed the basis for QER's next stage of development, a small-scale commercial plant, producing retail quality, ultra-low sulfur fuels from kerogen. Successful operation of such a project will herald the creation of an important new industry for Australia.