Wednesday, 14 November 2007

Rio Tinto Completes Acquisition of 100% of Alcan


LONDON, Nov. 14 /CNW/ - Rio Tinto today announces that Rio Tinto Canada
Holding Inc. ("RTCH"), an indirect wholly-owned subsidiary of Rio Tinto, has
acquired all of the common shares of Alcan Inc. ("Alcan") not already owned by
it by exercising its right under the compulsory acquisition provisions of the
Canada Business Corporations Act ("CBCA"). RTCH is now the registered holder
of 100% of the outstanding shares of Alcan. Accordingly, it is anticipated
that the Alcan common shares will be delisted from the Toronto Stock Exchange
effective at the close of business on November 15, 2007, and that such shares
will also be subsequently delisted as soon as reasonably practicable from
Euronext Paris, the New York Stock Exchange, the Official List in the United
Kingdom (and cancellation of admission to trading on the London Stock
Exchange) and the SWX Swiss Exchange. It is further expected that the
certificates admitted to trading on Euronext Brussels representing Alcan
common shares (the IDRs) will also be delisted as soon as reasonably
practicable from Euronext Brussels.

As required under the CBCA, notices of compulsory acquisition were mailed
today to registered holders of Alcan shares who had not deposited their shares
under the offer by RTCH to acquire all of the shares of Alcan which expired on
November 8, 2007.

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the
UK, combining Rio Tinto plc, a London listed company, and Rio Tinto Limited,
which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral
resources. Major products are aluminium, copper, diamonds, energy (coal and
uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and
iron ore. Activities span the world but are strongly represented in Australia
and North America with significant businesses in South America, Asia, Europe
and southern Africa.(CNW)

SAIL to build 8 processing units


New Delhi (PTI): State-run steel giant SAIL would invest about Rs 1,600 crore to build processing units in seven states to meet the growing demand of the metal in the country.

"Steel Authority of India Limited (SAIL) will build eight processing units in seven states at the cost of Rs 200 crore each," Steel Minister Ram Vilas Paswan told the Economic Editors' Conference here on Wednesday

The units would be set up in Bihar, Uttar Pradesh, Assam, Himachal Pradesh, Rajasthan, Madhya Pradesh and Jammu and Kashmir.

Paswan pointed out that by 2020, the sector would witness investments of Rs Rs 8,70,640 crore and the country is set to become the world's second largest producer of steel before 2015-16. (reuter)

Fundamental analysis

Investors may base their investment decisions on fundamental analysis. These investors analyze the macroeconomic situation, which includes international economic indicators, such as GDP growth rates, inflation, interest rates, productivity, and energy prices. They would also analyze the total global gold supply versus demand. Over 2005 the World Gold Council estimated total global gold supply to be 3,859 tonnes and demand to be 3,754 tonnes, giving a surplus of 105 tonnes [9]. Others point out that total mine production is only about 2,500 tonnes each year, leaving a 1,300 tonne deficit that must be made up by central bank or private sales.[13]. While gold production is unlikely to change in the near future, supply and demand due to private ownership is highly liquid and subject to rapid changes. This makes gold very different from almost every other commodity. Stock analyst Jim Jubak recently chose gold as one of his "stock" picks for the next 12 months giving it a price target of $870 per Troy ounce by July 2008. [14](wiki)

Gold versus stocks


The performance of Gold bullion is often compared to stocks. They are fundamentally different asset classes: gold is a store of value whereas stocks are a return on value (i.e. growth plus dividends). Stocks and bonds perform best in a stable political climate with strong property rights and little turmoil [Source: Investments (7th Ed) by Bodie, Kane and Marcus, P.570-571]. The attached graph shows the value of Dow Jones Industrial Average divided by the price of an ounce of gold. Since 1800, stocks have consistently gained value in comparison to gold due in part to the stability of the American political system. This appreciation has been cyclical with long periods of stock outperformance followed by long periods of gold outperformance. The Dow Industrials bottomed out a ratio of 1:1 with gold during 1980 (the end of the 1970s bear market) and proceeded to post gains throughout the 1980s and 1990s. The ratio peaked on January 14th, 2000 a value of 41.3 and has fallen sharply since. William Anton III wrote in the 2004 issue of Jefferson Coin and Bullion "...downward movement in the Dow/gold ratio is unlikely to stop precisely at the mean trendline. The extreme distension of the the 90s will likely overshoot to the opposite extreme in the current cycle." Source: Source: [10] [11] [12] [13]

In November 2005, Rick Munarriz of Motley Fool.com posed the question of which represented a better investment, a share of Google or an ounce of gold. The specific comparison between these two very different investments seems to have captured the imagination of many in the investment commuity and is serving to crystalize the broader debate. Source: [14] [15](wiki)

Conspiracy Theories

The Gold Anti-Trust Action Committee was organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities. GATA underwrote the federal anti-trust lawsuit of its consultant, Reginald H. Howe -- Howe vs. Bank for International Settlements et al. -- which was pursued in U.S. District Court in Boston from 2000 to 2002. While the Howe suit was dismissed on a jurisdictional technicality, it became the model for Blanchard Coin and Bullion's anti-trust lawsuit against Barrick Gold and J.P. Morgan Chase & Co., which was filed in U.S. District Court in New Orleans in 2002 and prompted Barrick Gold's decision to stop selling gold in advance for 10 years. [12]

Methods of investing in gold

Investment in gold can be done directly through bullion ownership, or indirectly through certificates, accounts, spread betting, derivatives or shares.

Demand

About 3,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds.

Supply and demand

Some investors consider that supply and demand factors are less relevant than with other commodities since most of the gold ever mined is still above ground and available for sale at a price. However, supply and demand do play a role. According to the World Gold Council, gold demand rose 29% in the first half of 2005. The increase came mainly from the launch of a gold exchange-traded fund, but also from jewelry. Gold demand was at an all time record. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%.

War, invasion, looting, crisis

In times of national crisis, people fear that their assets may be seized, and the currency may become worthless. They see gold as a solid asset which will always buy food or transportation. Thus in times of great uncertainty, particularly when war is feared, the demand for gold rises.

Production

According to the World Gold Council, annual gold production over the last few years has been close to 2,500 tonnes. However, the effects of official gold sales (500 tonnes), scrap sales (850 tonnes), and producer hedging activities take the annual gold supply to around 3,500 tonnes.

Low or negative real interest rates

Gold has a long history of being an inflation proof investment. During times of low or negative real interest rates when significant inflation is present and interest rates are relatively low investors seek the safe haven of gold to protect their capital. A prime example of this is the period of Stagflation that occurred during the 1970s and which led to an economic bubble forming in precious metals.

Inflation

Paper currencies pose a risk of being inflated, possibly to the point of hyperinflation. Historically, currencies have lost their value in this way over time. In times of inflation, people seek to protect their savings by purchasing liquid, tangible assets that are valued for some other purpose. Gold is in this respect a good candidate, since producing more is far more difficult than issuing new fiat currency, and its value does not rely on any particular government's health.

Bank failures


When dollars were fully convertible into gold, both were regarded as money. However, most people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. If people feared their bank would fail, a bank run might have been the result. This is what happened in the USA during the Great Depression of the 1930s, leading President Roosevelt to impose a national emergency and to outlaw the holding of gold by US citizens.

Factors influencing the gold price

Factors influencing the gold price
This ancient Egyptian golden bowl was buried in the tomb of a pharaoh and today sits in the British Museum. Gold items were often buried with pharaohs to use in the after-life, because gold is free from corrosion or decay.
This ancient Egyptian golden bowl was buried in the tomb of a pharaoh and today sits in the British Museum. Gold items were often buried with pharaohs to use in the after-life, because gold is free from corrosion or decay.

Today, like all investments and commodities, the price of gold is ultimately driven by supply and demand, including hoarding and dis-hoarding. Unlike most other commodities, the hoarding and dis-hoarding plays a much bigger role in affecting the price, since almost all the gold ever mined still exists and is potentially able to come on to the market at the right price. Given the huge quantity of above ground hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production or gold jewelry demand.

Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2004 central banks and official organisations held 19 percent of all above ground gold as official gold reserves [6]. The Washington Agreement on Gold (WAG) which dates from September 1999, limits gold sales by its members (Europe, United States, Japan, Australia, Bank for International Settlements and the International Monetary Fund) to less than 400 tonnes a year [7]. European central banks, such as the Bank of England and Swiss National Bank, have been key sellers of gold over this period [8].

In November 2005, Russia, Argentina and South Africa expressed interest in increasing their gold holdings [9]. Other than Russia, these are not viewed as significant central banks, but any move by Japan, China or South Korea to do the same would be seen as significant. Currently the United States Federal Reserve has 16% of its assets in gold Federal Reserve gold holdings, whereas China holds approximately 1% in gold.

Although central banks do not generally announce gold purchases in advance, some such as Russia have expressed interest in growing their gold reserves again as of late 2005 [10]. In early 2006, China, who only holds 1.3% of its reserves in gold [11], announced that it was looking for ways to improve the returns on its official reserves. Many bulls took this as a thinly veiled signal that gold would play a larger role in China's reserves, which they hope will push up the price of gold.

Inflation fears have also been influential in the past. The October 2005 consumer price index level of 199.2 (1982-84=100) was 4.3 percent higher than in October 2004. During the first ten months of 2005, the CPI-U rose at a 4.9 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.3 percent for all of 2004.(wiki)

Well drilling


Well drilling is the process of drilling a hole in the ground for the extraction of a natural resource such as ground water, natural gas, or petroleum. Drilling for the exploration of the nature of the material underground (for instance in search of metallic ore) is best described as borehole drilling, or 'drilling'.

The earliest water wells were probably shallow pits dug by hand in regions where the water table approached the surface, possibly with masonry walls lining the interior to prevent collapse. Modern drilling techniques utilize long drill shafts, producing holes much narrower and deeper than could be produced by human labor.

Drill bits


Depending on the soil condition different drill bits are utilised. There are three main categories: soft, medium and hard formation bits. Soft formation rock bits are used in unconsolidated sands, clays, soft lime stones, red beds and shale, etc. Medium formation bits are used in calcites, dolomites, lime stones, and hard shale, while hard formation bits are used in hard shale, calcites, mudstones, cherty lime stones and hard and abrasive formations.

Historically there were two types of drill bits used in oil or natural gas drilling rigs, a drag bit, and a rock bit:

1. a drag bit is used for soft rocks, like sand and clay. The drill stem is rotated, and teeth on the bit shear the rock.
2. a rock bit (also called a roller cone bit) consists of teeth on wheels which turn as the drill stem is rotated. These teeth apply a crushing pressure to the rock, breaking it up into small pieces.

The original patent for the rotary rock bit was issued to Howard Hughes Sr. for his dual cone roller bit in 1909. It consisted of two interlocking wheels. Walter Benona Sharp worked very closely with Hughes in developing the Rock Bit. The success of this bit led to the founding of the Sharp-Hughes Tool Company.

In 1933 two Hughes engineers invented the tricone bit. This bit has three wheels and is still the dominant bit in the market today. The Hughes patent for the tricone bit lasted until 1951, after which time other companies started making similar bits. However, the Hughes’s market share was still 40% of the worlds drill bit market in 2000.

In today's modern industry the two main types of drill bits are now classed as PDC (polycrystalline Diamond Compact) and Roller Cone; although the tri-cone dominates, bi-cone and mono cone bits do exist. Natural and synthetic diamonds are used in coring bits, as well as for very hard rock drilling with mud motors and turbines. Drag bit type bits are used for mining and construction and also for oil and gas workover wells.

The technology of both bit types has advanced significantly to provide improved durability and rate of penetration of the rock. This has been driven by the economics of the industry, and by the change from the empirical approach of Hughes in the 1930s, to today's time domain Finite Element codes for both the hydraulic and cutter placement software.

In 2005 market shares were roughly 20% each for Hughes Christensen and Smith Bits, ReedHycalog with 37%, and the remainder of the market with Security-DBS, and smaller companies such as Varel, TSK,Focusrocbit, Walker-Mcdonald et al, Ulterra, and Lone Star Bit.(wiki)

Drill


A drill is a tool with a rotating drill bit used for drilling holes in various materials. Drills are commonly used in woodworking and metalworking.

The drill bit is gripped by a chuck at one end of the drill, and is pressed against the target material and rotated. The tip of the drill bit does the work of cutting into the target material, slicing off thin shavings (twist drills or auger bits) or grinding off small particles (oil drilling).

[+]Drill
For other uses, see Drill (disambiguation).
A child using a cordless handheld drill to assemble a bookcase.
A child using a cordless handheld drill to assemble a bookcase.

A drill is a tool with a rotating drill bit used for drilling holes in various materials. Drills are commonly used in woodworking and metalworking.

The drill bit is gripped by a chuck at one end of the drill, and is pressed against the target material and rotated. The tip of the drill bit does the work of cutting into the target material, slicing off thin shavings (twist drills or auger bits) or grinding off small particles (oil drilling).
Contents

[+] History

The earliest drills were probably bow drills. The invention of the electrical drill is credited to Mr. Arthur James Arnot[1], in 1889, at Melbourne, Australia. Wilhelm Fein[2] invented the portable electric drill in 1895, at Stuttgart, Germany. In 1917, Black & Decker patented a trigger-like switch mounted on a pistol-grip handle.[3]

[+] Types

There are many types of drills; some powered manually and others using electricity or compressed air as the motive power. Drills with a percussive action (such as hammer drills, jackhammers or pneumatic drills) are usually used in hard materials such as masonry or rock. As well, drilling rigs are used to bore holes in the earth to obtain water or oil. An oil well, water well, or holes for geothermal heating are created with large drill rigs up to a hundred feet high. Some types of hand-held drills are also used to drive screws.
Carpenter using a crank-powered brace to drill a hole.
Carpenter using a crank-powered brace to drill a hole.

[+] Hand tools

A variety of hand-powered drills have been employed over the centuries. Here are a few, starting with approximately the oldest:

* Bow drill
* Brace and bit
* Gimlet
* Breast drill, also known as "eggbeater" drill
* Push drill, a tool using a spiral ratchet mechanism
* Pin chuck, a small hand-held jewellers drill

[+] Hammer Drill

The hammer drill is similar to a standard electric drill, with the exception that it is provided with a hammer action for drilling masonry. The hammer action may be engaged or disengaged as required.

The hammer action is cheap but delicate. It uses two cam plates to make the chuck accelerate towards the work. However because of the relative masses of the chuck+bit and the remainder of the drill the energy transfer is inefficient and will fail to penetrate harder materials and vibrates the operators hand. The cams wear quickly.

Compare this to a rotary/pneumatic hammer drill where just the bit is accelerated to the work. They have relatively little vibration and penetrate most building materials. It feels as though the work is sucking the bit inwards.

Large cam hammer drills, especially transverse motor, are crude in their action. The energy delivered in each stroke is highly variable. The cheaper drill will smash its way through the work and vibrate the surroundings, this can cause lots of collateral damage. A good SDS drill will gently pulverise the work material just in front of the bit and glide into the hole without any "fuss".

However there is a big difference in cost. In the UK typically £12-40 for a cam hammer and £100 up for a rotary/pneumatic. For light DIY use they are fine.

[+] Rotary hammer drill

The rotary hammer drill (also known as roto hammer drill or masonry drill) is an electric drill type dedicated to drilling holes in masonry. The rotary hammer drill is a percussion drill that uses a weight to create the impact force on the masonry bit. Generally, the drill chuck of the rotary hammer drill is designed to hold SDS drill bits. Some styles of this drill are intended for masonry drilling only and the hammer action cannot be disengaged. Other styles allow the drill to be used without the hammer action for normal drilling.

[+] Cordless drills
A cordless drill with clutch
A cordless drill with clutch

A cordless drill is a type of electric drill which uses rechargeable batteries. These drills are available with similar features to an AC mains-powered drill. They are available in the hammer drill configuration and most also have a clutch setting which allows them to be used for driving screws.

For continuous use, a worker will have one or more spare battery packs charging while drilling, so that he or she can quickly swap them, instead of having to wait several hours during recharges.

Early cordless drills started with interchangeable 7.2V battery packs, and over the years the battery voltage has been increased to 18V, and higher, allowing these tools to produce as much torque as many mains-powered drills. The drawback of most current models is the use of nickel-cadmium (NiCd) batteries, which develop a memory effect or internal short circuits due to dendrite growth, severely limiting their useful life, and posing a hazardous materials disposal problem. Drill manufacturers are now introducing lithium ion batteries, most notably DEWALT. The main advantages are lack of memory effect and very short charging time. Instead of charging a tool for an hour to get 20 minutes of use, 20 minutes of charge can run the tool for an hour. Lithium-ion batteries also have a constant discharge rate. The power output remains constant until the battery is depleted, something that nickel-cadmium batteries also lack, and which makes the tool much more versatile. Lithium-ion batteries also hold a charge for a significantly longer time than nickel-cadmium batteries, about 2 years if not used, vs. around 4 months for a nickel-cadmium battery.

[+] Drill press
A drill press.
A drill press.

A drill press (also known as pedestal drill, pillar drill, or bench drill) is a fixed style of drill that may be mounted on a stand or bolted to the floor or workbench. A drill press consists of a base, column (or pillar), table, spindle (or quill), and drill head, usually driven by an induction motor. The head has a set of handles (usually 3) radiating from a central hub that, when turned, move the spindle and chuck vertically, parallel to the axis of the column. The table can be adjusted vertically and is generally moved by a rack and pinion; however, some older models rely on the operator to lift and reclamp the table in position. The table may also be offset from the spindle's axis and in some cases rotated to a position perpendicular to the column. The size of a drill press is typically measured in terms of swing. Swing is defined as twice the throat distance, which is the distance from the center of the spindle to the closest edge of the pillar. For example, a 16-inch drill press will have an 8-inch throat distance.

A drill press has a number of advantages over a hand-held drill:

* less effort is required to apply the drill to the workpiece. The movement of the chuck and spindle is by a lever working on a rack and pinion, which gives the operator considerable mechanical advantage.
* the table allows a vise or clamp to position and lock the work in place making the operation secure.
* the angle of the spindle is fixed in relation to the table, allowing holes to be drilled accurately and repetitively.

Speed change is achieved by manually moving a belt across a stepped pulley arrangement. Some drill presses add a third stepped pulley to increase the speed range. Modern drill presses can, however, use a variable-speed motor in conjunction with the stepped-pulley system; a few older drill presses, on the other hand, have a sort of traction-based continuously variable transmission for wide ranges of chuck speeds instead, which can be changed while the machine is running.

[+] Geared head drill

The geared head drill is identical to the drill press in most respects, however they are generally of sturdier construction and often have power feed installed on the quill mechanism, and safety interlocks to disengage the feed on overtravel. The most important difference is the drive mechanism between motor and quill is through a gear train (there are no vee belts to tension) this makes these drills suitable for the larger sizes of drill

[+] Radial arm drill

A radial arm drill is a geared head drill that can be moved away from its column along an arm that is radiates from the column. These drills are used for larger work where a geared head drill would be limited by its reach, the arm can swivel around the column so that any point on the surface of the table can be reached without moving the work piece. The size of work that these drills can handle is considerable as the arm can swivel out of the tables area allowing an overhead crane to place the workpiece on the fixed table. Vices may be used with these machines but the work is generally bolted to the table or a fixture

[+] Mill drill

Mill drills are a lighter alternative to a milling machine. They combine a drill press (belt driven) with the X/Y coordinate abilities of the milling machine's table and a locking collet that ensures that the cutting tool will not fall from the spindle when lateral forces are experienced against the bit. Although they are light in construction, they have the advantages of being space-saving and versatile as well as inexpensive, being suitable for light machining that may otherwise not be affordable.(wiki)

Drilling in Wood

Wood being softer than most metals, drilling in wood is considerably easier and faster than drilling in metal. Cutting fluids are not used or needed. The main issue in drilling wood is assuring clean entry and exit holes and preventing burning. Avoiding burning is a question of using sharp bits and the appropriate cutting speed. Drill bits can tear out chips of wood around the top and bottom of the hole and this is undesirable in fine woodworking applications.

The ubiquitous twist drill bits used in metalworking also work well in wood, but they tend to chip wood out at the entry and exit of the hole. In some cases, as in rough holes for carpentry, the quality of the hole does not matter, and a number of bits for fast cutting in wood exist, including spade bits and self-feeding auger bits. Many types of specialised drill bits for boring clean holes in wood have been developed, including brad-point bits, Forstner bits and hole saws. As well, chipping on exit can be minimized by using a piece of wood as backing behind the work piece.

Holes are easier to start in wood as the drill bit can be accurately positioned by pushing it into the wood and creating a dimple. The bit will thus have no tendency to wander. In metal working, an accurate position needs to be marked with a punch to avoid the bit wandering from the desired position of the hole.

Microdrilling

Microdrilling refers to the drilling of holes less than 0.5 mm. Drilling of holes at this small diameter presents greater problems since coolant fed drills cannot be used and high spindle speeds are required.

The National Jet Company is one of the world's leading experts on manufacturer of microscopic holes by means of mechanical drilling. Using specialized drilling equipment, National Jet has created holes consistently and accurately down to the level of 0.0002 inches. To put that into perspectives a human hair is approximately 0.004 inches in diameter. One of the well known advertisements for National Jet shows a human hair under a microsope with a hole drilled through it using a National Jet Drilling station.

Drilling in Metal

Under normal usage, swarf is carried up and away from the tip of the drill bit by the fluting. The continued production of chips from the cutting edges produces more chips which continue the movement of the chips outwards from the hole. This continues until the chips pack too tightly, either because of deeper than normal holes or insufficient backing off (removing the drill slightly or totally from the hole while drilling). Lubricants and coolants (i.e. cutting fluid) are sometimes used to ease this problem and to prolong the tools life by cooling and lubricating the tip and chip flow. Coolant is introduced via holes through the drill shank (see gun drill).

Straight fluting is used for copper or brass, as this exhibits less tendency to "dig in" or grab the material. If a helical drill (twist drill) is used then the same effect can be achieved by stoning a small flat parallel with the axis of the drill bit.

For heavy feeds and comparatively deep holes oil-hole drills can be used, with a lubricant pumped to the drill head through a small hole in the bit and flowing out along the fluting. A conventional drill press arrangement can be used in oil-hole drilling, but it is more commonly seen in automatic drilling machinery in which it is the workpiece that rotates rather than the drill bit.

Drilling

Invest

Monday, 12 November 2007

Oil on Location : Mexico


While the government of Mexico claims it has over 100 gigabarrels of oil, as of January, 2006, the prestigious Oil and Gas Journal estimated its proven reserves at only 12.9 gigabarrels. The reason for the discrepancy is that, while the oil may exist in theory, in practice, politics prevents it from being developed. The constitution of Mexico gives the state oil company, PEMEX, a monopoly over oil production, and the Mexican government treats Pemex as a major source of revenue, taking 60% of its revenues in taxes, according to Business Week on 13 December 2004. As a result, Pemex has insufficient capital to develop the resources on its own, and cannot take on foreign partners to supply money and technology it lacks.

Since 1979, Mexico has produced most of its oil from the supergiant Cantarell Field, which is the second-biggest field in the world by production. In 1997, PEMEX started a massive nitrogen injection project to maintain oil flow, which now consumes half the nitrogen produced in the world. Unfortunately, non-miscible injection schemes such as nitrogen injection simply increase production rates rather than increasing the amount of oil that can be recovered, and result in the same amount of oil being produced over a shorter period of time. As a result of nitrogen injection, production at Cantarell rose from 1.1 million barrels/day in 1996 to a peak of 2.1 million barrels per day in 2004. However, during 2006 Cantarell's output fell 25% from 2.0 million barrels/day in January to 1.5 million barrels/day in December, and the decline continued at a higher than expected rate in 2007.

As for its other fields, 40% of Mexico's remaining reserves are in the Chicontepec Field, which was found in 1926, but which has remained undeveloped because the oil is trapped in impermeable rock. The remainder of Mexico's fields are much smaller, much more expensive to develop, and contain heavy oil that trade at a significant discount to light-oil which is cheaper to refine. As a result of concentrating on its one good oil field and ignoring everything else, Mexico's proven reserves have fallen every year for more than a decade, and it has less than 10 years worth of oil reserves at current production levels. As a result of the decline in the Cantarell field, during 2006 Mexico's total petroleum production dropped 12% from 3.4 million barrels/day in January to 3.0 million barrels/day in December.

In 2002 PEMEX began developing an oil field called "Proyecto Ku-Maloob-Zaap", located 105 kilometers from Ciudad del Carmen. It is estimated that by 2011 the field will produce nearly 800,000 barrels/day [9]. However, this level of production will be achieved by using a nitrogen injection scheme similar to that of Cantarell, and production at Ku-Maloob-Zaap is expected to decline after 2011.

In June, 2007 former U.S. Federal Reserve Chairman Alan Greenspan warned that declining oil production in Mexico could cause a major fiscal crisis there, and that Mexico needed to increase investment in its energy sector to prevent it. [10](wikipedi)

Oil on Location : United States


United States proven oil reserves declined to a little more than 21 gigabarrels by the end of 2004 according to the Energy Information Administration, a 46% decline from the 39 gigabarrels it had in 1970 when the huge Alaska North Slope ('ANS') reserves were booked. No oil fields of similar size have been found in the US since the ANS discoveries. With over 2.3 million wells having been drilled in the US since 1949,[12] there are very few undrilled areas left where another supergiant oil field could remain undiscovered. As a result, it appears that most US oil reserves have already been discovered. As oil fields get closer to the end of production, estimates of what is left become more accurate. Consequently, US oil reserve numbers are very accurate compared to those of other countries.

United States crude oil production peaked in late 1970 at over 4 gigabarrels per year, but declined to 1.8 gigabarrels per year by early 2006 (only 11 years of future production). In fact, production in the fall of 2005 fell to only 1.5 gigabarrels per year as a result of hurricanes in the Gulf of Mexico — a level not seen since shortly after World War II. At the same time, US consumption of petroleum products increased to over 7.3 gigabarrels per year. The difference ( 5.5 gigabarrels ) was mostly made up by imports, with the largest supplier being Canada, which increased its exports of crude oil and refined products to the US to 0.8 gigabarrels per year at the end of 2005. Imports of oil and products now account for nearly half of the US trade deficit. In early 2007, the Energy Information Agency (EIA) of the U.S. Department of Energy projected that in 2007 oil consumption would rise to 20.9 million barrels per day, while oil production would fall to 5.1 million barrels per day, meaning that oil consumption would be nearly four times as high as oil production.[13]

The United States has the largest known concentration of oil shale in the world, according to the Bureau of Land Management and holds an estimated 800 gigabarrels of recoverable oil, enough to meet U.S. demand for oil at current levels for 110 years. Unfortunately, oil shale is much more difficult and expensive to extract and refine than conventional oil and oil sands. Oil shale must be produced by mining rather than drilling, and the shale contains a waxy oil precursor known as kerogen rather than liquid petroleum. Despite that, oil shale could be developed given high enough oil prices, and the technology for converting oil shale to oil has been known since the Middle Ages, although the scale of the mining and processing operations would be vastly greater than anything done in history.
Oil rigs near Huntington Beach, California, USA
Oil rigs near Huntington Beach, California, USA

The main constraint on oil shale development is probably going to be that Canadian and Venezuelan oil sands are only about half as expensive to produce, and the US has full access to Canadian oil sands production under the North American Free Trade Agreement (NAFTA). In addition, there are environmental concerns about oil shale development. The oil shale areas are semi-arid, in which mine scars last for centuries, and are at the headwaters of several important rivers, notably the Powder River in a region in which water rights are very important. These rivers are the source of irrigation water for vast areas of farmland and are the source of drinking water for many major cities. As a result, the oil shales are probably not going to be developed until global oil shortages become very severe.

In December, 2006, the Bureau of Land Management of the US Department of the Interior issued research, development, and demonstration (RD&D) leases for five oil shale projects in Colorado's Piceance basin.

Oil On Location : Venezuela


According to the Oil and Gas Journal (OGJ), Venezuela has 77.2 billion barrels of proven conventional oil reserves (80 years of future production), the largest of any country in the Western Hemisphere. In addition it has non-conventional oil deposits similar in size to Canada's - at 1,200 billion barrels approximately equal to the world's reserves of conventional oil. About 267 billion barrels of this may be producible at current prices using current technology. [5] Venezuela's Orinoco tar sands are less viscous than Canada's Athabasca oil sands – meaning they can be produced by more conventional means, but are buried deeper – meaning they cannot be extracted by surface mining. In an attempt to have these extra heavy oil reserves recognized by the international community, Venezuela has moved to add them to its conventional reserves to give nearly 350 billion barrels of total oil reserves. This would give it the largest oil reserves in the world, even ahead of Saudi Arabia. In October 2007 the Venezuelan government said its proven oil reserves have risen to 100 billion barrels. The energy and oil ministry said it has certified 12.4 billion additional barrels of proven reserves in the country's Faja del Orinoco region [6]

Venezuela’s development of its non-conventional oil reserves is mainly limited by political unrest. In late 2002 and early 2003 a strike at the state oil company PDVSA resulted in a dramatic drop in Venezuelan oil production and the firing of most of the oil company’s workers. This has significantly limited its ability to develop and produce oil. [7] Estimates of Venezuelan oil production vary. Venezuela claims its oil production is over 3 million barrels per day, but oil industry analysts and the U.S. Energy Information Administration believe it to be much lower. In addition to other reporting irregularities, much of its production is extra-heavy oil, which may or may not be included with conventional oil in the various production estimates. The U.S. Energy Information Agency estimated Venezuela's oil production in December 2006 was only 2.5 million barrels per day (approx 0.9 gigabarrels annually), a 24% decline from its peak of 3.3 million in 1997. [8] Notwithstanding that, Venezuela continues to be the second or third largest supplier of oil to the United States, sending about 1.5 million barrels per day to the U.S. Venezuela is also a major oil refiner and the owner of the Citgo gasoline chain.(wikipedia)

Oil on Location : Iraq


Iraq has the third largest reserves of conventional oil in the world at 112 gigabarrels. Despite its vast oil reserves and low costs, production has not recovered since the US-led 2003 invasion of Iraq. Constant looting, insurgent attacks, and sabotage in the oil fields has limited production to around 0.5 gigabarrels per year at best. Political risk is thus the main constraint on Iraqi oil production and likely to remain so in the near future.

Oil on Location : United Arab Emirates and Kuwait


The United Arab Emirates and Kuwait are nearly tied for the fourth largest conventional oil reserves in the world at 98 and 97 gigabarrels, respectively. Both countries produce approximately 0.8 gigabarrels per year, leaving around 100 years of reserves in each. Abu Dhabi has 94 percent of the UAE's oil reserves while most of Kuwait's oil reserves are in the Burgan Field, the world's second largest oil field after Saudi Arabia's Ghawar. Kuwait hopes to step up oil production to reach capacity of 4 million bbl/d by 2020, but since Burgan was found in 1938 and is getting very mature, this will be a challenge. Furthermore, according to data leaked from the Kuwait Oil Company (KOC), Kuwait's remaining proven and non-proven oil reserves are only about half the official figure - 48 gigabarrels (60 years of future production).

Oil on Location : Iran


Iran has the world's second largest reserves of conventional crude oil at 133 gigabarrels, according to the CIA World Factbook, although it should be noted that both Canada and Venezuela have larger reserves if Non-conventional oil is included. Iran is the second largest oil holder globally with approximately 10% of the world's oil.

Iran averages about 1.5 gigabarrels per year (88 years of future production), which is a significant decline from the 6 gigabarrels per year it produced when the Shah of Iran was in power. The United States prohibits imports of oil from Iran, which limits its exposure to an Iranian oil cutoff, but does not reduce the likelihood that an interruption of Iranian oil would cause a spike in world oil prices. American pressure on Iran to renounce Iran's nuclear program makes the possibility of military confrontation quite high, and the political risks of Iranian oil far outweigh any geological ones.

Oil On Location : Canada

Canada's proven oil reserves were estimated at 179.2 gigabarrels (billion barrels) as of January 2007, placing it second only to Saudi Arabia.[1] Over 95% of these reserves are oil sands deposits in the province of Alberta. [2] Although Alberta contains nearly all of Canada's oil sands and about 75% of its conventional oil reserves, several other provinces and territories, especially Saskatchewan and offshore Newfoundland, have substantial oil production and reserves.[3]

Total Canadian oil production was about 1.2 gigabarrels in 2006, giving Canada about 150 years of reserves at current rates. Over 99% of Canadian oil exports are sent to the United States, and contrary to popular belief, Canada and not Saudi Arabia is the United State's largest supplier of oil. The picture is complicated by the fact that Canada is both an importer and exporter of oil and refined products. In 2006, in addition to producing 1.2 gigabarrels, Canada imported 0.44 gigabarrels, consumed 0.8 gigabarrels itself, and exported 0.84 gigabarrels to the U.S.[2] The excess of exports over imports was 0.4 gigabarrels.

The addition of 174 gigabarrels of the vast Alberta oil sands deposits, mostly in the Athabasca Oil Sands, to proven reserves by the Alberta Energy and Utilities Board (AEUB),[4] was controversial at the time because oil sands contain a semisolid form of oil referred to as bitumen by Canadian government authorities, rather than conventional crude oil.[4]. The existence of the deposits (historically referred to as "tar sands") has been known for centuries since major rivers cut through the sands to reveal the bitumen in the river banks, but their development had to wait for high prices and the invention of new technology. In recent years technological breakthroughs have overcome the challenges of producing it and most Alberta oil is now non-conventional production from oil sands rather than conventional oil fields. The AEUB estimates that by 2016 Alberta oil sands production will triple to amount to 86% of the province's total oil production, and Alberta will by then be one of the largest oil producers in the world.[4]

The difference between crude bitumen and crude oil is somewhat arbitrary since bitumen is really just an unusually thick and viscous grade of crude oil, and many U.S. oil refineries have been modified to handle it in recent years as domestic U.S. oil production declines. The main problem is that it must be heated or diluted with solvents before it will flow through pipelines.

A problem for companies trading on U.S. stock markets is that outdated U.S. Securities and Exchange Commission (SEC) rules do not allow them to report oil sands production as an oil and gas activity, so they cannot report their oil sands reserves as oil reserves.[5] This can produce a seriously underestimated value for the assets of companies with large oil sands operations such as Petro-Canada. [6]

Analysts estimate that a price of $30 to $40 per barrel is required to make oil sands production profitable,[2] but with oil prices rising to over $80/bbl, oil sands production has become profitable enough to trigger over $100 billion worth of new oil sands projects. The biggest constraint on oil sands development is a serious labor and housing shortage in Alberta as a whole and the oil sands center of Fort McMurray in particular. According to Statistics Canada, by September, 2006 unemployment rates in Alberta had fallen to record low levels[7] and per-capita incomes had risen to double the Canadian average. Another problem was that Canada was running out of pipeline capacity to ship rapidly increasing exports of oil to U.S. markets, and the National Energy Board warned that exporters could face pipeline apportionment by the third quarter of 2007.[8]

An indicator of how the economics of oil sands had changed became apparent in July 2007 when Royal Dutch Shell stated in its annual report that in 2006 its Canadian oil sands unit made an after tax profit nearly double its worldwide profit on conventional crude.[9] A few days later Shell announced it was going to build a $27 billion oil sands refinery near Edmonton, one of a string of oil sands upgrader announcements that could boost Canada's synthetic oil production to 3.46 million barrels per day by 2015.[10]

As of 2006, Canada was the only major OECD (Organisation for Economic Co-operation and Development) producer showing an oil production increase. The other major OECD producers (the United States, United Kingdom, Norway and Mexico) were all in decline. According to the Conference Board of Canada, total crude oil production in Canada is projected to increase by over 10 per cent in 2007, following an increase of 5 per cent in 2006. As a result of new nonconventional oil projects, total crude oil production is forecast to increase by an average of 8.6 per cent per year from 2008 to 2011.[11](wikipedia)

Oil On Location : Saudi Arabia

With a quarter of the world's proven oil reserves and some of its lowest production costs, Saudi Arabia produces over 4 gigabarrels (600 million tons) of oil per year (17 tons per second) and is likely to remain the world's largest oil exporter for the foreseeable future.[citation needed]However, there are serious political risks involved in Saudi Arabian domination of the world oil market.[citation needed]In spite of recent increases in oil income, Saudi Arabia faces serious long-term challenges, including rates of unemployment of at least 13 percent, one of the world's fastest population growth rates (its population grew sixfold since 1960), and the need for political and economic reforms [1].

According to the Oil and Gas Journal[citation needed], Saudi Arabia reports it has 262 gigabarrels of proven oil reserves (65 years of future production), around a quarter of proven, conventional world oil reserves[citation needed]. Although Saudi Arabia has around 80 oil and gas fields, more than half of its oil reserves are contained in only eight fields, and more than half its production comes from one field, the Ghawar field.[citation needed]

One challenge for the Saudis in maintaining or increasing production is that their existing fields sustain 5-12 percent annual decline rates, meaning that the country needs new capacity each year to compensate.[citation needed] The challenge is that the Ghawar field, found in 1948, has produced about half its total reserves, and is starting to run into production problems — notably, there are rumors that it is now producing more water than oil. Other Saudi fields are not only smaller, but more difficult to produce.[citation needed] Historically, when Saudi Arabia has run into production problems in other fields, it has simply shut them in and stepped up production in Ghawar, but if Ghawar runs into problems that no longer will be possible.[citation needed]

Since Saudi Arabia is the world's largest producer of oil, their reserves are analyzed very closely and estimates vary on the amount of economically recoverable oil in Saudia Arabia.[citation needed] The raw data are not available to outside scrutiny. The International Energy Agency has predicted that Saudi oil output will double during the next two decades, projecting production of 7 gigabarrels per year in 2020, although this seems unlikely, if only for political reasons.[citation needed]

A dissenting opinion regarding Saudi oil reserves came from Matthew Simmons who claimed in his 2005 book "Twilight in the Desert" that Saudi Arabia's oil production is declining, and that it will not be able to produce more than current levels — about 4 gigabarrels per year [2]. In addition to his belief that the Saudi fields have hit their peak, Simmons also argues that the Saudis may have irretrievably damaged their large oil fields by overpumping salt water into the fields in an effort to maintain the fields' pressure and thus make the oil easier to extract.[citation needed] Simmons interpretation of normal oilfield practice into a future crisis has been refuted by reservoir engineers at CERI.[3]

Since 1982 the Saudis have withheld their well data and any detailed data on their reserves, giving outside experts no way to verify the overall size of Saudi reserves and output.[citation needed] However, experts question the Saudi claim that recent declines in production are due to lack of demand (which no other producer has experienced), and pointed to the fact that the number of drilling rigs in Saudi Arabia has tripled with no comparable increase in production as similar to what happened in Texas when US production peaked and started to decline in the 1970s.[citation needed] This could mean that many Saudi oil wells have peaked and have begun the decline toward the end of their economic usefulness.[citation needed] Only with verifiable data can production and reserves increases or declines be demonstrated.[citation needed] According to the U.S. Energy Information Agency, Saudi oil production declined about 8% during 2006 to 8.75 million barrels per day in December.[4](wikipedia)

Oil reserves


Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints.

Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally as the amount of oil remaining is reduced. The recovery factor (RF) is the percentage of oil in place which is expected to be economically recoverable under a given set of conditions.

Oil reserve estimates are ideally a measure of geological and economic risk — of the probability of oil existing and being producible under current economic conditions using current technology. The international authority for reserves definitions is generally the Society of Petroleum Engineers. The U.S. Securities and Exchange Commission demands that oil companies with exchange listed stock adopt reserves accounting standards that are consistent with common industry practice. However these standards are based on historical production practices and are not always meaningful in dealing with deep-water and non-conventional oil fields that are becoming the source of more and more of the world's oil production. In addition, many of the world's largest oil-producing countries do not follow normal industry standards in estimating their oil reserves and do not publish any data which would allow their estimates to be verified.

Sunday, 11 November 2007

Oil Ex-situ technologies


In case of the ex-situ method, the oil shale is mined either by underground mining or surface mining from the ground and then transported to a processing facility. At the facility, the oil shale is usually heated to 450 °C to 500 °C (840 °F to 930 °F) at which, the kerogen in the oil shale decomposes to gas, oil vapor and char, a process known as retorting. The gas and oil vapors are separated from the spent shale and cooled, causing the oil to condense. The oil may be used as a fuel oil or upgraded to meet refinery feed specifications by adding hydrogen and removing impurities such as sulfur and nitrogen. The non-condensible retort gas and char may be burnt and the heat energy may be reused for heating the raw shale or generating electricity.

Based on the size of feed oil shale, the ex-situ technologies can be classified into lump shale using technologies and particulate shale using technologies. In general, the lump shale is used in internal hot gas carrier technologies, while the particulate oil shale (less than 10 millimetres (0.4 in)) is used in internal hot solid carrier technologies.[3]

[+] Internal combustion technologies

Internal combustion technologies use heat transferred by flowing gases, which are generated by combustion within the retort. Common characteristics of these technologies are, feed shale consisting of lumps which range from 10 to 100 millimetres (0.4 to 4 in) in diameter, and the retort vapors are diluted with the exhaust generated by the combustion. The main technologies are Kiviter, Union A, Paraho Direct, Superior Direct, and Fushun processes.[6][7] The Kiviter processing takes place in gravitational shaft retorts and it is possible by using only large-particle feed. The process gas combustion products are used as the heat carrier. In the case of kukersite, the yield of oil accounts for 14-17 % of shale and the oil consists of a small amount of low-boiling fractions. Main problems associated with Kiviter process are environmental concerns such as extensive use and pollution of water in the process, as also the waste solid residue which continues to leach toxic substances.[8][9] The Kiviter process is used by Estonian company VKG Oil, a subsidiary of Viru Keemia Grupp.[10] The company operates several retorts, the largest one, having a capacity of processing 40 tonnes per hour of oil shale.

Like the Kiviter, the Fushun-type retort processes oil shale lumps in a vertical shaft kiln. The Fushun Mining Group in Liaoning Province, China operates the largest shale oil plant in the world. In 2003, it employed 80 Fushun-type retortsand as of 2007 it has increased to 180 retorts. Each retort processes about 4 tonnes per hour of shale.[11]

The Paraho Direct is an American version of the lump-processing vertical shaft kiln. This technology is used by Shale Technologies LLC in a pilot plant facility in Rifle, Colorado.[12]

[+] Hot recycled solids technologies

Hot recycled solids technologies use heat, which is transferred by mixing hot solid particles with the oil shale. These technologies usually process oil shale fine particles (less than 10 mm). The heat carrier (usually shale ash) is heated in a separate chamber or vessel, thus the retort vapors are not diluted with combustion exhaust. The main technologies in this category include Alberta Taciuk Process (ATP), Galoter, TOSCO II, Lurgi-Ruhrgas, Chevron STB, LLNL HRS, and Shell Spher processes.[6][7]

In the Galoter process, retorting takes place in a rotary kiln-type retort using fine particles. The spent shale is burnt in a spouted bed and solid shale ash is used as the heat carrier.[9] In case of kukersite, the yield of crude oil accounts for roughly 12 % of shale and the oil consists 15-20 % of low-boiling fractions. The Galoter process is more eco-friendly than the Kiviter process, as the use of water and pollution caused is minimal. However, the burning residue does cause some environmental problems due to organic carbon and calcium sulphide content.[8] The Galoter process is used for oil production by Eesti Energia, an Estonian energy company.[10] The company has two retorts, both processing 125 tonnes per hour of oil shale and plans are underway to build two more.[13] In 2008, another Estonian company, VKG Oil AS, is going to construct a new production line using the Galoter process engineered by Atomenergoproject of St Petersburg.[14]
Alberta Taciuk Processor (ATP) retort
Alberta Taciuk Processor (ATP) retort

Similar to the Galoter process, the Alberta Taciuk processes oil shale fine particles in a rotary kiln-type retort. The unique feature of the Alberta Taciuk process is that drying and pyrolysis of the feed shale and the combustion, recycling and cooling of spent shale, all occur in a single multi-chamber horizontal, rotating vessel.[15][16] The extracted oil consists up to 30 % of low-boiling fractions. The water pollution caused by the process is quite limited.[8] Australian oil companies Southern Pacific Petroleum NL and later Queensland Energy Resources operated a 250 tonnes per hour industrial-scale pilot plant using the Alberta Taciuk Processor. The plant was shut down in 2004. UMATAC Industrial Processes is currently designing a 250 tonnes per hour Alberta Taciuk Processor in China, and is scheduled to start operation in 2008.[17] Estonian VKG Oil is considering construction of a new retort facility using the Alberta Taciuk Processor.[10] Oil shale exploration company LLC has arranged for an exclusive right to license the ATP for research, development and demonstration near Vernal, Utah.[18]

As with the Galoter and Alberta Taciuk process, the TOSCO II also processes oil shale fine particles which are heated with hot recycled solids in a rotary kiln. However, instead of recycling shale ash, the TOSCO II circulates hot ceramic balls between the retort and a heater. The process was tested in a 40 tonnes per hour test facility near Parachute Colorado which was shut down in 1972. The LLNL HRS (hot-recycled-solid) retorting process was developed by the Lawrence Livermore National Laboratory. The technology was used in a 4 tonnes per day pilot plant from 1990 to 1993. A delayed-fall combustor, which is used in this process, gives greater control over the combustion process as compared to a lift pipe combustor. A fluidized-bed mixer is used instead of the screw mixer, which is used in the Lurgi process. The majority of the pyrolysis occurs in a settling-bed unit.[6]

[+] Conduction through a wall technologies

Conduction through a wall technologies use heat, which is transferred by conduction through the retort wall. These technologies normally process fine particles and the retort vapors are not diluted by combustion exhaust. Technologies include Pumpherston, Fischer assay, Hom Tov and Oil-Tech processes.[6][7] Oil-Tech staged electrically heated retort process is developed by Millennium Synfuels, LLC (former Oil Tech Inc.). In this process, the feed oil shale is heated to greater temperatures as it goes further down the retort. The retort-style prototype was reported to have passed a test.[19]

In the Hom Tov process (US Patent 5372708), oil shale fine particles are slurried with waste bitumen and pumped through coils in a heater. Israeli promoters of this process claim that the technology enables the shale to be processed at somewhat lower temperatures with the addition of the catalyzing bitumen. The technology has not been tested in a pilot plant yet.[20] Fischer Assay is a standardized laboratory test that is used to measure the grade of an oil shale sample. A 100 gram sample crushed to 8 mesh (2.38 mm) screen is heated in a small aluminum retort to 500 °C (930 °F) at a rate of 12 °C (54 °F) per minute, and held at that temperature for 40 minutes.[21] The distilled vapors of oil, gas, and water are passed through a condenser and cooled with ice water into a graduated centrifuge tube. The oil yields achieved by other technologies are often reported as a percentage of the Fischer Assay oil yield.

In Red-Leaf Resources EcoShale In-Capsule Process, hot gas generated by natural gas or pyrolysis gas is circulated through an oil shale rubble pile using a set of parallel pipes. The heat is transferred to the shale through the pipe walls rather than being injected directly into the rubble pile, thereby avoiding dilution of the pyrolysis gas with the heating gas. The rubble pile is encapsulated by a low-cost earthen impoundment structure designed to prevent environmental contamination and to provide easy reclamation. Energy efficiency is enhanced by recovering heat from the spent shale by passing cool gas through the heating pipes and then using it to preheat adjacent capsules.[22][23]

A new process from Combustion Processes, Inc., seeks to eliminate carbon dioxide emissions from the shale oil production process. Pyrolysis occurs in a rotating kiln heated by hot gas flowing through an outer annulus. The hot gas is created by burning hydrogen generated in a separate unit by coal gasification followed by carbon dioxide separation. The annular geometry achieves heat transfer to the moving shale through a wall, thereby avoiding dilution of the product gas.

[+] Externally generated hot gas technologies

Externally generated hot gas technologies or indirectly heated technologies use heat, transferred by gases which are heated outside the retort vessel. The main technologies are Petrosix, Union B, Paraho Indirect, and Superior Indirect processes.[6][7] As with the the internal combustion technologies, most of the externally-generated hot gas technologies process oil shale lumps in vertical shaft kilns; however, the retort vapors are not diluted with combustion exhaust. The world’s largest operational surface oil shale pyrolysis reactor is the Petrosix which is located in São Mateus do Sul, Paraná, Brazil. The 11 metres (36 ft) diameter vertical shaft kiln is owned by Petrobras and has being operating since 1992 with high availability. The company operates two retorts, the largest of which processes 260 tonnes per hour of oil shale.[10][24] The largest retort ever built used the Union B technology, developed by Unocal. The Union B processed 400 tonnes per hour of oil shale lumps heated by externally generated hot gas. However, unlike all other vertical shaft kilns, the Union B pumped the oil shale into the bottom of the retort, with the hot gas entering at the top. Unocal operated the retort from 1986 to 1992 near Parachute, Colorado. The Paraho Indirect technology is similar to the Petrosix which is considered a highly reliable technology for use with U.S. oil shale.[10]

[+] Reactive fluids technologies

Reactive fluids technologies are IGT Hytort (high-pressure H2) process, Xtract Technology (supercritical solvent extraction), Donor solvent processes, and Chattanooga fluid bed reactor.[6][25][22] In the IGT Hytort process, developed by the Institute of Gas Technology (IGT), oil shales are processed at controlled heating rates in an atmosphere of hydrogen at high pressure.[26] This technology like other reactive fluid technologies, is more appropriate for oil shales with low hydrogen content, such as the Eastern US Devonian shales, for which only a third of the organic carbon is typically converted to oil during conventional overground retorting. The hydrogen or hydrogen donor react with coke precursors and roughly double the yield of oil, depending on the characteristics of the shale and process.[27]

Chattanooga Corp. has developed an extraction process which uses a fluid bed reactor and an associated hydrogen fired heater. In this process conversion reaction occurs at relatively low temperatures (1,000 °F (540 °C)) through thermal cracking and hydrogenation into hydrocarbon vapors and spent solids. The thermal cracking allows for hydrocarbon vapors to be extracted off the oil shale which is then extracted and scrubbed of solids. The vapor is then cooled, during which condensate drops out of the gas and the remaining hydrogen, light hydrocarbon and acid gases are passed through an amine scrubbing system to remove hydrogen sulfide which is converted to elemental sulfur. The cleaned hydrogen and light hydrocarbon gases are then fed back into the system for compression or into the hydrogen heater which provides the heat for the fluid bed reactor. This nearly-closed-loop allows for an efficient process where nearly all the energy needs are provided by the source material. The demonstration plant in Alberta was able to produce 930 barrels (~130 t) of oil per kilotonne of oil shale at an API gravity ranging between 28 to 30. With hydrotreating, it would be possible to improve this to 38-40 °API. Chattanooga Corp is currently looking at a design to produce a 2,500 barrels (~330 t) per hour facility.[22](wikipedia)

Oil shale extraction


Oil shale extraction refers to the process in which kerogen, an immature form of hydrocarbon trapped in the oil shale, is converted into a usable hydrocarbon in form of a petroleum-like shale oil—a form of non-conventional oil—and combustible shale gas. It is a process wherein shale is heated in absence of oxygen, to a temperature at which kerogen is decomposed or pyrolysed into gas, condensable oil, and a solid residue. Decomposition begins at relatively low temperatures (300 °C (570 °F)), but proceeds more rapidly and more completely at higher temperature.[1]

There are hundreds of patents for oil shale retorting technologies.[2] However, only a few dozen have been tested in a pilot plant (with capacity 1 to 10 tonnes of oil shale per hour) and less than ten technologies have been tested at a demonstration scale (40 to 400 tonnes per hour). Currently, only five technologies are in commercial use, namely Kiviter, Galoter, Fushun, Petrosix, and Alberta Taciuk. Almost all commercial retorts currently in operation or in development stages are internal heating retorts.[3] Currently, shale oil extraction is being undertaken in Estonia, Brazil and China, while some other countries such as Australia, USA, Canada and Jordan have planned to start or restore shale oil production.[4][5](wikipedia)

Oil shale


Oil shale is a fine-grained sedimentary rock, containing significant amounts of kerogen (a solid mixture of organic chemical compounds), from which liquid hydrocarbons can be manufactured. The name oil shale is something of a misnomer as the rock is not necessarily a shale and the hydrocarbon in it is not truly oil.[1] Deposits of oil shale are located around the world, including major deposits in the United States. Global deposits are estimated as equivalent to 2.9–3.3 trillion (2.9–3.3 x 1012) barrels of recoverable oil.[2][3][4][5]

The kerogen in oil shale can be converted to synthetic crude oil through the chemical process of pyrolysis. When heated to a sufficiently high temperature a vapor is driven off which can be distilled (retorted) to yield a petroleum-like shale oil—a form of non-conventional oil—and combustible shale gas (shale gas can also refer to gas occurring naturally in shales). Oil shale can also be burnt directly as a low-grade fuel for power generation and heating purposes, and can be used as a raw material in the chemical and construction materials industries.[6][7]

Oil shale has gained attention as an energy resource as the price of conventional sources of petroleum has risen, and as a way to secure independence from external suppliers of energy.[8][9]

Underground mining (hard rock)


Underground hard rock mining refers to various underground mining techniques used to excavate hard minerals such as those containing metals like gold, copper, zinc, nickel and lead or gems such as diamonds. In contrast soft rock mining refers to excavation of softer minerals such as coal, or oil sands.

Mine Access

[+] Underground Access

Accessing underground ore can be achieved via a decline (ramp), vertical shaft or adit.

* Declines can be a spiral tunnel which circles either the flank of the deposit or circles around the deposit. The decline begins with a box cut, which is the portal to the surface. Depending on the amount of overburden and quality of bedrock, a galvanized steel culvert may be required for safety purposes.

* Shafts are vertical excavations sunk adjacent to an ore body. Shafts are sunk for ore bodies where haulage to surface via truck is not economical. Shaft haulage is more economical than truck haulage at depth, and a mine may have both a decline and a ramp.

* Adits are horizontal excavations into the side of a hill or mountain. They are used for horizontal or near-horizontal ore bodies where there is no need for a ramp or shaft.

Declines are often started from the side of the high wall of an open cut mine when the ore body is of a payable grade sufficient to support an underground mining operation but the strip ratio has become too great to support open cast extraction methods.

[+] Ore Access

Levels are excavated horizontally off the decline or shaft to access the ore body. Stopes are then excavated perpendicular (or near perpendicular) to the level into the ore.

[+] Development Mining vs. Production Mining

There are two principle categories of mining, development mining and production mining.

Development mining is composed of excavation almost entirely in (non-valuable) waste rock in order to gain access to the orebody. There are five steps in development mining: remove previously blasted material (muck out round), drill rock face, load explosives, blast explosives, and support excavation.

Production mining is further broken down into two methods, long hole and short hole. Short hole mining is similar to development mining, except that it occurs in ore. There are several different methods of long hole mining. Typically long hole mining requires two excavations within the ore at different elevations below surface, (15m-30m apart). Holes are drilled between the two excavations and loaded with explosives. The holes are blasted and the ore is removed from the bottom excavation.

[+] Ventilation
Door for directing ventilation in an old lead mine. The ore hopper at the front is not part of the ventilation.
Door for directing ventilation in an old lead mine. The ore hopper at the front is not part of the ventilation.

One of the most important aspects of underground hard rock mining is ventilation. Ventilation is required to clear toxic fumes from blasting and removing exhaust fumes from diesel equipment. In deep hot mines ventilation is also required for cooling the workplace for miners. Ventilation raises are excavated to provide ventilation for the workplaces, and can be modified to be used as escape routes in case of emergency.The main sources of heat in underground hard rock mines are Virgin rock temperature, Machinery, Auto compression and Fissure water although other small factors contribute like people breathing, inefficiency of machinery and blasting operations.

[+] Ground Support

Some means of support is required in order to maintain the stability of the openings that are excavated. This support comes in two forms, local support and area support.

[+] Area Ground Support

Area ground support is used to prevent major ground failure. Holes are drilled into the back (ceiling) and walls and a long metal bar (or rock bolt) is installed to hold the ground together. There are several different styles of area ground support.

* Point Anchor Bolts are a common style of area ground support. A point anchor bolt is a metal bar between 20mm-25mm in diameter, and between 1m-4m in length (the size is determined by the Mine's engineering department). There is an expansion shell at the end of the bolt which is inserted into the hole. As the bolt is tightened by the installation drill the expansion shell expands and the bolt tightens holding the rock together.
* Resin Grouted Rebar is used in areas which require more support than a point anchor bolt can give. The rebar used is of similar size as a point anchor bolt but does not have an expansion shell. Once the hole for the rebar is drilled, cartridges of epoxy resin are installed in the hole. The rebar bolt is installed after the resin and spun by the installation drill. This opens the resin cartridge and mixes it. Once the resin hardens the drill spinning tightens the rebar bolt holding the rock together.

[+] Local Ground Support

Local ground support is used to prevent smaller rocks from falling from the backs and walls. Not all excavations require local ground support.

* Welded Wire Mesh is a metal screen with 10 cm x 10 cm openings. It is held to the backs using point anchor bolts or resin grouted rebar.
* Shotcrete is a spray on concrete which coats the backs and walls preventing smaller rocks from falling. Shotcrete thickness can be between 50 mm-100 mm.
* Latex Membranes can be sprayed on the backs and walls similar to shotcrete, but in smaller amounts.

[+] Stope and Retreat vs. Stope and Fill

[+] Stope and Retreat
Sub-Level Caving Subsidence reaches surface at the Ridgeway underground mine.
Sub-Level Caving Subsidence reaches surface at the Ridgeway underground mine.

Using this method, mining is planned to extract rock from the stopes without filling the voids, this allows the wall rocks to cave in to the extracted stope after all the ore has been removed. The stope is then sealed to prevent access.
[+] Stope and Fill

Where large bulk ore bodies are to be mined at great depth, or where leaving pillars of ore is uneconomical, the open stope is filled with backfill, which can be a cement and rock mixture, a cement and sand mixture or a cement and tailings mixture. This method is popular as the refilled stopes provide support for the adjacent stopes, allowing total extraction of economic resources.

[+] Mining Methods

* Cut and Fill mining is a method of short hole mining used in narrow ore zones. An access ramp is driven off the main level to the bottom of the ore zone to be accessed. Using development mining techniques a drift is driven through the ore to the defined limit of mining. Upon completion the drift (or "cut") is filled back to the access ramp with the defined type of backfill, which may be either consolidated or unconsolidated. Another drift is driven on top of filled cut. This process continues until the top of the stope is reached.

* Drift and Fill is similar to cut and fill, except it is used in ore zones which are wider than the method of drifting will allow to be mined. In this case the first drift is developed in the ore, is backfilled using consolidated fill. The second drift is driven adjacent to the first drift. This carries on until the ore zone is mined out to its full width, at which time the second cut is started atop of the first cut.

* Room and Pillar mining : Room and pillar mining is commonly done in flat or gently dipping bedded ore bodies. Pillars are left in place in a regular pattern while the rooms are mined out. In many room and pillar mines, the pillars are taken out starting at the farthest point from the stope access, allowing the roof to collapse and fill in the stope. This allows a greater recovery as less ore is left behind in pillars.

* Block Caving such as is used at the Northparkes Mine [1] in NSW, Australia, is used to effect with large sized orebodies which are typically composed of low-grade, friable ore. The method works best with cylindrical, vertical orebodies. Pre-production mining development work consists of driving accesses underneath the orebody[2]. This includes the formation of "drawbells" by undercutting and blasting. Initially, blasted ore is removed via the extraction level underneath the drawbells until a sufficient area of unsupported ore is formed that the orebody begins to fracture and cave on its own. The eventual aim of the block caving method is that the friable ore needs no blasting and continues to fracture and break up on its own, flowing down the drawbells to the extraction level, where it is removed from the ore chute mouths with loaders and sent off for processing. Eventually the fracturing will propagate to the surface, resulting in subsidence. One of the main hazards associated with block-caving is that fracturing can potentially stop before it reaches the surface unbeknownst to the people in control of the mine. If fracturing stops propagating upwards and extraction continues, a large void can be formed, resulting in the potential for a sudden and massive collapse and catastrophic windblast throughout the mine. [3]

Tailings Disposal Methods



Pond Storage

There are many different subsets of this method. Large earthen dams may be constructed and then filled with the tailings. Tailings may be deposited into natural geographical depressions. Exhausted open pit mines may be refilled with tailings. In all instances, due consideration must be made to contamination of the underlying water table, amongst other issues. Dewatering is an important part of pond storage, as the tailings are added to the storage facility the water is removed - usually by draining into decant tower structures. The water removed can thus be reused in the processing cycle. Once a storage facility is filled and completed, the surface can be covered with topsoil and revegetation commenced. However, unless a non-permeable capping method is used water that infiltrates into the storage facility will have to be continually pumped out into the future.

[+] Disposal into underground workings

While disposal into exhausted open pits is generally a straightforward operation, disposal into underground voids is more complex. A common modern approach is to mix a certain quantity of tailings with waste aggregate and cement, creating a product that can be used to backfill underground voids and stopes. A common term for this is HDPF - High Density Paste Fill. HDPF is a more expensive method of tailings disposal than pond storage, however it has many other benefits - not just environmental but it can significantly increase the stability of underground excavations by providing a means for ground stress to be transmitted across voids - rather than having to pass around them - which can cause mining induced seismic events like that suffered recently at the Beaconsfield Mine Disaster

[+] Disposal into river systems

Usually called RTD - Rivering Tailings Disposal. Not a particularly environmentally sound practise, it has seen significant utilisation in the past, leading to such spectacular environmental damage as done by the Mt Lyell Mining Company in Tasmania to the King River. It is still practised at some operations in the world, and while experts agree it is a feasible method for locations where the river is rapidly flowing and turbulent and the additional silt loading will not impact on the river quality, it is not generally favored and is seeing a gradual decline in use.

[+] Disposal into the oceans

Commonly referred to as STD (Submarine Tailings Disposal) or DSTD (Deep Sea Tailings Disposal). If a mine is located in close proximity to the coast, and the coast itself is not an excessive distance from a continental shelf, STD is conceptually an excellent method for the disposal of tailings. Tailings can be conveyed using a pipeline then discharged so as to eventually descend into the depths. Practially, it is not an ideal method, as the close proximity to off-shelf depths is rare. When STD is used, the depth of discharge is often what would be considered shallow, and extensive damage to the seafloor can result due to covering by the tailings product. It is also critical to control the density and temperature of the tailings product, to prevent it from travelling long distances, or even floating to the surface. The Solwara project being commenced in the Bismark Sea by Nautilus Minerals proposes to use a modified STD method back down to depths below 1500 metres. Many countries specifically outlaw the use of STD methods.

[+] New Developments

A number of improvements have been made in tailings disposal technology and tailings dam design, both to improve on the weaknesses of previous practices and also to take advantage of tailings processing technologies. Geochemical aspects now largely drive the siting, of a tailings impoundment, the design of retention structures, and tailings disposal technology. There have been technologies put forward as panaceas for tailings disposal problems, which have turned out to be flawed in practice. These improvements can be categorized as changes in basic management practices and changes in tailings characteristics through pre-discharge dewatering.

Designing for Geochemical Issues

Geochemical issues have become highly prominent as severe acid generation problems became apparent at a number of mature mines around the world. Some of these mines, which had been operated by smaller mining companies, became orphan sites, leaving significant legacies for future generations. The majority of the acid drainage mine sites have become very expensive legacies for the major mining companies that owned them. It has been necessary to develop and operate acid drainage collection and treatment systems for continued operation and closure of numerous mines. Capital costs for ARD collection and treatment systems have been in the several tens of millions of dollars, with ongoing operating costs up to several millions of dollars annually. As a result, companies developing new mines have focussed on methods to predict and prevent or reduce acid generation from tailings.

Considerable research, for example CANMET's Mine Effluent Neutral Drainage (MEND) program, was carried out in the 1980’s and 1990’s, to assess viable methods of acid drainage control. The most significant conclusion of the past 20 years is that it is far easier (economic) to prevent ARD in the first place than to control it. From a number of existing sites where tailings had been placed in lakes in northern Canada, it was concluded that long-term submergence of acidic wastes was probably the most effective means of ARD control. Considerable work has also been done on placement of impervious closure covers over tailings to prevent ingress of air and water. Sophisticated designs of multiple-layer covers, incorporating impervious zones, pervious capillary barriers and topsoil for vegetation growth, have been developed. Covers have been found to present the risk of long term cracking or erosion, and to be ineffective in excluding air, so are less favoured solutions than submergence from the geochemical standpoint. Some of the main technologies for reduction of ARD potential from sulphide bearing tailings are the following:

1. Design for submergence by flooding the tailings at closure. This is a solution, which is being increasingly encouraged and accepted by regulators. However, the authors are concerned that flooded impoundments may create a risky legacy. The more traditional closure configuration for tailings impoundments has been to draw down water ponds as completely as possible, to reduce the potential for dam failure by overtopping or erosion. To raise water levels in impoundments formed by high dams could present considerable long-term risk. One of the reasons that closed tailings impoundments have traditionally proven to be generally more safe, from the physical stability perspective, than operating impoundments is the relatively more “drained” condition of closed impoundments that do not include a large water pond. The flooded closure scenario represents an “undrained” condition that does not allow this improvement in physical stability to develop, so the risk does not decrease with time.

2. Treatment of tailings to create non-acid generating covers. To avoid the necessity of flooding impoundments, non-reactive covers of tailings can be placed on the top of the impoundment on the last few years of operation. It has been shown in several mining operations, for example at the Inco Ontario Division central milling operation in Copper Cliff, Ontario, that by the relatively inexpensive installation of some additional flotation capacity, pyrite can be removed to the level that the tailings can be made non-acid generating. The upper non-acid generating tailings placed on top can be left as a wide beach for dam safety, while the underlying mass of potentially acid generating tailings remains saturated below the long-term water table in the impoundment. Normally, the small amount of pyrite removed by flotation can be disposed as a separate tailings stream, placed in the deepest part of the impoundment where it can be left flooded.

3. Lake or ocean subaqueous disposal. The surest, safest and most cost-effective solution to prevent ARD is sub-aqueous disposal in a lake or the ocean. Tailings will remain permanently submerged and have shown to be non-reactive under water and to have few permanent environmental impacts. The challenge for this solution is that regulators have become reluctant to permit lake or ocean disposal, and there are not always appropriate sites available. In addition, the public often reacts emotionally and negatively to the concept of such disposal, despite the considerable benefits of these approaches. The authors are aware of at least two examples where public pressure incited regulators to demand that existing operations switch from ocean and lake disposal to on-land impoundments, with the result that environmental problems actually increased. The authors do note a slight trend to re-acceptance of subaqueous disposal, particularly in the marine environment, as the true environmental impact of the technique can be demonstrated to be almost negligible in certain instances. Moreover, the corporate risks and environmental liabilities associated with surface tailings storage on many projects grows to the point where project viability is threatened without looking to environmentally acceptable alternatives including subaqueous disposal. And after all, who really gives a shit if it happens to be in a lake that we get our drinking water from? Or the marine life that is so vital to the ecology of our planet? The mining companies sure don't.

Improved Basic Design Concepts - Improved Upstream Construction.

Considerable attention has been given to improving traditional upstream dam construction to make the technique not only economical but also stable under both static and dynamic conditions. Numerous failures of upstream constructed dams have occurred. The failures have been the results of earthquakes, high saturation levels, steep slopes, poor water control in the pond, poor construction techniques incorporating fines in the dam shell, static liquefaction, and failures of embedded decant structures. Most failures have involved some combination of the above weaknesses.

Based on the above experiences, and through the use of improved analytical tools (computer programs for stability, seepage, and deformation under both static and seismic conditions), safe, optimised designs have been developed. Some of the key design features that have been added include:

• Underdrainage, either as finger drains or blanket drains, to lower the phreatic level in the dam shell; • Beaches compacted to some minimum width to provide a stable dam shell. Beaches are compacted by tracking with bulldozers, which are also used for pushing up berms for support of spigot lines; • Slopes designed to a lower angle than was used for many failed tailings dams. Slopes are generally set at 3 horizontal to 1 vertical or flatter, depending on the other measures incorporated into the designs. Steeper slopes, without an adequate drained and/or compacted beach, create the potential for spontaneous static liquefaction - a phenomenon not widely recognized in 1972 but one responsible for a number of major tailings dam failures.

Improved Basic Design Concepts - Lined Tailings Impoundments.

With the advent of larger gold mining operations, and the almost universal use of sodium cyanide as an essential part of gold extraction, the need came about to develop impervious impoundments to contain cyanide solutions. Although cyanide is in most forms an unstable compound that naturally breaks down on exposure to air, it can be very persistent and migrate long distances in groundwater. As well as cyanided gold tailings, other types of tailings may also be considered potentially contaminating. For protection of aquifers, where tailings impoundments are not sited over impervious soils or bedrock and embankment cut-offs are not sufficient to reduce seepage, it is often necessary to design and construct a liner over the base of a tailings impoundment. Great progress has been made in liner design and construction practise.

Liners may be as simple as selective placement of impervious soil to cover outcrops of pervious bedrock or granular soils, or may need to be a composite liner system constructed over the entire impoundment. Where geomembrane liners are used, it is normal practise to incorporate a drainage layer above the geomembrane, to reduce the pressure head on the liner and minimise leakage through imperfections in the liner. Another benefit of such under-drainage is that a low pore pressure condition is achieved in the tailings, giving them a higher strength than would exist without such under-drainage. The drainage layer typically consists of at least 300 mm of granular material, with perforated pipes at intervals within the drainage layer. The pipes are laid to drain water extracted from the base of the tailings deposit and to discharge to a seepage recovery pond. When a liner extends beneath an impoundment, care must be taken to design for lower foundation shear strength for the downstream slope of the embankment, as the liner may form a plane of weakness.

Improved Basic Design Concepts - Dewatering Technologies.

As shown on the figure below, the basic segregating slurry is part of a continuum of water contents available to the tailings designer in the 21st century. Although tailings dewatering was previously practised for other purposes in the mining process, until recently the only form of tailings for most tailings facilities was a segregating, pumpable slurry with geotechnical water contents of well over 100%.


There are several candidate scenarios where dewatered tailings systems would be of advantage to the mining operation. However, dewatered tailings systems have less application for larger operations for which tailings ponds must serve dual roles as water storage reservoirs, particularly where water balances must be managed to store annual snowmelt runoff to provide water for year round operation.

"Dry" Cake filtered tailings disposal. Development of large capacity, vacuum and pressure belt filter technology has presented the opportunity for disposing tailings in a dewatered state, rather than as a conventional slurry. Tailings can be dewatered to less than 20% moisture content (using soil mechanics convention, in which moisture content is defined as weight of water divided by the dry weight of solids). At these moisture contents, the material can be transported by conveyor or truck, and placed, spread and compacted to form an unsaturated, dense and stable tailings stack (often termed a "dry stack") requiring no dam for retention. While the technology is currently considerably more expensive per tonne of tailings stored than conventional slurry systems, and would be prohibitively expensive for very large tonnage applications, it has particular advantages in the following applications:

• In very arid regions, where water conservation is an important issue. The prime example of such system is at the La Coipa silver/gold operation in the Atacama region of Chile. A daily tailings production of 18,000 t is dewatered by belt filters, conveyed to the tailings site and stacked with a radial, mobile conveyor system. The vacuum filter system was selected for this site because of the need to recover dissolved gold from solution, but is also advantageous for water conservation and also for stability of the tailings deposit in this high seismicity location.

• In very cold regions, where water handling is very difficult in winter. A dewatered tailings system, using truck transport, is in operation at Falconbridge’s Raglan nickel operation in the arctic region of northern Quebec. The system is also intended to provide a solution for potential acid generation, as the tailings stack will become permanently frozen. A dry stack tailings system is also being planned for a new gold project in central Alaska.

• Relatively low tonnage operations. A separate tailings impoundment can be avoided all together by having a tailings/waste rock co-disposal facility.

• Regions where a “dry landscape” upon closure is required. The tailings area can be developed and managed more like a waste dump and therefore avoids many of the operation and closure challenges of a conventional impoundment.

Moreover, filtered tailings stacks have regulatory attraction, require a smaller footprint for tailings storage (much lower bulking factor), are easier to reclaim and close, and have much lower long-term liability in terms of structural integrity and potential environmental impact.