FAQ's

Statutory Questions
 

1. What does it mean: "License given under the Petroleum Law does not exempt the holder from any other laws"?

The License was awarded to IEI pursuant to the Israeli Petroleum Law. The license gives IEI the right to explore the area for oil (as defined in the law), including the exclusive rights to perform survey drilling and experimental oil production.

IEI is obligated to execute a detailed work plan which is an integral part of the terms of license. Once IEI reaches to a "Discovery", IEI will be entitled to a "Lease" – long term right on a selected portion of the License area.

License under the petroleum law does not exempt the holder from any other laws, including planning laws and environmental laws. Moreover, the license held by IEI specifically states that. This is also the case when one holds a Lease.

2. Why there, of all places in Israel? What makes the southern plain the optimal place for oil production?

There are more than 25 deposits of oil shale in Israel, but only the southern plain (Shfela) deposit holds the potential to bring Israel to energy independence and liberate Israel from the dependency in foreign oil. This is due to the unique geological conditions of this deposit – its size, its richness (high quality of oil shale), its depth, and the hydrological isolation from the aquifer below and from the surface above. The deposit is optimal for In-Situ extracting, and the option to deploy this method provides tremendous environmental advantages, versus other methods of shale oil extraction.

3. What are the main considerations that defined the exact license area?

Geological, environmental, and operational consideration were taken into account when selecting the license area:

A. The area which the Judea syncline is at the greatest depth: was a major consideration in the License's borders, because it was estimated that this area will hold the deepest and richest deposits. In the survey drilling performed by IEI, this assumption turns out to be exact.

B. Low probability of hydraulic connection between oil shale and aquifer: to ensure that no risk to the aquifer water will occur.

C. Thickness of overburden layer: The overburden layer need to be thick enough to ensure complete hydraulic separation from the surface, in order to prevent refill caused by rain water, like in the Hartov area north of the license.

D. Existing land use designation and sensitive areas: urban centers were excluded from the license area. In the area selection we have made an effort to avoid sensitive areas.

4. Why does the License cover such a large area if commercial production requires a very small area?

In order to accurately characterize the deposit, and verify the preliminary geological assumptions, a large area was selected. Eventually, the area in which IEI will operate will be significantly smaller: IEI estimates that in the commercial production stage, the total surface area required for the drillings and infrastructures during the entire commercial production stage will be less than 1 square kilometer (less than half percent of the license area).

5. What are the survey drillings? What had been done so far in the license area?

The survey drillings are part of the appraisal study and resource characterization program. It comprised several geological wells in which rock samples were extracted and subsequently analyzed and a variety of geological and hydrological parameters were measured and tested in the sub surface. Each of the survey wells required approximately 2 for a short period of several months. Until now, IEI successfully performed survey drillings in Beit Govrin, Aderet, Lachish, Galon and Zoharim. All drilling sites were successfully reclaimed (The Zoharim site is at its final stages).

6. Who authorized the drilling operations at the selected locations?

All of the wells drilled by IEI were approved by the respective district planning and building committees (Jerusalem and Southern districts). The approval process entailed extensive coordination with the Ministry of Environment, the JNF, local authorities, etc. The survey drillings were also authorized by the drilling committee of the water authority, which operates under the Water Law and includes members from the Ministry of Environment, Ministry of Health, the National Park Authority, the geological institute, etc.

7. What are the major findings of the appraisal study to date?

The preliminary findings of the appraisal study are extremely positive: the shale oil quality in the area is high, the deposit is very uniform and its properties are ideal for In-Situ Conversion process. Moreover, the survey drillings provided additional support to the fact that there is no hydrologic link between the aquifer and the oil shale layers. See the reports made by Dr. Avihu Burg, the geological institute, and Ronen Gersman, IEI's hydrologist.

8. What does the pilot include?

The pilot is a small scale field test. The pilot goal is to demonstrate the technological capability, the economical viability, and the environmental feasibility of the shale oil In Situ production process. The location of the pilot is near the Ella junction.

The location was chosen based on scientific, geological and environmental considerations. The request is currently pending before the Regional Committee for Planning and Building. The activity at the pilot site is expected to last for up to 3 years and include the following stages:

• Drilling and construction works
• Subsurface heating
• Production of shale oil and byproduct treatment
• Reclamation of the site

9. Why here? How was the location of the pilot decided?

The location of the pilot was chosen by a combination of geological and environmental constrains.

Since the pilot is a small scale field test => in order to get a reliable result with an appropriate scientific validity, high precision is required (constrain that is not relevant in the commercial production) => to achieve such precision, the pilot drillings need to performed in shallow depth => there is only one area, in the northwest section of the license area that meets the geological and the environmental requirements, therefore the pilot can be perform only in that area. Once the area had been selected, the specific site was selected based on an alternative analysis was performed by Top Environment and Acoustic in cooperation with the ecologist, Dr. Ron Frumkin. That site was presented by IEI to various environmental authorities (e.g., the Ministry of Environment, the National Park Authority, the JNF, the regional local council, etc.).

10. Does the pilot site location determine the commercial production location?

In a word: no. The location of the commercial production will not be in the location chosen for the pilot, due to their different geological and technological constrains that are applicable at each stage.

Since the pilot's requires high precision, it will take place in area where the oil shale lies in a relatively shallow depth (in the north part of the license area). During the commercial production stage this specific constrain does not exist, therefore there is higher flexibility in its location. The geological research performed in the license area, allows IEI to conclude the due to the uniformity of the oil shale deposit within the license area, we will be able to utilize the pilot's data for the purpose of planning the commercial production in another location.

It will be premature to try and determine the most suitable location for the commercial production prior to the completion of the pilot. Nevertheless, based on the preliminary data gathered so far, we believe that the area along the road leading to Tarkumia chekpoint may be ideal for the commercial production.

It should be noted that prior to selecting a commercial location, IEI will conduct environmental impact statement which will be reviewed by the relevant authorities (e.g. Ministry of Environmental Protection, Ministry of Infrastructures).

11. What happens when the pilot will succeed? What are the following steps?

In accordance with IEI's development plan, once the pilot succeeds, IEI will apply to the Ministry of Infrastructures to declare it as a "Discovery". If that is granted, IEI will receive a "Lease" on a selected portion of the license area. Once IEI will receive a "Lease", controlled and graduate development of the commercial stage will be underway. First – in a small scale Demo (up to 2,000 bbl per day), we estimate the planning and developing a full scale project will take another 10 years. It is important to clarify that any future commercial deployment will require a Plan under the Planning Law.

12. What are your pilot products and how will they be handled?

Early simulations indicate that heating the oil shale will produce approximately:

1. Oil – at the amount of 500 bbl;
2. Gas – at the amount of 42,500 cubic meters;
3. Water – natural salty water (pore water) and pyrolysis water (extracted at the pyrolysis stage) roughly 3 times the amount of liquid oil extracted.

All of the products will be transferred from the production well head to the on-site separation stage and later will be gathered and treated. The oil and water will be separated and stored in containers at the site. The gas will be fully treated using absorption and thermal oxidizer facilities in the site.

13. Why do we need this at all? What would domestic oil production mean for Israel?

Oil is a basic commodity. We all consume oil and oil's byproducts on a daily basis. One cannot exaggerate the importance of ensuring a state's own independent supply of this commodity. Local supply of oil will bring to lower prices of oil and will ensure its supply during global competition over limited resources. The development of local oil shale industry will ease the dependency on foreign suppliers of oil, boost the Israeli economy and provide an important contribution to its security.

14.What does local production of shale oil mean in national security terms?

Sufficient fuel reserve for the military, during peace times and hostile times, is a strategic and essential need: the rising price of oil is adding to the burden of military expense. Moreover, as oil is becoming harder to get, there is a danger that we could not get enough oil in order to support Israel's national security.

15. Is it not better to invest in renewable energy instead of oil shale?

The two are not mutually exclusive … the threat of a pending oil crisis is so severe that different approaches should be adopted in order to mitigate its risk. The vast unused potential of oil shale needs to be part of the solution, along with other alternatives for conventional crude oil.





Geologic Questions

1. What is oil shale?

Oil shale is a sedimentary rock which contains organic matter called Kerogen; it can be converted via pyrolysis into a synthetic crude oil; distilled through heating into oil similar to petroleum; or burned directly as a low-grade fuel.

During the pyrolysis process, the Kerogen turns into gases, liquid and coke (coal-like material).

2. What is the permeability of the oil shale layer in the Shfela Basin?

As shown in the report prepared by Dr. Avihu Burg from the geological institute, the permeability of the oil shale layer is extremely low. The layer is defined as an aquiclude unit with almost no flow of liquid. For additional information regarding see Dr. Burg's report.

3. Are the layers beneath the oil shale layer impermeable to gases?

In geological terms, the rock layer below the target layer (where oil shale will be heated) provides an impermeable seal:

A. The Ghareb Formation followed by the upper part of the Mishash Formation (~100 meters thick*). These chalk layers have a horizontal permeability of 0.1 mD (extremely low permeability) and a vertical permeability which is even lower (about a third of the horizontal perm.)

B. Below, there is a massive flint layer of the Mishash Formation (~10 meters thick*) that does not contain any water or porosity.

C. Below, the Menuha Formation, that is also an impermeable chalk unit with few horizontal inter-bedded Marl, that further reduce its permeability (approx. 130-180 meters thick*)

The combination of these geological units creates a "perfect" seal that will prevent any gases from moving down to the aquifer that lays below.

* The thickness of the layers refers to the cross section at the pilot site near the Ella junction

4. Is it possible that gases will be able to escape from the heated zone upwards as non source emissions?

Based on the data collected and analyzed to date, this scenario isn't possible.

The scientific evidence for this statement is the rock properties above the heated zone at the Shfela basin and the layers above it. Both the oil shale rocks and the marlstone (rock containing clays) are impermeable to gas movement, therefore creates an ultimate seal between the heated zone and the above units. This conditions are very common in all oil bearing rocks since this is required for trapping the oil in the subsurface.

The geological units above to the heated zone are:

A. The Ghareb Formation has extremely low hydraulic permeability (~0.1 mD) and is saturated with brine water. In order for gas to penetrate the saturated pores, the gas pressure needs to be higher than the pore's pressured (hydrostatic pressure + capillary pressure). At the given pore size and the given depth, we know that the gas pressure in the heated zone needs to be higher than hundreds psi in order for it to penetrate the surrounding rook pores and escape from the heated zone. Therefore, the gas cannot "escape" from the pilot heated area through the surrounding rock as long as the gas pressure is kept below 100 psi, as planned.

B. The Taqia Formation lays on top of the Ghareb Formation, comprised of dense marlstone unit (150-200 meter thick). This unit is even more impermeable than the Ghareb Formation and those impermeable for gas or liquid.

One of the pilot's main goals is to prove that non-source emission will not be emitted due to the oil & gas In-Situ production from oil shale.

5. Can you rule out the possibility of existing fracturing in the geological formations?

Hydrological tests conducted during the survey drillings, examined 100 meter thick cross section of the Ghareb Formation. The cross section shows extremely low permeability (10-10-10-11 m/sec) and effective permeability of 0.1 mD. This show the natural fractures in this unit are either closed or extremely small. Open fractures in that unit are very few and their impact is negligible.

The lack of permeability of the fractures also applies to the thick layer separating the aquifer and the heating zone. The strong confinement of the aquifer in the license area proves that there are no significant fractures in that separation layer. If there were any fractures, water would have passed from the aquifer (high pressure) to the oil shale unit, resulting in mixing (same salinity and pressures) a condition that does not exist. Therefore – it is clear that no significant fractures exist in the separation unit in the license area.

With respect to fractures that may be created due to the heating process, there is no fear of that due to the low pressures that will be in the heated zone compared with the surrounding rock strength. Also it is important to understand that fractures do not tend to propagate downward due to the increasing rock pressures in that direction (overburden pressure).

6. Will sub-surface heating can affect the ground surface?

There will be no effect on the ground surface. During the entire heating process the temperature of the rock at a distance greater than 9 meters will remain unchanged at roughly 25˚C. The rock is a very poor heat conductor - heat conductivity is extremely low, therefore rapid heat decline will occur in all directions (the thermal gradient from the heating area is expected to be very steep). Therefore, the heat doesn't have any impact on the ground surface.

7. How does the production process affect the ground stability? What replace the extracted material?

During the heating, two the organic matter, found in natural state as solid, turns into liquid and gas and extracted mostly trough the production wells (this matter constitute about 10% of the volume of the rock). Moreover, within the heated area, micro fractures related to the liquid and gas conductivity are formed. Once the heating is over, when the temperature at the heating zones declines again to less than 100˚C, natural salty water, which surround the heated zone, gradually accumulate in the rock's pores (in the microscopic fractures depleted from the organic matter), starting from the lower section of the heated zone and later filling its entire volume. At the end of the process there is no real lose of volume and no empty pores remain in the heated area.

8. Will there be any surface subsidence?

Rock volume changes as a result of the heating process, as well as the loss of matter at the pilot site are expected to have negligible effect on the surface. As an order of magnitude, numerical simulations indicate that the maximum change of the ground surface is 0.044 centimeters which occur almost 3,000 years later (million days).

Because rock strength is reduced an engineering plan must be applied in a large project in order to minimize vertical variations of the surface (in the pilot phase these changes are so small that they are undetectable). The plan will use similar concepts as in tunneling and construction with leaves cold pillars for stability. In this form no subsidence should occur.

9. What happens to the sub surface pressure when the sub pressure process is ceased?

During the heating there is a pressure gap between the hydrostatic pressure in the pilot and the working pressure in the wells (~100 psi). This pressure gap ensures that no flow will occur outwards from the pilot, but only inflow to the production wells. Once the heating and production process stop, the pressures will gradually balance themselves along with the sub surface cooling process. As water flow into the heated zone, the temperature and the pressure will gradually balance, until they will match the hydrostatic pressure and the surrounding temperature.

Also due to the extremely low permeability out side of the heated zone the gasses will not be able to flow once they condense. This will happen very quickly out side of the heated zone to the rapid temperature drop.





Environmental Questions

1. What measures does IEI take in order to protect the environment?

We believe the protecting the environment is a crucial key for the pilot success. IEI employs an environmental manager, an environmental engineer and in addition IEI hired one of the leading environmental planning firms in Israel. For the pilot test, IEI developed an environment plan that was introduced to the relevant authorities (e.g., the Ministry of Environmental Protection, the National Park Authority, the JNF, etc.).

2. Does the In-Situ Conversion Process (ICP) require water?

Only for drilling purposes. We will be using a small amount of water that will be recycled over and over again. In fact, the lack of need for water is one of the significant advantages of the Israeli deposit versus other deposit in the world, where geological conditions require greater use of water. This is not the case in Israel. At the production stag, IEI will extract the brackish water that saturates the pore volume of the rock and produce substantial quantities of water suited for agricultural usage.

3. Is there any risk of contaminated water flowing from the heated zone to the aquifer?

The geological appraisal study confirmed our initial assumption, that there is complete hydrological separation between the units. The aquifer in isolated from the oil shale layer by several sealed layers, several hundreds of meters thick (is the Ghareb, Mishash and Menuha formations). It is important to note that all are operations are under the guidance and supervision of the Israeli water authority.

4. Is there any risk that contaminates will "leak" the sub surface, outside of the heated zone?

The hydrological measurements, performed in the survey drilling showed that the Ghareb formation has extremely low permeability (~0.1mD). This means that there is no possible connection of gas or fluids from the heated zone to the saturated rock. In addition, the atmospheric pressure difference between the heated area (low pressure) and the surrounding hydrostatic pressure (high pressure) will ensure that water will be able to enter the heated zone but will not be able to get out from it, other than from the production well. Therefore, contaminate expansion in not likely to occur. Anyway, the dewatering (pumping water from the heated zone surroundings) will form a secondary shield strip for the purpose of trapping and preventing the expansion of gas and liquid that eligibly escaped the heated zone.

5. Will a commercial project create a large amount of greenhouse gas emissions?

Quite the contrary: The use of Israeli oil will decrease the greenhouse emissions of Israel by approximately 5%, when compared to imported crude oil on a well to wheels basis.

The main reason for lower greenhouse emissions, results from the fact that during In-Situ conversion, the heavy hydrocarbons are left in the sub surface in their original state (as part of the rock). In other production processes (conventional fuel) the heavy hydrocarbons are produced together with the crude oil to the surface. The crude oil needs to be intensively refined, which requires a lot of energy and excess greenhouse gases to the atmosphere. Simply put – while it takes more energy (and hence more GHG emissions) to get the shale oil out of the ground, it requires less energy to refine it, when compared with "conventional" crude oil.

6. Will the sub surface heating damage the surface vegetation?

Heating the sub surface will have zero effect on the land surface! The heating in conducted at a depth of hundreds of meter below the surface. The heating affects only up to 9 m from the heated zone, at that distance the temperature drops to the rock natural temperature.

7. In case of a technical malfunction, how will IEI prevent an oil/contaminated water spill?

All of the liquid storage tanks (water and oil tanks) will be set in spill containment pallet that can hold 110% from the tank volume. The spill containment pallets are intended to prevent the expansion of the spilling at the site. In any case of liquid spill the spill containment pallet liquid will be pumped to an evacuation tank and will be transfer to treatment in authorized facility.

8. At the end of the heating process, wll the sub surface or the surface itself will be contaminated?

No, there will be no contamination to the sub surface or the surface. Actually, one of the pilot's goals is to prove it using extensive monitoring systems.

9. Is there any possibility of combustion in the sub surface due to oxygen penetration to the heated area?

There can be no combustion without the presence of oxygen. The pressure at the heated zone during production is a positive pressure of approximately 100 psi, which means oxygen cannot possibly penetrate it. Therefore, no spontaneous combustion can take place in the sub surface.

Actually, many attempts were made to create the conditions that will allow penetration of oxygen to the sub surface in the oil shale projects at Colorado, but all of these attempts have failed. Spontaneous ignition of oil shale can occur only when the oil shale is exposed to air, with connection to the open air and at low moisture level of the oil shale.

10. How can IEI guarantee the reclamation of the pilot site?

IEI is committed under the terms of the license to fully return any drilling site to its "original" state. At the pilot site, the reclamation will include the removal of the substrate. At the end of the reclamation process, the area will return to its original agriculture use. This is our commitment to the authorities, to the surrounding villages, and to the Israeli BLM. IEI has offered, in a legal proceeding before the Supreme Court, to deposit a bond in a substantial amount to guarantee its reclamation obligation.

11. Does IEI have an environmental monitoring plan for the pilot?

IEI's environmental monitoring plan is currently in preparation and will be coordinated with the Ministry of Environmental Protection and the water authority prior to the works on the site. The plan will include water monitoring, air monitoring (stack emissions and non source emissions), surface monitoring, and temperature & pressure monitoring in the sub surface.

12. Who will oversee the surface, water, and air monitoring?

A. Aquifer water monitoring – the monitoring plan will be developed in accordance with the Water Authority guidelines. In addition, all of the data will be submitted to the Ministry of Infrastructures, the Ministry of Environmental Protection, and the Ministry of Health.

B. Runoff water monitoring – will be conducted in accordance with the Ministry of Environmental Protection guidelines. The finding will be submitted to the Ministry of Agriculture, the Draining Authority, Water Authority, and the Ministry of Health.

C. Surface monitoring – will be conducted in accordance with the Ministry of Environmental Protection guidelines. The monitoring data will be submitted to relevant authorities according to the Ministry of environment instructions.

D. Air – will be conducted in accordance with the Ministry of Environmental Protection guidelines. The finding will be submitted to relevant authorities according to the Ministry of Environmental Protection instructions.





Technological Questions

1. What are the available oil shale extraction methods?

Oil shale has been used as an energy source for centuries. Extracting oil from oil shale requires conversion of the solid hydrocarbons in the rock to liquid form, so that they can be pumped or processed. This is done by heating the rock to a high temperature, and separating and collecting of the resultant liquid. This heating process is called retorting.

Oil shale processing is generally done in one of two ways: surface retorting and In-Situ retorting

A. Surface Processing

Surface processing (also commonly referred to as surface retorting) has traditionally been the more common of the two processes. The process basically entails three steps:

i. Mining of the oil shale - mining of the oil shale can be done using traditional mining methods, either by open pit mining or underground mining (sometimes called room-and-pillar method).

ii. Thermal processing or retorting above ground

iii. Processing of the shale oil to obtain a refinery feedstock and value-added by-products, disposal of the spent shale

Surface processing has many disadvantages:

  • Both mining methods have a large land impact and consume large amounts of water (as the process requires water for operations and also requires pumping out groundwater to prevent flooding of the mines).
  • Surface (or open-pit) mining involves a considerable land impact while Room-and-Pillar mining methods are considered inefficient: approximately one-third of the resources are left behind in pillars and/or unmined areas. In fact, the thicker the resource the less efficient the mining process becomes.
  • Disposal of the waste shale is a major problem for some processes, requiring large quantities of water.

 

B. In-Situ Retorting

In-Situ (Latin for "in place") is the technology for processing oil shale underground.

  • This process obviates the problems of mining, handling, and disposing of large quantities of material, which occurs for above ground retorting.
  • In-Situ retorting also offers the potential of recovering deeply deposited oil shale. In an In-Situ process, the oil shale is slowly heated underground and the resultant liquids and gas are being extracted directly from the reservoir, in a manner not different from pumping crude oil.
  • Utilizing slow heating methods and lower heating requirements than those used in surface retorting holds another key advantage: the oil shale produced will be of a superior quality that that produced in above-ground retort facilities, materially reducing the upgrade requirements before delivery to refineries can take place.

In-Situ technologies have been successfully demonstrated on a small scale. Various technologies differ by the method used to introduce heat underground, but follow the same basic principle.

2. What are the advantages of the In-Situ method compare to the Ex-Situ?

A. Environmental advantages – the In-Situ method leads to minimum impact on the environment:

  • The In-Situ process does not require vast mining area. The In-Situ is conducted using small and temporary land use. By using horizontal drillings, extraction can be made from a large volume of sub surface area, while using only a small surface area.
  • The In-Situ method leaves the extraction area in its original state once the extraction has ended.
  • In the Ex-Situ method, vast amount of water is used compared to the In-situ method (Ex-Situ require large amounts of water to treat the spent shale).
  • The amount of waste in the In-Situ method is minor compared to the Ex-Situ method.
  • In the In-Situ method, the gases from the subsurface emitted to designated facilities for further treatment while in the Ex-Situ method, gases (e.g., H2S, NOX, etc.) are emitted to the atmosphere.

B. Efficiency – the In-Situ method allows high utilization rate of the organic matter comparing the Ex-Situ method.

C. Product quality – due to the slow heating process the shale oil's quality is higher when using the In-Situ method comparing to Ex-Situ method, and even when comparing to conventional crude oil.

3. Why now? Why is the intensive development of the oil shale happening now?

Commercial production of shale oil using the In-Situ technology started in Sweden in the mid 1940's. Low oil prices caused the production of oil from oil shale to be no longer economically viable.

During the energy crisis in the 1970's, the global interest in the oil shale as an alternative fuel had increased, but the technology wasn't sufficient for the production to be economically viable. In addition, the environmental impact was relatively high. Since then, key development has been made in the oil industry and other related fields. Nowadays, using new technologies, it is economically viable producing oil from oil shale, and it can be done with low environmental impact.

4. What will be the project's stages?

The learning process in this project, from its beginning until the commercial production, includes the following stages: geological definition, laboratory analysis, small scale field test (pilot), small commercial production facility (demo) and finally, commercial production facility that its capacity will gradually increase until it reaches its maximum production capacity. The planning and executing of each stage is stipulated by the success of its predecessor. Success means meeting the license terms and the technological and environmental goals. For additional information see the Project Stages page.

5. How can IEI plan the commercial production based on a pilot which takes place at a different location and uses vertical and not using horizontal drillings?

The production processes at the pilot site, and later on, at the demonstration sites are similar. An increase of the production amount only means multiplying identical units. The volume of gas and liquid extracted from certain unit of volume has high coefficient to the products extracted in the commercial stage. There is a no geological difference between the hydrological layers of the pilot to those found throughout the license area, including in the area contemplated for the commercial production.

The main technological difference between the pilot and the stages following to the pilot is that in the future, horizontal drillings will be utilized. The use of horizontal drillings is common in the energy field (it is common practice). The vast body of experience in this technology provides a solid basis to planning the drilling element of the subsequent stages.

6. How can IEI project the products quantity in the pilot?

Laboratory analyses performed on rock samples from the license area provide valuable information regarding its petrophysical and geochemical characteristics. Oil shale are heated and examined in pyrolysis cells at the Department of Geology and Environment at Ben Gurion University.

Using numerical simulations, the expected gas and liquid amounts are calculated. The calculation is done by using an advanced reservoir simulation program called STARS. The results of the calculation will be matched with the actual amount produced during the pilot. One of the major goals of the pilot will be to test our ability to accurately predict the production rate and quantities.