Friday, July 07, 2006

Go to shale

With oil prices hovering around $70 a barrel, Israel is looking for ways to reduce its near-total dependence on energy imports. It's pondering the use of the nation's huge reserves of oil shale - a dark, crumbly rock loaded with hydrocarbonslocated in the central and southern parts of the country. Thanks to a technical breakthrough, it should be possible to extract fuel oil from the shale for less than $20 a barrel. That could allow Israel eventually to cut its crude imports by up to one-third.

Shale is already used as a fuel for power plants in Israel and Estonia, where the rock is burned like coal to drive steam turbines. Israel's small shale-fired power plant was built nearly 20 years ago. But past attempts to extract liquid oil from shale weren't economically feasible: The process cost upwards of $50 per barrel at a time when oil was selling for less than half that.

Now, the tables have turned. A Russian-born Israeli immigrant named Moshe Gvirtz developed a technique in the 1990s to squeeze oil from shale by mixing the rock with a residue from conventional oil refining and putting it through a catalytic process. The dramatically improved results, coupled with soaring crude prices, have inverted the economics of oil shale. That could help not just Israel but dozens of other countries, including the U.S., that are rich in shale reserves.

And the best part is the byproduct: less money going to Arab terrorists laundered through Saudi Arabia, Iran and other oil-rich terror-supporting countries.