Business: Gas from Goo

More energy from heavy oil

At first glance, it looks like any other oilfield, with acre upon acre of pumps rhythmically nodding up and down as they suck up the crude oil trapped in rock below the surface. But the Guadalupe, Calif., oil patch 50 miles northwest of Santa Barbara is no ordinary oilfield. Like a growing number of production sites in California and Texas, Guadalupe is producing a gloppy goo that looks more like asphalt than normal petroleum. This is so-called heavy oil, a once rejected energy source that oilmen now believe may help diminish the nation's dependence on imported petroleum.

The potential supplies of heavy oil are vast. Venezuela alone has untapped deposits perhaps equal to the total known world oil reserves of 642 billion bbl. But heavy crudes have a much higher sulfur content and less potential energy value than the lighter grades normally used for making gasoline or heating oil. Until recently, energy companies left the heavy oil in the ground because it was too costly to produce and refine into useful petroleum products. But skyrocketing petroleum prices now mean that even heavy oil has become economical; engineering breakthroughs are also making it more profitable.

By going after domestic heavy crude, the U.S. could double its present oil reserves of 29 billion bbl. The leading heavy oil producer is Shell Oil, which is already pumping 85,000 bbl. of it per day. That is about 20% of the company's total U.S. output and nearly half the nation's total heavy oil production. The company last year paid an estimated $3.5 billion for the Kern County oilfields of Belridge Oil Co., which are believed to contain up to 375 million bbl. of heavy crude, by far the largest such deposit in the country. One of Shell's toughest competitors is California's Union Oil, which operates the Guadalupe field.

Plentiful though it is, heavy oil poses problems that begin with getting it out of the ground. Because the crude is so sticky, less than 10% of it will flow to the surface by conventional pumping methods. One way to liquefy the goo is to force superheated steam into deep crude wells for as long as two weeks at pressures as high as 2,500 lbs. per sq. in. The extraction also requires huge amounts of energy. Just to heat enough steam to liquefy and then force three barrels of heavy oil up a well shaft can take as much as one barrel of oil or its energy equivalent in the form of natural gas or coal.

The complications continue at the refinery. Heavy oil molecules, compared with those in lighter crudes, have a higher proportion of carbon atoms and fewer hydrogen atoms. Since the energy potential of oil depends on the number of hydrogens, 40% to 50% of a barrel of heavy oil comes out as low-energy, low-priced products, such as industrial fuel oil and bunker oil for ships. Getting more gasoline requires a multimillion-dollar investment in complex equipment to break down these heavy residual fuels.