1. 1 SPE Distinguished Lecturer Program The SPE Distinguished Lecturer Program is funded principally through a grant from the SPE Foundation. The society gratefully acknowledges the companies that support this program by allowing their professionals to participate as lecturers. Special thanks to the American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME) for its contribution to the program. Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl

2. Unlocking Ten Trillion Barrels of Global Oil Shale Resources - The State of the Industry Khosrow Biglarbigi Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl INTEK, Incorporated

3. 3 Global Petroleum Liquid Demand 24% Increase 20 40 60 80 100 120 20082011201620212026 Year Million Barrels Per Day 2030 25% Increase Source: EIA, 2009

4. 4 Global Petroleum Liquid Supply Source: IEA, 2008 Million Barrels per Day 1990 2000 201020202030 0 20 40 60 80 100 120 Oil – Existing Fields NGL Future Discoveries Oil Sands CTLGTL ? EOR Oil Shale Heavy Oil Bio Fuels Year

5. 5 What is Oil Shale? Rock Kerogen Pyrolysis Upgrade 700 - 800 °F Syn- Crude Naphtha Jet Fuel Diesel Nat. Gas Hydrogen

6. 6 10 Trillion Barrels of Shale Oil Worldwide United States Zaire Russia Brazil Italy Morocco Estonia China Canada France Egypt Australia Israel Jordan Countries With Oil Shale Deposits

7. 7 Australia32 Billion Jordan* 90 Billion Morocco 53 Billion Zaire 100 Billion United States6,000 Billion Top Ten Countries (Barrels) Brazil 82 Billion Russia 248 Billion Italy 73 Billion Source: USGS, 2005 * Jordan NRA, 2009 China16 Billion Estonia 16 Billion

8. 8 America’s Oil Shale Most Concentrated Hydrocarbon Deposit 2 Trillion Barrels 6 Trillion Barrels Source: US DOE, 2004

9. 9 Substantial Areal Density Source: Oil and Gas Journal, August 2004 1000 Barrels Per Acre Oil Shale 70 100 500 800 1,300 0 250 500 750 1,000 1,250 1,500 Alaska N. Slope Oil Canada Oil Sands Wyoming USA Utah USA Colorado USA

10. 10 The Mahogany Zone The Most Prolific Up to 1000 Ft Thick Up to 75 Gal/Ton Source: Redleaf Resources, 2008

11. 11 Oil Shale Production Processes Mining Retort Upgrading Resource Refinery Surface Process Drilling Heating Upgrading Resource Refinery In-Situ Process Source: US DOE, 2004 Choke Point

12. 12 Shell In-Situ Conversion Process Source: US DOE, 2008 High Value Products Pilot Test (Colorado, USA) Light Surface Processing HEATER PRODUCER OVERBURDEN

13. 13 Other Examples of In-Situ Technology Pilot Tests (Colorado, USA) AMSO Process Chevron Process Fractures Injector Producer Source: US DOE, 2008

14. 14 Ecoshale In-Capsule Technology Source: Redleaf Resources, 2008 HOT GAS COOL GAS Pilot Test (Utah, USA)

15. 15 Alberta Taciuk Processor (ATP) Pilot Test (Utah, USA) Preheat tubes Vapour tube Combustion zone Retort Preheat tubes Cooling zone Oil shale feed 750°C 500°C250°C Source: US DOE, 2006

16. 16 Gas Combustion Retort (GCR) Brazil (4,000 Bbl/d) China (4,000 Bbl/d) Estonia (6,000 Bbl/d) Australia (Project Scale Up) Source: US DOE, 2007

17. 17 Energy Return on Investment (EROI) 0 2 4 6 8 10 12 Oil Shale (Surface) Oil Sands (Surface) Oil Shale (In-Situ, Non.Elec.) Oil Sands (In-Situ) Oil Shale (In-Situ) Source: US DOE, 2007 EROI = Energy out - Energy in Energy in EROI Oil ShaleOil Sands 3 7 10 7 5

18. 18 “Oil shale is a local asset under global constraints.” Klaus Brendow, Senior Advisor World Energy Council June 9, 2009

19. 19 Oil Shale Project Costs Item UnitRange Capital Cost$/BPD O&M Cost$/Bbl15-25 45K-65K * * Barrel of Daily Capacity Source: INTEK, Inc., 2009

20. 20 Canadian Oil Sands Operating Costs Source: Suncor, 2008 $0 $5 $10 $15 $20 $25 $30 $35 $40 200620072008 $35 $30 $23 Dollar/ Barrel Year

21. 21 Source: Canadian Association of Petroleum Producers, April 2008 $1,000 per Bbl of Daily Capacity 140000 0 20 40 60 80 100 120 Suncor - Millennium AlbianSyncrude - Aurora 2 & UE 1 Nexen – OPTI CNRL - Horizon Shell - Muskeg & Scotford PCA/UTS Fort Hills $3 Billion$11 Billion 100,000 Bbl/D Project 2001200320062007200820102011 Canadian Oil Sands Capital Costs

22. 22 Shell CEO Says Higher Costs Limit Canadian Oil Sands Projects Oct 8, 2009 Causing Project Delays

23. 23 Oct 4, 2009 Total Canada Chief Says Oilsands Need Pricier Oil Needing Higher Prices

24. 24 Economic Price for Oil Shale Technology True In-Situ Surface Mining Underground Mining 2007 Dollars Per Bbl In-Capsule $50 $60 $75 Rate of Return – 15% $0 $10 $20 $30 $40 $50 $60 $70 $35 Source: INTEK, Inc., 2008 $80

25. 25 Oil Shale Environmental Impacts Air Quality Oil Shale Processing HC Gas CO 2 SO x NO x CO 2 Enhanced Oil Recovery Sequestration Other Industrial Uses Capture and Clean Existing Technology Process Plant Use Source: SPE #110590, 2007

26. 26 Land Use Depends On The Process 1 MMBbl/D Production for 40 Years – Surface: 30 Square Miles – In-Situ: 15 Square Miles Example for 2.5 MMBbl/D Industry: – 52 Square Miles 2.5 MMBbl/d 52 Square Miles Green River (USA) 17,000 Square Miles Source: SPE #110590, 2007

27. 27 Water Requirements 1-3 Barrels of Water per Barrel of Shale Oil Challenges: –Water rights –Water availability –Water runoff –Ground water protection Source: US DOE, 2007

28. 28 Development Hurdles Access to Land –70% on Federal Land –No Commercial Leasing Program RD & D Environmental Permitting Fiscal Regime

29. 29 Total Resource 6 Trillion Barrels High Quality Resource 2 Trillion Barrels Technical Recovery 1 Trillion Barrels Reserves 600 – 750 Billion Bbls The Prize (USA Example) $50 - $65 / Bbl @ Source: INTEK, Inc., 2008

30. 30 0 500 1,000 1,500 2,000 2,500 2005201020152020202520302035 Year Thousand Bbl/D Projected Production Potential (Shale Oil in the U.S.) Base Tax Incentives RD&D Accelerated Scenario Measured Scenario Business as Usual Source: US DOE, 2007

31. 31 Summary Over 10 trillion barrels of in place resource Conversion technologies are advancing rapidly Estimated reserves of up to one trillion barrels worldwide Oil Price is a key driver for its development Requires concerted effort by the private sector, governments, and local communities

32. 32 Appendix

33. 33 Worldwide Oil Shale Activities USA Brazil Morocco China Australia RD&D 8 Pilot Tests 29 Companies Production 6,000 Bbl/D 430 Mw Production 4,000 Bbl/D Production 4,000 Bbl/D Exploration 12 Companies Jordan Commercial Scale-Up Source: INTEK, Inc., 2008 Estonia

34. 34 Breakdown of Economic Price for Generic Surface Project $60/Bbl Operating Costs 38% Risk Premium 9% Taxes 19% Cost of Capital 19% Transfer Payments 14% Source: INTEK, Inc., 2008

35. 35 Cashflow of a Generic Oil Shale Project -1000 -800 -600 -400 -200 0 200 400 600 800 1000 1200 510152025303540 After Tax Before Tax Year Cum. Discounted Cashflow (MM$) Room for Government Action Source: INTEK, Inc., 2008