Digital Gas in Agreement to Acquire Rights to Advanced Oil Recovery Technology
Thursday June 22, 4:52 pm ET
NEW YORK--(BUSINESS WIRE)--June 22, 2006--Digital Gas, Inc. (OTC Pink Sheets:DIGG - News) announced today that it signed an agreement with Carbon Recovery Corporation ("CRC") of West Berlin, New Jersey, to collaborate on commercializing CRC's advanced magnetic resonance technology.
Carbon Recovery Corporation, using its proprietary technology, has developed revolutionary techniques to recover oil and other valuable raw materials from relatively untapped resources including oil shale, oil sands, tires, municipal solid waste as well as other potential sources such as coal and plastics.
Digital Gas has entered into this agreement to augment its products and technologies for itself and its present partners in oil, gas and tire processing.
Shale
CRC's most recent tests of the technology on oil shale demonstrated that oil can be extracted at a substantially lower cost than previously thought possible. CRC reports that costs should go down even further when the tests of the technology are run on its newest test unit, expected to be delivered in July. Digital Gas anticipates that the total cost may be significantly less then $10.00 per barrel based on tests to date.
The National Institute for Resources and Environment estimates that the worldwide supply of Oil in shale is 3.5 trillion barrels. The US Department of Energy estimates that 2 trillion of those barrels are in the United States. These figures are based on existing technology which allows shale to be converted into oil at a rate of 15 gallons per ton.
Importantly, because of CRC's improvements in efficiencies, the estimated worldwide recoverable reserves would increase to 6 trillion barrels worldwide and 3.45 trillion barrels in the United States. CRC's process allows for oil to be recovered in a gaseous state that in turn can be fractionalized to gasoline worth as much as $90 a barrel.
Oil Sands, Oil Drill Cuttings, Slurry Oil
Oil Sands, also known as tar sands, are deposits of bitumen, a heavy, black viscous oil that must be rigorously treated to convert it into an upgraded crude oil. The world's two richest deposits are in Alberta, Canada and Orinoco, Venezuela. It is estimated that there are 1.5 trillion barrels of available oil from Canadian Oil Sands and 1.6 trillion barrels from Venezuela Oil Sands. This is far greater than the entire Saudi Arabian oil reserves.
Currently, about two tons of oil sand must be extracted, moved and processed to produce one barrel of oil. The current process of choice for extraction is Steam Assisted Gravity Drainage. The cost of this process is exorbitant and has a considerable negative environmental impact in terms of carbon dioxide gas released into the atmosphere. CRC technology is expected to dramatically reduce this energy cost and virtually eliminate the environmental impact.
Oil drill cuttings are the waste product generated during the drilling of oil wells. These cuttings are bits and pieces of oil soaked soil and rock. A typical oil well can generate between 5 to 10 tons of cuttings an hour. Oil companies are currently paying approximately $300 a ton to dispose of these cuttings. For offshore oil operations, the cost can rise to as much as $1,000 a ton. The disposal consists of nothing more than hauling away the cuttings and either depositing them in landfills that accept such hazardous waste or burning the material to remove the hydrocarbons.
In its most recent tests, CRC has been able to eliminate all but 0.01% of the contaminants in these cuttings leaving clean fill that can be redeposited into the ground or otherwise handled in an environmentally compliant manner. The technology will be marketed in portable units which can be placed on site, allowing the cuttings to be immediately treated at the drilling site and eliminating the need for storage and hauling.
Slurry oil is refinery waste oil. It is waste oil that is too thick to economically crack or reprocess with current technologies. At least 3% (and in some refineries as high as 7%) of typical oil refinery production is slurry oil. Using an average of 5% of production, on a worldwide basis, refineries generate an estimated minimum of 1.5 billion barrels annually. CRC's technology can cost effectively crack this oil so that it can be fractionalized into fuel oils. As with the oil cuttings, a CRC unit can be placed on site at the refinery.
Recyclables, Municipal Solid Waste
Scrap tires are a significant problem worldwide and their disposal presents significant environmental and safety hazards including fires, overflowing landfills and pollution of the atmosphere. The CRC proprietary process allows for the cost effective, environmentally safe recovery of virtually all of the original chemical/mineral materials from scrap tires. Utilizing the CRC process, each 20-pound tire will yield 19.9 pounds of resalable materials.
In the future, CRC plans to use this same technology to also break down plastics. National Geographic Magazine estimates that 280 million gallons of oil based products go into the landfills in the United States each day. Economically recapturing the raw materials from just a small fraction of these products will not only generate substantial profits, but it will also positively impact the environment and reduce landfill needs worldwide.
Digital Gas has agreed to arrange funding for CRC's initial tire project and to fund final development of one or more products and technologies for oil and gas recovery from natural resources.
In exchange for the aforementioned, Digital Gas may acquire equity in CRC and/or one or more of its projects and will receive a non-exclusive license to use the CRC magnetic resonance technology on its own oil shale, oil sands and coal and recycling projects, as well as in its Energy & Farming Centers.
In addition, the companies have agreed to joint venture on Digital Gas' coal and other hydrocarbon natural resource projects in Pennsylvania, West Virginia and Kentucky. The two companies are exploring additional opportunities both in the United States and internationally.
Contact:
Digital Gas, Inc.
Brian Smith, 732-927-4073
Source: Digital Gas, Inc.
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