SM Energy Company (SM)

[ChitForBrains]

Seems like the July Popular Science special hinted that the cost to market is high in the Bakken, energy returned on energy invested, or EROEI. http://www.popsci.com/technology/article/2011-06/last-drops-how-bridge-gap-between-oil-and-green-energy

Oil shale is created when kerogen, the organic precursor to oil and natural gas, accumulates in rock formations without being subjected to enough heat to be completely cooked into oil. Petroleum engineers have long known how to finish the job, by heating the kerogen until it vaporizes, distilling the resulting gas into a synthetic crude, and refining that crude into gasoline or some other fuel. But the process is expensive. The kerogen must either be strip-mined and converted aboveground or cooked, often by electrical heaters, in the ground and then pumped to the surface. Either process pushes production costs up to $90 a barrel. As all crude prices rise, though, the added expense of shale oil may come to seem reasonable--and it is likely to drop in any case if the shale oil industry, now made up of relatively small pilot operations, scales up.

Policymakers should resist the urge to go hunting shale oil.The problem is that the external costs of shale oil are also very high. It is not energy-dense (a ton of rock yields just 30 gallons of pure kerogen), so companies will be removing millions of tons of material from thousands of acres of land, which can introduce dangerous amounts of heavy metals into the water system. The in-ground method, meanwhile, can also contaminate groundwater (although Shell and other companies say this can be prevented by freezing the ground). Both methods are resource-intensive. Producing a barrel of synthetic crude requires as many as three barrels of water, a major constraint in the already parched Western U.S. With in-ground, the kerogen must be kept at temperatures as high as 700°F for more than two years, and aboveground processes use a lot of heat as well. Those demands, coupled with kerogen’s low energy density, yield returns ranging from 10:1 (that is, 10 barrels of output for every one barrel of input) to an abysmal 3:1.

At any rate they seem to have the oil Eagle Ford in Dimmit County where TXCO had leases and along the mid-South Edwards rig if I remember the map right (from a previous post where the compaines were listed by location but too small to tell with enlarging....) Maybe here or Rosetta is where I posted that link, I thought I had it booked marked? Oh well. SM should be good.