IEI (Genie) pushing for pilot project, moves locale to near West Bank Checkpoint Tarkumiya

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Oil shale firm hopes to advance pilot project, pledging complete transparency


While plunging 300 meters into the shale rock of the Shfela basin has long been criticized as a risky endeavor to the area’s residents, the company aiming to extract the oil wedged within these sediments promises an environmentally sound process that provides complete transparency.

Jerusalem-based Israel Energy Initiatives (IEI), a subsidiary of the New Jersey firm Genie Energy, has for many years been aiming to prove the usability of the approximately 40 billion barrels of oil found in the shale rock layer of the Shfela basin. Although IEI completed its exploratory trial stage in 2011, progression toward a fullfledged pilot program has been delayed for the past few years as a result of environmental opposition, as well as changes in relevant regulations.

“There’s the promise of energy independence and a commercial value that will bear fruit to the tune of at least NIS 10b. a year,” IEI CEO Relik Shafir told The Jerusalem Post. “This is a resource that belongs to the people – the people need to know that it’s there. And we need to see if it can be produced in its way to the benefit of Israel.”

In just a month and a half – August 4 – the company’s pilot project plans will once again resurface on the table of the Jerusalem District Committee for Planning and Building, at which time decisions will be made as to how and in what capacity the project can move forward.

Stressing that an impermeable, 200-meter layer of rock separates the shale and the area’s aquifer, and that the drilling will entail on site, underground oil-heating, IEI has promised that the drilling will not damage the environment.

The potential 40 billion barrels of hydrocarbons in IEI’s license zone are located between 200 to 400 meters below the surface, enmeshed between 70-million-year-old fossils. To eventually produce oil on a commercial scale, the company must drill a production pipeline surrounded by a ring of heating wells, which gradually heat the rock over the course of nine months to 300º C and thereby transform it into lightweight oil on site.

During the exploratory phase, the company extracted the shale without using heaters, and sent the oily rock to laboratories in Ben-Gurion University and the US for analysis.

The pilot phase would consist of one drilling site and production facility in a portion of IEI’s license zone, through which the company would aim to extract about 500 barrels of oil – 2 barrels per day. For the sake of comparison, Shafir pointed out that Israel currently consumes about 275,000 barrels of imported oil daily.

Only after the successful completion of a pilot project could a demonstration phase, followed by a full commercial phase, move forward.

IEI has faced opposition along the way due to the fact that their technology has yet to be proven anywhere in the world. Focusing in particular on this issue, Adam Teva V’Din (Israel Union for Environmental Defense), filed a High Court petition in August 2010 arguing the technology has not been proven, and yet it is subject only to the archaic Petroleum Law from 1952, which lacks the strict environmental constraints associated with other construction plans.

While the government did not decide to subject hydrocarbon drilling plans to the country’s planning and building laws, the Energy, Water and National Infrastructures Ministry instead issued regulations that tightened construction guidelines and environmental protocols for such projects, in April 2012.

“[Drilling] does not have the latitude it had before,” Shafir said. “Since we’re Israeli citizens as well, I think the public interest is kept, and we went along with this.”

Adam Teva V’Din representatives, however, argued the new regulations are not strong enough.

“They don’t give the environmental considerations enough place at all,” said Keren Halperin- Museri, deputy director of Adam Teva V’Din.

The regulations, Halperin- Museri stressed, have only created a “middle pathway,” in which drilling companies must ask for an exploration permit from district planning committees, who then operate under the new regulation rather than under national planning and building laws.

“It is true that it’s better to have these regulations than having nothing at all,” she said.

Adam Teva V’Din attorneys filed a second petition to the High Court in June 2012 detailing why they felt the new regulations were insufficient, with regards to all hydrocarbon drilling projects, but also including a specific section on the oil shale project in question, Halperin-Museri explained. Because the first and second petitions therefore had some overlap, Adam Teva V’Din agreed to withdraw the first petition at an October 2012 hearing, and combine the contents of the two in the second one, Halperin-Museri said.

At the December 2012 hearing that followed, Halperin- Museri said she and her colleagues at Adam Teva V’Din did not have the opportunity to go into enough detail about the oil shale case specifically. Yet the judges determined the regulations did not present enough of a problem to justify their cancellation, she said.

While Shafir agreed the regulations do not have quite as much power as planning and building laws, he stressed the regulations did direct the Energy Ministry to take part in enhanced consultations with the Environment Ministry – so much so, that the requisite environmental impact assessment directives took a year to generate. The judges, Shafir stressed, decreed that the issuance of directives would be a balanced process taking public interest into consideration.

One of the biggest problems, according to Halperin-Museri, is the fact that the Petroleum Law mandates that if during a pilot project a drilling firm finds a quantity of oil that the Energy Ministry deems valuable, then the company is obligated to produce the oil on a commercial scale.

Following the December 2012 hearing, the Energy Ministry was tasked with delivering environmental impact assessment directives to IEI, with the approval of the Environmental Protection Ministry. IEI received these directives after a year, in April 2013, Shafir said.

Among the many components of the directive provided to IEI were instructions to determine a suitable alternative to the originally proposed Ela Valley location for the pilot project, Shafir said.

They have identified what they feel would be a reasonable alternative to Ela along Road 35, which the company is calling “Tarkumiya” and overlaps with the probable production zone, should the project continue to a commercial phase. While the site is still within the Israel-proper side of the Green Line, it is located close to the Tarkumiya checkpoint.

Although the Tarkumiya area requires drilling significantly deeper, Shafir said this alternative is located in an industrial area and essentially not a tourism area. About 2.5km. away from the closest village, no residents would have any direct contact with the site, and a hill precludes any noise or landscape eyesores, he said.

“The only one ever seen riding a bicycle there is me,” Shafir said.

In terms of environmental sensitivity to inhabitants, IEI determined this alternative would be optimal.

Also in the assessment, the company evaluated how heating the rock would impact the area’s geology, such as interaction with the aquifer.

“This is one of the worries of the environmentalists,” Shafir said. “Had we not understood geology and petrophysics, this would have been our worry as well because it would mean we would lose the oil.”

In the pilot program, the heating rods require about nine months to heat up the rock to the necessary 300º for oil extraction, and because the rock itself is a poor conducting element, the heating would only have “a limited effect in the area being heated,” Shafir said.

Although confident – and having received the support of numerous geologists – the heat would not crack the impermeable layer of rock, Shafir said the upward pressure of the aquifer is so high that water would only be able to shoot upward through such cracks, rather than oil spilling downward.

Shafir said proof would be delivered in the pilot stage, and in doing so compared the process to an in situ thermal remediation technology belonging to the company TerraTherma, invented by IEI’s now chief scientist, Dr. Harold Vinegar. Similar subsurface heating technologies are used by this TerraTherma in order to clean up organic underground contaminants, and the resultant impacts are all well documented, he said.

Shafir also referred to six in-situ oil shale pilot programs in Colorado and one in Alberta, which have proven their ability to produce, as well as the original in-situ production that occurred in Sweden years ago, with an only 20-meter impermeable rock barrier.

Calling this example “living proof of the effectiveness of the sealed layer,” Shafir said that no hydrogeologist would support claims of interaction between Israel’s shale layer and aquifer, separated by 10 times the amount of rock.

Yet none of these pilots occurred under exactly the same environmental conditions that apply to the Shfela basin, and no one has tried out the technology on a commercial level, Halperin-Museri argued. Acknowledging that interaction between oil shale layer and the aquifer below is not certain, Halperin-Museri said she and her colleagues feel such a risk is not worth taking.

Although Shafir agreed no such commercial venture has ever taken place, he said if the same attitude had been applied to the TerraTherma technology, many contaminated land sites could have never been cleaned.

At the Jerusalem District Committee for Planning and Building meeting on August 4, IEI will likely find out whether they can proceed with the Ela Valley pilot project, the Tarkumiya version or no project at all.

“It is a legitimate and respectable solution to move it to a less geologically agreeable area so as to take the inhabitants’ consideration into the decision-making process, simply because if I were there or you were there, you would not like it either,” Shafir said.

Acknowledging Tarkumiya is farther from residences, Halperin-Museri said the new spot may be more environmentally sensitive, due to its proximity to Beit Guvrin – the national park recently declared a UNESCO World Heritage Site.

To these concerns, Shafir responded the Tarkumiya site is six kilometers from Beit Guvrin. Whereas, the BG Bond industrial plant is located only 350 meters from Kibbutz Beit Guvrin.

If the Tarkumiya alternative is chosen, IEI will need to submit a detailed environmental impact assessment of that area after receiving new directives, which would take a few months, Shafir predicted. An objection period of roughly 45 days would then follow, during which Shafir said he expects to receive several thousand objections. A final vote on the plans would likely occur no earlier than the beginning of spring 2015, he estimated.

If IEI receives a nod in its favor, it would then need to acquire authorizations from dozens of authorities, outline a detailed engineering plan and only then could start drilling the pilot program by around summer 2015, Shafir said. The pilot program would last three years until the end of production, followed by a cooling period, he explained.

“If as we go along we find everything works well as projected, then we start going toward industrial production on a very slow path,” he said.

Such a project could only succeed on a commercial level, however, if the government deems it an official national project, due to the coordination needed among so many state agencies, according to Shafir.

Even if IEI was to receive the affirmation of every committee and authority necessary along the way, industrial production would not be able to begin before a decade’s time, Shafir said.

While in principle Adam Teva V’Din is against moving forward with the project as it stands, Halperin-Museri said she would not be unequivocally against all such projects – if the legislative process occurred differently.

There is no justification to advance this project before Israel has a clear national energy strategy, which would determine how much of each fuel type the country will need in the future, Halperin-Museri explained. If such a national energy strategy determined that Israel would in fact still require the amount of oil offered by this project, only then should the plans be evaluated – under national planning laws, she added.

“Then we will decide if it makes sense,” Halperin-Museri said.

To these demands, Shafir responded, “This is like saying that until we have a constitution, no legal proceeding should take place.”

No matter what decisions are made, Shafir said he advocates complete transparency all the way through and promised that absolutely no information would be hidden from the public.

“We look at this as a body of knowledge that needs to be presented to the public in the most trustworthy way, and let the public be educated and take its own stand,” he said.

Along these lines, Shafir praised Adam Teva V’Din for working to legitimately protect the public interest.

“It is important that they exist within our society, and they are the watchdogs,” he said. “They did their work.”

“I think that we’re in a good position that they had forced the state to take the environmental point of view very seriously,” Shafir added. “Now it’s a question for scientists and engineers to ascertain what is the balance of the benefits and environmental implications for the well-being of the state and people.”