This blog is part of a series about Enefit, and Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.
Despite posturing by Enefit’s corporate officers, internal documents and tests show that the company’s attempts to extract and process oil shale in Utah have run into trouble.
Enefit Chairman Harri Mikk has said that their technology “does not need to be proven.” (ed. note – Harri Mikk resigned from the board 31 Dec. 2012)
This past June, Enefit CEO Rikki Hrenko made the following statement:
“And most importantly for our project in Utah, and for our activities here in the U.S., we also have demonstrated proven commercial shale oil production.”
In late 2012, Estonian newspaper Postimees reported that the company had experienced delays and setbacks with its new Enefit 280 technology.
Sandor Liive, chief executive officer of Eesti Energia [Estonian state-owned power company] said that the company has failed to put their new [oil shale] production plant into operation due to technological problems and, therefore, the launch of the plant has been postponed until the new year. – BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees, November 30, 2012
“But it is not a big surprise that a new technology does not work right away,” said Sandor Liive, CEO Eesti Energia – BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees, November 30, 2012
According to the Postimees, the delay puts on hold the company’s plans for similar facilities in the United States and Jordan.
Enefit’s new oil shale technology had only been tested in a lab until recently when, after technical delays, the Enefit 280 plant began producing oil from oil shale in December of 2012.
Back here in the United States, the Salt Lake Tribune reports that Enefit is experiencing difficulties applying its technology to Utah oil shale deposits, and specifically that the company hasn’t been able extract oil from the oil shale ore mined in Utah as easily as executives had hoped and promised. Tests have proven Utah’s oil shale to be “stronger and drier” than Estonian oil shale.
The Vernal Express also reported that:
Enefit’s Utah project has proven to be “unexpectedly difficult to do,” and that tests indicate that Utah oil shale requires more energy to break down than expected, resulting in higher carbon dioxide emissions.
What Enefit called, “a simple mining project” has experienced significant delays and requires additional funds. Eesti Energia now projects Enefit’s Utah project will need an additional 37 million Euro in investment. And, Estonian mining experts say oil production from Utah oil shale is still decades away.
The financial and environmental risk posed by this still unproven technology demands that companies like Enefit fully prove the viability of their technologies before they are given access to more public land for oil shale extraction.