Scientists ‘cook’ oil from Alaska coal, suggesting exploration opportunities

Alaska is home to about half of the United States coal reserve. (iStock)
A laboratory experiment that produced crude oil from bits of Alaska coal has geologists hoping coal-rich areas contain undiscovered pools of oil in sedimentary basins.

While coal is typically associated with basins that produce natural gas, it is believed to be the source rock for commercial oil discoveries in some basins around the world, such as in Australia, said David LePain, a petroleum geologist with the Alaska Department of Natural Resources.

It’s possible Alaska, home to about half the nation’s coal reserves, contains large amounts of oil that were generated eons ago from coal deep beneath the ground. But much more work is needed to determine that, he said on Tuesday.

“I don’t want people to have the wrong idea and think we’re going to get all this oil from coal next year, or five years from now,” he said. “It’s research at this point.”

Turning coal into oil

Experts with the U.S. Geological Survey near Denver in 2016 cooked the “waxy oil” from four samples of coal collected by state geologists. Lab teams mixed the coal with water in a reactor vessel and superheated it for three days at nearly 700 degrees.

It’s the first time state geologists have conducted such tests with coal from Alaska. Each submitted sample produced oil, they said.

“It’s significant,” said state geologist Steve Masterman. “The very fact you can generate liquid hydrocarbons from coal is potentially a big step forward.”

The billions of barrels of Alaska crude produced by BP and other companies in Alaska, primarily from the large Prudhoe Bay and Kuparuk oil fields, have not come from coal. Instead, the oil was made long ago by other kinds of oil-prone rocks, LePain said.

But perhaps the new information will encourage oil explorers to “poke around” a bit more in underexplored areas containing coal, such as the Nenana or Susitna basins, LePain said.

Limited commercial demand

Alaska geologists collected the four coal samples in 2015 from outcroppings at the Usibelli Group operation near Healy — near the Nenana Basin — and near Wishbone Hill in the Matanuska Valley near Sutton.

At the Denver laboratory, USGS scientists produced 60 to 100 milligrams of crude oil from 1 gram of coal, depending on the sample. At the high end, that’s a 1-to-10 ratio.

Paul Lillis, a petroleum geochemist with the USGS in Denver, said Alaska’s samples generated less oil than samples from Nigeria, but more than those from North Dakota and Wyoming, according to research he reviewed.

The oil produced in the lab is called pyrolysate, based on the process that created it, hydrous pyrolysis, meaning decomposition with heat and water. But the result was very similar to crude oil, with the same look and smell to a lay person, he said.

In theory, gasoline and other crude-oil derivatives could be refined from the substance, though that has not been tried, he said. There is not a lot of commercial demand for hydrous pyrolysis, with only a few labs around the world conducting such experiments.

During World War II, the fuel-starved Nazi regime had a somewhat similar concept, in that they produced hydrocarbon liquids from mined coal for their military. But they used a different process — hydrous pyrolysis was invented in the 1970s.

Natural oil-producing basins

The state effort is also different because geologists want to know if underground coal can naturally yield oil that could one day be produced.

“We’re talking about coal generating oil in a natural subsurface system, as opposed to taking mined coal and running it through a coal-to-liquid surface plant,” LePain said.

The Gippsland Basin in southeastern Australia is a prolific oil-producing basin with oil that many believe came from coal, officials said.

As a next step in Alaska, the USGS is planning to study whether the right conditions in the wild — mostly heat and time — may have helped coal generate oil in Alaska’s Susitna Basin, about 50 miles northwest of Anchorage.

A report on the lab results from the Alaska Division of Geological and Geophysical Surveys says earlier studies have suggested coal could have produced “significant quantities” of oil in basins including the Holitna, the Nenana and Susitna.

Coal has contributed to dozens of surface oil seeps found near Yakataga along the northern Gulf of Alaska, according to Gerry Van Kooten, a petroleum geologist. Doyon Ltd., exploring the Nenana Basin for oil and gas, appears to have discovered “oil-prone” coal like that in southeastern Australia, he wrote in 2012.

Doyon has not found commercial quantities of oil or gas, but is continuing to explore.

LePain said the lab results have the potential to make a meaningful difference in the future, he said.

“What I hope, as someone working for the state of Alaska, is that some oil company out there learns of this work and gets interested in these basins and wants to come in and explore,” he said. “Because you have to explore before you can say we have elements of a petroleum system here.”

Related stories from around the North:

Canada: Gold miner Agnico Eagle to invest $1.2B in two Canadian Arctic mines, Radio Canada International

Finland: Commodities firm takes 15 percent stake in Terrafame troubled mine, Yle News

Greenland: Greenland pioneers Arctic tourism & mining, Cryopolitics Blog

Norway: Production uncertain beyond Q2 at iron-ore mine in Arctic Norway, Barents Observer

Russia: On remote Russian Arctic coast, a grand coal project in the making, The Independent Barents Observer

Sweden: Relocation of Arctic town underway in Sweden, Radio Sweden

United States:  Could good mining jobs actually hurt Bush villages?, Alaska Dispatch News

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