Israel, saving the world, again.

In a follow-up to Kate's post, I thought I would post a link to Israel's Ministry of Foreign Affairs which has a write about a revolutionary unique process the Israeli engineering firm of Hom Tov has developed for extracting oil from shale (circa January 2007):

An Israeli company intends to revolutionize oil production by recycling oil shale rock into high quality fuel.

Haifa-based A.F.S.K Hom-Tov recently demonstrated its patented method of extracting high quality oil and natural gas from a mixture of bitumen and oil shale rock. Bitumen - or asphalt - is the residue obtained by distillation of crude oil.
Experts predict the process will produce oil at just $25 dollars a barrel and the additional natural gas generated would further boost the financial feasibility. With crude oil prices currently floating over the $50 a barrel mark, this proposed method is generating interest around the world.

The Hom-Tov process uses oil shale as a catalyst to extract combustible organic material from the residual bitumen byproduct of crude oil refineries. The end product from the process can easily be refined into high-grade petroleum and other fuels. At present, oil refineries produce countless tons of bitumen residue every year that have little practical use or economic benefit and are an environmental hazard.

As a further bonus, the process converts the oil shale rock into a dry fuel in which the inorganic rock structure traps dangerous gases, such as sulfurous materials, preventing pollutant emissions to the atmosphere. The dry fuel byproduct could be burnt to power the Hom-Tov process itself as well provide additional electricity for the national grid.

The volume of bitumen residue left over from each barrel of crude oil depends on the quality of the crude, but ranges from 10 percent and upwards. Once used as a heating fuel in steam-powered ships and power stations, stricter emission laws have relegated bitumen to be used for roads surfaces or waterproofing materials.
The Hom-Tov process enables refineries to reprocess the bitumen and extract a variety of liquid and gaseous fuels at much lower temperatures. The process itself can be tweaked to produce different grades of oil as required.

Hom-Tov first suggested using the shale process in 1992 Although the results proved that oil could be made at just $16 a barrel, at a time when oil was selling at $20 a barrel made the profit margin too low to justify setting up a plant. A decade later, as oil prices reach record highs, Hom-Tov relaunched its method for producing cheap oil.

AFSK Industries was established 30 years ago and in 1994 established AFSK Hom-Tov to promote the unique extraction process. Yisrael Feldman, A.F.S.K. Hom Tov CEO, and creator of the revolutionary technique, estimates it will cost $700 million to set up a production plant in Israel's Negev region that could produce 2.3 million tons of oil and natural gas from 6 million tons of shale and 2 million tons of bitumen. With those costs, a barrel of oil would be just $25.

Last year, energy consultants Eco-Energy reviewed the Hom-Tov process and concluded that the proposed plant would return profits of over $200m, given current oil prices.

The project has already attracted serious interest from foreign investors. Ofer Glazer Holdings recently bought a 70% controlling share of the company and both US and European oil companies are ready to back the proposed Israeli plant along with similar extraction sites in Jordan and Morocco. For Israel and other countries that have negligible domestic oil resources, the process will relieve dependence on imported oil. (Israeli 21c)

There really is more than one way to break the price death grip and render OPEC completely irrevelant at the same time. Give yourself a pause and imagine living in a world with no petrodollars available for funding international terrorism. So the next time you hear oil prices have surged - ask yourself why?

I only wish Hom-Tov would go public.

NB: A Follow-up article can be found here