Erik Sherman – CBS
The secret to business is buy low and sell high. Canadian holding company MCW Energy Group hopes to do that by economically separating the petroleum from oil sands and then selling it at market rates of double to triple the processing costs.
The company uses a patented closed-loop technology that treats the sands with a solvent that helps remove the oil. The oil and solvent are separated, with the latter recycled for the next batch of production. According to CEO Gerald Bailey, the finished sand is 99.9 percent clean and can be put back on the ground.
The company currently has 1,000 acres in Vernal, Utah, about a 173-mile drive east of Salt Lake City. “Those sands run about 12 percent oil,” said Bailey, who has a doctorate in chemical engineering. “It looks like black sand. You can pick it up and it’s dry, but it’s dirty with oil in it.”
An $8 million plant using the process can produce 250 barrels of oil a day at a cost of between $30 and $35 a barrel. “Conventional oils typically will run up to $20 a barrel,” he said. Although crude oil prices have plummeted from almost $100 a barrel to about $75 since September, that would still let MCW make a significant profit.
“There are hundreds of little oil companies that make a good living off of 250 barrels a day,” Bailey said. But MCW sees its first plant as a proof of concept and is currently raising money to build a $70 million plant that could produce 5,000 barrels daily. (…)