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By Meg Flippin, Benzinga
The world may be getting greener, but oil demand continues to grow, and even after the COVID-19 slowdown, demand is back to the pre-COVID trend “even amid muted expectations for global economic growth this year and increased deployment of clean energy technologies,” according to the IEA.
After all, oil is needed to manufacture countless everyday products from bicycle tires to shoes. That won’t go away anytime soon, given the U.S. seems to be in a manufacturing surge and consumers are still spending – investments in manufacturing buildings, driven by the computer, electronics and electrical markets, have doubled since 2021 and show no signs of slowing. Byproducts from oil include ingredients that are used in everything from our cars, electronics, manufacturing, to beauty products and lifesaving pharmaceuticals.
But even though oil continues to be in demand, it doesn’t mean producing it has to come at the expense of the environment. Green energy companies are transforming how oil is produced and are working to create an emissions-free future. One company that’s garnering attention is Sky Quarry Inc. The clean energy company is on a mission to convert discarded asphalt roofing shingles into a sustainable energy source.
Are Asphalt Shingles The Answer?
About 15 million tons of discarded asphalt shingles end up in landfills each year, taking as much as 300 years to break down. Those shingles are comprised of 25% asphalt bitumen oil. That’s the equivalent of 20 million barrels of oil being dumped into landfills every year, says Sky Quarry. That’s a lot of oil that can help the U.S. with its quest for new sources of sustainable fuels and energy and to power the manufacturing boom.
The potential may be even bigger thanks to the $65 billion Infrastructure Bill passed in November 2021, which was the largest investment in clean energy transmission and the electric grid in American history. Part of the money is earmarked to repair 173,000 miles of roads and 45,000 bridges in poor condition. That, according to Sky Quarry, requires almost 52 million tons, or over 311 million barrels, of asphalt bitumen.
So how is Sky Quarry extracting all this asphalt bitumen oil? Via PR Spring, a recently acquired like new bitumen extraction facility in Utah that the company bought for what it says is pennies on the dollar. Sky Quarry paid $3.5 million for the oil sands facility that cost over $50 million to build. The oil sands facility comes with mineral leases, which the company says hold about 180 million barrels of heavy oil valued at $166 million based on an independent updated engineering report completed in 2022.
In late 2022, Sky Quarry bought the Eagle Springs Refinery in Ely, Nevada for $11 million. Sky Quarry says building a comparable refinery would cost over $70 million today. That refinery earned revenues of $50 million in 2023. Sky Quarry now owns one of a handful of oil refineries in the western states and estimates it can process 4,500 to 5,000 barrels of bitumen oil a day.
To learn more about Sky Quarry’s refineries and extraction process click here.
Extracting The Oil Through A Proprietary Process
At these facilities, Sky Quarry will be putting its patent-protected ECOSolv technology to work enabling the company to recover bitumen embedded inside of discarded asphalt shingles and convert it into a cost-saving product that the company reports performs as well as using virgin materials.
With Sky Quarry’s process, the post-ground waste asphalt shingle or WAS is fed into the mixing bin and mixed with the company’s proprietary solvent. Next, WAS and the solvent mixture are agitated into a fluid slurry that dissolves the asphalt bitumen. The Sky Quarry solvent makes solids sink while the separated bitumen and solvent mixture rises and the remaining fluid is heated to separate the solvent from the oil. Clean bitumen flux is then sent to storage tanks and the solvent is captured for reuse.
The company controls three bitumen processing patents and is confident in its ability to start commercializing this recycling technology and roll it out to the recovered asphalt shingle market. According to Sky Quarry, every ton of recovered asphalt shingles is equal to 1.5 barrels of oil worth roughly $140 (assuming a WTI price of $95 per barrel). Including the rest of the recovered solids, Sky Quarry expects every ton of asphalt shingles is expected to be worth about $250 (assuming a WTI price of $95 per barrel).
The Potential In Sky Quarry
All of this comes as demand for petroleum products for roads and home construction continues to grow, even as supplies have tightened. The U.S. Strategic Petroleum Reserves, contained in four storage caverns along the Texas and Louisiana coasts, are now at the lowest since 1983 at just 350 million barrels.
Sky Quarry said it has an oil sands resource estimated at over 180 million barrels or more than half the current strategic petroleum reserve. This is achieved through a process that focuses on resource recovery and efficiency – underscoring the company’s commitment to environmental stewardship and closed-loop principles, which aligns with what many investors are looking for in terms of responsible industry.
In addition to potentially revolutionizing the clean market and helping make the world greener, investing in Sky Quarry provides a possibility to capitalize on a potential profitable exit of the company. After all, mergers and acquisitions in the clean energy space are heating up, with the U.S. seeing $9 billion of energy-related corporate takeovers in 2022 alone.
The largest in that year was the $4.1 billion acquisition of Archaea Energy by BP PLC (NYSE: BP). Archaea received a 38% premium to its 30-day average trading price from the deal. If the asphalt industry adopts Sky Quarry’s technology, it could have its own profitable exit. Are you intrigued? To learn more about Sky Quarry click here.
Featured photo by QiuJu Song at Shutterstock
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
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