As global oil demand rebounds to pre-COVID levels, concerns about the environmental impact of oil production persist. Sky Quarry Inc., a clean energy company, is making strides in addressing these concerns by converting discarded asphalt roofing shingles into a sustainable energy source. This innovative approach not only mitigates waste but also contributes to the manufacturing boom in the United States.
Annually, approximately 15 million tons of asphalt shingles are discarded, taking up to 300 years to decompose in landfills. These shingles contain about 25% asphalt bitumen oil, equivalent to 20 million barrels of oil. Sky Quarry aims to harness this untapped resource to bolster the U.S. supply of sustainable fuels and energy.
The potential for this initiative is amplified by the $65 billion Infrastructure Bill passed in November 2021, which marks the largest investment in clean energy transmission and the electric grid in American history. The bill allocates funds to repair vast expanses of roads and bridges, necessitating substantial amounts of asphalt bitumen.
Sky Quarry's efforts are centered around its PR Spring facility in Utah, acquired for $3.5 million despite its original construction cost of over $50 million. This facility, which includes mineral leases holding an estimated 180 million barrels of heavy oil, represents a significant asset for the company. Additionally, Sky Quarry's acquisition of the Eagle Springs Refinery in Ely, Nevada, for $11 million further strengthens its capacity to process bitumen oil, with current revenues from the refinery exceeding $50 million annually.
At these facilities, Sky Quarry employs its patent-protected ECOSolv technology to recover bitumen from discarded shingles. This proprietary process involves mixing waste asphalt shingles with a solvent, agitating the mixture into a slurry, and separating the bitumen from the solids. The result is clean bitumen flux stored for commercial use while the solvent is reused, exemplifying a closed-loop system.
Sky Quarry holds three bitumen processing patents and is poised to commercialize this recycling technology, which promises significant economic and environmental benefits. The company estimates that every ton of recovered asphalt shingles equates to 1.5 barrels of oil worth roughly $140, assuming a WTI price of $95 per barrel.
The relevance of Sky Quarry's innovation is underscored by the tightening supply of petroleum products and the depletion of the U.S. Strategic Petroleum Reserves, currently at their lowest since 1983. With an oil sands resource estimated at over 180 million barrels, Sky Quarry's process aligns with the growing demand for petroleum products and emphasizes environmental stewardship.
Sky Quarry's approach not only has the potential to revolutionize the clean energy market but also offers promising financial returns. The increasing trend of mergers and acquisitions in the clean energy sector, highlighted by BP PLC's $4.1 billion acquisition of Archaea Energy, suggests a lucrative future for companies like Sky Quarry. As the asphalt industry adopts Sky Quarry's technology, the company could see substantial growth and profitability.
