Global Resources chief executive Frank Pringle holds pieces of bituminous coal and oil shale in front of a microwave reactor unit.

Sometimes it pays to take a risk. Like drilling a wildcat, funding a start-up or sticking a no-no thing into a microwave oven. That’s right.

On March 13, 1996, while Frank Pringle was experimenting with a microwave oven to find a new way to recycle glass, he heard news of a used tire heap on fire in Philadelphia. He promptly found a two-inch by half-inch piece of rubber, popped it into the microwave, and “played with frequencies until it disappeared in a puff of smoke.”

Now, more than a decade later, Pringle’s company, Global Resource Corp. (OTC: GBRC) based in West Berlin, New Jersey, has found a way to apply the technology to recover hydrocarbons from all sorts of things. It has patents pending on a radio frequency (RF) klystron tube, which is a microwave electron tube with velocity modulation, that can gasify and recover heavy oil from capped wells, shale, coal, tar sands and even old tires.

Of immediate interest to the oil industry is GRC’s technological ability to recover oil left in depleted reservoirs. While there are some 400,000 capped oil wells in the U.S., according to GRC, other experts say there may be as much as 65% of bypassed oil left in those reservoirs, too heavy and viscous to be economically recovered.

The GRC gasification process works by using highly efficient RF energy with ultra-high microwave frequency to gasify the heavy oil. Then, using a vacuum environment to extract the hydrocarbons from source rock, the hydrocarbons are captured and then cracked into fuels without freeing CO2 or CO due to the lack of oxidation in the process.

Since November 2006, GRC has been testing and refining its technology with oil shale in its laboratory. After exposing hydrocarbon-bearing rock to its microwave process, causing a 200? to 300?Celsius increase in temperature, GRC collects the resulting gases and heat-exchanges them into products ranging from C-4 (methane) to C-24 (diesel) and C-44 (heating oil).

GRC’s in-situ capped-well system uses a seven-inch-diameter, 15-foot-long tube to transmit low-voltage electricity to the klystron tube downhole, which then powers up to 100 kilowatts. The microwaves travel at six-meter increments and gasify the hydrocarbons, leaving heavy metals and most of the sulfur behind. Then the gas is recovered using vacuum pulse technology.

The vacuum brings the gas to the surface before it condenses into diesel fuel or other heavy molecules. The recovery equipment can move a minimum of 9.9 gallons of condensed fluid per minute at a cost of about $25 per barrel.

The microwave

Although the technology is not yet commercially available, Pennsylvania’s Gov. Edward G. Rendell has already invited GRC to pilot-test the technology near Oil City in 2008. The area has fairly shallow, 500- to 1,000-foot-deep wells with light crude oil, making it an ideal proving ground.

This technology can also be used to recover oil and gas from drilling cuttings, according to GRC. Oil cuttings are bombarded with a specific microwave frequency in the form of molecular vibration, which causes cracking of hydrocarbon chains. As a result, the hydrocarbon components in the oil cuttings are gasified. The gas is then collected and converted into oil.

Using a very similar process, refinery heavy oil or slurry oil, can be upgraded to useable products. Also known as refinery waste oil, slurry oil is normally too thick to be economically cracked or reprocessed with current technologies, according to GRC.

At least 3% (and in some refineries as much as 7%) of typical oil-refinery production results in slurry oil. In fact, according to GRC, at least 1 billion gallons of slurry oil are produced in refineries each year. While slurry oil can be used in the manufacture of asphalt or other products, at today’s oil prices, it may be economic to upgrade slurry into higher-value products.

Meanwhile, in November 2007, GRC signed a research agreement with Pennsylvania State University to conduct research on the commercialization of its microwave technology to extract hydrocarbons from oil shale.

Also in November, GRC received a purchase order from ECO Energy, based in Placentia, California, to draft site specifications for a tire recycling plant in Mobile, Arizona, to convert 300 tons of tires per day into gas, oil, steel and carbon black. The tires will be supplied under agreements from state agencies in California, Arizona and New Mexico.

ECO reports that it already has agreements to purchase the resultant fuel and other products of commercial value, although those purchasers are undisclosed. The project will require two, and possibly three, of GRC’s $5-million machines.

This year, things are really heating up for the company. On January 3, GRC signed an agreement with C6 Energy of Sydney, Australia, to provide a third party with the technology to recycle waste tires into saleable products such as steel, fuel oil, activated carbon and syngas. The deal is expected to include the purchase of about 30 microwave units.

Then, on January 10, GRC signed a contract with Warwick Communications Inc. of Calgary, Alberta, for an exclusive 20-year license to use the microwave technology to recover energy from oil, gas, mining and waste resources in Canada. Warwick placed a purchase order for a five-ton-per-hour system to process Canadian oil shale. The system will be delivered in September.

In exchange for the license, GRC will receive 2 million Warwick shares plus warrants to buy additional shares. Warwick agreed to buy a minimum of one microwave machine each year for the next five years, representing some $25 million in sales.

As a result of the deal activity, GRC, an $89.7-million-market-cap company, has seen its stock price rise from 55 cents in mid-May 2007 to $2.92 last month, and reports receiving about 10 inquiries per day about its microwave technology system.