http://www.usatoday.com/money/industries/energy/2006-06-01-oil-shale_x.htm
Oil shale enthusiasm resurfaces in the West Posted 6/1/2006 10:10 PM ET USATODAY By Ed Andrieski, AP Workers check the size on pipes at the Freeze Wall test site at Shell Oil Company's Mahogany Oil Shale Research Project near Meeker, Colo. By Tom Kenworthy, USA TODAY GRAND JUNCTION, Colo. - The headline on the newspaper that state Rep. Bernie Buescher keeps in a box at home captures the allure of the vast petroleum riches under the rolling hills and arid mesas north of this western Colorado city. "Oil Shale Development Imminent," the paper reads. That edition of the defunct Grand Junction News, Buescher notes, was published at the dawn of the 20th century. More than a hundred years later, instability is roiling world oil markets, and Americans are paying $3 a gallon for gas. And oil shale fever is again rising in the geologic region known as the Piceance Basin, part of the Green River Formation that stretches across the rugged plains of northwestern Colorado and parts of Wyoming and Utah. There is no dispute that a thousand feet below the isolated ranch country here on Colorado's western slope lie almost unimaginable oil riches. It's locked in sedimentary rock - essentially immature oil that given a few million years under heat and pressure would produce pools of oil easy to extract. The Energy Department and private industry estimate that a trillion barrels are here in Colorado - about the same amount as the entire world's known reserves of conventional oil. The entire Green River Formation might hold as much as 2 trillion barrels. Pushed by the Bush administration and legislation from Congress last year, and spurred by oil prices above $70 a barrel, the energy industry is mobilizing to unlock the secret of oil shale. As it has before, oil shale holds out the hope of a USA no longer dependent on foreign oil. Testing a new approach In a remote area of Rio Blanco County, nestled between dusty ridges covered with sagebrush and pinyon and juniper trees, Shell Oil is engaged in a multiyear test of a new technology for extracting the oil. Previous efforts that were uneconomical and environmentally destructive entailed mining the rock, crushing it and heating it above ground to release the oil. Shell's new process involves sinking heaters deep underground, cooking the rock at 700 degrees and recovering the oil and natural gas with conventional drilling. For a decade, Shell has been ramping up its research on private property here. It is also one of a handful of companies vying for research and development leases on larger tracts of federal land nearby. That could lead to full-scale development across 1,200 square miles of western Colorado. Early results are promising, says Terry O'Connor, a vice president in the oil giant's unconventional resource division. But, he admits, "no one has been able to develop oil shale on a commercially sustainable basis." Shell has four more years of research here before it will know if it has the answer. U.S. Sen. Pete Domenici, R-N.M., who heads the Senate Energy and Natural Resources Committee, was less cautious at a tour of Shell's test site Wednesday: "This is not pie in the sky. It's real this time." Such talk has swept this region before, most memorably in the wake of the energy crisis of the 1970s. Longtime residents remember how it ended on May 2, 1982 - "Black Sunday" - when Exxon abruptly canceled its $5 billion Colony Shale Oil Project, laid off more than 2,000 workers and left a trail of home foreclosures and economic distress. Now, said U.S. Sen. Ken Salazar, D-Colo., who accompanied Domenici on the tour, "we have a tourism-based economy on the western slope, and we will not do anything ... that will endanger that sustainability." Though oil shale has "great potential," Salazar said, "there's also great risk." A RAND Corp. study last year for the Energy Department said that "the prospects for oil shale development are uncertain," though new technology could make it competitive with conventional oil. Producing 3 million barrels a day - about 15% of U.S. consumption - "is probably more than 30 years into the future," the study said. Among the possible negative effects cited by RAND were large scale land disruption, air pollution, a large population influx in a rural area, and a huge demand for water in a region where it's scarce and, as Salazar said, "as precious as oil." Randy Udall, of the Community Office for Resource Efficiency that promotes energy conservation in Carbondale, Colo., pointed out another drawback: the huge demand for electricity to cook the shale. "To do 100,000 barrels a day ... we would need to build the largest power plant in Colorado history." 'We ... need to get it right' This region's bitter experience with the boom-and-bust of oil shale was on display Thursday as Domenici and Salazar held a hearing before an overflow crowd at the city auditorium here. Outside, critics hawked T-shirts urging "Go Slow on Oil Shale." Inside, state and county officials said they welcome energy development but worry about the costs of providing roads, housing and other needs if a new boom arrives. "Most of us agree it's time for the development of oil shale," said Russell George of Colorado's Department of Natural Resources. "But we really do need to get it right." A letter from 17 county and city officials noted, "When oil shale is mentioned on the Western Slope of Colorado it is discussed as an industry that brought our economy and communities to their knees." And Buescher, the Democratic state legislator, thought of that ancient newspaper headline. "They may be able to make it work," he said, "but I'm skeptical." [Non-text portions of this message have been removed] ------------------------ Yahoo! Groups Sponsor --------------------~--> Everything you need is one click away. Make Yahoo! your home page now. http://us.click.yahoo.com/AHchtC/4FxNAA/yQLSAA/TySplB/TM --------------------------------------------------------------------~-> -------------------------- Want to discuss this topic? 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