Study reveals huge U.S. oil-shale field

http://seattletimes.nwsource.com/html/nationworld/2002463368_oilstudy01.html

WASHINGTON — The United States has an oil reserve at least three times that of Saudi Arabia locked in oil-shale deposits beneath federal land in Colorado, Utah and Wyoming, according to a study released yesterday.

But the researchers at the RAND think tank caution the federal government to go carefully, balancing the environmental and economic impacts with development pressure to prevent an oil-shale bust later.

"We've got more oil in this very compact area than the entire Middle East," said James Bartis, RAND senior policy researcher and the report's lead author. He added, "If we go faster, there's a good chance we're going to end up at a dead end."

For years, the industry and the government considered oil shale — a rock that produces petroleum when heated — too expensive to be a feasible source of oil.

However, oil prices, which spiked above $70 a barrel this week, combined with advances in technology could soon make it possible to tap the estimated 500 billion to 1.1 trillion recoverable barrels, the report found.

The study, sponsored in part by the U.S. Department of Energy, comes about a month after the president signed a new energy policy dramatically reversing the nation's approach to oil shale and opening the door within a few years to companies that want to tap deposits on public lands.

The report also says oil-shale mining, above-ground processing and disposing of spent shale cause significant adverse environmental impacts. Shell Oil is working on a process that would heat the oil shale in place, which could have less effect on the environment.

Copyright © 2005 The Seattle Times Company

Shell stated the oil has to be over $30 a barrel to produce.

 

8 companies apply for BLM oil shale leases

Friday, September 16, 2005

By SALLY SPAULDING

The Daily Sentinel

The Colorado office of the Bureau of Land Management has received 10 applications from eight companies for its new oil shale leasing program.

The small-scale leasing program will allow groups to test oil-shale extraction technology in the public lands of Colorado.

The lease program allows companies to explore the resource, which could produce as much as 2.6 trillion barrels of oil, by granting 160-acre tracts of land and 10 years time to worthy applicants.

“There are some bigger companies like Shell that have applied, and some of the companies are really small,” said Karen Zurek, acting head of the BLM’s solid minerals division. “Some of them know what they’re doing, and some others probably don’t.”

All of the applications in Colorado are for land in Rio Blanco County, according to officials with the BLM’s state office.

Bureau employees said the number of applications was “about what they expected,” but many in the industry were surprised by the turnout.

“I’m floored that the number of applicants was so small,” said Paul Lerwick of EGL Resources, a company based in Midland, Texas, that applied for a lease.

Lerwick said the problem may have been the time frame, just 90 days, for companies to complete lease applications.

The leasing program was announced in June, and the deadline for companies to apply was last week.

In the application process, a company or group had to include information about its technology and extraction process, prove it could fund operations, post a bond, pay a $2,000 application fee and comply with other bureau restrictions.

“I know of at least two companies that just threw the towel in (on the application process),” Lerwick said. “Most people in the industry with this current boom are busier than a one-armed paper hanger with natural gas and oil. If you didn’t already have a team working on this, then you were really out of luck.”

Some companies, however, have continued to follow the industry for years, long after the last oil-shale activity attracted thousands of workers to western Colorado during the late 1970s and early 1980s.

The boom went bust in May 1982 after Exxon abruptly announced it was closing its oil-shale project because of rising costs.

Other companies followed suit, and the resulting economic bust lasted almost a decade. Some individuals have been brainstorming new technologies ever since and waiting for a time when oil prices could make the industry viable.

“Some of our work started 20 years ago,” said William H. Pelton, a partner with Phoenix Wyoming Inc., a Denver-based company that applied for a lease. “This is about a resource in our own back yard, and hopefully this is our chance to develop it. This is one of the things we have been gearing up for.”

Other companies in the industry have been waiting for a public lands leasing opportunity to present itself.

Shell Oil Company has tested an in-ground oil-shale process on private land in Rio Blanco County for the past five years.

Executives with the company said that while the company had made technological progress at the private site, it was important to access federal resources to assess the commercial viability of oil shale.

The company filed three applications for lease parcels with the BLM as of last week.

Zurek said some of the applications were “more complete than others” and that a team of employees will be looking at the extraction processes described by the applicants.

That will take several months, Zurek said, and a complicated environmental assessment process will follow.

“It will be a while,” she said.

Companies that have applied for a BLM oil shale lease are:

Rifle-based Natural Soda, Inc.

EGL Resources Inc. of Midland, Texas.

Salt Lake City-based Kennecott Exploration Company.

Englewood-based Independent Energy Partners.

Denver-based Phoenix Wyoming, Inc.

Chevron Shale Oil Company.

ExxonMobil Corporation.

Shell Frontier Oil and Gas Inc.

 

Canada has invested heavy into their tar sand technology which are producing 1 million barrels of oil per day from tar sands and that is expected to reach 2 million barrels a day.

Shell has said commercial oil shale production should be around 2010 and as long as the oil stays above $30 a barrel.