Oil shale still beckoning: New method tried on W. Slope rock

Denver Post ^ | November 29, 2001 | Nancy Lofholm

[sarcasm]

Thursday, November 29, 2001 - On a remote plateau in Rio Blanco County, several pump jacks are drawing oil from the Piceance Basin. They look like the hundreds of oil and gas rigs seesawing up and down across the country's largest oil reserve. But they represent something radically different.

Drilling rigs dot the land north of I-70 in the Piceance Basin. Shell is experimenting with extracting oil from the shale below.

They are part of Shell Exploration and Production Co.'s dogged effort to economically unlock the vast oil supply trapped in oil shale - long after the world's other large petroleum companies have mostly given up on it.

In a research and development project that is shaping up to be more than a mere pipe dream, Shell's closely guarded technique involves using super-heated water to melt the oil-containing substance in shale underground so that it can be pumped to the surface and refined into crude oil.

"We've been fiddling with oil shale for a long time. We're pretty excited about this," said Rich Hansen, community relations manager for the Houston-based Shell.

Hansen added a cautionary note: "It's still research, and getting too excited about research is ill-advised."

Shell has been trying for about 40 years to spring the 300 billion barrels of oil estimated to be in the huge Piceance Basin shale formation that covers northwest Colorado and reaches into Utah and Wyoming. There is as much oil in that shale as there is in all of Saudi Arabia - and nearly half as much of all the oil estimated to be in the entire Middle East. If all the oil in the Piceance Basin shale were liquefied and brought to the surface, it would create a sea of oil 300 feet deep across the basin.

Getting at that huge resource has taken on added importance in the wake of the Sept. 11 terrorist attacks. But oil companies have been trying to unlock the oil in oil shale since Congress passed the Synthetic Fuels Act in 1944. They've tried injecting hot water, gases and air. They've dropped explosives and electric heaters into drill holes. They've used radio waves. A nuclear bomb was even considered in the 1970s, around the same time an underground nuclear device was detonated near Rulison to release natural gas reserves.

Shell experimented with a hot-water injection method in the 1960s, but that effort was scrapped well before the oil-shale boom in the late 1970s and early '80s, when oil companies took an unsuccessful stab at mining the shale, carting it to giant ovens and roasting the oil out of it.

When the oil-shale mining industry went bust in 1982, Shell continued, in laboratories, to look for a simpler, cleaner, cheaper way. Field work on Shell's new underground method began in the Piceance Basin in 1996. Hansen said good results from those initial tests resulted in more extensive testing in 1997.

Low oil prices temporarily scrapped that effort the following year, but Shell came back to the field in 2000 to expand the research and development with a number of related projects that each focus on a slightly different technology. These projects have been ongoing for a year and a half.

Hansen said crude oil prices that are hovering below $20 a barrel should not affect the research and development this time: Part of Shell's mission is to devise a technology that will not be affected by fluctuating oil prices.

The research is being done on two of the 38,000 acres Shell owns in Rio Blanco and Garfield counties. In addition to the pump jacks and normal drilling equipment, the research sites include a mobile laboratory and scads of monitoring equipment. A regular crew of 10 is working the drilling sites, with the oversight of a constant stream of additional consultants and Shell scientists. Hansen said this second phase of research and development includes studies of environmental impacts, including on groundwater and wildlife.

Shell is also looking at the potential social and economic impacts that could arise from commercial production of a resource that created an extreme Western Slope boom and bust. The bust left Grand Junction and other parts of the Western Slope reeling economically for more than a decade.

"We're trying to evaluate all the impacts. We're working with the communities and counties to develop this slowly and gradually," Hansen said.

Shell Exploration and Production, an arm of the international petroleum giant Royal Dutch/Shell Group, has been secretive about technical details of its Rio Blanco County project. Rio Blanco officials say they have been advised about the project but are not privy to particulars.

"They brought us out to check it out, but they really don't want to talk about the technology," said Don Davis, a Rio Blanco county commissioner.

Jerry Sinor, a mining consultant who worked for Shell in the 1970s, said he doesn't know how Shell might refine earlier in-the-ground extraction methods to come up with a workable technology now.

"Theoretically, there's no reason it can't be done," Sinor said. "The porosity of the (shale) beds makes it possible. It all comes down to economics. How efficiently can you recover it?"

Kurt Nielsen, chief operating officer of American Soda LLP, said he based his company's successful Piceance Basin soda ash operation on Shell's earlier hot-water injection experiments.

His company uses water to dissolve nahcolite, used to make sodium bicarbonate, and then sends it via pipeline to a processing plant near Parachute.

"If somebody can do this it would be the Shell Oil Co.," Nielsen said. "I don't know anyone in the business that knows more about this technology than Shell."

[sarcasm]

ping

[yankeedame]

One question: Why?

The price of of a barrel of crude oil is in free fall. There was talk in both Forbes and Business Week about oil potentially falling below $10 a barrel-- thanks in no small part to Russia.

How much does 1 barrel of "oil shale" oil cost? $25? $30 $40 a barrel? Don't kid yourself, "oil shale" oil is EXPENSIVE. Besides, who the heck is going to buy it, given the falling price of "regular" oil? Why would Shell spend all this money extracting oil that (because of the price) no one will buy?

Time to wake up and smell the coffe: The fact of the matter is that companies get massive tax credits/breaks for this sort of "alternative fuel research" thing. Shell isn't doing this stuff for "the good of mankind"; more like the good of their bottom line-- and there's nothing wrong with that considering it was the Federal government that encouraged/encourages them.

[Dog Gone]

We need to learn how to do this economically. It doesn't make sense in the current price environment, but as R&D it's not a bad investment.

At some point in the next 30 years, we will be extracting this oil as the Middle East goes into significant decline.

[Cobra64]

I lived in Colorado from 1968 through 1976. In the mid 1970s, Exxon spent a fortune pursuing this alternative energy fuel. Exxon folded the initaitive when the so called, "gas shortage" diminished.

Regardless, I'll never forget seeing a guy holding a piece of "rock" and lighting it with a match.

Fast forward 30 years... if the Tree Huggers don't want to allow the oil companies to punch a few holes in the ground in ANWR, they sure as sh!t won't let strip mining on the Western Slope in the pristine Rocky Mountains.

[Patria One]

"if the Tree Huggers don't want to allow the oil companies to punch a few holes in the ground in ANWR, they sure as sh!t won't let strip mining on the Western Slope in the pristine Rocky Mountains."

Its true. LOL

[dirtboy]

Fast forward 30 years... if the Tree Huggers don't want to allow the oil companies to punch a few holes in the ground in ANWR, they sure as sh!t won't let strip mining on the Western Slope in the pristine Rocky Mountains.

A lot of that land is rather barren. But IMO the major problem for oil shale extraction is the lack of available water in the region - just about all of the water in the Colorado and Yampa Rivers is already spoken for...

[sarcasm]

I recall reading that the Department of Energy is funding research into conversion of shale into oil in Estonia. Estonia has been using shale for at least 100 years - at one time they supplied the electric supply for St. Petersburg by means of burning shale. They are now trying to find a more environmentally friendly way of burning it.

[AmericanVictory]

That's the rub. There is no environmentally sound way of using oil shale.

Note also that using "super hot water" means that you will be using so much energy attempting to get the oil that it will never be cost competitive with getting oil from the substrate in which it is found. There is no oil in oil shale; it is kerogen, a wax, and there is no way to get it converted to oil that is economical and does not leave an environmental mess.

We note that a Shell led syndicate is gearing up to go into the Alberta tar sands with the Canadian government having put an "upgrader" requirement on them to better the present technology, which is highly polluting and cost inefficient, but still better than shale technology in both regards.

The process which we have advocated and sponsored was recently turned down by this syndicate because they did not wish to have a process used which they could not capture and control.