Its all about the oil |

Its all about the oil

Paul Foy

MEEKER Two senators praised the promise of oil shale as Shell Exploration & Production Co. led a federal delegation on a tour of experimental works meant to bake oil from the ground.Shell is providing the reality check that will determine if any oil company can profitably extract shale oil from layers of hard rock, said Sen. Pete Domenici, R-N.M., chairman of the Senate Energy and Natural Resources Committee.Shell is poised to snap up leases on federal lands in western Colorado rich in kerogen, a fossilized material in rock that yields oil when heated. Shell has been working out here for 10 years, and has invested tens of millions of dollars, trying to perfect a method of baking shale oil from the ground using heating rods drilled into layers of rock an alternative to mining.Shell is still four years from proving the technology or deciding whether to build a commercial-scale operation, said Terry OConnor, a company vice president for external and regulatory affairs.If they can produce oil from shale using their technology at a profit, the reality check will be that in a few years, we will be able to tell the world that we have unlocked for a certain price this great reserve, Domenici said.Sen. Ken Salazar, D-Colo., echoed that hope but said he worried about widespread oil shale development spoiling the gold mine of tourism.We have become very much a tourism-based economy on the Western Slope, and we dont want to do anything in the context of developing oil shale to endanger that sustainability, Salazar said. That is why the technology here is so important.Domenici and Salazar visited a test site where Shell plans to produce no oil its already done that at another site.Instead, Shell engineers will spend two years trying to maintain an underground ice curtain with refrigerated pipes around a cook site, both to repel groundwater and keep oil from slipping away. Shell has applied for federal land leases with the goal of producing upward of 1,000 barrels a day from a more productive site.Domenici said the federal Bureau of Land Management is set to award experimental, 160-acre leases within months.Vail, Colorado

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