10/03/2005

ABC News: Geting Oil From Shale a Complex Process

Process by Which Oil Is Extracted From Layers of Underground Rock a Challenge for Energy Industry

MEEKER, Colo. Oct 3, 2005 — Out in sagebrush country, Kenneth Brown is standing over part of the world's most concentrated energy resource, land that holds up to 1 million barrels of oil per acre. Too bad it's locked up in layers of rock in some places hundreds of feet underground.

Such is the dilemma presented by the West's oil shale deposits, believed to contain more than 1 trillion barrels of oil four times the holdings of Saudi Arabia, according to government and industry estimates.

Shell Exploration & Production Co. has been out here for nine years, trying to bake shale oil from the ground by using heating rods drilled into layers of rock.
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"Things have progressed well in the last two years, which makes us feel good," said Brown, operations manager for Shell's closely guarded test in the middle of desolate Rio Blanco County, about 60 miles from tiny Meeker, the nearest town.

Technological hurdles remain daunting, but that hasn't stopped "people with gleam in their eyes," said Robert Hirsch, a senior energy adviser for San Diego-based Science Applications International Corp. "I think Shell has something that could turn out successful. They've been working on this technology for a long time."

In a report last year, the Energy Department called Shell's technology the most promising but said it will take a "massive capital investment" to unlock Western oil shale.

Shell believes it can make its technique economical as long as crude oil stays above $30 a barrel, but it is five years away from proving the technology or deciding whether to build a commercial-scale operation, said Terry O'Connor, a company vice president for external and regulatory affairs.

Outside Vernal, Utah, officials with Oil-Tech Inc. say they have perfected an older technology of baking oil from shale in a furnace and wants government approval to mine 1,600 acres of state land plus access to 30,000 tons of shale left outside an abandoned mine on federal land.

"We're ready to go as quick as we can get a mining permit and a few bucks," said Byron Merrell, a 63-year-old inventor and stockholder in Oil-Tech.


ABC News: Geting Oil From Shale a Complex Process

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