As home to one of the largest oil shale deposits in the world, Northwest Colorado stands to reap the greatest benefit from technological advances that could make mining the rock profitable.
At a time when oil demand is rising and supply is peaking, oil shale is looking increasingly attractive to energy companies. So much so that six companies submitted 20 proposals for the chance to be the first to mine oil shale on public lands.
The Bureau of Land Management announced Tuesday it selected eight proposals for continued consideration to conduct research of oil shale development on public lands.
Shell Frontier Oil & Gas submitted proposals for three parcels in Rio Blanco County. The company has been conducting small-scale research since 1996 on land it owns in Rio Blanco County.
On Tuesday, a Shell representative spoke to more than 40 area business leaders about the company's research during a luncheon sponsored by the Craig/Moffat County Economic Development Partnership.
The company is ready to test its research in a large-scale project.
"If their project happens, there will be impacts all over Northwest Colorado," said Tim Gibbs, director of the partnership.
The partnership's goal is to invite speakers on topics affecting economic development.
Jill Davis, a spokeswoman for Shell Exploration and Production, was the first such speaker.
Davis said the company is prepared to move into the next phase of a research project it launched nine years ago in Rio Blanco County.
The difficult process of extracting oil from shale has long hampered its viability as an energy source in the United States.
The Mahogany Research Project tests a process Shell patented, which uses steady heat to separate oil and gas from shale while it is in the ground. The process partially refines the oil and gas, significantly reducing the cost of preparing fuel products for market.
The process is a big change from the days when energy companies strip-mined the shale and extracted a tar-like substance that required significant processing before it could be used, Davis said.
"We're just learning how to do it right, and doing it right is the key," she said.
Shell also is experimenting with a process to protect groundwater during extraction.
In the simplest terms, the company freezes the water surrounding the work site into a wall, which blocks contaminated groundwater from flowing in or out.
After extraction is complete, the hole is flushed to ensure that no residue remains, and the freezewall is thawed.
Although the concept is a simple one, it can take 10 years to slowly heat the shale to the temperature required to release the oil and gas, build the freezewall and to extract the product, Davis said.
Although Shell holds the title to 22,000 acres of private land in Colorado, prime resources are on federal land, Davis said.
If Shell were selected to conduct research on BLM land, the project probably would begin in 2007 and would take 13 years. Shell has requested leases on three 160-acre BLM parcels in Rio Blanco County.
Gibbs said it would be the largest project in Colorado history. Its success could launch Shell into a full-scale extraction project in the Green River Basin, Davis said.
"There are big opportunities here," Gibbs said. "We have several businesses that cater to the energy industry. There will definitely be an effect here, kind of 'the rising tide raises all boats' concept."
Gibbs said if the project moves forward, there will be a need for many trained employees. But company officials say it's too early to offer employment projections for the project.
The United States' oil shale reserves match what the rest of the world has combined, and Colorado boasts the most oil shale in the United States.
Shell's intent is to mine oil shale until renewable resources can provide a stable supply of energy, Davis said. Shell has predicted that will occur in about 2050.
Energy industry observers es----timate that 1,000 billion barrels of oil are available from shale reserves, exceeding the 50 billion barrels of crude oil remaining in the United States.
Using new technology, ex----tracting oil and gas in shale is economically viable as well as environmentally friendly, Davis said.
Environmentalists have ex------pressed concern about oil shale extraction, including the energy it takes and possible damage to habitat.
Davis on Wednesday said it takes one unit of energy to extract three units of energy from oil shale. That's taking into account the amount of energy it takes to mine coal, turn it into electricity and use it to extract oil and gas from shale. Considering just the energy it takes to extract the minerals, Davis said one unit of energy can net as many as eight.
"We do acknowledge it is energy intense; however, we get a lot more out of the ground than we put in," Davis said.
Christina M. Currie can be reached at 824-7031, ext. 210, or at email@example.com.