Royal Dutch Shell Group .com Shell unearths shale experiment: “Deep in this rich treasure trove of shale oil, the giant Royal Dutch Shell has been cautiously - and until this week quietly - experimenting with a new technology to free oil trapped eons ago…” ( Posted 9 April 05


Given rocky past, development decision could be years away


By Ellen Miller, Special To The News

April 8, 2005


PICEANCE BASIN - Deep in this rich treasure trove of shale oil, the giant Royal Dutch Shell has been cautiously - and until this week quietly - experimenting with a new technology to free oil trapped eons ago in the Mahogany Zone of the Green River Formation.


Unlike the boom of 25 years ago, when the infamous Exxon "White Paper" confidently predicted a population of 250,000 by 1990 in Grand Junction alone, along with massive industrialization of northwest Colorado, Shell is making no promises and no predictions.


"There is a historically bleak perspective of oil shale, and a decision whether we go forward with commercial development might not be made until the end of this decade," Terry O'Connor, Shell vice president for external and regulatory affairs, said Thursday during a tour of the Shell experimental plot.


O'Connor said Shell believes it can produce commercial quantities of shale oil at $25 to $30 a barrel, provided experimentation with the technology goes smoothly. U.S. light crude declined to $54.11 a barrel Thursday.


Shell's technology is quite different from the previous attempts, in which oil giants including Exxon, Occidental and Unocal poured billions of dollars into failed projects in the boom of the late 1970s and early 1980s.


Exxon and Unocal, in their projects, used conventional mining to bring shale rock to the surface, where it was crushed and cooked in giant "retorts," or huge tanks. The cooking, which freed oil, also expanded the rock and left behind huge amounts of waste.


Instead of that method, Shell inserts heaters into the ground several hundred feet to reach shale rock. It is akin to using a slow-simmer control on a conventional stove to bring the temperature gradually to 650-700 degrees. What is released is "two-thirds oil and one- third gas," O'Connor said, leaving in place heavy residue.


Shell thereby avoids the popcorn effect of expanding spent shale, which posed a host of disposal and environmental problems.


Down the road west of Rifle, the old Anvil Points, where the U.S. Navy geared up in World War II to try to extract shale oil and where experimental operations continued for another 50 years, plans are under way to spend hundreds of millions of dollars to clean up the mess left behind.


Ken Brown, Shell's Colorado operations manager, said much experimenting remains to design and build the most efficient and cost-effective heaters. At the experimental site, several different well-drilling areas are being used.


One has 32 heaters and 16 producing wells, and it takes three months to heat until the first sign of product is seen, Brown said.


"We've found that spacing is important to heat the whole block," he said. "These peaked at 10 to 11 barrels a day in December, and the total production will be about 1,700 barrels."


One of 30 Shell employees at the site, Meeker native Jesse Hale has been on board three years and is grateful for a chance to come home from a job in Albuquerque.


"My family's been here more than 100 years," he said.


"I'm glad to be home, and this is totally different and mind-blowing at that. We haven't raised hopes drastically."


Shell is nowhere near deciding whether to attempt commercial development, O'Connor said.


The Green River Formation, which spreads across northwest Colorado, eastern Utah and southwest Wyoming, contains an estimated 1 trillion barrels of oil, which O'Connor said is "roughly equivalent to all the discovered oil in the world today."


Still, he said, "It's important for Congress to make the determination that it's in the national interest to develop in an environmentally sensitive fashion.",1299,DRMN_4_3684230,00.html



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