Casper Star Tribune: Shell Oil hopes to begin shale oil production by 2010: “With crude oil topping $50 a barrel more than 20 years after the oil shale bust of the 1980s, Shell Oil Co. is testing a new technology it hopes will make extracting oil from rock beneath northwestern Colorado profitable and environmentally sustainable” (ShellNews.net) 9 April 05
By The Associated Press Saturday, April 09, 2005
MEEKER, Colo. (AP) -- With crude oil topping $50 a barrel more than 20 years after the oil shale bust of the 1980s, Shell Oil Co. is testing a new technology it hopes will make extracting oil from rock beneath northwestern Colorado profitable and environmentally sustainable.
The company is testing its patented method of burying heaters encased in pipe hundreds of feet underground to liquefy the oil trapped in the porous rock so it can then be pumped up to the surface, Shell's spokesman Terry O'Connor said Wednesday.
Electrical heaters gradually heat the rocks to between 650 to 700 degrees to produce natural gas and light-grade oil. Heavier hydrocarbons remain within the formation.
"We're still a couple of more test stages away from commercial production," O'Connor said.
The new method is an improvement over the previous method of extracting oil from shale, which entailed digging up tons of earth, heating the rock, then disposing of petroleum byproducts.
About 2,000 barrels of oil have been produced in tests of the heaters, which are spaced 10 to 20 feet apart over a five-acre parcel at the company's 20,000-acre Cathedral Bluffs property in Rio Blanco County. The tests have been ongoing for at least five years.
Within the next two to three years, Shell will expand its research operation as a next step toward commercialization, drilling to greater depths and sinking more well bores. O'Connor said the goal is to be commercial by about 2010.
"But that doesn't mean in 2010 you'll see major construction," he said. "The technology works ... but how efficiently, that's what we're trying to find out."
A commercial operation would mean more heaters and much larger spacing, and greater needs for electricity to run the heaters.
So far the challenge has been finding an efficient heater that can keep a steady temperature of about 600 degrees over a period of months or years.
"We've made some significant advances in the last year and a half," O'Connor said.
Commercial development of shale oil began with World War II and continued until 1982 when a drop in oil prices forced Exxon (now Exxon Mobil) to close its oil shale project and lay off 2,200 workers.
Bankruptcies and foreclosures quadrupled in the years after the closure.
For years, industry observers said crude oil would have to hit at least $40 a barrel to make extracting oil from shale profitable.
Colorado Operations Manager Ken Brown said Shell estimates its process would be profitable with oil prices at $25 to $30 a barrel, if the technology works out.
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