Industry Seeks to Extract Oil from Rocky Mountain Shale Climbing gasoline prices have forced the oil industry to search for alternatives to importing oil from the Middle East. The federal government estimates that the oil shale of the Rocky Mountains holds more than a trillion barrels of burnable fuel. But the oil is locked inside of the rock, and finding a cheap way to extract it hasn't proven easy.

Industry Seeks to Extract Oil from Rocky Mountain Shale

Industry Seeks to Extract Oil from Rocky Mountain Shale

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Climbing gasoline prices have forced the oil industry to search for alternatives to importing oil from the Middle East. The federal government estimates that the oil shale of the Rocky Mountains holds more than a trillion barrels of burnable fuel. But the oil is locked inside of the rock, and finding a cheap way to extract it hasn't proven easy.


With gas prices so high, the oil industry sees profits on the high plains of northwest Colorado, or more specifically in the rock that lies beneath them. The federal government estimates that there's more than 1 trillion barrels of burnable fuel in the oil shale of the Rocky Mountains. That's more than all the oil in Saudi Arabia. The problem is the oil is locked inside the rock and until now, nobody's found a cheap way to get it out. In a moment, we'll hear about a new technology that the oil industry hopes will cut the cost.

First, NPR's Jeff Brady visited a small Colorado town where people remember the last time that oil shale was supposed to make them rich.

JEFF BRADY reporting:

There's a saying in western Colorado: Oil shale has always had a promising future, and it always will. The region has been through several oil shale booms and busts over the last century. The most recent was a doozy that came right around 1980. Oil prices spiked at nearly $60 a barrel and the US was looking for new fossil fuel sources. Attention focused on a small town on the western slope of the Rockies where a company said they could get oil from the rocks.

Mayor JOHN LOSCHKE (Parachute, Colorado): Parachute, Colorado, at that time had a population of somewhere in the neighborhood of 300, 3-0-0, no commas, no nothing.

BRADY: John Loschke is the mayor of Parachute. Back in 1981, he, along with about 5,000 other people, overwhelmed this town. Many of them came to work at an Exxon oil shale processing plant. Mayor Loschke opened a pub catering to all those thirsty oil workers. At first, he says, the money rolled in like you wouldn't believe.

Mayor LOSCHKE: I'll tell you, it was a nice high. We were floating along good, till somebody just forgot to tell us about one little thing.

BRADY: The oil business can go bust as easily as it booms, and once world oil prices began to go down not even millions of dollars in federal subsidies could keep the Colorado oil shale operation profitable. In 1982, Exxon abruptly shut it down.

Mayor LOSCHKE: It was--well, `black Sunday' is the term that's been applied to it.

BRADY: The boom in Parachute ended. Businesses went under, including Loschke's pub. As oil prices again head north of $50 a barrel, there's renewed interest in oil shale. Congress recently held a hearing about it, and the energy bill before lawmakers would step up oil shale development on federal land. Question is, can you take the bust out of the boom? That depends a lot on how much it costs to get at the oil. Back in the '80s, it cost a lot. Several tons of rock had to be dug out of the ground just to make one barrel of oil. That rock also had to be crushed, then transported to a plant where it was cooked to extract the oil and gas. All that mining and trucking rock around was expensive, even though the basic idea, heating the rock, has always been very simple, so simple that you can even do it at home, as NPR's technology reporter Nell Boyce explains.

NELL BOYCE reporting:

OK, so here I am in my kitchen and I'm holding a piece of oil shale in my hand. It's about the size and shape of a pack of playing cards, I guess. It's kind of a dark, black rock with some stripes of a slightly lighter brown color. So I'm just going to see if I can fire this thing up. I got some matches here.

(Soundbite of fire being ignited)

BOYCE: OK, so now I'm holding the rock in the gas stove and it's definitely looking redder and hot, almost like an ember. When I take the rock away it's on fire. There's a little flame coming out. But it smells disgusting. It smells like--this smoke coming out almost smells like burning tar.

Of course, no one's going to process oil shale in a kitchen. And as Jeff Brady explained, getting rock to a processing plant was the major expense that doomed past oil shale efforts. But now, Shell Oil Company hopes to change all that with a radical new twist: Bring the heat to the rock.

Mr. TERRY O'CONNOR (Oil Shale Program, Shell Oil Company): It's called the in-situ conversion process or the acronym, ICP.

BOYCE: Terry O'Connor works for Shell's experimental oil shale program.

Mr. O'CONNOR: The ICP technology involves drilling holes--vertical holes into the ground and inserting long electric heaters, which then gradually heat the rock over a long period of time, and over a long period of time--by that, I mean two or three or more years.

BOYCE: These thousand-foot-long heaters bring the underground rock to around 600 to 700 degrees Fahrenheit. That's not enough to set it on fire, but it is enough to release the oil. One danger is that, as the oil slowly oozes out, it might leak into the ground water before a drilling rig can pump it out. But Shell says it has a solution for that, a giant underground wall of ice. The plan is run pipes with a coolant around the heated area. O`Connor says this will create a barrier of ice that's 20 to 30 feet thick.

Mr. O'CONNOR: Now the trick is--one of the many tricks is to make sure that the ice barrier that is created is at sufficient distance from the heated area so as not to counteract each other.

BOYCE: Shell scientists have tried this fire-and-ice approach in small tests on private lands. One recent test yielded 1,200 barrels of oil. The company will soon decide whether to go forward with a final larger test. If all goes well, Shell could move forward with a commercial operation by the end of the decade. The company predicts that the oil should cost $20 to $30 a barrel which could make the process financially doable, and the idea seems a lot more environmentally friendly than the old method of mining out all that shale.

But no one knows exactly what the impact will be of all that underground heat. What's more, some say drilling many holes may still do serious damage to the terrain. This region gets little rain and is slow to rebound from ecological disturbances. There are also other doubts, as my colleague Jeff Brady found back in Parachute, Colorado.

BRADY: Al Tanner retired from the oil industry and says processing oil shale has always been expensive, and he's not sure it can be done cheaply enough now.

Mr. AL TANNER (Retired Oil Worker): I think it is not economically feasible. I think, if you throw the economics out, it can be done.

BRADY: Like Tanner, Linda Leatherman says she's not convinced oil shale's time has come.

Ms. LINDA LEATHERMAN (Colorado Resident): The people who've lived here a long time have seen this happen numerous times. And so, if you're an old-timer, you can't help but think, yeah, it's just another one of those things. But, honestly, I believe that some day it is--something is going to happen.

BRADY: Leatherman says that day probably will come once the country gets really desperate for new sources of oil and when that happens, towns like Parachute likely will see a new oil shale boom, and maybe then it will last, until the country uses up that oil, too.

Jeff Brady, NPR News, Denver.

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