Oil-shale companies tout research projects

Associated Press Modified: May 15, 2012 at 11:15 pm •  Published: May 15, 2012
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SALT LAKE CITY (AP) — A small company that holds a federal lease to extract petroleum from oil shale reserves in western Colorado is taking a new approach to withdrawing crude oil from solid rock — one that it hopes will avoid groundwater contamination.

The process is "basically the same as steaming vegetables," said Alan Burnham, chief technology officer for Rifle, Colo.-based American Shale Oil LLC.

Within weeks, the company will send a pool of oil down a well and blast it with hot fuel gas. The boiling oil will heat up an underground zone about 50 feet wide and 50 feet deep to more than 600 degrees.

Burnham described his company's process Tuesday at an unconventional fuels conference at the University of Utah. It's the latest in nearly a century of efforts by companies to unlock oil shale — a rock that contains fossilized algae, an immature form of oil that never received enough heat or pressure to produce liquid crude.

The University of Utah conference has been a showcase of varied efforts for the past six years to develop vast reserves of oil shale and tar sands across parts of Colorado, Utah and Wyoming. This year's conference follows a decision by the federal government to limit research and development projects after an initial round of leasing in 2007.

The Bureau of Land Management has tentatively decided to lease about 460,000 acres of oil shale deposits, down from 2 million acres that the Bush administration planned to offer across the Rocky Mountains.

The agency said it would open another 91,000 acres for development of gooey tar sands, down from 431,000 acres previously.

American Shale Oil is working a piece of land near another oil-shale research project by Shell Oil Co., but taking a different approach. Shell is targeting a rich zone of oil shale that has the potential for groundwater contamination.

American Shale Oil plans to drill deeper into a less concentrated layer of oil shale that it says is isolated from groundwater.

"We are avoiding the water aquifer contamination problem," Burnham said. "They have spent a lot of money on that. We're a small company that wants to avoid it."

The company has no doubt it can extract high-quality crude oil from solid rock on its 160-acre lease in the Piceance Basin of Colorado. Its test is more about how well it can heat a zone of rock 2,000 feet underground.

The company expects to generate enough oil initially to purge startup fluids, then capture more oil in tanks for refinery tests. The company believes the oil will yield sweet or light crude with little polluting sulfur.

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