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The Daily Sentinel (Colorado): Oil shale a ‘solid gold investment’

Chairman of Senate Energy and Natural Resources says oil shale could be in commercial production within a decade

Thursday, June 01, 2006

By SALLY SPAULDING and GARY HARMON

Oil shale is going to turn out to be “a solid gold investment,” Sen. Pete Domenici, R-N.M., said to members of Club 20 and Associated Governments of Northwest Colorado on Wednesday night.

Domenici, chairman of the Senate Energy and Natural Resources Committee, plans to preside over a field hearing today in Grand Junction, further exploring local concerns, issues and comments on oil shale.

The event will begin at 9:30 a.m. at Grand Junction City Hall Auditorium and will be broadcast on Grand Junction’s public-access channel, Channel 12.

Following a Wednesday afternoon tour of Shell Exploration & Production Company’s test site in Rio Blanco County, the senator told those in attendance at a barbecue on Colorado National Monument that oil trapped in rock in Colorado, Utah and Wyoming could be in commercial production within a decade.

Club 20 on Tuesday had issued a statement enthusiastically supporting the development of northwestern Colorado’s oil shale resource, which is estimated to contain the bulk of roughly 1 trillion barrels of oil trapped in the three states.

The Western Slope’s most powerful lobbying organization touted the resource, despite remembering the oil shale boom of the 1970s, which led to a bust in 1982 when Exxon abruptly announced it was closing its oil shale project because of rising costs.

Other companies followed suit, and the resulting economic collapse lasted for almost a decade.

Club 20 officials said this time oil shale will be different, but did not offer specifics on how those differences will occur.

On Wednesday, Domenici told Club 20 members there was a “big difference” between the 1970s and now. He said back then, oil shale simply “didn’t work.”

The differences now are oil prices and technology, added Sen. Ken Salazar, D-Colo., who also attended the tour and barbecue as part of the federal delegation’s look at oil shale this week.

“Times have changed since Black Sunday,” Salazar said in reference to the day Exxon announced its closure. “Oil shale can be more compatible with the environment and with the support of the local community.”

But Salazar cautioned against harming another “gold mine” in Colorado, the tourism industry, saying he didn’t want oil shale production to damage the sustainability of the growing trend.

Among the red rocks of the Devil’s Kitchen area in the monument, Domenici commented that western Colorado was a beautiful area.

“If I were you, I wouldn’t want oil shale to ruin it,” he said. “I don’t think it will.”

Domenici’s comments at the monument followed an afternoon of touring Shell’s technology, where the company has for the last 10 years researched a method of heating rock with giant heaters, removing shale oil in the process.

Officials with Shell have yet to disclose exactly how much water or energy will be required to extract the oil from shale but said some of that information could be made public as early as the end of this year.

The company hopes to receive research and development leases from the federal government this summer to begin the first pilot test of their oil shale project.

Chevron Shale Oil Co. and EGL Resources Inc. also have applied to extract shale oil in Colorado under the leasing program.

Sally Spaulding can be reached via e-mail at sspaulding@gjds.com.

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