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The Daily Sentinel (Colorado): Shell signs research leases

By GARY HARMON
Thursday, November 16, 2006

Shell Frontier Oil & Gas has accepted leases on three oil shale research and development plots in northwest Colorado.

The U.S. Interior Department earlier this week approved findings that would allow Shell and two other companies to move forward on the 160-acre test plots.

The findings included several environmental stipulations to be parts of the leases.

Shell accepted the leases and is excited about the opportunity to demonstrate its technology on federal land, said Jill Davis of the company’s Mahogany Research Project, which is aimed at extracting petroleum from oil shale.

The leases will allow Shell to propose research and development involving three different technologies, the company said.

The first test will combine research from each of the component areas of Shell’s patented in-situ conversion process into one integrated demonstration project. Construction and operations are to begin once the company obtain permits from the Colorado Division of Reclamation, Mining and Safety and other agencies, Shell said.

The two other research tests — one of an advanced heater and another to explore recovering oil shale co-mingled with different minerals — will be pursued later. Shell has been conducting research on its own lands in the Piceance Basin since 1996.

Shell is now conducting tests on its own land of its freeze-wall technology intended to protect groundwater during production.

During the test, engineers will try to construct, break and repair an underground ice wall.

The leases mark “a very important milestone on the road to developing a technology that will allow the commercial development of U.S. oil shale resources in a manner that is economically viable, environmentally responsible and socially sustainable,” said Stephen Mut, vice president of unconventional resources for Shell Exploration & Production.

Gary Harmon can be reached via e-mail at [email protected].

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