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Post Independent (Colorado): Shell pushes back time line for any oil shale development

By Dennis Webb

RIFLE — Unexpected delays have pushed back Shell’s time line for possibly beginning commercial oil shale development in western Colorado.

Meanwhile, the company’s new oil shale test project in Rio Blanco County could result in the creation of 500 to 600 new jobs.

Shell representatives provided an update on its oil shale efforts during an open house in Rifle Thursday.

Company spokesperson Jill Davis said Shell previously had hoped to switch from research and development to a commercial phase by the end of this decade. Now it’s shooting for early in the next decade, assuming its testing continues to produce positive results.

“Things are still going very well but we need more time,” Davis said.

She said the process of obtaining permits and federal leasing has been taking longer than the company had expected.

Shell recently was awarded three, 160-acre oil shale research, development and demonstration leases on federal land. It is planning a test project on one of the properties, but first must acquire state, federal and local permits, which could take another year. Its application with the state Division of Reclamation, Mining and Safety alone consists of seven binders of documents.

Shell is seeking to produce oil from shale by heating it up underground and then pumping it to the surface through traditional drilling methods. By the end of 2005 it had successfully produced 1,700 barrels of light crude oil from below a 30-by-40-foot test plot. Those results matched with the company’s predictions and marked a turning point for the project, Davis said.

The company now is looking to test more advanced heaters that are more efficient and could make less concentrated oil shale layers more economically viable to develop. It also wants to test its methods in areas with overlying layers of nahcolite — essentially baking soda. Those areas present challenges such as erosion but contain some of the richest concentrations of oil shale, Davis said.

In addition, Shell wants to further test the use of an underground freezewall that surrounds heated areas and is intended to protect groundwater from contamination.

Shell plans to heat only about one acre of the 160-acre lease plot, but will use almost all of the acreage for other facilities.

In an interview, Davis said employment is expected to total 100 people at the start of the test project construction, peak at 580 jobs and then go back down to 100.

Shell already has built temporary, on-site living quarters that house 100 people and have room for 150. It is permitted to expand the quarters to house 400 people, and it also has conceptual plans for another facility similar in size.

As many as 80 people attended Thursday’s open house, along with a sizable contingent of Shell employees identifiable in their blue denim shirts. Glenwood Springs residents Bill and Cheryl Wright were among those in attendance. Bill Wright said they bought a real estate business in Glenwood just before the last oil shale bust started with the pullout by Exxon in 1982.

He said area residents need to consider the national aspects of potential oil shale development as well as the local ones.

“It’s there,” he said of the resource. “It’s just a matter of getting it out economically and environmentally correctly.”

He’s impressed by the way Shell is proceeding with its project.

“The approach these people seem to be taking, it seems to me they’re on good, solid ground,” Wright said.

Dave Merritt also attended Thursday’s forum. He’s interested in Shell’s project both as a Glenwood City Council member and chief engineer of the Colorado River Water Conservation District, based in Glenwood.

Merritt said it’s important to identify the potential water needs that could be required not only by oil shale development, but by the growth in population that would accompany it because of job creation.

He and Wright both said public education about oil shale is important. Merritt praised Shell’s decision to hold open houses about its project.

“These forums are great because they let folks know what’s going on and get a chance to ask questions,” Merritt said.

Contact Dennis Webb: 384-9119
[email protected]

Post Independent, Glenwood Springs Colorado CO
February 22, 2007

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