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Aspen Daily News (Colorado): Shell counting on ice for oil shale development

David Frey – Aspen Daily News Correspondent
Mon 10/29/2007 00:01AM MST

RIO BLANCO — Above northwestern Colorado’s rolling hills studded with piñon, juniper and sagebrush rises a maze of giant pipes and frost-covered tubes that circle a football-sized testing site and plunge into wells bored a quarter-mile into the pale rock below.

A refrigeration and pump unit the size of a warehouse pumps cooling fluid into the wells in an effort to turn the groundwater into walls of ice that will line the holes.

These ice walls are a centerpiece of Shell Exploration and Production’s attempts to convert the rock that underlies this region into fuel. Using a mixture of heat and ice, it’s one of three companies attempting to develop oil shale.

“If it’s a total failure, which is hard to comprehend, I’d say we’d have to step back and reconsider what we’re going to do,” said Tracy Boyd, communications and sustainability manager for Shell.

Unlike past attempts to unleash the energy potential locked in oil shale, which involved open pit mining and baking out the petroleum liquid called kerogen, Shell, like most other companies pursuing oil shale, is considering an “in situ” process that would drop long heating units into wells, some 3,000 feet deep, heat the rock to 650-750 degrees for about three years, then pump out the kerogen, which could be used for gasoline, diesel and jet fuel.

Chevron and EGL Resources are also pursuing oil shale in the region using the federal program, but Shell may be alone in its hope to use freeze walls, meant to line the wells, keep groundwater out of the wells and keep the fuel out of groundwater.

Freeze walls have been used for years in construction and mining, but this may be the first time it’s been used in underground wells. Shell is conducting a test of the technology at its Mahogany Research Project on the high desert between Rifle and Meeker.

RAISED EYEBROWS

Shell has been for the most part open about its plans, but it raised eyebrows when it withdrew a state permit to pursue its pilot project, part of a plan approved in the 2005 Energy Act.

“There was just a myriad of factors,” said Boyd, and officials realized that their plans would probably change from what they had requested in their permit, including new developments in freeze wall and heater development.

Shell officials have invested “many tens of millions of dollars” in the project, Boyd said, but the company will not likely decide until the beginning of the next decade if it believes oil shale development is economically feasible. The company is devoting the next four to five years to studying the freeze-wall technology, building up the walls of ice, breaking them down and trying to repair them.

The resource could be huge. The federal government estimates as much as 1.8 trillion barrels of oil could lie in a region that reaches into Utah and Wyoming. But the vast majority of it lies in western Colorado’s Piceance Basin. That’s equal to world oil supplies, or as Jerry Boak, of the Colorado School of Mines, puts it, as much oil as has ever been consumed.

“It’s just a huge, huge resource,” Boak said.

Federal estimates suggest maybe 800 million barrels could be recoverable, the equivalent of 110 years of domestic energy, based on current consumption.

But skeptics abound, noting nearly a century of failed attempts to harness oil shale.

“I think the corporations will continue to throw vast amounts of money at it,” said Andrew Gulliford, a professor at Fort Lewis College and author of the book “Boomtown Blues,” which chronicles the crash of Western Colorado’s oil shale economy in the 1980s that put thousands out of work, many overnight. “They will come up with a variety of pipe dreams.”

In-the-ground methods are less impactful than open-pit mines, but they bring a range of environmental concerns, from air quality to water use to scars on the landscape. Plans call for scouring football-field-size portions of land, drilling wells mere feet apart, then reclaiming those areas and moving on to the next plot.

The process would also require the construction of power plants to supply a massive amount of energy to the project, which Shell officials believe could produce about three times the amount of energy than it will take to develop it.

“The Bush administration has made a priority out of extracting energy anywhere and anytime and they’re doing so at peril to this country,” Gulliford said. “The Bush policy is causing environmental damage that will take centuries to repair and quite frankly, it’s the wrong way to proceed.”

Some, like energy expert Randy Udall, of Carbondale, question whether oil shale development can ever make money, given the amount of energy, infrastructure and workers it would need.

“This is a century-long story,” he said, “and we’re no closer to a commercial oil shale industry today than we were in the year 2000.”

Boyd said“We have this huge resource sitting here in the United States of unconventional oil shale that is awaiting someone to crack the nut here in terms of how to produce it in an environmentally sensitive and economically viable way.

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http://www.aspendailynews.com/article_22529

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