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Shell abandons Western Slope oil-shale project

Shell has learned a great deal about oil shale in Colorado and will apply that knowledge to oil-shale plays in other parts of the world…

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By Mark Jaffe: The Denver Post: Posted:   09/24/2013 

Royal Dutch Shell on Tuesday became the most recent company to abandon efforts to turn Western Slope oil-shale rock into oil, announcing it is abandoning its Mahogany project.

Chevron stopped its oil-shale research in Rio Blanco County in February 2012.

“The energy markets have evolved since we started the project in 1982,” said Kelly op de Weegh, a Shell spokeswoman. “We are exiting our Colorado project to focus on other opportunities.”

The aim of the Mahogany Research Center was to turn oily shale rock into liquid by heating the rock in situ and pumping it out.

“The economics of oil shale have always been the issue,” said David Abelson, an analyst with Western Resource Advocates, an environmental group opposing shale development.

Shell spent an estimated $30 million to create a test subterranean “freeze wall” to hold in the shale oil when it was heated.

Full-scale production would likely have required building a dedicated power plant.

The new oil plays in North Dakota and Texas and along Colorado’s Front Range, which are producing large quantities of oil, hurt the viability of oil shale, said Jim Spehar, former mayor of Grand Junction.

“Out here on the Western Slope, oil shale will always be the fuel of the future,” Spehar said.

Shell announced plans Tuesday to build a $12.5 billion plant in Louisiana that would turn natural gas into diesel, jet fuel and other liquids.

“We have a large portfolio of opportunities, all competing for capital,” op de Weegh said.

Shell has learned a great deal about oil shale in Colorado and will apply that knowledge to oil-shale plays in other parts of the world, op de Weegh said.

As for Colorado, she said, “Our focus is to work with our staff and contractors to safely stop research activities and close the site.”

Mark Jaffe: 303-954-1912, [email protected] or twitter.com/bymarkjaffe

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