The U.S. Bureau of Land Management (BLM) has received 19 nominations for 160-acre parcels of public lands in its new research, development and demonstration program in the Western oil shales. Colorado, home to the highest-quality resource, attracted 10 nominations by companies including Chevron, ExxonMobil and Shell. Eight parcels were nominated in Utah by smaller firms, and Anadarko Petroleum offered one nomination in Wyoming. The agency will evaluate the potential of each nomination to advance oil-shale technology, and will consider the economic viability and environmental effects of the proposed processes. Leases may be awarded after the analyses are completed. Colorado, Utah and Wyoming will have representatives on the evaluation team, as will the Department of Energy, Department of Defense and the BLM. The Eocene Green River formation in the Western U.S. is recognized as hosting the largest known oil-shale deposit in the world. The potential of the oil shales has been recognized for more than a century, but development has proceeded in fits and starts. Economics have been a perennial problem, with projects continually announced and cancelled as oil prices have fluctuated. The only significant production achieved from oil shales was from Unocal's Parachute Creek project in the Piceance Basin in northwestern Colorado. The company began experimenting with shale recovery in the late 1950s, but didn't move to a large-scale mining and retorting facility for several more decades. Unocal produced 4.5 million barrels of oil from its experimental facility between 1980 and 1991, according to the American Association of Petroleum Geologists. During the life of the project, the company averaged production of 34 gallons of oil per ton of shale. Estimates of the shale-oil resources in the U.S. vary widely, with most researchers comfortable with figures between 1.38- and 2.9 trillion barrels. More than 90% of these resources are in the Green River formation, and most are on federal land. Reserves are likely in the 80- to 280-billion-barrel range, according to Amos Salvador, in his recent book, Energy: A Historical Perspective and 21st Century Forecast. Shell, which submitted three applications for the research leases, has been investigating oil-shale recovery at its Mahogany property in Rio Blanco County, Colorado. For more than 20 years, it has been developing its in-situ conversion process (ICP). In its most recent test, the company recovered more than 1,200 barrels of light oil and associated gas from a small pilot. Oil shale doesn't actually contain oil; it contains kerogen, a precursor to oil that has not been subjected to the pressures and temperatures necessary for hydrocarbon generation. Essentially, ICP artificially matures the oil shale by slowly heating it. In ICP, holes are drilled into the shale and electric resistance heaters are installed. The subsurface temperature is raised to around 650? Fahrenheit for three to four years, after which a mixture of oil and gas is produced. A unique feature of the process is the use of ice walls to isolate the productive area and prevent the loss of both heat and product to the surrounding rocks. The company drills holes around the production cell, puts in piping and pumps in refrigerants. Ice walls are often used in the construction and mining industries, but are innovative in the oil business. Indeed, the efforts to heat up the middle of a block of rock while freezing its perimeters are quite unusual. Like other thermal in-situ methods, ICP is energy-intensive. Nonetheless, in testimony before the U.S. Senate Energy & Natural Resources Committee this past spring, Stephen Mut, chief executive of Shell Unconventional Resources, testified that Shell could produce about 3.5 units of energy per unit it uses. Mut noted that ICP could recover about 10 times the volumes of oil that is possible from conventional mining and retorting methods. And, the process has several other potential benefits: the produced oil is light and contains few heavy ends; it offers a small, clean footprint; and it requires less water than conventional shale-extraction techniques. Shell continues to work on ICP, and says much remains to be done before the process can be commercialized. The research leases are another step forward it wants to take on the road to economic production.
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