The oil trapped in the oil shale of Western Colorado maybe vast, but it is unclear whether it makes economic sense to get it. Canadian Peter Tertzakian thinks supplying the world’s 1,000 barrel a second oil addiction will be far from easy. But that doesn’t mean businesses aren’t hedging their bets.
Earlier this week, the Bush administration authorized oil-shale leases for five sites on public land in western Colorado. As Mike Soraghan writes, they are the first leases since the shale bust of the 1980s wrenched the region’s economy.
The approval was for relatively small-scale “research and development” leases, but it was the government’s biggest endorsement yet of oil shale, a vast petroleum resource with a checkered past.
The 10-year research and development leases clear the way for Shell, Chevron Corp. and EGL Resources to use 160-acre sites of public land between Rangely and Meeker in Rio Blanco County.
The leases can be converted later into larger, commercial leases.
Shell has been operating on private land in the area, but shale deposits owned by the federal government are thicker and richer with organic material.
All three of the companies are experimenting with heating the shale underground to melt organic material into oil, then pumping it out of the ground.