Posted: Tuesday, December 19, 2006 12:00 am
DENVER (AP) - The Interior Department last week granted leases for shale oil extraction experiments, a step in allowing companies to figure out how to profitably tap into an estimated 100-year supply of oil locked in rock formations under Colorado, Utah, and southwest Wyoming.
The leases are the first in 30 years and two decades after companies abandoned large-scale commercial efforts in western Colorado because coaxing oil out of rock turned out to be laborious and expensive.
The Interior Department issued 10-year leases for Shell Frontier Oil & Gas Co., Chevron USA and EGL Resources Inc. for 160-acre parcels for research and development projects in northwest Colorado.
"These oil shale (research, development, and demonstration) leases will help us determine how industry might develop this tremendous resource effectively and economically," said C. Stephen Allred, assistant secretary of the interior for land and minerals management.
The companies must submit detailed development plans, monitor groundwater, and obtain all required permits to protect air and water quality, the department said last month in approving the projects.
The projects could begin as early as next summer.
Since 1996, Shell has tested procedures on private land in western Colorado that involve baking shale rock in the ground with electric heating rods, then pumping the melted oil to the surface. The plan is to circulate refrigerants through underground pipes to freeze adjacent areas to keep groundwater away from the melted oil.
Earlier this year, the Bureau of Land Management declared the projects would have no significant environmental impact. State officials and environmentalists however voiced concerns over threats to air and water, and said there was a lack of information on the kinds of substances that will be released by the extraction process.
"Important issues remain to be addressed, including how to ensure appropriate environmental protections are achieved," Allred said in a statement.