Shell shifting attention to deep oil shale
GOLDEN — Shell Oil Co. has shifted its attention from its freezewall testing on federal oil shale lands in northwest Colorado and is concentrating on deeper areas of the deposit.
Shell officials described their freezewall test in the Mahogany layer of the deposit as a success at the 31st annual Oil Shale Symposium at the Colorado School of Mines and said the company is moving as planned to other aspects of its testing.
Shell holds three 160-acre research, development and demonstration leases on lands administered by the Bureau of Land Management in the Colorado section of the Green River Formation. Other than saying the freezewall test was “quite successful” and announcing its interest in deeper shale, Shell had “nothing to disclose” about other test sites, said Tracy C. Boyd, venture integration manager for Shell Exploration and Production Co.
Shell pioneered the freezewall technology as a way to protect groundwater contamination from its heating of the Mahogany layer to release kerogen, a petroleum-like substance from the rock to be captured in a conventional production well.
The lease that Shell will discuss is deeper than the Mahogany layer, and the groundwater issues that required the freezewall technology, Boyd said. The company plans to use solution mining to remove nahcolite, clearing room for fracturing of the shale and heating to release the kerogen.
American Shale Oil, a joint venture of Total, the French petroleum company, and IDT Corp., a global telecommunications provider, is already working in the deepest parts of the shale deposit in its federal lease in northwest Colorado.
Shell is now halfway through its 10-year leases, a time line that Shell is well aware of, Boyd said.
Along with the technological and scientific challenges the company faces, it also has to take into account what Boyd called “regulatory instability.”
That instability “is significant,” Boyd said, “it’s not unmanageable, but it’s significant.”
Shell received three of the original six leases, all of which are being used for its in-situ conversion process, or production from the shale without surface disturbance, such as mining.
Oil shale resources in Utah, where surface mining and retorting is planned on the shale closer to the surface, are likely to be developed before those in Colorado, Boyd said.
In Colorado, though, there still is much work to be done to prepare small rural towns for oil shale development, Boyd said, calling that a “key challenge” still to be dealt with.