Shell begins first shale research project in Rio Blanco
Shell has broken ground on the first project on any of its three federal oil shale research and development leases, a company representative said Thursday.
Carolyn Tucker told the Northwest Colorado Oil and Gas Forum in Rifle the company continues to make “significant progress” on its oil shale project, which until now has occurred only on Shell land. She said she wanted to provide the update partly in light of Chevron’s announcement a few days ago that it is divesting itself of its oil shale R&D lease in Colorado. Chevron said it wanted to focus on other priorities.
In comments at the forum and in an interview, Tucker said Shell has been researching oil shale since 1981, and has had a physical presence in the Piceance Basin since 1996. It has conducted six pilot projects to date. These have included producing oil by heating kerogen in place underground using heater bores and then pumping the oil to the surface, and successfully testing a freezewall technology that it could use to protect surrounding groundwater from heated areas.
Now Shell is preparing to do what it calls a multi-mineral test. This addresses the Bureau of Land Management’s desire to see any oil shale development also entail extracting commercially valuable deposits of nahcolite (baking soda) in the same formations, or at least protecting those deposits.
Shell is planning a two-phase test that first will use decades-old solution-mining technology to remove nahcolite in two layers more than 2,000 feet underground by injecting 300-degree water into it. Tucker said Shell pioneered that technology.
The second phase will involve using its heater bores to then produce oil.
Shell believes it wouldn’t need to use a freezewall in the area where this approach is being employed because of an overlying nahcolite cap layer that prevents groundwater movement.
Shell’s three leases, all in Rio Blanco County, initially last 10 years, through 2016.
“We’re very cognizant of the time frame,” Tucker said.
She said Shell has the option of seeking a five-year extension.
Also, the leases, which cover 160 acres, include a right to seek to have them converted to commercial leases covering about eight square miles if R&D efforts are successful.
Tucker said Shell’s plans for its other two leases are to test more advanced heater technology and to do a test making use of the underground heating approach in combination with its freezewall method.