Chevron halting oil shale effort
Chevron Corp., one of the three companies issued leases to experiment on oil shale in 2007, is “divesting” its lease in northwest Colorado.
“While our research was productive, this change assures that critical resources — people and capital — will be available to the company for other priorities in North America and around the globe,” Chevron said in a statement.
An environmental organization said Chevron was making a smart business decision.
Chevron received its research, development and demonstration lease in the first round of oil shale leasing in 2007. Royal Dutch Shell and another company, now known as AMSO, hold four leases in Colorado. A fifth lease is being explored in Utah.
Chevron officials are working with the bureau to determine the future use of the lease and are willing to consider transferring the lease to another company, spokesman Cary Baird said.
Chevron has three people working full time on oil shale and several others working part-time. All are being reassigned to other projects in the company, Baird said.
Chevron was investigating the use of supercritical carbon dioxide as a solvent to draw out kerogen from the rock deep below the surface. The kerogen, a petroleum-like substance, then could be collected via conventional drilling techniques.
Chevron’s decision comes against the backdrop of an environmental study in which the Interior Department is considering reducing the area from which oil shale research could be conducted from 1.9 million acres in Colorado, Utah and Wyoming to as few as 32,640 acres in all three states.
The Obama administration is scheduled to make a decision on its environmental impact study of oil shale at the end of 2012.
The original decision to set aside nearly 2 million acres for oil shale experimentation and eventual commercial petroleum production was the result of a similar environmental study process conducted by the George W. Bush administration.
Chevron’s departure from oil shale illustrates what can happen when rules change frequently, said Bonnie Petersen, executive director of Club 20, a West Slope advocacy organization.
“It’s definitely a concern when you don’t know what you can do after making large investments” in studying oil shale, Petersen said.
Chevron’s decision is unsurprising in that there is still no commercial technology for oil shale, said Jason Bane of Western Resource Advocates. “Chevron probably decided they didn’t want to build a factory before they knew how to make the widget,” Bane said. “They’re not ‘pulling out’ of oil shale, because that would imply that they were producing something to begin with.”
The development is “surprising only (in) that this isn’t happening more often,” Bane said.