Companies set to test oil shale refining venture

GOLDEN — In the race to produce commercially viable transportation fuel from oil shale, a venture in northwest Colorado appears to have an early contender.

American Shale Oil, which is a partnership of a global telecommunications company and French petroleum giant, is preparing to move the heating element for its pilot project into place in the next three weeks, said Howard Jonas, chairman of IDT Corp., in an interview at the 31st annual Oil Shale Symposium at the Colorado School of Mines.

Total, the French petroleum giant, which partnered with IDT, remains “quite bullish” on the project in northwest Colorado, Jonas said.

IDT, meanwhile, will split off its interest in oil shale and other energy resources into Genie Energy, which will go public on the New York Stock Exchange on Oct. 31.

The venture, frequently referred to as AMSO, is on 160 acres in northwest Colorado administered by the Bureau of Land Management. It is one of six existing research, development and demonstration leases issued by the federal government. Five of those leases are in Colorado and one is in Utah.

The Colorado leases all are aimed at extracting kerogen, a petroleum-like substance, from rock deep beneath the surface with minimal surface disturbance. After heating the rock to boil off kerogen and other petroleum distillates, the liquids are collected from wells just as oil is collected in conventional drilling.

Royal Dutch Shell, which holds three leases in Colorado, has been testing its own method of heating shale to release kerogen in an area isolated by a freezewall, which encircles the area being heated with a wall of ice formed by cooling water already present in the surrounding soils. The freezewall is intended to prevent groundwater contamination from the heating process.

AMSO’s next testing step will depend on the results with the pilot test, Roger Day told the symposium.

AMSO is far from alone in moving quickly toward producing liquid fuels from oil shale.

Queensland Energy Resources in Australia has taken experience it gleaned in Rifle to develop a shale retorting process down under. The company hauled thousands of tons of Queensland shale to Rifle to refine its retorting technique.

Queensland now has a plant up and running as of last month, Pearce Bowman, managing director and CEO of Queensland, said. In retorting, mined shale is crushed, then heated in a kiln-like structure, or retort, and the vaporized substances collected as they rise up a shaft.

Retorts in the western United States use water in the process, but Australian oil shale is wet and needs to be dried out before being put through the retort, Bowman said. The company hopes to produce 3,000 barrels a day of the equivalent of crude oil by 2014 and 21,500 barrels per day with the completion of a commercial plant in 2019, Bowman said.

The fuels produced by Queensland will go a long way toward making Australia independent from foreign energy sources, Bowman said, noting that Queensland still needs other help, in the form of skilled tradespeople and others needed to complete the company’s construction plans.

Queensland is competing for workers with three liquid-natural gas plants under construction nearby, Bowman said.


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