Company to start testing oil-shale production method in July

One of the companies that leased land in 2005 to study a way to tease oil from the rock of northwest Colorado will start a decade-long process this summer aimed at doing just that.

Two officials with American Shale Oil LLC told the Grand Junction Area Chamber of Commerce during its monthly energy briefing Wednesday that the company will begin its test in July.

American Shale Oil is the company that took over EGL, which was one of the first three companies to obtain 160-acre research and development leases to develop oil shale in the Green River Formation of western Colorado. Two major companies, Shell and Chevron, also are working leases near American Shale Oil’s.

If the project works as American Shale Oil hopes this summer, the company could look to begin commercial production in as few as 10 years, eventually building to production levels of 100,000 barrels of the equivalent of crude oil, said Alan Burnham chief technology officer for the company.

The potential is there to produce at that level for 30 years on the 5,120 surface acres the company eventually could claim from the government, if it demonstrates it could produce at a commercial level.

American Shale Oil plans to heat oil shale well below the rich mahogany zone that others have concentrated on to produce a range of petroleum products, from light gases to the equivalent of sweet Texas crude, said Roger Day, vice president of operations.

Although the experiment will begin with a heater to boost the temperature of the deeply buried rock to 650 degrees, it’s possible some of the lighter products could be burned on site to accomplish the same thing. That could mean the company wouldn’t need an outside source of energy for its operations, Day said.

Likewise, water requirements would be minimal because the illitic shale American Shale Oil hopes to exploit is dry and lies well below known aquifers, Day said.

American Shale Oil will hire 16 temporary operators for its project this summer. Those employees will work for about six months on the first part of the experiment.

If the project develops commercial production, “a few hundred people” will be needed to produce shale oil, Day said.


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