Vast oil-shale reserves in the West offer potential relief to soaring petroleum prices – as long as we can wait 20 years or more.
That’s the conclusion of a new report by research firm Rand Corp., the first independent, in-depth study of oil shale since the industry went bust and caused a western Colorado economic meltdown in 1982.
Pilot projects – particularly one conducted by Shell in Colorado’s Piceance Basin – show technical and economic promise, according to the study commissioned by the U.S. Energy Department’s National Energy Technology Laboratory.
But even a best-case scenario suggests that commercial-scale production of oil shale is 20 years away, and it could be at least 30 years before shale produces enough oil to make a significant contribution to U.S. oil supplies.
The amount of oil locked in the West’s shale formations is staggering, said Rand senior policy researcher James Bartis.
Oil-shale fields in Colorado, Utah and Wyoming have technically recoverable amounts of an estimated 500 billion to 1.1 trillion barrels of oil, according to Rand.
The midpoint of the Rand estimate – 800 billion barrels – is three times the size of Saudi Arabia’s oil reserves. It would be enough to meet 25 percent of current U.S. oil demand for the next 400 years.
But development of the resource hinges on overcoming economic, technical and environmental obstacles, Bartis said.
“No work has been done on the impacts of development and ways to mitigate those impacts,” he said.
For example, shale development requires large expenditures of water and energy, produces air pollution and carbon emissions and leaves toxic byproducts that could endanger the environment.
Bartis said Shell’s Colorado project, where electric heaters are suspended in underground wells to melt oil from shale, offers potentially less environmental damage than conventional mining and processing of oil shale, the technology employed in Colorado’s flirtation with shale development in the 1970s and ’80s.
Development of oil shale would help reduce U.S. exposure to oil imports from politically unstable countries, Ken Wonstolen of the Colorado Oil and Gas Association said.
“It seems to me that the most secure supply of petroleum we have is right here in our backyard,” he said.
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
