800 Billion Barrels Of Oil

[Trae]

Three times the oil in Saudi Arabia:

http://money.cnn.com/2007/10/30/magazines/...rtune/index.htm

(Fortune Magazine) -- Touring a drilling site on a dusty mountain plateau above Rifle, Colo., Harold Vinegar stops, grins and then announces out of the blue, "I love that smell!"

No, the Royal Dutch Shell chief scientist is not referring to the crisp fragrance of the high desert air or the conifer scent wafting from the nearby stand of evergreens. Rather, it's the faint, asphalt-like aroma of oil shale - a sedimentary rock rich in kerogen, a fossil fuel that is now the focus of Shell's single biggest R&D investment.

Black gold? Heated, pumped, piped and refined, this rock could end up in a gas tank.

Harold Vinegar believes he has discovered an efficient way to turn oil shale into common fuels.

The raw materials - or prehistoric detritus - that is oil shale

The first field test in 1981 squeezed out a few cups of good oil and a lot of junk; 24 years later, Shell was able to produce 1,700 barrels of high-quality oil.

In 2004, Shell pumped coolant down this well near Rifle, Colo., to test a method to keep oil from leaching.

Reclamation projects, says Shell, will restore the landscape after extraction. Environmentalists are not so sure.

Vinegar is the energy industry's leading expert on the complex petroscience of transforming solid oil shale into synthetic crude - a liquid fuel that can be refined into diesel and gasoline. The breakthroughs this 58-year-old physicist has achieved could turn out to be the biggest game changer the American oil industry has seen since crude was discovered near Alaska's Prudhoe Bay in 1968.

If that sounds like hyperbole, then consider this: Several hundred feet below where Vinegar is strolling lies the Green River Formation, arguably the largest unconventional oil reserve on the planet. ("Unconventional oil" encompasses oil shale, Canadian tar sands, and the extra-heavy oils of Venezuela - essentially, anything that is not just pumped to the surface.)

Spanning some 17,000 square miles across parts of Colorado, Utah and Wyoming, this underground lakebed holds at least 800 billion barrels of recoverable oil. That's triple the reserves of Saudi Arabia.

The reason you probably haven't heard about the Green River Formation is that most of the methods tried for turning oil shale into oil have been deeply flawed - economically, environmentally or usually both. Because there have been so many false starts, oil shale tends to get lumped with cold fusion, zero-point energy, and other "miracle" fuels perpetually just over the horizon.

"A lot of other companies have bent their spears trying to do what we're now doing," Vinegar says of his 28-year quest to turn oil shale into a commercial energy source. "We're talking about the Holy Grail."

link

Summation from the last page:

A mature oil shale industry might employ tens of thousands of workers in sparsely populated parts of Colorado, Utah and Wyoming - and that doesn't include the indirect employment from shop, restaurants and other businesses serving oil companies and their workers. "There's a real question of how we manage that kind of development," says Dammer of the DOE.

While it waits for its latest freeze wall to freeze and for the BLM to grind its way toward some sort of commercial leasing program, Shell is exploring other applications for ICP. It is negotiating with Jordan to test it on that country's oil shale reserves and investigating whether ICP can produce oil from Canadian tar sands - in which Shell also has major investments - more efficiently than current methods.

For his part, Vinegar's attention is focused squarely on Colorado. "So many Americans have no idea that they're sitting on a resource several times the size of Saudi Arabia's," he says. "The fact is that it's entirely possible to produce this stuff. Our technology works. There's no doubt about it."

I wonder if many companies will start setting up shop in Denver now.

[houstonmacbro]

Yeah, but just how easy is this oil to get ... I think worldwide there is probably plenty of oil (some theories suggest it replenishes itself over time from regular processes) ... I just wonder how easy all this oil is to get ...?

[sunsets]

Not easy at all, that's why it took so long to figure out a process to extract the oil. It involves a lot of heating and the potential for leaching out into the surrounding area.

But the price of oil is so high now that it's economically feasible.

[TJones]

Trae, they are already there my friend. They are setting up shop in Colo. and working in Wyoming right now. There are actually some towns that have been built by a couple of oil companies just north of Denver. I have a good friend of mine that is living in Denver right now, but works in Wyoming for one of these companies. Mark F. Barnes can shed some light on this also, if he wants to.

[crunchtastic]

Interestingly, I got the new issue of Conde Nast Traveler yesterday and of all things, there was a fairly lengthy article on all the drilling work now being done in these states, esp. natural gas. Obviously the slant was the impact to the travel and recreation industry, and the outlook for the national parks and monuments of the west (bleak, but that's not exactly news) as well as ranchers, and the hunting/game lodge business, etc.

[Mark F. Barnes]

Yeah, but just how easy is this oil to get ... I think worldwide there is probably plenty of oil (some theories suggest it replenishes itself over time from regular processes) ... I just wonder how easy all this oil is to get ...?

We are currently averaging 24.5 days per well @ a cost or 3.4 million dollar spent per well, that is not including completing the well. that averages about $1.2M completion to production. Output being 850 bbls/day and 1.2 MMCFT.

Not easy at all, that's why it took so long to figure out a process to extract the oil. It involves a lot of heating and the potential for leaching out into the surrounding area.

But the price of oil is so high now that it's economically feasible.

It's been economically feasible for the last three years and has been a virtual boom for the last two. I have been the operations manager for Shell in this play for the last two years. I have another three left to do up here, will fully retire in 2011.

Trae, they are already there my friend. They are setting up shop in Colo. and working in Wyoming right now. There are actually some towns that have been built by a couple of oil companies just north of Denver. I have a good friend of mine that is living in Denver right now, but works in Wyoming for one of these companies. Mark F. Barnes can shed some light on this also, if he wants to.

Have been in the Rockies for several years now. Was involved in some on the initial exploration wells drilled in the Green River Basin. It has been a project on going for many years now. I've known Harold for many years, and he is a visionary at what he does. Rock Hounds are a different breed. And he's a real charactor.

I am sitting in my office here in the Green River Basin as I type at this very moment.

[Mark F. Barnes]

The Big Players up here along with Shell are, Encana, Williams, Questar, Conoco/Phillips, Ultra Resources, BP, EOG, Chevron, Gasco, Caza. All of which have offices in Denver, and Gasco is head-quartered out of Denver. The Rockies have been a big play for quite some time, it's no major revalation.