RIFLE, COLO. – The ramshackle collection of wellheads and electrical cables hidden in a pine-covered draw west of town doesn't look like much now, but until three years ago it was the home of the oil industry's equivalent of the Manhattan Project.
Over five years, Shell Oil conducted a series of secretive experiments that have the potential to blow open North American oil production, unlocking the vast reserves of oil shale that underlie western Colorado and much of Utah and Wyoming.
Early attempts failed miserably. But beginning in 2002, Shell drilled a honeycombed series of wells, then lowered in giant heating elements, raising the temperature of the shale to 650 degrees for 12 months. Out flowed an abundance of high-quality shale oil.
“It was our 'eureka' moment,” said Tracy Boyd, a spokesman for Shell, smiling as he showed off the historic spot. “Now we know we have a technology that works.”
Shell's technology and similar oil-extraction methods have become fodder in the nation's increasingly contentious energy debate, holding out the possibility that the United States might be sitting on oil reserves equal to a 100-year supply of the country's imports.
The fight over oil shale has become a major issue in Colorado's U.S. Senate race as well as a regular talking point for Republicans nationwide. At the White House in June, President Bush blasted Democrats for “standing in the way” of oil-shale development and hurting ordinary Americans.
The latest to enter the fray was Sen. Orrin Hatch, the powerful Republican from Utah, who accused Colorado Democratic Senate candidate Mark Udall of siding with “an elite, anti-oil crowd” by helping to impose a moratorium on commercial leasing regulations for the shale deposits.
On one hand, there's little doubt among experts that Shell's technology represents a breakthrough. It's a fundamentally different approach from the one that guided the failed efforts of Exxon in the region in the 1980s. Shell has produced an unconventional hydrocarbon – technically a form of synthetic oil – that's higher in quality and concentration than conventional oil.
The recovery rate in Shell's experiment was 62 percent, compared with 25 percent for the average conventional oil field.
On the other hand, the technology is in such early development that there's little chance it will affect oil supplies for at least 15 years, oil company officials and analysts said.
It's also possible that as promising as the technology is, it simply won't pan out.
If the technology is a success, one small area – the Piceance Basin between Rifle and Meeker, Colo. – could contain one of the biggest resource-extraction projects the nation has ever seen, with potentially huge impacts on air, water and the environment.
Full commercial production probably would mean several new electricity plants in western Colorado to heat the underground oil, as well as new refineries. Those would cause pollution.
Critics also say that extracting oil shale might use as much energy as it produces.
The amount of water required by the process would shift regional supplies from supporting agriculture to supporting industry, according to a 2007 analysis by the federal Bureau of Land Management.
In addition, thousands of new workers would reshape communities.
