Brief by Central Staff
Mining – April 2005 – Colorado Central Magazine
When the price of crude oil rises, especially when there’s turmoil in the Middle East, there comes talk of developing the immense oil-shale reserves of Colorado, Utah, and Wyoming. How vast? Try two trillion barrels, or 60% of the world’s known supply.
Often there’s a little action – like a pilot project – to go with the talk, but in general, if crude is selling for $10 a barrel, then we hear that oil shale won’t pay until the price goes up to $25. And if crude is $40, then shale won’t pay until $50 … you get the idea.
Crude was over $50 at press time, and more and more of it is imported. So the Pentagon is looking to “catalyze” oil-shale as a domestic energy supply.
The Department of Defense spends $6.5 billion a year on fuel, and it’s setting aside some funds for petroleum that meets certain specifications that, in effect, require the fuel to come from kerogen, which is the oil part of oil shale.
This should inspire more activity by two companies that have dabbled in shale: Royal Dutch Shell, which will soon decide on a 1,000-per-barrel production facility, and Exxon-Mobile, which pulled the plug on shale development in 1982 in western Colorado after crude prices fell to $10 a barrel.
The federal government quit financing oil-shale research in 1985, and most energy companies let their leases lapse.
But as the Wall Street Journal reports, “the only people known to have made big money on ventures on shale-rich land are two caretakers whom the Interior Department’s Bureau of Land Management hired to patrol the deserted facilities of the White River Mine. After weeks of watching suspicious movement of water trucks over the area’s roads, federal agents raided the place in 1993. They seized more than $3 million of marijuana.”