Oil shale companies making deals
Post Independent Staff
Glenwood Springs, CO Colorado
GLENWOOD SPRINGS ” Four companies pulled the trigger on two oil shale deals on the same day last week, about a month after the Bureau of Land Management designated 2 million acres in Colorado, Utah and Wyoming as possible areas for oil shale development.
Raytheon announced Tuesday that it was selling oil shale extraction technology to Schlumberger, a global oilfield services provider. The key behind the new technique is microwaves, which would generate underground heat and potentially release petroleum from the rock formations. Raytheon, a major defense contractor, developed the technique with CF Technologies, based in Hyde Park, Mass.
Details of the deal were not disclosed. Attempts to contact company representatives from CF Technologies and Schlumberger were not successful Friday.
Companies for years have been trying to develop an economically feasible way of extracting the vast oil shale reserves underneath several Western states. A renewed interest in the energy source has developed because of high oil prices and diminishing world supplies.
Last year, the BLM gave three companies 160-acre oil shale research, development and demonstration leases, including EGL Oil Shale. The company, in the second oil-shale-related deal of the week, announced that IDT Corp. signed a letter of intent to purchase a 75 percent interest in the company. According to EGL, the proceeds from IDT’s investment will be used to fund EGL’s oil shale technology.
“Once EGL demonstrates the economic and environmental viability of its technology, it will have the opportunity to expand to 5,120 acres for commercial development,” the company said in a statement.
The BLM has said the potential oil shale resources within the Green River Formation are more than 50 times the United States’ current proven conventional oil reserves and about five times the proven reserves of Saudi Arabia.
However, some critics have said oil shale is an inefficient resource to produce.
“Oil shale is the world’s misunderstood fossil fuel,” said energy expert Randy Udall, who until recently headed the Aspen-based Community Office for Resource Efficiency. “There are three times more energy in a ton of phone books or a ton of cattle manure than in a ton of oil shale. Even ‘rich’ oil shales are the poorest fuels on the planet.”
Udall said all new research into oil shale is welcome because many methods have been tried, unsuccessfully. But he cautioned that all claims about oil shale extraction technology remain speculative until they are demonstrated in the field.
“The world has very serious energy challenges, which ensures that oil shale will continue to be of interest, even if it’s destined to always be a mirage,” Udall said. “In my view, one energy boom in Colorado in western Colorado is plenty. Natural gas has become what oil shale always dreamt of being. It’s the real deal.”
The Associated Press contributed to this report.
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