Vawter: AMSO could start shale production in a ‘year or two’

RANGELY — Glenn Vawter’s fascination with oil shale began in 1958 when he participated in a field trip to this area while attending Colorado School of Mines.
Vawter shared his knowledge of oil shale during a presentation Sept. 23 at a Community Networking Group meeting at Colorado Northwestern Community College.
He said the first known use of processed shale came from an English patent in 1694 and Native Americans used it for fire fuel. Shale began to be processed commercially in the United States in the 1920s to fuel the automobile, but the Texas oil strikes led to the first bust era.
Small scale developments continued through the ’30s and ’40s, most notably the Anvil Points mine near Rifle and tar sand mining in Carbon County, Utah. The ‘70s Arab oil embargo led to the Unocal mine and plant being built in Parachute and the government’s creation of the Synthetic Fuels Corporation.
By the end of the 1970s, a stabilized oil supply and falling prices made the shale program no longer viable and the plant closed in 1982. In the late ‘90s, advancing technologies, escalating oil prices and worldwide demand renewed interest in shale production.
A handful of other countries, including Russia, China, Australia, Canada, Brazil and Estonia are producing shale oil, but of all the deposits in the world, the Piceance Basin holds the richest reserves, an estimated 400 billion barrels of recoverable oil. The deposit is about 1,000 feet thick and holds up to 2 million barrels per acre.
In addition to Shell’s Mahogany Ridge project, several other companies are testing various production techniques.
ExxonMobil is using a process called Electrofrac to fracture and heat the shale, Chevron is trying a CO2 and chemical injection system, AMSO is developing an underground retort and pumping system and EcoShale will use surface pits as retorts for its conventionally mined shale.
Shell’s program is probably the furthest along, but company officials say they still need a few more years to prove its “freeze-wall” technology is viable. AMSO says it could be in production within “a year or two.”
The challenges of emerging technologies, investment risk, political shenanigans and regulatory hurdles still remain. Although 160-acre research and development leases have been granted, leasing of BLM lands for production use is still pending and production royalty rates haven’t been set yet. Environmental and social concerns are still being addressed. Vawter said he thinks development is shifting from Garfield County to Rio Blanco County and the resulting impacts will only increase.
When asked about the increased power needs to supply these projects, Vawter said several different options are being evaluated, included using captured natural gas from the drilling process to fuel an electric generation plant somewhere in this area. He was also asked about per barrel price and how it would effect the current project’s viability.
“As long as oil stays above the $60 to $70 a barrel range, all these will remain very viable,” he said. “And we don’t see it getting back that far now or in the future.”