Shell cancels oil-shale mining permit request in Colorado

Oil from shale is one of the many alternative sources of petroleum that has been researched for the past several decades but to date no one has actually brought it to mass production. As with the tar sands in Alberta, Canada, there are huge quantities of petroleum locked in other materials in North America. Unlike traditional oil drilling, shale and tar sands development is not as simple as just poking a hole in the ground.
Shell is one of the companies trying to develop shale oil, but extracting the oil requires actually heating the shale to high temperatures to literally melt out the oil. The company has now withdrawn one of its three permit applications for shale development because the process requires so much more work. In order to keep the oil from leaking into ground water and keep the water out of the shale, the ground water below the shale deposit has to be frozen. All this heating and cooling requires a great deal of energy input and that drives up the cost of the oil.

In our recent dinner discussion with Gary Smyth and Nick Zielinski, Gary talked about shale, coal and other potential petroleum replacements and he didn't think any of these would ever be economically viable. Shale oil in particular is likely to cost well over $100/barrel, a price point that makes almost any alternative much less expensive. In discussions with people in the auto industry, no one seems to believe shale, coal to liquid or any of these synthetic oil projects are viable or desirable replacements for crude. Throw in the potential environmental disaster that is likely to accompany any shale oil development and all of these projects should be abandoned now.

[Source: Denver Post]

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