Uinta Basin • Companies soon will be cranking out fuel, but skeptics remain.
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Far from the conceptual science project that skeptics assume, industry officials say, Utah's oil shale is about to start churning out fuel.
Executives from several oil shale and tar sands companies told about 100 scientists and business people Tuesday at the University of Utah's 2011 Unconventional Fuels Conference that their technologies are ready if government regulators are.
One of them, Red Leaf Resources Vice President Laura Nelson, said her Utah-based company will start building a Uinta Basin mine and plant next year and produce oil from the rock by 2014 if the state Division of Oil, Gas and Mining approves its permit.
"It is a world-class resource," Nelson said, quoting geologists' estimates that 800 billion barrels of oil are recoverable from Utah, Wyoming and Colorado shale if a technology is economically viable.1
She asserted that the company is ready to produce commercially. Its technology involves natural-gas burners placed into a clay-lined cell to heat mined ore until it releases the kerogen that can be refined into oil. It uses no water other than what's necessary for dust suppression and typical industrial development, she said, and certainly not the five to seven barrels of water that previously proven processes required to produce each barrel of oil.
"This is a real industry," she said, and the Beehive State could be "a world leader in oil reserves" if government policies help develop it widely in eastern Utah's Uinta Basin and Book Cliffs.
Red Leaf's mine initially would produce 9,500 barrels a day and provide 200 jobs at pay comparable to the basin's existing oil and gas jobs, she said. Those jobs average about $65,000 a year.
Environmentalists have targeted the leasing and mining plans for protest because they threaten to industrialize a wide swath of the state's backcountry, while using water that they say Utah cannot afford.
Opponents also dread the climate consequences, and Hans Ehrbar, a University of Utah associate professor of economics, attended Tuesday's conference because he fears continued exploration for fossil fuels.
"To me," he said, "this conference is a conspiracy [on] how to kill future generations."
The U.S. Bureau of Land Management is conducting an environmental study that could reduce the acreage approved for federal leasing by the Bush administration. It is expected to define the areas for development by late next year. An industry can get going without federal acreage, though, as the entry of Estonia's publicly owned oil shale company to the Utahmarket shows.
Enefit American Oil, a subsidiary of the Estonian company that uses shale oil to produce all of that small European county's electricity, two months ago bought a U.S. company with private shale reserves in Uintah County. The company plans to mine the surface there, Enefit management board chairman Harri Mikk said, and test the ore to determine how it differs from the European ore that the Estonians have treated since World War I.
After that testing and resulting revisions to Enefit's process, he said, the company expects to begin commercial production by 2017, with oil hitting the market in Utah by 2019-2020. Two phases would bump production to 50,000 barrels a day, he said, though the company can produce much more from proposed nearby underground mining on a federal lease near the White River.
"There is more oil shale in our property," Mikk said, "which would enable us to produce up to hundreds of thousands of barrels a day."
Canada-based tar sands company Earth Energy also is nearing production, President Glen Snarr said, though it needs the federal government's support because its state lease at PR Spring in the Book Cliffs is amid a patchwork of state and federal lands. Like the other companies, he assured the audience that the technology this one using a citrus-derived solvent to strip oil from sand is ready to go.