Shell has been trying for about 40 years to spring the 300 bn barrels of oil estimated to be in the huge Piceance Basin shale formation that covers northwest Colorado and reaches into Utah and Wyoming. There is as much oil in that shale as there is in all of Saudi Arabia -- and nearly half as much of all the oil estimated to be in the entire Middle East. If all the oil in the Piceance Basin shale were liquefied and brought to the surface, it would create a sea of oil 300 feet deep across the basin.
Getting at that huge resource has taken on added importance in the wake of the Sept. 11 terrorist attacks. But oil companies have been trying to unlock the oil in oil shale since Congress passed the Synthetic Fuels Act in 1944. They've tried injecting hot water, gases and air. They've dropped explosives and electric heaters into drill holes. They've used radio waves. A nuclear bomb was even considered in the 1970s, around the same time an underground nuclear device was detonated near Rulison to release natural gas reserves.

Shell experimented with a hot-water injection method in the 1960s, but that effort was scrapped well before the oil-shale boom in the late 1970s and early '80s, when oil companies took an unsuccessful stab at mining the shale, carting it to giant ovens and roasting the oil out of it. When the oil-shale mining industry went bust in 1982, Shell continued, in laboratories, to look for a simpler, cleaner, cheaper way. Field work on Shell's new underground method began in the Piceance Basin in 1996. Hansen said good results from those initial tests resulted in more extensive testing in 1997.
Low oil prices temporarily scrapped that effort the following year, but Shell came back to the field in 2000 to expand the research and development with a number of related projects that each focus on a slightly different technology. These projects have been ongoing for a year and a half.

Hansen said crude oil prices that are hovering below $ 20 a barrel should not affect the research and development this time: Part of Shell's mission is to devise a technology that will not be affected by fluctuating oil prices. The research is being done on two of the 38,000 acres Shell owns in Rio Blanco and Garfield counties.
In addition to the pump jacks and normal drilling equipment, the research sites include a mobile laboratory and scads of monitoring equipment. A regular crew of 10 is working the drilling sites, with the oversight of a constant stream of additional consultants and Shell scientists. Hansen said this second phase of research and development includes studies of environmental impacts, including on groundwater and wildlife.
Shell is also looking at the potential social and economic impacts that could arise from commercial production of a resource that created an extreme Western Slope boom and bust. The bust left Grand Junction and other parts of the Western Slope reeling economically for more than a decade. "We're trying to evaluate all the impacts. We're working with the communities and counties to develop this slowly and gradually," Hansen said.

Shell Exploration and Production, an arm of the international petroleum giant Shell Group, has been secretive about technical details of its Rio Blanco County project. Rio Blanco officials say they have been advised about the project but are not privy to particulars. "They brought us out to check it out, but they really don't want to talk about the technology," said Don Davis, a Rio Blanco county commissioner.
Jerry Sinor, a mining consultant who worked for Shell in the 1970s, said he doesn't know how Shell might refine earlier in-the-ground extraction methods to come up with a workable technology now. "Theoretically, there's no reason it can't be done," Sinor said. "The porosity of the (shale) beds makes it possible. It all comes down to economics. How efficiently can yourecover it?"
Kurt Nielsen, COO of American Soda, said he based his company's successful Piceance Basin soda ash operation on Shell's earlier hot-water injection experiments. His company uses water to dissolve nahcolite, used to make sodium bicarbonate, and then sends it via pipeline to a processing plant near Parachute. "If somebody can do this it would be the Shell Oil," Nielsen said. "I don't know anyone in the business that knows more about this technology than Shell."