Posted by
Cary Wesberry on Thursday, May 22, 2008 8:56:16 AM
(Fortune Magazine) -- Touring a drilling site on a dusty mountain plateau above Rifle, Colo., Harold Vinegar stops, grins and then announces out of the blue, "I love that smell!"
No, the Royal Dutch Shell chief scientist is not referring to the crisp fragrance of the high desert air or the conifer scent wafting from the nearby stand of evergreens. Rather, it's the faint, asphalt-like aroma of oil shale - a sedimentary rock rich in kerogen, a fossil fuel that is now the focus of Shell's single biggest R&D investment.
Black gold? Heated, pumped, piped and refined, this rock could end up in a gas tank.
Harold Vinegar believes he has discovered an efficient way to turn oil shale into common fuels.
The raw materials - or prehistoric detritus - that is oil shale
The first field test in 1981 squeezed out a few cups of good oil and a lot of junk; 24 years later, Shell was able to produce 1,700 barrels of high-quality oil.
In 2004, Shell pumped coolant down this well near Rifle, Colo., to test a method to keep oil from leaching.
Reclamation projects, says Shell, will restore the landscape after extraction. Environmentalists are not so sure.
Vinegar is the energy industry's leading expert on the complex petroscience of transforming solid oil shale into synthetic crude - a liquid fuel that can be refined into diesel and gasoline. The breakthroughs this 58-year-old physicist has achieved could turn out to be the biggest game changer the American oil industry has seen since crude was discovered near Alaska's Prudhoe Bay in 1968.
If that sounds like hyperbole, then consider this: Several hundred feet below where Vinegar is strolling lies the Green River Formation, arguably the largest unconventional oil reserve on the planet. ("Unconventional oil" encompasses oil shale, Canadian tar sands, and the extra-heavy oils of Venezuela - essentially, anything that is not just pumped to the surface.)
Spanning some 17,000 square miles across parts of Colorado, Utah and Wyoming, this underground lakebed holds at least 800 billion barrels of recoverable oil. That's triple the reserves of Saudi Arabia.
The reason you probably haven't heard about the Green River Formation is that most of the methods tried for turning oil shale into oil have been deeply flawed - economically, environmentally or usually both. Because there have been so many false starts, oil shale tends to get lumped with cold fusion, zero-point energy, and other "miracle" fuels perpetually just over the horizon.
"A lot of other companies have bent their spears trying to do what we're now doing," Vinegar says of his 28-year quest to turn oil shale into a commercial energy source. "We're talking about the Holy Grail."
Unlike the Grail, though, Shell is convinced that oil shale is no myth and that after years of secret research, it is close to achieving this oil-based alchemy. Shell is not alone in this assessment. "Harold has broken the code," says oil shale expert Anton Dammer, director of the U.S. Department of Energy's Office of Naval Petroleum and Oil Shale Reserves.
Vinegar has developed a cutting-edge technology that, according to Shell, will produce large quantities of high-quality oil without ravaging the local environment - and be profitable with prices around $30 a barrel. Now that oil is approaching $90, the odds on Shell's speculative bet are beginning to look awfully good.
This is in addition to the Bekkan Oil reserve at 300-billion bbls, the untouched reserves in ANWR, and of course all the oil sitting off our costs. None of these sources have been touched by drilling because we might kill fishies or hurt a bird. When you pay 4-dollars-a-gallon at the pump; remember Congress and their restrictions on our oil companies.