The Trillion-Barrel Field

In Colorado's Parachute Canyon not far from Grand Junction, the seed of an oil revolution was planted. Union Oil Co. of California last week fired up a $7,000,000 prototype retort to produce oil from shale rock, the biggest such attempt by private enterprise. As 400 top oilmen and Government officials gathered for the dedication, Colorado's Governor Steve McNichols put their dream into words: "All around us is one of the greatest potential sources of energy materials ever to be found on this earth."

In Colorado's Piceance Creek Basin alone, geologists estimate there is an oil shale reserve of a trillion barrels, enough to supply the U.S. for perhaps a century. And the Piceance Creek Basin is only a small part of far vaster shale beds throughout Colorado, Utah and Wyoming. The problem is how to get out the oil on a paying basis. The U.S. Bureau of Mines worked on the problem in an experimental Colorado plant, finally perfected a process that promised some day to supply gasoline competitively to the West Coast. But when Congress last year refused to allocate more money, the plant was shut down. Board Chairman Reese Taylor of Union, which has little production of cheap foreign oil and faces rising crude costs in California, decided to see what could be done with oil shale as a hedge against the future.

$15 Million Bet. Union strip-mines the oil-bearing rock in high butte country, then transports it by conveyor belt to the new retort. Crushed to small pieces, the rock is rammed upward in the six-story-high retort by a huge piston, meeting a stream of fire-fed gases that distill out shale oil at a rate of about 30 gal. per ton of rock. The raw oil is carried by truck to Union's Brea, Calif, plant.

So far, the retort has produced more than 4,000 bbl. of oil, can handle some 400 tons of rock a day. With a nest of such retorts, commercial production would be at least 20,000 bbl. a day. But that goal is five years off, warned Union President Albert C. Rubel. In arid Colorado, a big problem for industry is water. Though Union's experimental retort needs no water, the waxy shale crude does not flow well in a pipeline unless carried along by water, and the nearest source is the Colorado River 15 miles away. Even more important, Rubel thinks a profitable shale industry can never really roll without the 27 1/2% depletion allowance now given to liquid-crude oilmen. At present, shalemen are classified as mineral miners, get only a 15% tax break on the raw shale. Nevertheless, Rubel foresees a bright Union future in shale. Says he "We have about $15 million in the pot, and that's only the ante. We're betting $15 million that we can do it."

Bright Future. Sinclair Oil Corp. is also experimenting, trying a method of drilling holes into shale beds, fracturing the strata by driving in high-pressure water, then using fuel-oil fires to distill out the shale oil. Though the oil recovery may not be high, the Sinclair idea would save mining machinery, possibly produce lighter oil for the pipelines. In Denver, the Oil Shale Corp. has a small new pilot plant designed to test the Swedish Aspeco retort process; this distills out the oil by whirling crushed shale mixed with superheated porcelain and aluminum balls in a rotating drum, also by-produces natural gas.

Whichever process wins out, the experts are now sure that shale oil can be produced commercially before too many years. Analyzing the shale future in Colorado, the University of Denver's Research Institute says that a 1,000,000-bbl. daily production is possible by 1970.

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