"You're going to build refineries where demand is increasing, and that's the developing world," Scott Nauman, Exxon's manager of economics and energy planning, said in a May 18 presentation at a University of Chicago oil conference.

Shell's project

In the high desert near Rifle, Colo., Shell engineers are burying hundreds of steel rods 2,000 feet underground that will heat the shale to 700 degrees Fahrenheit, a temperature at which Teflon melts.

The heat will be applied for the next four years to convert the hydrocarbons from dead plants and plankton, once part of a prehistoric lake, into high-quality crude that is equal parts jet fuel, diesel and naphtha, the main ingredient in gasoline.

Chevron, which helped build the Saudi Arabian energy industry when it struck oil in the kingdom in 1938, plans to shatter 200-foot thick layers of shale deep underground, said Robert Lestz, the company's oil-shale technology manager.

Rather than using heat to transform the shale into crude, Chevron plans to saturate the rubble with chemicals to convert it. The method will reduce power needs and production costs, Lestz said in a May 24 interview. Using chemical reactions to get oil from shale also means fewer byproducts such as ash and fewer greenhouse gases, he said.

Chevron scientists are working with researchers at the Los Alamos National Laboratory in New Mexico to determine which chemicals work best for converting shale to crude oil. Shell's heating technique amounts to "a brute-force approach," said Lestz, who is based in Houston.

Raytheon Co., the maker of Tomahawk missiles and the first microwave ovens, is developing a process that would use radio waves to cook the shale.

Exxon Mobil, based in Irving, Texas, plans to shoot particles of petroleum coke, a waste by-product of oil refining, into cracks in the shale. The coke will be electrically charged to create a subterranean hot plate that will cook the shale until it turns into crude. The company declined to discuss the progress of its oil shale tests.

'Oil is here'

"These are quite remarkable technological approaches," said Jeremy Boak, a geologist at the Colorado School of Mines in Golden, Colo., who spent 11 years cleaning up radioactive waste and disposing of weapons-grade plutonium at U.S. government sites. "The oil companies don't have the exploration problem of finding resources to drill. We know the oil is here. It's just a matter of getting it out."