Oil-shale projects are going ahead in Utah — for now

The falling crude-oil prices of recent weeks will have little impact on the current oil-shale and tar-sands boom going on in eastern Utah, according to companies now working to develop the resources in the Uintah Basin.

Energy companies with oil-sands operations in Canada are cutting back development there, and oil companies worldwide are withholding billions of dollars of investment in new oil-field and refining projects. But even with oil prices closing at less than $57 per barrel on Wednesday, most companies engaged in oil or tar-sands production and oil-shale development in Utah said they will be moving ahead with their projects for the foreseeable future.

Earth Energy Resources, headquartered in Calgary, Canada, has a permit for an approximately 200-acre surface-mine site in eastern Utah, said its president and chief executive officer, Glen Snarr. The design capacity of the project is for 2,000 barrels of oil per day, with a mine life of at least 30 to 40 years.

"We estimate that we have about 200 million barrels of recoverable oil on our land," he said.

The biggest obstacle is access to capital in the current economy, he said, and his company is facing many of the same capital constraints as other firms in his business. "If they don't have the money, they're not getting it, and we're not any different," he said.

An executive with Nevtah Capital Management Group, which along with its partner Black Sands Energy has multiple leases for potential tar-sands projects in the Uintah Basin, offered his explanation for the sudden drop in the crude-oil market following record high prices during the summer.

"As soon as the West starts looking at alternate energy, the price of oil drops in order to cool or dampen any effort to find an alternate source of oil," said Daniel Patrick O'Keefe, executive vice president of government, public affairs and marketing for Nevtah.

He said his company is not looking at the price of oil as it fluctuates in the current economic turmoil.

"We're saying that the price of oil now is not going to remain at its current price, and the economically sound thing is to proceed with the technology we have," O'Keefe said. "We're moving full speed ahead."

Royal Dutch Shell PLC, Europe's largest oil company, said last month that it was pushing back a decision on expanding an oil-sands project in Canada. But Shell's Denver-based exploration and production company is moving its oil-shale development forward, said Tracy Boyd, communications and sustainability manager.