Utah's Oil-Tech in running for oil shale project

VERNAL — Byron Merrell said his emotions were "somewhere between excitement and terror" recently when he learned his company's proposal for oil shale research and development had been chosen by the Bureau of Land Management as part of a landmark federal government program.

Merrell, a longtime inventor and former Uintah County commissioner, and Romit Bhattacharya said they were overwhelmed with joy by the announcement that their company, Oil-Tech Inc., was one of eight applicants whose plans to produce oil from shale is now eligible for "continued consideration" for coveted BLM leases.

That puts obscure Oil-Tech's name in the same breath as Chevron, Exxon and Shell. Pretty heady stuff for the man who owns a retort — a facility where oil shale is ground up and then heated to the point of vaporization to produce liquid oil — several miles southeast of Vernal. He has been struggling for years to unlock vast oil shale resources buried in the Green River formation of eastern Utah.

"Of course we have known we could do this and no one paid attention to it," Merrell said about his extraction process, which he says can produce oil at a cost of about $10 a barrel. "We're kind of like a cocklebur on a cow's tail — more of an annoyance rather than something to take interest in. Then when we show up in the same group as Chevron and Exxon, it causes you to pause a little bit."

Oil-Tech was selected from among a field of nominations the BLM received in response to a June 2005 call for proposals for 160-acre research and development leases on public lands in Colorado, Utah and Wyoming. The companies that win approval for experimental works will get first rights to lease close to 5,000 additional acres surrounding their 160-acre parcels.

The financial rewards of the lease are substantial. Official estimates put the amount of recoverable oil in the Green River formation in these three states at 2.6 trillion barrels. That's roughly 60 percent of the world's known deposits, and it surpasses Saudi Arabia's proven reserves of 261 billion barrels.

"Sometimes we feel like we have a tiger by the tail," Merrell said.

He's been working on grabbing hold of the tiger for more than two decades now. He became interested in oil shale in the mid-1980s — at the same time the federally subsidized White River Shale Oil facility in Uintah County became a ghost town when the price of oil plunged, halting the need for the government to spend money to mine oil shale.

Merrell saw the downturn as a plus in his book.