Oil-shale test impact is approved

GLENWOOD SPRINGS, Colo. — Federal land managers have concluded that a test project proposed by EGL Resources Inc. to extract oil from shale in western Colorado would have no appreciable environmental impact.

EGL is one of four companies in the running for Bureau of Land Management permits to operate experimental oil-shale projects in Colorado and Utah.

Shale formations in the West are believed to contain a trillion barrels of oil, four times the oil holdings of Saudi Arabia, but an affordable and environmentally safe method of extracting the energy has been elusive.

EGL, based in Midland, Texas, wants to drill a vertical shaft on a 160-acre parcel near Meeker to fracture the shale, circulate superheated steam or fluids to melt the oil-bearing materials and then pump the oil to the surface.

The BLM reached its environmental conclusions from an environmental assessment published last week, the Glenwood Springs Post Independent reported Monday.

Shell Frontier Oil & Gas Co. and Chevron Shale Oil Co. are also seeking BLM permits for experimental oil shale projects in Colorado. Oil Shale Exploration Co. is seeking a permit for a project in Utah.

A final decision on EGL's proposal is expected by the end of September, said Jim Edwards, chief of the BLM's solid minerals branch. The agency will take public comments on the EGL report until Sept. 1.

Glenn Vawter, EGL's oil shale division manager, said he expects field work on the project to begin next summer. He said the test will cost "in the tens of millions of dollars."

"It will probably be three years before we know it's successful," he said.