Estonia company wants to pull 2.6 billion barrels of oil from Utah

Published: Saturday, July 13 2013 1:05 p.m. MDT

The practice, first commercially successful in the late 1940s and used in the majority of new wells globally, has sparked harsh opposition by critics who link it to groundwater pollution and even earthquakes.

Enefit does not extract shale oil, as in North Dakota's Bakken Play, which is revolutionizing the global market for oil — with the United States poised to cut into OPEC's share as early as next year.

Oil shale mining is a different process than mining tar sands, which in Utah are the largest resources of their kind in the country, but still nothing compared to what exists in terms of oil shale.

Utah's oil shale is within the largest oil shale deposits in the world, located in the Green River Formation that also covers parts of Colorado and Wyoming.

The organic material preserved in the oil shale formed 50 million years ago is not oil, but rather a substance called kerogen that can either be heated at the surface, or underground. The result of heating is the production of crude oil and natural gas.

Estimates by the U.S. Geological Survey are the entire formation holds 3 trillion barrels of oil, of which nearly half would be recoverable. To put that in perspective, that is just about equal to the entire world's proven oil reserves.

In Utah, that number has been put at 1.4 trillion barrels.

Mike Vanden Berg, a geologist with the Utah Geological Survey, said an extensive study done by the agency looked at Utah's own deposits, put constraints on that resource such as depth of the oil shale, land use and economic factors, and came up with an estimate of 77 billion barrels of oil that could be potentially recovered.

"It's not a trillion, but it is a huge resource," he said.

Leases bring jobs

Enefit has secured the leases to the largest oil shale holdings in the state — a little more than 30,000 acres — of which only the south portion would be mined during the 30-year phase. That phase, expected to take 1.2 billion barrels of oil from the south segment, would create 1,200 construction jobs and 2,000 full-time employees once full production begins.

Two thirds of the land, located 45 minutes south of Vernal, is privately owned while other owners are Bureau of Land Management and the School and Institutional Trust Lands Administration. The south segment, where the mining would take place in that 30-year-phase, is all privately owned.

Hrenko said only a few hundred feet of surface area would be mined at one time, and then reclaimed as the mine advances. The super heating of the rocks extracts virtually all the organic material so it can eventually be returned to the land and the topography reclaimed, she said.

No water is used in the actual processing of the oil shale, and the water that is used is for dust supression, she said.

Enefit says they have 10,480 acre-feet of water to the White River, which it wants to trade out to take water from the Green River for use in its Utah project.

Hrenko said the water use would be actually much less than that, with industry estimates that put the requirements for 50,000 barrels of oil per day at 4,000 acre-feet of water per year. An acre-foot of water is typically enough to supply a family of four or five for a year.

"We think it will be less than that," she said. "And all the water will be re-used."

For some, in the face of over-allocated Colorado River and Utah pinched by repetitive dry cycles, any water is too much water.

"The state is going to face some very difficult decisions on how it allocates water," Abelson said.

Pollution worries

The company is doing surface and groundwater monitoring, air pollution modeling and finished a two-year survey on the sage grouse in the project area, of which they said there were none found.

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