VERNAL — South of here on a barren hillside full of craggy rocks, the eyes of oil men are glistening with hope.
A geologist is in awe, at home in this playground of sandstone rocks that are full of a sticky semi-solid petroleum substance called bitumen.
They are pulling this bitumen from the rock and transforming it into heavy oil that is low in sulfur, contains no paraffin and is low in heavy metals like nickel and vanadium. That oil can then be turned into diesel, kerosene or jet fuel or mixed with lighter oils.
By the end of this year, Petroteq Energy aims to be producing 1,000 barrels of oil per day. By 2019, the goal is 2,000 barrels per day.
The market is right and the process is proven, said Chief Executive Officer David Sealock, a 30-year oil man who cut his teeth with Chevron and has worked all over the globe.
A demonstration project in 2015 at Maeser, Uintah County, met company objectives and the state requirements to prove viability with production of 10,000 barrels.
At a media tour of this mining site off state Route 45, the Bonanza Highway, Sealock explains the compelling potential of pulling 86 million barrels of oil out of the rock over a two-decade span on Asphalt Ridge.
"Everything starts with geology in the energy world," he said. "It is tremendous what we can do in two decades."
Utah's oil sand deposits are the largest in the United States, holding 14 to 15 billion barrels of oil in place, according to the Utah Geological Survey.
Unlike a conventional oil field with wells that go thousands of feet underground, this extraction process is above ground with rocks that are weeping the black gooey substance.
At this site, there's no overburden — waste rock — to worry about and no need for tailings ponds.
"There are a tremendous amount of tailings ponds in Canada that are an environmental nightmare," said Petroteq's chief geologist Donald Clark. "No one wants to see that."
Petroteq spent five years developing a proprietary solvent that transforms the bitumen into oil.
It is a closed-loop system that uses no water and produces zero greenhouse gasses, with 99 percent of the "benign" solvent recycled and recirculated.
"We call it our secret sauce," said R. Gerald Bailey, another career oil man from Houston who is now president of Petroteq. "We call this revolutionary energy technology."
Petroteq is in the second week of a seven week commissioning process, testing 14 different processes to make sure this can be a 24/7 operation 350 days a year.
"That is what makes projects, making sure you have the technology" Sealock said.
Later, pointing to a bucket of finished product, Sealock said, "this is black liquid gold."
Sealock said the break-even point to produce a barrel of oil is about $32, and they run their internal economics at $47 a barrel. The going price in the market today is just over $65.
The complex array of machinery will process 50 to 70 tons of rock an hour, grinding it into fine grains that are mixed with the solvent and agitated into a fluid. The fluid is then heated to separate the solvent from the oil.
The end result is marketable oil and fine sand that is then used in the reclamation process.
"It is environmentally safe. What we are putting back is actually better than what we are taking away," Clark said.
Alex Blyumkin, company founder and executive chairman, said development of the technology used by Petroteq was in large part inspired by the environmental devastation in many of the world's major oil sands projects — such as what played out in neighboring Canada.
Sealock said it is incumbent upon the company to stay clear of the old conceptual ways of extraction and be a good player in the environment by using a process that doesn't take water and is emissions free.
"We understand we have to be better at this," he said.
But Ashley Soltysiak, Utah Chapter director of the Sierra Club, is skeptical.
"It definitely seems overly rosy," she said. "It is certainly very different than any other type of oil sands operation that we are aware of."
Soltysiak said Sierra Club members have an interest in seeing what goes on at Asphalt Ridge, and Sealock said he welcomes the scrutiny.
"The conventional methods are not here. We respect the earth, water and air," he said.21 comments on this story
At Asphalt Ridge, Clark said there is no ground water to contaminate. And in what is the nation's second driest state, company officials say it's important that their process does not require water.
"Water is going to be a much more valuable resource than oil 20 to 30 years from now," Sealock predicted.
With 3,000 private acres under lease and an abundance of the shallow resource, Petroteq has plans for expanding its production capacity.
"We're looking at the world's largest oil spill by Mother Nature," Sealock said. "Our job is reclaiming it. We are cleaning it up."