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Fri, Sep 02, 2005 - Page 12 News List

US' shale deposits rich in oil, but mining carry risks

AP , WASHINGTON

The US has an oil reserve at least three times that of Saudi Arabia locked in oil shale deposits beneath federal land in Colorado, Utah and Wyoming, according to a study released on Wednesday.

But the researchers at the RAND think tank caution the federal government to go carefully, balancing the environmental and economic impacts with development pressure to prevent an oil shale bust later.

"We've got more oil in this very compact area than the entire Middle East," said James Bartis, RAND senior policy researcher and the report's lead author. However, he added, "If we go faster, there's a good chance we're going to end up at a dead end. You could end up bogged down."

For years, the industry and the government considered oil shale -- a rock that produces petroleum when heated -- too expensive to be a feasible source of oil.

However, oil prices, which spiked above US$70 a barrel this week, combined with advances in technology could soon make it possible to tap the estimated 500 billion to 1.1 trillion recoverable barrels, the report found.

That could meet a quarter of the nation's current oil needs for the next 400 years.

But the risks are high. It's unclear how new technologies will affect the land, air and the Colorado River, Bartis said.

The study, sponsored in part by the US Department of Energy, comes in the wake of Hurricane Katrina, which disrupted Gulf oil production and sent crude oil prices surging.

It also comes about a month after the president signed a new energy policy, which dramatically reversed the nation's approach to oil shale, opening the door within years to companies that want to tap deposits on public lands.

Bartis said he hopes lawmakers will take the study's recommendations into consideration as they make future decisions on oil shale.

The US has tried to develop oil shale in the West before. Sky-high oil prices in the 1970s led Congress under former president Jimmy Carter to create the Synthetic Fuels Corp, to find new, domestic sources of crude.

The report also says oil-shale mining, above-ground processing and disposing of spent shale cause significant adverse environmental impacts. Shell Oil is working on a process that would heat the oil shale in place, which could have less effect on the environment.

"We need to be focusing on what are the implications," Bartis said.

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