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France's Total Researching Colorado Oil Shale

While its investments with Chesapeake Energy Corp. in Barnett and Utica shale gas and oil plays have been widely publicized, Paris-based Total SA also is quietly investing in a major research and development (R&D) project looking at in-ground ways to develop oil shale, an unrealized dream of energy independence that the industry and some policymakers have flirted with for decades.

American Shale Oil LLC (AMSO) is a 50-50 partnership venture of Genie Energy and Total is looking at a different resource, oil shale as opposed to the shale oil being produced today. The partners have gone after the R&D project near Rifle, CO, on the West Slope oil shale. It is thought to comprise a total resource base -- not the same thing as reserves -- approaching seven Saudi Arabias, a Total executive, who asked not to be identified, told NGI's Shale Daily.

Total has been operating in the United States at some level more than 70 years, and it is spread across the energy spectrum from exploration and development to renewables, natural gas trading/marketing, crude oil, and refining/marketing. The global giant has nearly 6,000 employees in the United States among its worldwide work force of 97,000 and sales exceeding $200 billion.

Total is undeterred by critical environmental/conservation groups, such as the Western Resource Advocates in Colorado, that earlier in March released a highly critical report on oil shale (see Shale Daily, March 14).

AMSO is one of four companies with leases on federal Bureau of Land Management (BLM) acreage to conduct R&D leading to eventual commercial extraction of oil shale, and do it in what the company contends will be an environmentally responsible manner. With Total's backing, the joint venture is supposed to complete a pilot project and then move into a demonstration phase later this year on 160 acres close to the Piceance Basin, the Total official said.

If the pilot and demonstration work out, AMSO has the commitment from BLM to move into the Piceance on up to 5,000 acres for commercial operations on BLM-managed land. "The pilot phase is within weeks of beginning," the Total official said.

Unlike shale oil and shale gas where the energy product flows after it is unlocked by hydraulic fracturing, oil shale does not flow. It must be found and heated to high temperatures several thousand feet below the surface. The process requires about a barrel of water for every barrel of oil produced, said the Total official, noting that it is more akin to mining than normal E&P operations.

As it has been for more than three decades, the pot of gold at the end of the oil shale value chain holds out the promise of a total resource base of more than 1.53 trillion bbl. For now, the reserves are zero, the Total official said, adding that the potential remains mind-boggling, and to date, unfulfilled.

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