Shell Oil, one of the major players in developing western Colorado's oil shale into actual oil, announced this week that it is dropping a contested application for conditional water rights on the Yampa River near the Piceance Creek Basin, where much of the fable trillion barrels of American oil remains locked up in rock.
The company said in its statement, “The exact scale and timing for development will depend on a number of factors, including progress on our technology development, the outcome of regulatory processes, market conditions, project economics and consultations with key stakeholders.
That's what companies have been saying about oil shale since before my mother was born. (A local newspaper editorialist makes that point, punctuating a talking-head video with a 1920 oil shale news story.)
I remember as child my father pointing out street signs falling down in a patch of desert, where developers promised oil shale was going to bring a monorail and a burgeoning new community. Ten years later, I was working on drilling rigs that were sampling the Piceance Creek shale deposits, and fiften years later, a big oil shale project collapsed with oil prices, nearly taking the entire western slope economy with it.
It's not much of an overstatement to say that experience made many locals here feel about oil shale after Black Sunday the way 9/11 made Americans feel about terrorists.
Regardless of what happens to prices in world oil markets, one irreducible fact remains. Most oil shale reserves are in the arid west, where water is a very precious commodity — with competing demand from agriculture, growing cities and power generation. Extraction technologies that work in pilot programs still must be able to scale. With water shortages all over the west now, that's a big hurdle to overcome.
