The immense potential of oil shale overshadows existing proved oil reserves. The U.S. Geological Survey has estimated world oil-shale resources of 2.7 trillion barrels, more than twice the 1.2 trillion barrels of Earth's remaining conventional stores of oil.

The world's richest share of oil shale lies in northwestern Colorado's Piceance Basin. The heart of the deposit, in the Green River formation, contains between 1.5- and 2.5 million barrels per acre.

"With technology breakthroughs, oil shale can close the U.S. energy gap," David Nelson, general manager, asset development, Chevron North America said at a recent Platts oil and gas conference in Denver.

At present, economic production has not been achieved from Colorado's oil-shale deposits. But that's something government and industry would both like to change.

This year, the Bureau of Land Management awarded five 160-acre demonstration leases in Rio Blanco County, Colorado. Shell Exploration & Production Co. received three, Chevron got one and Midland independent EGL Resources Inc. signed for one. The leases carry 10-year terms, and successful recovery will lead to options for 5,120-acre development leases on each project. (One R&D lease was also awarded in Utah, to Mobile, Alabama-based Oil Shale Exploration Co.)

Shell is focusing on in-situ methods for oil-shale recovery, said Terry O'Connor, vice president, communications, regulatory and government affairs. The major has been working on an in-situ conversion process (ICP) for 25 years on its fee land in the Piceance Basin.

The ICP technology uses electric heaters to heat the kerogen-rich Green River to some 300° Celsius for two to three years. It results in high recovery of light hydrocarbon products, which are produced in a vapor stage by conventional techniques.

Shell's next research phase involves a freeze-wall test. This is the last major research hurdle, according to O'Connor.

Freeze walls are tried-and-true methods used in the construction industry. In Shell's application, it has drilled and fully cased holes at eight-foot intervals around a target area. A refrigerant is applied, and over months, ice walls form that reach tens of feet in thickness. The area within the freeze wall is then dewatered and heat is applied.

"We're now in the process of building an ice wall the size of a football field," he said. "It goes down 2,000 feet and it will take a year." This latest effort, on private Shell land, is solely a test and not intended for production.

On one of its three demonstration leases, Shell plans to begin construction of a three-acre ice wall in 2009, and to heat the center with electrostatic heaters. On another lease, it will use the freeze-wall technique but try bare electrode heaters. Plans for the third lease, which is in a portion of the Green River deposit that contains high percentages of nahcolite, involve solution mining the mineral and then installing heaters in the oil shale.

Chevron also has a long history in oil shale, beginning in the 1930s. "We've learned that the technology solution has to be resilient to fluctuating oil prices," Nelson said.

Chevron's research will focus on a hot-gas process. It involves rubbilizing the formation to create surface area and mobilizing the kerogen through thermal or chemical processes. Upgrading both above ground and in the subsurface will be studied.

The company's near-term plans on its demonstration lease are to drill and evaluate a corehole, install groundwater-monitoring wells, and begin modeling work. This year, it expects to spend some $2 million; total investment during the next five years in support of the R&D project is expected to be $150 million, said Nelson.

On its Colorado R&D lease, EGL Resources proposes a closed system that uses natural gas and/or propane to heat liquid. "It's a little like a partial fractionation tower in the Earth," said director Paul Lerwick. The idea features a large number of spider holes that will be drilled with coiled tubing, and a closed-loop heating system that runs across the base of the wells.

During the coming two years, EGL plans to evaluate its test site through cores, model the retorting process and conduct hydrologic studies. It's also interested in forming or participating in a research consortium.