USA has huge oil reserves
Colorado and Utah have as much oil as Saudi Arabia, Iran, Iraq, Venezuela, Nigeria, Kuwait, Libya, Angola, Algeria, Indonesia, Qatar and United Arab Emirates combined. Trapped in limestone up to 200 feet thick in the two Rocky Mountain states is enough so-called shale oil to rival OPEC and supply the United States for a century.
Exxon Mobil and Chevron, the two biggest U.S. energy companies, and Royal Dutch Shell Plc are spending $100 million a year testing methods to separate the oil from the stone for as little as $30 a barrel. A growing number of industry executives and analysts say new technology and persistently high prices make the idea feasible.
"The breakthrough is that now the oil companies have a way of getting this oil out of the ground without the massive energy and manpower costs that killed these projects in the 1970s," said Pete Stark, analyst at IHS Inc., an Englewood, Colo., research firm. "All the shale rocks in the world are going to be revisited now to see how much oil they contain."
Energy providers are investing in shale oil production because the reserves are large enough to generate higher returns than smaller fields in Oklahoma and Texas, where output is declining after eight decades.
Shale also is a more attractive investment than new U.S. refineries, which Shell and Chevron say may lose money as rising use of crop-based fuels such as ethanol lowers domestic gasoline demand. Exxon says it isn't interested in building new fuel plants in the United States because the company expects North American fuel consumption to peak by 2025.
"These are quite remarkable technological approaches," said Jeremy Boak, a geologist at the Colorado School of Mines in Golden, who spent 11 years cleaning up radioactive waste and disposing of weapons-grade plutonium at U.S. government sites.
"The oil companies don't have the exploration problem of finding resources to drill. We know the oil is here. It's just a matter of getting it out." More from Bloomberg News article