CNBC
updated 8/23/2006 11:38:11 AM ET 2006-08-23T15:38:11

We have an energy problem. There’s no argument about it. Of course, the argument lies in how to fix it, whether it’s fixable at all, and when it can be fixed. On Colorado’s western slope, under the big sky, near a town called Meeker, quietly and often secretly, for decades scientists have been probing hundreds of feet into the Earth.

They’re trying to extract what is believed to be the largest oil reserve in the world. More oil than in Saudi Arabia or Iraq. But, there’s just one problem: It’s trapped in rock called shale.

With a barrel of crude selling at more than $70 dollars these days, Shell executives believe they can now produce oil form shale at a profit. The oil from shale is like any other oil. At Shell’s labs in Houston, scientists studying core samples say this could eventually turn into a conventional oil field – it just would take 100 million years.

The oil is extracted by cooking it out of the ground.  The unit used is an electric heater, and works like an old fashioned coffee percolator. At 650 to 700 degrees, the oil vaporizes and seeps through the rock. It flows to a well and then rises to the surface where it cools and liquefies. Too good to be true?

At a recent hearing in Colorado, residents told members of the Senate Energy Committee that while extracting the oil from shale may be profitable, it puts a heavy tax on the environment. The biggest fear: damage to the water supply.

“The cumulative impact is going to make this whole area an industrial area. That’s the bottom line and there’s no way around it”, said rancher Bob Elderkin.

One U.S. government study says for every 1,000 pounds of shale, there’s 15 to 25 gallons of oil trapped inside. That would mean, say experts, that there’s 1.5 trillion barrels of oil right under our feet. Eight percent of the oil shale is on federal land. If government leases are approved, oil could begin to flow in five years, but some here in Colorado say it comes at too high a cost.

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