RIFLE - There's sticker shock at every corner gas station and prices are going nowhere but up. So a new drilling technique that may eventually unlock a massive oil reserve right here in Colorado is generating a great deal of excitement.

The oil is locked in rock deep beneath the surface, in an ancient river basin near Rifle. Its location has made extraction in the past too difficult.

Shell has been working on the process since 1997 -- a system of closely spaced wells punched into the shale layer-- deep holes into which they then lower heaters.

The rock is slowly warmed to as high as 700 degrees, causing the shale to expand. This releases the oil trapped in the layers of shale. It is then is pumped to the surface in staggering amounts -- one million barrels an acre.

Many Coloradoans will remember the oil shale bust in Colorado in the early 80's. At that time, engineers were mining the rock. The new technology allows extraction while leaving the rock in place. This means the surface is undisturbed.

"We're sitting generally in the sweetest of sweet spots where the most concentrated oil shale on earth is located," says Terry O'Connor, with Shell Oil.

"All the good oil comes up while all the bad oil or heavier more carbon elements stay down below," says Jill Davis with Shell Oil.

Shell says there is potentially a trillion barrels of oil that could be extracted from the Green River Basin, which runs through Colorado, Wyoming and Utah.

The early results have been so successful that the project now has the attention of the Department of the Defense. "Not only at times of war, but even during peacetime they use 300,000 barrels of oil a day," says O'Connor.

9News spoke with two environmental groups in Grand Junction about Shell's project. They both said that it is currently so small that it's not on their radar, but they will be watching closely.

Shell says there are still some technical issues to sort out but the company is hoping to start production in 2010.




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