Royal Dutch Shell PLC recently joined Chevron in its abandonment of oil-shale projects in Colorado. After spending nearly $30 million in exploration, the company decided to leave the Western Slope shale rock deposits. They exited citing a shift in energy markets since they began their project in 1982.
Colorado experienced an oil shale boom that halted back in the 1980′s when government subsidies disappeared and oil prices dropped. As the AP notes, residents remember the “Black Sunday” of May 2, 1982 when Exxon shuttered a $5 billion endeavor near the West Slope town of Parachute that left thousands out of work. Shell is the latest in a long line of companies to withdraw from the Rockies.
“We have a large portfolio of opportunities, all competing for capital,” said Shell spokeswoman Kelly op de Weegh.
Shale extraction in the Western Slope would have required Shell to build a large power plant, something that the oil giant was not willing to do. Instead, Shell announced on Tuesday that they will be investing in a $12.5 billion plant in Louisiana that converts natural gas into jet fuel and diesel. Meanwhile, an estimated 1-1.8 trillion barrels of oil in the Colorado shale and parts of Utah and Wyoming remain trapped in the ground.