Daily Herald | Posted: Thursday, September 21, 2006 11:00 pm
Paul Foy
The Associated Press
SALT LAKE CITY -- When Jim Runquist's company starts digging tar sands near Vernal, Utah, next week, it will end up with sand that's worth more than the heavy oil it produces.
"It's not worth it if you compare us to Canada," Runquist, chief executive for Temple Mountain Energy Inc., said at a conference Thursday at the University of Utah.
He was referring to northern Alberta's vast, superior deposits of tar sands, which make Utah's fragmented, leaner deposits look like a poor cousin.
Utah's tar sands are barely worth recovering with today's technology, two professors at the conference said.
Milind Deo, professor of chemical engineering, said oil prices would have to stay well above $60 a barrel to make Utah's tar sands worth developing. Crude oil was trading for $61.17 a barrel Thursday on the New York Mercantile Exchange.
Alberta's wet, scoopable tar sands make for easy separation of oil and sands with a hot-water treatment, while Utah's dry tar sands are bonded to hard sandstone in scattered, mostly underground deposits, Deo and other experts said.
"It requires some effort to mine," said James F. Kohler, solid-minerals chief for the U.S. Bureau of Land Management in Utah.
The "fine-grained, cemented sandstone" contains a tar-like bitumen that is so thick it may never prove economical, said Jan D. Miller, a professor of metallurgical engineering at University of Utah.
Runquist said Temple Mountain Energy will dig up tar sands on 256 acres of land, 6 miles south of Vernal, because it can produce things of value -- asphalt, cement and a hard, abrasive sand used for fracturing deep petroleum wells.
Robert Trent, vice president for Temple Mountain Energy, said thick oil coming from the tar sands will be a "byproduct" of lesser value than the sand.
In an interview, Runquist hastened to add that the bitumen could become more valuable if crude prices soar higher.
"We decided not to go with oil shale," said Larry Clynch, president and chief operating officer of Temple Mountain Energy. "That's too difficult and takes too much money."
The richer, larger reserves of oil shale in Utah and Colorado also are the focus of development.
Oil Shale Exploration Co., backed by Twin Pines Coal Co. of Alabama, is seeking federal approval to reopen the White River oil-shale mine near Vernal. It was abandoned by three major oil companies in 1985 when falling crude prices made shale oil uneconomical.
At least one other company sees some value in the tar sands around Vernal.
Earth Energy Resources Inc., of Alberta, Canada, said it plans to set up a portable plant on 6,000 state-owned acres east of Vernal using an environmentally friendly solvent to coax bitumen from Utah's tar sands.
The company produced 25 barrels of oil in a demonstration project last fall. D. Glen Snarr, Earth Energy's president and chief financial officer, said that's more than anybody has ever produced from Utah's tar sands.
This story appeared in The Daily Herald on page D4.