Colony Shale Oil Project
Encyclopedia
Colony Shale Oil Project was an oil shale
development project at the Piceance Basin
near Parachute Creek
, Colorado
. The project consisted of an oil shale mine and pilot-scale shale oil plant, which used the TOSCO II retorting technology
, developed by Tosco Corporation
. Over time the project was developed by a consortium of different companies until it was terminated by Exxon
on 2 May 1982 a day which is known amongst locals as "Black Sunday".
, and Cleveland Cliffs Iron Company formed the Colony Development joint venture. The aim of the newly formed joint venture was to develop the Colony Oil Shale Project and to commercialize the TOSCO II technology. Starting in 1965 the consortium operated a shale oil pilot plant and in 1968 the Colony Development started preparatons to build a commercial-scale plant.
In 1969 Atlantic Richfield Company
joined the project acquiring part of Tosco's stake. However the commercial project was delayed by economic uncertainties and then resurrected in the 1970s after the Arab oil embargo. In 1972 the consortium stopped the pilot plant and the development of the commercial plant was suspended in November 1974 when more detailed economic studies indicated a more than three times higher cost than previously anticipated.
In 1974 Ashland Oil and Shell Oil Company
joined the project. In the late 1970s Standard Oil of Ohio, Cleveland Cliffs Iron Company, Shell and Ashaland Oil sold their shares to Atlantic Richfield Company. As a result of these transactions Tosco owned 40% of shares and Atlantic Richfield Company owned 60% of shares in the project.
In 1980 Atlantic Richfield Company sold its share to Exxon for $300 million. In 1981 the Colony Development started a construction of the commercial scale shale oil plant. On 2 May 1982 Exxon announced the termination of the project because of low oil-prices and increased expenses laying off more than 2,000 workers resulting in the date becoming known among locals as "Black Sunday". According to the shareholders agreement in a case of project termination Exxon had an obligation to buy out Tosco's shares. It paid $380 million worth of compensation.
During its existence the project produced 270 koilbbl of shale oil
.
.
type oil shale mine and aboveground shale oil pilot plant with input capacity of 1,000 ton
of oil shale per day which used TOSCO II retort a horizontal rotating kiln
-type retort classified as a hot recycled solids technology. Mining was conducted in a 60 ft (18.3 m)-thick portion of the Mahogany Zone in the Parachute Creek Member of the Green River Formation at depths of 860 ft (262.1 m) and 600 ft (182.9 m) by a one-bench system. Pillar dimensions were 58 ft (17.7 m) by 58 ft (17.7 m) and rooms were 55 ft (16.8 m) wide.
The planned commercial scale plant was to contain six TOSCO II retorts with total input capacity of 66,000 ton of oil shale per day. The proposed plant was to produce about 46000 bbl (7,313,415.6 l) of shale oil per day. The project was also to consists of shale oil upgrading plant for hydrogen treating to remove nitrogen and sulfur compounds. This plant was scheduled to produce about 17 Moilbbl of premium petroleum products, 52,000 long ton
of sulfur
, and 41,000 long tons of ammonia
per year. At the moment of cancellation the estimated costs would exceed $5.5 billion in then-year dollars or about $10 billion in 2005 dollars.
Oil shale
Oil shale, an organic-rich fine-grained sedimentary rock, contains significant amounts of kerogen from which liquid hydrocarbons called shale oil can be produced...
development project at the Piceance Basin
Piceance Basin
The Piceance Basin is a geologic structural basin in northwestern Colorado, in the United States. It includes geologic formations from Cambrian to Holocene in age, but the thickest section is made up of rocks from the Cretaceous Period...
near Parachute Creek
Parachute, Colorado
The Town of Parachute is a Statutory Town in Garfield County, Colorado, United States. The population was 1,006 at the 2000 census.-Geography:Parachute is located at ....
, Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
. The project consisted of an oil shale mine and pilot-scale shale oil plant, which used the TOSCO II retorting technology
TOSCO II process
The TOSCO II process is an above ground retorting technology for shale oil extraction, which uses fine particles of oil shale that are heated in a rotating kiln. The particularity of this process is that it use hot ceramic balls for the heat transfer between the retort and a heater...
, developed by Tosco Corporation
Tosco Corporation
Tosco was an independent US based petroleum refining and marketing corporation. It was founded in 1955 in Santa Monica, California by A&P heir Huntington Hartford, and originally focused on extracting oil from oil shale and developing alternative energy sources.-Oil shale operations:In 1964...
. Over time the project was developed by a consortium of different companies until it was terminated by Exxon
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
on 2 May 1982 a day which is known amongst locals as "Black Sunday".
History
The project started in 1964 when Tosco, Standard Oil of OhioStandard Oil of Ohio
Standard Oil of Ohio or Sohio was an American oil company that was acquired by British Petroleum, now called BP.It was one of the successor companies to Standard Oil after the antitrust breakup in 1911. Standard Oil of Ohio was the original Standard Oil company founded by John D. Rockefeller. It...
, and Cleveland Cliffs Iron Company formed the Colony Development joint venture. The aim of the newly formed joint venture was to develop the Colony Oil Shale Project and to commercialize the TOSCO II technology. Starting in 1965 the consortium operated a shale oil pilot plant and in 1968 the Colony Development started preparatons to build a commercial-scale plant.
In 1969 Atlantic Richfield Company
ARCO
Atlantic Richfield Company is an oil company with operations in the United States as well as in Indonesia, the North Sea, and the South China Sea. It has more than 1,300 gas stations in the western part of the United States. ARCO was originally formed by the merger of East Coast-based Atlantic...
joined the project acquiring part of Tosco's stake. However the commercial project was delayed by economic uncertainties and then resurrected in the 1970s after the Arab oil embargo. In 1972 the consortium stopped the pilot plant and the development of the commercial plant was suspended in November 1974 when more detailed economic studies indicated a more than three times higher cost than previously anticipated.
In 1974 Ashland Oil and Shell Oil Company
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
joined the project. In the late 1970s Standard Oil of Ohio, Cleveland Cliffs Iron Company, Shell and Ashaland Oil sold their shares to Atlantic Richfield Company. As a result of these transactions Tosco owned 40% of shares and Atlantic Richfield Company owned 60% of shares in the project.
In 1980 Atlantic Richfield Company sold its share to Exxon for $300 million. In 1981 the Colony Development started a construction of the commercial scale shale oil plant. On 2 May 1982 Exxon announced the termination of the project because of low oil-prices and increased expenses laying off more than 2,000 workers resulting in the date becoming known among locals as "Black Sunday". According to the shareholders agreement in a case of project termination Exxon had an obligation to buy out Tosco's shares. It paid $380 million worth of compensation.
During its existence the project produced 270 koilbbl of shale oil
Shale oil
Shale oil, known also as kerogen oil or oil-shale oil, is an unconventional oil produced from oil shale by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock into synthetic oil and gas...
.
Location
The Colony Development's property located in the southern edge of the Piceance Basin in northwestern Colorado, approximately 200 miles (321.9 km) west of Denver. It located next to the Union Shale Oil property, developed by Unocal CorporationUnocal Corporation
Union Oil Company of California, dba Unocal is a defunct company that was a major petroleum explorer and marketer in the late 19th century, through the 20th century, and into the early 21st century. It was headquartered in El Segundo, California, United States.On August 10, 2005, Unocal merged...
.
Technical description
The pilot stage of the project consisted of underground room-and-pillarRoom and pillar
Room and pillar is a mining system in which the mined material is extracted across a horizontal plane while leaving "pillars" of untouched material to support the roof overburden leaving open areas or "rooms" underground...
type oil shale mine and aboveground shale oil pilot plant with input capacity of 1,000 ton
Tonne
The tonne, known as the metric ton in the US , often put pleonastically as "metric tonne" to avoid confusion with ton, is a metric system unit of mass equal to 1000 kilograms. The tonne is not an International System of Units unit, but is accepted for use with the SI...
of oil shale per day which used TOSCO II retort a horizontal rotating kiln
Rotary kiln
A Rotary kiln is a pyroprocessing device used to raise materials to a high temperature in a continuous process. Materials produced using rotary kilns include:* Cement* Lime* Refractories* Metakaolin* Titanium dioxide* Alumina* Vermiculite...
-type retort classified as a hot recycled solids technology. Mining was conducted in a 60 ft (18.3 m)-thick portion of the Mahogany Zone in the Parachute Creek Member of the Green River Formation at depths of 860 ft (262.1 m) and 600 ft (182.9 m) by a one-bench system. Pillar dimensions were 58 ft (17.7 m) by 58 ft (17.7 m) and rooms were 55 ft (16.8 m) wide.
The planned commercial scale plant was to contain six TOSCO II retorts with total input capacity of 66,000 ton of oil shale per day. The proposed plant was to produce about 46000 bbl (7,313,415.6 l) of shale oil per day. The project was also to consists of shale oil upgrading plant for hydrogen treating to remove nitrogen and sulfur compounds. This plant was scheduled to produce about 17 Moilbbl of premium petroleum products, 52,000 long ton
Long ton
Long ton is the name for the unit called the "ton" in the avoirdupois or Imperial system of measurements, as used in the United Kingdom and several other Commonwealth countries. It has been mostly replaced by the tonne, and in the United States by the short ton...
of sulfur
Sulfur
Sulfur or sulphur is the chemical element with atomic number 16. In the periodic table it is represented by the symbol S. It is an abundant, multivalent non-metal. Under normal conditions, sulfur atoms form cyclic octatomic molecules with chemical formula S8. Elemental sulfur is a bright yellow...
, and 41,000 long tons of ammonia
Ammonia
Ammonia is a compound of nitrogen and hydrogen with the formula . It is a colourless gas with a characteristic pungent odour. Ammonia contributes significantly to the nutritional needs of terrestrial organisms by serving as a precursor to food and fertilizers. Ammonia, either directly or...
per year. At the moment of cancellation the estimated costs would exceed $5.5 billion in then-year dollars or about $10 billion in 2005 dollars.