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A New Use for Orange Peels: Squeezing Oil From the Utah Desert

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By Chester Dawson

A boom in oil production Utah has increased the state’s output to the highest level in 25 years, but that rising tide also is giving a lift to more exotic plays:  petroleum trapped in sand and hard shale rock.

Eastern Utah has the largest oil sands formation in the U.S. as well as extensive oil shale rock resources—not to be confused with the shale oil extracted from the Bakken formation astride the North Dakota and Saskatchewan border. These have never been economically viable in the U.S., but a combination of advances in technology and higher crude prices has led to several new proposals for open pit mines in and around the sagebrush-covered Uinta Basin.

Among the most aggressive proponents are Calgary–based US Oil Sands Inc.USO.V -6.67% and Enefit American Oil, the U.S. unit of Estonia’s state-run utility. But both companies’ projects have triggered fierce opposition from environmental groups and a healthy dose of skepticism from critics who doubt their viability.

These have attracted more local opposition than traditional oil drilling because they rely on open pit surface mines that are anathema to conservationists.

US Oil Sands, which raised $80 million in financing in Canada this fall, expects to produce up to 10,000 barrels per day using a citrus-based solvent to separate heavy oil embedded in sand. Solvents are something of a holy grail because they hold the promise of dramatically reducing the amount of hot water currently needed to melt away oil from sand. But they’re still an unproven technology and even the world’s largest oil sands producers have yet to adopt them widely.

To read more, visit the Wall Street Journal.