Company: Utah tar sands poised to yield oil
For years, industry has mined paving material from the aptly named Asphalt Ridge southeast of Vernal.
Soon it could also yield the state's first commercial volumes of oil from tar sands under a California company's plans to process mined ore at the site near the Colorado state line.
MCW Energy Group executives say they expect to produce 250 barrels a day at the site later this year under an agreement with Temple Mountain Energy Inc., which will supply the ore. MCW has developed a technology so environmentally friendly that the operation will leave the site even cleaner than pre-extraction, said company spokesman Paul Davey.
"We intend on starting small to prove the technology on the ground. We are using a closed loop and not discharging to anything into the ground," Davey said. His Glendale, Calif.-based firm, led by retired Exxon President Gerald Bailey, specializes in distribution of fuels, serving 500 gas stations in Southern California.
The project taps a 1,128-acre federal lease MCW acquired from another company and is exempt from a programmatic EIS the Department of Interior recently finalized to guide unconventional oil development on the West's federal lands.
The Bureau of Land Management, however, is conducting an environmental assessment and expects to release a draft soon. This will open a public comment period.
MCW officials say they have the financing and state approvals needed to move forward.
Tar sand does not contain liquid oil, but a viscous hydrocarbon called bitumen. It must be mined and heavily processed to produce oil. Critics remain skeptical of both the economic viability of tar sands as well as claims that developing the resource is environmentally benign.
Rob Dubuc of Western Resource Advocates complained the public has no way of knowing whether the solvents used to process tar sands injure the environment
"Part of the problem is you can't find out what they are doing because it's a trade secret," Dubuc said. "Until you bring a suit and sign a confidentiality agreement, you can't see it. And then you can't talk about it."
Dubuc's group is challenging state approvals for a much larger tar sands proposal on state land at PR Springs. Environmentalists are concerned with that project's impacts on water resources and air quality.
MCW's technology won't trigger such concerns because it uses no water, officials say.
"This is neat and tidy strip-mining. The sand is so clean after processing we can sell it for other uses," Davey said. The plan is to return the processed ore to the ground from which it was mined.
The company has been drilling for two years to test the ore and found that it can yield at least a barrel of oil per ton, roughly a cubic yard, he said. If successful the firm expects to scale up to 2,000 barrels a day. The oil would be shipped by truck to Salt Lake City for refining.
"We like Utah because it has a lot of areas that can be developed without disturbing protected lands," Davey said. With about 32 billion barrels of recoverable oil in tar sands, Utah holds more than half the nation's reserves of this unconventional source.
Oil is being extracted from tar sands in Alberta, but at a steep environmental cost, critics say, because of the heavy need for water and heat needed to separate and process the bitumen. Everyone agrees that Utah's tar sands deposits are different, but there is sharp disagreement over what that means for the environment.
"What we have [in Utah] is an 'oil wet' sands. No water is involved. It's a closed system where we treat the sands with our proprietary solvent and extract the oil and recycle the solvent," Bailey told a radio show for Canadian investors.
But environmental critics say Utah's tar sands aren't wet or oily at all, but a dry rock-like substance that is tougher to process than Canada's soft deposits where the bitumen is bound to sediments with a thin layer of water.