I onl,l unlaoa I t' I ' f xtracting oil from shale has always E b""n-"t best-an expensive, risky proposition. Even now, as oil shale gradu- ally lumbers toward commercial produc- tion, some doubs linger about whether or not producing oil from shale will prove profitable, particularly in light of today's economics. But at Paraho Development CorP. in Technology Base Crand Junction, CO, no such unce(ainties seem to exist, and managers of the small company (approximately 100 employees), bustle with enthusiasm for the oil shale industry in general and Paraho in particu- lar. Paraho has doubled the number of employees in the past year, and if all goes as planned, could have 1,500-2,000 employ- ees by 1986. Those plans include a pro- posed commercial oil shale faciliry the Paraho-Ute project, 50 miles southeast of Vernal, UT, as well as continued expansion of the company's research and technology, including maintaining the facility at Anvil Points, near Rifle, CO. Back to the Poinb In fact, Paraho's history is firmly an- chored to Anvil Points, where the U.S. Navy holds shale lands known as Naval Re- serves One and Three. During the 1940s and 1950s, the federal government, primar- ily through the U.S. Bureau of Mines, con- ducted research on oil shale mining and processing at the site, and the knowledge gained in those years has served as a basis for much of the shale technology used today. John B. Jones, Jr., a chemical en- gineer, was one of the researchers who worked on the project and helped develop the Bureau of Mines retort, a vessel in which crushed shale is heated to remove the oil. When the government program was discontinued in the 1950s, Jones and Rus- sell Cameron, who also worked on the project, formed their own engineering firm, Cameron and .lones. The company con- tinued to research oil shale and was in- volved in developing the Petrosix retorting process that is now being used in Brazil. The firm of Cameron and Jones was dis- solved in 1965, and Jones went on to form his own company, Development Engineer- ing, Inc. After he became self-employed, Jones Paraho's Anvil Points oil shale facility near Rifle, CO. co.invented a new retorting method that { Shale Counrr* Fehuary/March 1982 was based on the one devised at Anvil retort. This technology was then used from services of 30G400. "We can then use our Points in the 1950s. He considered the de 1976-1979 in a project for the Navy under a saff to coordinate the subcontractors," says sign simple and relatively inexpensive. Bovernment contract, which produced Pforzheimer. "By using these types of Since there was no oil shale industry at that 100,000 barrels of shale oil. The fuel was financing and confiacting methods, Paraho time, he decided to test the process on a then commercially refined at Sohio's To- has been able to spend $45 million on commercial basis in Rapid City, SD, using ledo, OH, facility into products meeting proving its technology." the calcination of limestone. While in military specifi cations. South Dakota, Jones met Harry Pfor- With Sohio also serving as one of the Shipping shale worldwide zheimer, Jr., who was vice president of sponsors of the project, fforzheimer con- Not content to stick to neighboring shale, Sohio Petroleum Co., and the two began tinued his involvement with Paraho. During the Paraho retort has also been used to proc- organizing a project to test Jones' vertical the 1970s he was on loan to Paraho from ess oil shale from lsrael and Morocco, retort on oil shale. The process was named Sohio and served as program director. After which was shipped to Anvil Points for test- Paraho, a title taken from a Portuguese retiring from Sohio in 1980, he then be- ing. "We feel we have the basic technology word meaning"for man." came Paraho's chief executive officer and for processing all different types of oil In 1971, the company's name was chairman of the board. shale," says fforzheimer. "And we expect changed to Paraho Development Corp., fforzheimer feels plans fbr the compa- in the future to continue adapting the retort and Development Engineering became a ny's continued expansion will become a to obtain shale oil from various types of de reality. Using the knowledge gained from posits." past years research, .-::.r'el,?.':l.tr -*-:',-.,-=-- -1 the company's 10 of :' construction on the proposed Utah site is Pooling Resources I i..:t expected to begin in the fall of 1982, with ' ln June 1980, Paraho entered into a con- | completion set for early 1985. The site will tract with lhe U.S. Dept. ol Energy (DOE) for j contain an oil shale mine and three modu- , an l8-month detail-design program of a j lar Paraho retorts that will be phased in commercial oil shale retort modrte. the -'l gradually, and which will be based on the ' $$mil[on proj'ect corsists of a mine io pto- ] . drce oil shale, a commircial retorttd iecover I retorting technology demonstrated at Anvil : lhe shale cit and gafas well as supporting ' Points. lt is hoped that upon completion, prolqct is now in the final ' i equipment- "That ': the Utah facility will produce more than . Oesign stag'e$.. I"1. i 42,OOO barrels of upgraded shale oil per I Paraho is_managii.tg the program, and the ' i osts are shared by DOE and 14 industry day. spohsors. Jne industry sponsors include Those are ambitious plans for any com- ARGO Coat, Chevron, Conoco, Davy pany,_ but especially for one the size of McKee, Hustiy,"[,lobil, Mono Power (South- Paraho, since the commercial plantwill prob. Phillips, Placid Re- em California Edison), ably cost $2 billion. "We call it creative fining, Sohio, Sun, Texaco, Texas Eastern and The Oeveland-Clitb lron Co. financing," says fforzheimer. "By using sponsors and grants, we are able to achieve Sohio, qavy McKgq _and OevelandClifb, j Harry Pforzheimer, Jr,, chairman and as well as lhree environmental firms, also ' much more than if we had to use our own chief executive officer of the Paraho . *r" ;ir-"tr*t"r;f"it"pro;ect. o i resources." As an example, costs for de- Development Corp. ' -..;i*:.1*;-r-.*-i..----* -t-l i -.-- veloping the retort design to be used at Paraho-Ute were split by &e Dept. of Energy Nevertheless, the Paraho retort is con- Paraho subsidiary. lt was 2 years later, in (DOE) and a group of 14 private energy and stantly being refined and improved. "You 1973, that Paraho moved back to Anvil engineering firms. In return for their sup- can never wait for the finished product," Points. The government had shut down the port, the firms received favorable terms for fforzheimer explains, "since we'll never be facility after the 1940s' and 1950s' projects licensing any of the technology developed finished with it. There's always something were completed, except to lease it occa- from the project. In other words, sponsoring we can improve." sionally to private firms during the 1960s. companies will pay less to use Paraho The Paraho retort uses a gravity-feed, Now it was Paraho's turn. technology than those who did not partici- counter-current type of flow with gases and pate in the project. Paraho also received a heat moving up and shale rock moving Rounding up dollars DOE grant for a feasibility study on the down the retort. The processed shale leaves Paraho's initial oil shale work was done Paraho-Ute retort. the bottom of the retort in chunks. The in conjunction with a group of 17 energy In addition to creative financing, Paraho Paraho process produces low BTU gas that companies that sponsored the $10 million makes the most of its resources by using can be used to generate electricity. ffor- needed for the demonstration program. The subcontractors for much of the work it zheimer estimates that eventually, 50 result was construction and operation of a does. That way, even though the company megawatts of electricity could be sold to pilot plant and a semiworks demonstration itself only has 100 employees, it gets the outside customers from the three-retort Shale Country February/March 1982 5 facility planned for the Paraho-Ute project. Other development and research projects exploring the best ways to fracture oil shale But even though Paraho officials are en- continue to keep the firm's technology for modified in-situ (underground) retorting. about their process, thusiastic they admit it up-to-date. For example, Marathon Oil Paraho also offers analyzing services for is not the only solution to processing shale Corp. is working with Paraho to utilize the various private and government operations "When you oil. talk about a commercial oil Paraho retort with process changes spec- through its laboratory and testing facilities shale plant that produces 100,000 to ified by the oil company. The major differ- at Anvil Points. 150,000 barrels a day, we'll probably be ence between the two processes, says ffor- Because of such diverse projects and the looking at a facility that uses several kinds zheimer, is that while Paraho's retort uses a company's move toward commercial pro- of retorts to meet the needs of various types direct heating method, Marathon uses duction, Pforzheimer views Paraho,s future of oil shale," says fforzheimer. However, super-heated steam. optimistically. And, he adds, to keep up because the Paraho-Ute project will be on a Another aspect of oil shale pro- with the constantly changing oil shale smaller scale---42,000 barrels of shale oil a cessing-rnethods of blasting the rock- industry, Paraho intends to continue day-it will use only Paraho retorts.