Locked in shale deposits on acres of eastern Utah's high-plain desert are thousands of barrels of coveted oil.
The problem is nobody seems to know how to get it out at a reasonable price.
That is, not until now.
A Utah man says he can develop oil shale for less than $15 a barrel, while current oil prices have been sitting at more than $40 a barrel.
"They say it's impossible to do it," said Leon Smith of Lindon. "Nothing's impossible."
Smith says he can produce up to 12,000 barrels of oil a day using his patent-protected process of extracting oil from shale.
Utah is rich in oil, yet it is still undeveloped. The Green River Formation, a geologic swatch stretching into Utah, Colorado and Wyoming, contains an estimated 1.5 trillion barrels of oil, according to the American Association of Petroleum Geologists.
If Smith can get a major oil company to listen and invest in his oil-extraction process, he said he will create 250 full-time jobs in the Vernal area.
Smith met last week with oil executives and government officials, including Tony Dammer, director of naval petroleum and oil shale reserves for the Department of Energy.
But some officials who were at the meeting aren't as optimistic as Smith about the development of oil shale.
"We don't want to say anything that suggests we're negative to Mr. Smith's idea, but the reality of the situation is leasing federal oil shale land at this point in time is a little more than problematic, because we don't have the authority to do that," said Jim Kohler, minerals chief for the BLM's Utah office.
Kohler said Interior Secretary Gale Norton must come up with regulations on leasing oil shale land before anything can happen. A task force, which Kohler sits on, is mulling over possible recommendations.
"There is really nothing we can say about where the Department of Interior will be with oil shale development in the near future, other than it is being considered by the department and recommendations should be forthcoming in the near term," Kohler said. "If Mr. Smith can convince the secretary to do something about it, we wish him well."
The key to Smith's idea is hybrid technology.
Similar to hybrid cars, which use both electricity and gas for fuel, Smith's oil extraction method uses two technologies, coal and a rotary kiln.
Coal gasified at extremely hot temperatures will produce a synthetic gas. That gas is then cooled in a rotary kiln with the oil shale. Instead of condensing the oil into a crude form, it is sent to a fractionation tower, where the oil is cut into different grades.
Smith's company funded a research project at the University of Utah to see if his idea really worked. Researchers have been working on the project for nearly three years and will present a final report to Smith on June 30.
Francis Hanson, a U. chemical engineering professor who ran the research project, said his role was to study the technical feasibility of Smith's technology. He didn't study any of the economic impacts.
"Is it technically feasible to produce oil from oil shale using syn gas?" Hanson said. "Yes, it did work, and it does appear that (Smith) has a concept that is worth investigating and perhaps commercializing."
Smith's idea would not only produce much-needed oil, but it would also pump out a by-product of 300 megawatts of electricity a day.
The United States must build up its own oil reserves instead of relying on other countries for oil, said Smith, who studied at Brigham Young University and the U.
"We have the natural resources to put us in the black in Utah," Smith said. "But we're not doing anything. We need more oil, and we're not finding oil as fast as we're using it."
During the oil shale boom in the 1970s and 1980s, one company spent $120 million for the rights to one 10,240-acre tract of oil shale lands. The company spent an additional $40 million developing a mine 45 miles south of Vernal, which was never put to use.
If Smith gets his way, that facility in Vernal will finally start extracting oil. He said he plans to use the existing infrastructure to extract oil using his new hybrid method. But officials at the BLM said that facility isn't up to par.
"We don't share Mr. Smith's belief that it is quite as viable as he says it is," said Kohler, of Utah's BLM office. "The shafts have been sitting out there for a number of years. You can't simply open a mine and start mining. It's going to be very capital intensive. It's going to require significant investment."
And most oil companies are gun-shy since losing millions of dollars when OPEC dropped the price of oil back down following the 1970s efforts.
John McLemore, a spokesman for ConocoPhillips, said he would not discuss why his company at this time will not take the financial risk to develop shale oil. McLemore said ConocoPhillips, which was involved in the 1970s oil shale boom, is always interested in new oil developments, but the company is not currently working on any projects involving oil shale.
"They're all scared of oil shale," Smith said. "Oil companies know what to do when you have liquid (oil). They just don't know what to do with rock."
Some experts say the technology to extract oil from shale remains too expensive and the prospects are too risky when oil prices, while increasing, are still volatile. But earlier this month, the International Energy Agency, an energy watchdog group, urged oil suppliers to boost investment in exploration for oil.
David Deming, an associate professor of geosciences at the University of Oklahoma, said the major factor stopping the development of unconventional oil like oil shale is uncertainty and instability in the price.
"It's just very expensive," said Doug Jensen, a reclamation specialist with the Utah Division of Oil, Gas and Mining. "It's a fascinating thing if somebody could come up with the technology. There's a lot of bucks out there to earn if they could ever figure it out."
E-mail: ldethman@desnews.com