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How did the U.S. miss the opportunity? Ever since the 1920s, oil-shale pilot plants have been opening and closing in Colorado, reflecting the Federal Government's failure to develop a consistent energy policy. But in 1980, at long last, shale seemed poised for takeoff. Two traumatic Persian Gulf oil crises in the 1970s had sent oil prices zooming and had given rise to high hopes in Washington and the oil industry that shale would develop into a synthetic-fuel industry. To encourage domestic production, Congress enacted the synfuels tax credit and also created the Synthetic Fuels Corp. As envisioned by President Jimmy Carter, synfuels would "replace 2.5 million bbl. of imported oil a day by 1990." Oil companies flocked to Colorado. Those already active in the field, like Union Oil Co. of California (Unocal), redoubled their efforts to bring plants online. Unocal started construction of a mine and processing plant near Parachute, Colo., in 1980 and predicted that it would produce 50,000 bbl. of oil a day by the late 1980s. Calling the Unocal project vital to the nation's energy supplies and national security, chairman Fred L. Hartley described it as a "solid economic proposition."
The most dramatic sign that shale had finally arrived came from Exxon (now ExxonMobil), the world's largest oil company. In May 1980 Exxon bought control of the Colony Oil Shale Project, a promising pilot venture near Parachute. Exxon paid $300 million up front and said it would invest at least $2 billion. The plant was supposed to produce 47,000 bbl. a day by 1985. And that was only the beginning. An internal corporate report predicted that by the mid-1990s Exxon would be producing 2 million bbl. a day from shale--enough to slice U.S. imports 20%. To accommodate the workers and families who would stream into Colorado for the new industry, Exxon began building a company town for 25,000 people. Called Battlement Mesa, it would be a self-sustaining community of single-family homes, apartments, churches, schools, stores, recreation centers--even a golf course.
So what does Parachute look like today? The building where Unocal started converting shale to oil is still there, but it's not doing much to wean the nation from foreign oil. After sitting idle for years, the building was acquired in 1999 by American Soda, which began producing baking soda and soda ash from nearby deposits.
Battlement Mesa, the company town that was to be the hub of the new industry, still exists, but not for oil-shale workers. It has become a retirement community. Against a backdrop of majestic mountains, retirees pump iron, hike scenic trails, swim and play golf. There's no trace of the Exxon project that was supposed to be shale oil's breakthrough. All vestiges of the mine and outbuildings are gone. The road leading to the plant site is still there, but it abruptly ends at the top of the hill. The land has been reclaimed and today looks much as it always did.
One by one, all the oil-shale projects of the 1980s were scrapped. Exxon spent $1 billion within two years of its much ballyhooed plunge into shale, then abruptly abandoned the project in 1982, citing market conditions and escalating costs. The Unocal plant actually did begin producing a modest amount of oil in the 1980s, but then in 1991 it too shut down, after heavy losses.