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Tuesday, August 29, 2006

US Investments for Oil

By Yaser Anwar, CSC of Equity Investment Ideas

The WSJ talks about, Driven by a growing desire to lower dependence on foreign oil, the U.S. is set to help two of the world's biggest energy companies seeking to extract oil from stone in the Rocky Mountains - a venture that previously has been polluting and prohibitively expensive.

More than 70% of the U.S.'s oil shale is found on federal land, mostly in Colorado, Utah and Wyoming in what's known as the Green River Formation. The research and development plots are in Northwest Colorado in the Piceance Basin.

A Department of Energy study last year estimated that crude prices would have to stay at $70 to $95 a barrel for a first-of-kind shale-oil operation to be profitable, though costs would come down as technology improved. This isn't a view shared by Shell, which, with 20 years of research under its belt, believes it will be able to make money at crude prices of $30.

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