In this story, it's a couple dozen Xes, taped to the side of an ordinary rock face on a corner of Rio Blanco County Road 5, west of Meeker.

The Xes mark the outcrop of the Mahogany formation, which gets thicker as it plunges underground. The rocks are made of kerogen, otherwise known as oil shale.

Companies have produced oil from these rocks in the past, but they have never done it in a way that makes sense economically. Now, with oil prices at $100 a barrel, oil companies - big and small - are back in Colorado, eyeing a payoff that could be hundreds of billions of dollars.

Netherlands-based Shell is taking the lead. Although the company dropped its state mining permit application this summer, it is still very serious about its project, said Shell's Denver-based spokeswoman Jill Davis.

"We just know there's a huge benefit to our national security and our oil supply if we can do it. That's why we're sticking with it," Davis said.

But memories of Black Sunday still linger. It was May 2, 1982, when Exxon pulled out of its Colony oil-shale project, immediately putting 2,100 people out of work and effectively ending Colorado's oil-shale boom.

Today, skepticism greets the companies that have returned to give shale one more try.

"I am still fascinated that somebody would spend that amount of money to get something that is so elusive," said Cathy Kay, an oil-shale critic from Western Colorado Congress, based in Grand Junction.

Randy Udall, a renewable-energy advocate from Carbondale, wrote a critique of shale's comeback. Measured in amount of energy per ton, oil shale has one-third the energy density of Cap'n Crunch cereal, Udall wrote.

Two federal programs move ahead

Private companies own some oil-shale lands in Colorado, but they need to lease federal land to get the best oil-shale deposits.

The federal government plans to lease the lands to oil companies by moving ahead on two separate - critics say contradictory - tracks.

Last year, the Bureau of Land Management awarded leases for five, 160-acre tracts in the Piceance Basin (pronounced PEA-ahns) to companies for research and demonstration projects. Shell got three tracts, and Chevron and EGL each got one.

But the agency also plans to offer commercial oil-shale leases well before the research work is done on the five tracts.

The BLM released a draft Environmental Impact Statement for the commercial leasing program last month. In late 2007, congressional Democrats tried unsuccessfully to delay the study and leasing program, which were mandated in the 2005 Energy Policy Act, passed when Republicans controlled Congress.

Freezing and melting

Shell, Chevron and EGL all plan some form of "in-situ," or underground, shale processing. Shell is the most public about its idea. It plans to put coolers into the ground to build a "freeze wall," then pump out the groundwater inside the wall and bake the rocks at 650-750 degrees Fahrenheit for a few years before pumping out the liquids and gases.

Shell expects to get natural gas, gasoline, diesel and jet fuel once it runs the shale oil through a processing plant on the surface. The plant will be like a refinery, but smaller, Davis said.

"It's not going to need a major refinery," Davis said. "It's still columns and parts and pieces - don't get me wrong. But it's slightly more efficient."

Shell will be working on its freeze-wall test for the next few years. By 2010, the company will be at a major decision point for its project, Davis said.

Chevron spokesman Dan Johnson said the California-based company needs three to seven years to work on its tests.

"We have a very go-slow approach. We are supporting research and demonstration," Johnson said. "We know that we have to do this right, or we shouldn't do it at all."

Chevron is working with Los Alamos National Laboratory on its technology. It involves drilling into the shale formation and passing hot and cold gases over the rock to melt the oil out of it, Johnson said. The process is not heavily dependent on water, he said.

Black Sunday veteran

This is Johnson's second time around with oil shale. He was one of the first three or four employees of Chevron's oil-shale division in 1980. He left in late 1982, several months after Exxon pulled the plug on its operation - and the whole industry - on Black Sunday.

"I remember getting the call," Johnson said. "I think the immediate reaction was - we just didn't know. The predictions had been so rosy, so positive."

But those predictions turned sour as the price of oil kept falling. "I was thinking, I hope we can hold on, because this was an important resource," Johnson said.

He's happy to see that Western Colorado has recovered today, and is booming with retirees, natural gas and commercial development. "This place is running on all cylinders," he said. "That's different. It's a much more diversified boom than it was 25 years ago."

1 million barrels per acre

Oil shale's fortunes rise and fall with the price of oil.

In 1981, oil was selling for $93 a barrel, adjusted for inflation. By Black Sunday, it had fallen to $71 a barrel. It kept falling through the late 1990s, except for a few spikes. But last week, oil reached $100 a barrel.

At these prices, companies see the potential for profits to make the big projects worthwhile.

Shell estimates that its method can wring 1 million barrels of oil out of a single acre of ground. That's more than $40 billion from the three 160-acre leases Shell already owns.

If its demonstration projects work and it wins federal approval to expand its leases to 27 square miles, then it takes a calculator with extra digits to show how much all that oil might be worth.

In the best case, "That's the sort of manageable prize that Shell is looking at from this potential," said Davis. But, she said, Shell has to prove its technology first. It has already produced oil from shale, but now it has to prove it can protect the environment, she said.

Chevron officials look at the size of tomorrow's market. Six billion people live on Earth, and there might be 9 billion by the middle of the century. "We're probably going to need every molecule of energy going forward that we can get to meet the needs of that growing population," Johnson said.

That's what brings Chevron back to Colorado's notoriously difficult oil-shale deposits. "The easy oil, we pretty much have used up," he said.

The military is involved in Colorado, too. The 2005 energy bill required the secretary of defense to write a strategy for using fuel made from oil shale, coal and tar sands in American military vehicles.

Global politics have a direct effect on Colorado in this case. And Coloradans might not get to choose their fate, said Dan Birch, who is leading a study on oil shale and water for the local river basins.

"Because of what's going on in the world and what's going on with oil demand, there could be a strong pressure to do this that is beyond Colorado's control," Birch said.

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