Getting oil shale development right
 requires research-first approach

“A reasonable plan” is how Sunday’s Daily Sentinel editorial described revised plans for oil shale development announced last Friday by the U.S. Department of Interior as one of the final acts of departing Secretary Ken Salazar.

It is indeed eminently reasonable to expect finalized research and development results that will first confirm exactly what industry says it desires — the ability to produce oil from “the rock that burns” in a manner that is economically viable, environmentally sustainable and socially acceptable — before commercial leasing of federal lands.

If research is successful, it also prompts market-based leases generating appropriate returns for taxpayers rather than premature speculative leasing at discounted rates.

That doesn’t mean we’ll be spared the sort of whining heard from Garfield County Commissioner Tom Jankovsky, Alaska Sen. Lisa Murkowski and House Interior Committee Chairman “Doc” Hastings in the immediate wake of last week’s Interior Department announcement. They lamented the supposed loss of opportunities for a “shovel ready” industry to make the U.S. more energy independent.

Hogwash!

As the Sentinel’s editorial pointed out, recent developments are already moving us toward that goal of energy independence. Booming development of conventional resources, advances in energy conservation and contributions from alternative energy sources all combine to make the use of oil shale less necessary and oil shale economics more difficult.

It’s also helpful to examine the “shovel ready” argument advanced by cheerleaders such as Dr. Jeremy Boak at the Colorado School of Mines; the industry-financed pseudo-consumer organization Environmentally Conscious Consumers for Oil Shale, run by the local energy industry consulting firm EIS Solutions, and some county officials.

The poster child for the assertion that oil shale is commercially viable right now is Enefit, the Estonian company preparing to develop oil shale in Utah. But the Estonians have never generated motor fuels at the scale they propose in Utah, neither in Estonia nor anywhere else in the world. The bulk of Estonians’ experience with oil shale is burning it like coal in their power plants while producing small amounts of what’s called “bunker fuel,” a low-grade fuel suitable for boilers, ships and the like. They’re behind schedule in bringing on line a prototype facility to expand modest motor-fuel production in their home country.

Like Enefit, Red Leaf Resources proposes mining Utah oil shale by conventional means but would cook it in buried trenches rather than 1980s-style, above-ground retorts. Its efforts, if successful, might actually confirm the desirability of research before leasing and production. But, its procedure is applicable only to Utah’s shallow shale, not Colorado’s deeper, more dense resources.

Perhaps the most telling tale is the absence of cheerleading from the major players such as Shell, Exxon-Mobil and Chevron. The latter recently placed its research and development leases on hold. Those are firms examining in-situ oil shale production and continually cautioning that commercial development is still on the rolling “ten more years” pace it’s been on even prior to the point which my own work with Shell ended nearly a decade ago.

Those bigger firms are caught in the proverbial “Catch 22.” Research is ongoing; they’re not ready yet but would like to snare some federal leases at the discounted rates proffered in the waning days of the Bush administration. So they remain silent while some in Congress, including Colorado Reps. Scott Tipton and Doug Lamborn, along with Hastings and others, claimed in the last year or so that oil shale revenues are the immediate answer to transportation funding problems, energy independence and everything, it seems, but a cure for cancer.

Here’s one thing you may want to consider.

In Colorado, home to the most valuable oil shale resources, three successive Republican and Democratic state administrations have, after much study, supported the go-slow, research -first approach. From Bill Owens to Bill Ritter to John Hickenlooper, governors have argued for the same thing the industry supposedly champions and that our Western Slope history demonstrates is necessary — that verifiable research first confirm oil shale can be produced in an economically viable, environmentally sustainable and socially acceptable manner before any commercial leasing occurs.

That is indeed the most reasonable approach.

Jim Spehar suspects our energy appetite may ultimately consume our oil shale resources but wants it done right. Your thoughts are welcome at .(JavaScript must be enabled to view this email address).


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