Time to tap abundant resources of Energy Alley

It’s about time to start tapping the biggest tank of fuel along Energy Alley between Green River, Utah, and Rifle, a RAND Corp. analyst said.

“We need some early production” from oil shale, said James T. Bartis, senior policy researcher for RAND. “Let’s get some experience.”

While many geological and scientific questions about shale remain to be answered, it’s time for the federal government to start learning how best to manage the federal lands of Energy Alley that overlay the world’s richest sources of oil shale, Bartis said.

Oil shale isn’t the only fuel along Energy Alley that might yet be back in the nation’s energy picture, Bartis said. There is a future for coal, especially when mixed with biomass. And given that nuclear energy emits no greenhouse gases, “more and more, nuclear starts looking like an option” for baseload electricity generation, Bartis said.

At no other place is there such a convergence of resources as in Energy Alley, Colorado State Geologist Vince Matthews said.

“The oil shale alone is unique. Right there, you can stop,” Matthews said. The region’s coal, uranium, natural gas, methane and other resources only boost the richness of the mix, Matthews said.

The energy resources of Colorado and Energy Alley are “something quite frankly the state needs to take better recognition of, especially in a time of recession,” Colorado Mining Association President Stuart Sanderson said. “You really have to appreciate the fact that domestic mining and domestic resources are extremely important to national security.”

While market forces drive demand for fuels such as those from Energy Alley, energy companies need to come to terms with “the growing expectation that companies need to earn not just the government-required permits and licenses, but that there is a less formal but very real social license to operate,” said Dr. Rod Eggert, director of the Division of Economics and Business at Colorado School of Mines.

It’s time for universities in general to start their own involvement to assure the development of oil shale can be done “without making this one of the ugliest corners of the United States,” Bartis said.

The Obama administration will begin one step toward oil shale development Monday, when nominations for a second round of oil shale research, demonstration and development leases are due to the Interior Department in Washington, D.C.

Government has to be just as imaginative in preparing for oil shale development as the energy companies are in learning how to unlock it, Bartis said.

“It’s in the national interest to get a lot of production,” he said, “but it’s also in the national interest not to have an environmental disaster.”

Bartis recommends structuring an agency like a port authority to handle the leasing of oil shale for development.

Just as a port authority controls a limited number of docks and provides for common needs, such as dredging, an oil shale agency needs to control access to the lands that contain, by one estimate, almost half again the amount of oil produced from the Earth since the dawn of commercial drilling.

The federal government also needs to devise the best royalty system for oil shale, Bartis said. The existing leasing system grew out of 19th century efforts to encourage people to move west, a carrot that’s no longer needed to encourage western development, he said.

In the case of oil shale, a highly concentrated resource in relatively small areas of western Colorado, eastern Utah and southwest Wyoming, the federal government has to find a way to meet paradoxical goals, Bartis said.

“How do we reward truly pioneering companies that put down hundreds of millions of dollars and should have a good reward if they do it the right way?” Bartis said. “And how do you do that without setting it up as a giveaway?”

A major impediment to nuclear energy seems to be disappearing, Bartis said.

Spent fuel rods from nuclear reactors were to be stored deep in Yucca Mountain in Nevada, but that state’s congressional delegation fended off the proposal.

The loss of Yucca Mountain seems “really not that important” to continuing the nuclear-energy industry, and it illustrated the folly of using politics to select a disposal site, Bartis said. It now seems that the pencil-thin spent fuel rods can be safely and inexpensively stored in concrete bunkers, taking up little space and requiring the oversight of a security force, Bartis said.

The lack of a large, secure storage site hasn’t hamstrung the industry to the point it can’t operate, Bartis said.

Colorado coal also could be mixed with biomass from its farms and forests for electricity generation, he said.

The possibility of another boom for an Energy Alley fuel points out that much has changed since 1982, said Eggert of the Colorado School of Mines, referring to the oil shale bust that hit western Colorado that year.

“The economy of the Western Slope has evolved and changed,” Eggert said. “People there are looking for a more out-of-the-way place. There is more of a potential conflict.”

Universities, Eggert added, are in a position to play constructive roles and be “honest brokers” in the sometimes fractious relationship between energy development and residents of places like Energy Alley.

“It just shows God’s sense of humor,” said Reeves Brown, executive director of Club 20, the Western Slope lobbying and promotional organization. “He takes the prettiest spots on the planet and underlays them with the richest of energy resources.”


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