Cutting oil shale
 a punitive move, researcher says

Obama administration assailed over move to reduce federal leases

GOLDEN — President Barack Obama’s administration’s move to reduce the amount of land available for development of oil shale seems designed to punish, not promote, the industry, the head of the Oil Shale Symposium said.

Opponents of oil shale development, meanwhile, said the nation would be better served by abandoning the search to develop a “Stone Age fuel.”

The Obama administration in 2011 began conducting an environmental survey of oil shale, which is concentrated in three Western states: Colorado, Utah and Wyoming, with the richest concentrations in northwest Colorado.

A similar study conducted by the George W. Bush administration in 2008 opened 2 million acres in the three states to possible oil shale development. The preferred alternative in the Obama administration study calls for reducing the land available to 460,000 acres, including 35,000 in Colorado.

“To my mind, it looks punitive,” said Jeremy Boak, who heads the Colorado Energy Research Institute at the Colorado School of Mines.

Not only does the Obama administration proposal slash by about 85 percent the acreage available for potential development, but the land also includes existing research, demonstration and development leases as well as areas of lesser potential.

Critics have derided as a giant giveaway the potential leasing of 2 million acres of public land overlaying rock containing the equivalent of trillions of barrels of oil.

The potential of setting aside 2 million acres for oil shale makes little sense “for an industry that does not yet exist,” said David Abelson of Western Resource Advocates.

The Bureau of Land Management would issue leases of the portions of the 2 million acres just as it handles the leasing of other materials, by considering nominations of parcels and auctioning them as it deems appropriate, Boak said.

Though the United States has only experimental projects under way, oil shale is being worked commercially elsewhere, notably Estonia, Boak said.

Enefit, which is the Estonian company that has long dealt with oil shale, is ramping up operations in Utah with plans to begin producing 25,000 barrels of oil per day by 2020 and 50,000 barrels a day by 2024.

The company has been producing oil from shale for decades now in Estonia and also is looking to operate in Jordan, which has significant oil shale deposits.

Enefit’s experience demonstrates that the development of oil shale is moving into the commercial realm.

“This is not about research,” Boak said.

The potential payoff is significant.

The value of oil shale is measured in barrels of the equivalent of crude oil per ton of ore to be processed.

There are about 1 trillion barrels of oil available in lands containing 15 barrels per ton, and about 350 billion barrels in lands containing 25 barrels per ton.

The world to date has used about 1 trillion barrels of oil, so the 25-barrel-per-ton lands hold about one third of the oil used since people discovered how to use it.

Oil shale is best left exactly where and as it is, Abelson said.

If oil shale businesses are moving quickly, so are their potential customers, such as airlines, which are experimenting successfully with other, more modern, sources of jet fuel, such as generating them from existing wastes, Abelson said.

While Enefit is moving forward, it’s largely on private lands, Abelson said.

So if Enefit isn’t using the federal lands it leased, “does it really need (them)?” Abelson asked.

If oil shale is to go forward, Abelson said, much more needs to be understood about its demand for water and effects on water and air quality, wildlife and socioeconomic consequences.

The Bureau of Land Management was to have released oil shale regulations, including the amounts companies would be charged for producing on federal lands, called royalties, last May, but has yet to do so.

The Obama administration set a Dec. 31 deadline for the completion of its environmental study and final decision on the amount of land available for oil shale development.


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