We can deal with oil shale issues and allow industry to move forward
Let’s agree that socioeconomic issues related to a developing oil shale industry must be addressed. Second, let’s agree that the potential benefits to our region and our country are high enough that we must find a way to make it possible for industry to succeed.
Local governments are rightfully concerned about demands on infrastructure, just as farmers, ranchers and outdoor enthusiasts worry about impacts on water and land. All of these concerns can be mitigated by research, innovation and development, but no industry can succeed if overburdened with restrictive and arbitrary regulations that eliminate the means or incentives to succeed.
The key to success is thoughtful cooperation between industry, government and stakeholders.
In the 1980s, millions of dollars were collected as a part of the Naval Oil Shale Reserve Trust Fund to assist in offsetting impacts on the community due to industry. Some suggest that before oil shale begins commercial development, a similar fund should be established, but this plan has several flaws.
First, no other industry related to energy, hospitality, medical or retail is required or expected to make impact payments in advance.
Second, how do you calculate a formula to pay for unknown impacts based on the unknown scope of growth of an unproven industry?
Third, though not immediately, many of the impacts on infrastructure will be paid through increased revenues produced by sales and real estate taxes as well as severance taxes and royalties.
Lastly, roughly $17 million from the trust fund are still in federal hands and have yet to be dispersed to the affected communities.
Cooperation is the key. One resolution could be an impact-mitigation agreement where industry provides agreed-upon impact payments up front for negotiated tax and royalty credits in the future. Other options may have to consider ways to deal with federal Payment In Lieu of Taxes monies, usage taxes or a number of other possibilities.
Arguments against the energy source include:
It’s a threat to water rights, water quality and requires too much water. It creates an unacceptable environmental footprint. Threats to habitat and potentially endangered species like birds, migratory mammals and fish are too high.
Also, opponents say, it requires more energy to produce than what you can get out of it, causing a net energy loss. The industry isn’t sustainable without significant taxpayer-supported subsidies. Industry may have negative impacts on tourism.
Finally, technology is years away from creating an efficient means of energy production that is fiscally or commercially viable.
These statements are no surprise, but the fact that they were not made about the oil shale industry might surprise you. They were, in fact, references to potential geothermal projects in Colorado, wind farms in Wisconsin and Massachusetts, hydro-electric plants in Canada and the UK, solar projects in California and ethanol projects across the United S.
In no way am I trying to discredit the potential of these industries, just as I don’t discount the importance of the coal, natural gas, oil and nuclear industries. My purpose is to demonstrate that all sources of energy production have pros and cons, so we must maximize the potential of all resources, including oil shale, while being conscious of our environmental and socioeconomic responsibilities.
Our nation’s struggles with high unemployment, increased energy costs and threat of war with Third World countries dominate headlines. Energy independence must be a priority and oil shale development can aid in that effort while providing high-paying jobs and needed tax revenues. But we must balance that need with responsible development.
Going slow to be responsible is one thing, but stalling industry to the point of paralysis through lawsuits, regulatory uncertainty and arbitrary policies is irresponsible.
Dependence on oil is going to remain for decades. Even with aggressive research and development of alternative energy sources, the U.S. Energy Information Administration projects worldwide demand for oil will increase by 30 percent by 2035.
Facing a national energy crisis in 1979, President Jimmy Carter stated that Congress would be given “the responsibility and authority to cut through red tape, the delays and the endless roadblocks to key energy projects. We will protect our environment. But when this nation critically needs a refinery or a pipeline, we will build it!” Simply put, we will be as responsible as we have the luxury to be, but when faced with the next crisis, all bets are off!
We currently have the luxury to be responsible on both socioeconomic and environmental fronts, but to prevent this region from becoming a national sacrifice zone, and to provide for generations to come, we must have faith in American ingenuity and industry. We can be a world leader in environmentally responsible energy development and be energy independent by utilizing all of the energy resources we have.
You have heard why oil shale hasn’t worked before, but if it can work, now is the time to listen to what must be done in order to succeed.
Brad McCloud is the executive director of Environmentally Conscious Consumers for Oil Shale in Grand Junction.