BLM Mainlining Oil Shale Development

No oil company has yet invented a commercially viable way to extract oil from oil shale. Not ExxonMobil, not Shell Frontier, not Chevron USA.

Sure, there are several experiments that look promising, especially Shell’s in-situ process (simply, heating the shale rock underground so that the oil seeps up to the surface,) but it could still take decades to make oil shale a feasible enterprise and a temporary answer to our petroleum shortages. Yet, the Bureau of Land Management has given the governors of Utah, Wyoming and Colorado and affected city and county officials only a couple of weeks to digest and respond to the BLM’s seven-volume, 2,000 page draft environmental impact statement for oil shale development. The BLM is the same government agency that has yet to update its master plan for natural gas drilling in Piceance Creek area near Meeker. Its 1997 version addressed impacts from about 1,500 gas wells when in reality, over 22,000 wells will be drilled in the area (which incidently, overlaps into Colorado’s oil shale deposits.)

The governors had asked for a September deadline, but were denied. From a Grand Junction Sentinel article:

The Bureau of Land Management this week rebuffed Gov. Bill Ritter’s request for more time to review a federal report on potential oil shale development in Colorado.

The report, the draft environmental impact statement for the BLM’s fledgling commercial oil shale leasing program, was released to Wyoming, Colorado and Utah government officials Monday for their comment.

The document will show how widespread the BLM expects commercial oil shale development to be and what energy and water resources it might consume.

The state originally had until May 29 to comment on the report. Gov. Bill Ritter and Wyoming Gov. Dave Freudenthal protested, asking the BLM to give them until Sept. 11.

But, in a letter to Ritter this week, Assistant Interior Department Secretary C. Stephen Allred gave the governors an additional two weeks, setting a June 12 deadline.

Colorado Department of Natural Resources Deputy Director Mike King said the extended deadline will prevent the state from giving the report a comprehensive review.

So what are some of the impacts of oil shale development that the BLM is suppose to be addressing in its study and expects the governors to speed read? Let’s go back about 30 years when Exxon’s “White Papers” had outlined its possible oil shale mining impacts:

Oil shale companies were required to produce many documents such as an Economic-socio Impact Study (EIS) as part of the federal leasing requirements. One day in June 1980, an Exxon executive went one step beyond an EIS.

In a speech before the American Mining Congress and assuming he was under the media radar, the Exxon official described the future of oil shale in western Colorado. He predicted that the industry would increase growth to 1.75 million people between Mesa, Garfield, Moffat and Rio Blanco Counties by 2010 (the 1980 population of the area was 115,000). There would be 660,000 people between Rifle and DeBeque alone. Water needs would be so great that oil shale companies would have to pipe water from the Missouri River Basin in South Dakota.

If allowed to surface mine oil shale for its retort process, which had not been fully developed yet, Exxon projected it would invest $500 billion dollars to reach a target of one million barrels (bbl) of oil from oil shale per day. They would employ 22,000 miners and 8,000 processing workers for each of the proposed six open pit mines that individually would stretch over three miles long.

There was a lot of explaining to do after the LA Times published these comments and many an Exxon public relations team spent the rest of the year softening that position. Yet, the facts were out there: oil shale was going to have a colossal effect in the region and no one had prepared for it.

Oil shale deposits in Utah, Wyoming and Colorado supposedly have reserves of 500 billion to 1.1 trillion barrels of oil, which is three times the size of Saudi Arabia’s reserves. At current or reduced consumption, these reserves could theoretically supply the U.S. for about 100 years. The process of separating the oil from rock would consume massive amounts of energy, but coal is plentiful in the region. Since you can’t “fill ‘er up” with coal in your tank, the investment of building coal firing plants to process oil from oil shale may be a viable exchange of energy.

Water, air quality, environmental and social impacts, boom towns…the list is almost endless about what the BLM study will need to address and resolve in just a year or so. If it’s going to take at least another decade to find out if there is a feasible commercial process, why the big rush on part of the BLM to have this study completed and the program in the works by 2008? Could a new presidential administration in 2009-and a possible new energy policy– have any influence?

The public and governmental agencies will have a brief window to comment on the draft plan starting in mid-July. But will the BLM have the time to listen?