Opponents of oil shale development in western Colorado, Wyoming and Utah participated in a “fly-in” to Washington, D.C. this week to push for increased federal oversight of the still-unproven form of energy that would consume huge amounts of water and conventional power.
The group was made up of sportsmen, energy experts, farmers and former politicians. They met with members of Congress and Obama administration officials to push for tougher regulations as the Interior Department reviews Bush-era rules for leasing public lands and collecting royalties.
On its way out of the White House in 2008, the Bush administration expanded leasing for oil shale research and development and set a sliding royalty rate. Conservation groups at the time argued such policies were premature given the fact that oil shale production has never been proven commercially viable in the United States and many questions remained unanswered.
“Oil shale research should be more than a science project regarding technology,” said fly-in participant Jim Spehar, a former Grand Junction mayor. “Someone needs to be figuring out how communities in northwest Colorado can handle up to six times their current population, as forecast in the most recent impacts analysis for local governments, and who’s going to pay the costs of dealing with that kind of growth.”
Oil shale, not to be confused with shale oil, is most prevalent in the Green River Formation of northwestern Colorado, southwestern Wyoming and eastern Utah. Extracting it involves heating up rocks to pump out the organic kerogen and then converting it into commercial oil. Exxon spent millions in the late 1970s trying to ramp up commercial production on Colorado’s Western Slope, but the Colony Oil Shale Project went bust in 1982.
Shell Oil is widely believed to be the farthest along in terms of current work on its RD&D (Research, Development and Demonstration) leases, but even Shell officials admit commercial production is years, if not decades, away.
“We aim to advance the technology systematically to the point at which an application could be made to convert the 160-acre RD&D tracts to commercial leases,” the company’s website states. “A commercial decision would be middle of the next decade and possibly later depending on the sequence and outcome of research activities.”
Shell officials have confirmed that research at its Mahogany Project in Rio Blanco County shows it will take at least three barrels of water for every barrel of oil produced from oil shale. Critics say such research should be completed and the process proven commercially viable before the federal government sets royalty rates and leasing parameters.
But Shell official Dan Whitney, during a congressional oversight field hearing conducted by Colorado Republican Reps. Scott Tipton and Doug Lamborn in Grand Junction this summer, called the Obama administration review of Bush-era rules “a waste of taxpayer money” that is hindering oil shale development.
Shell has spent an estimated $200 million so far on its Mahogany Project without ever recouping any of that investment with commercial sales of oil. Asked about its “middle of the next decade” statement on its website, a spokeswoman had this to say:
“The exact timing and size of a commercial oil shale operation is dependent upon many factors, including the economic and regulatory environment, project economics and consultations with key stakeholders,” said Shell’s Kelly op de Weegh.
“We are deliberately taking a cautious approach to oil shale technology development. Our research to date has demonstrated that our In-Situ Conversion Process works technically on a small scale. What remains is to prove that it can work commercially.”
Members of Colorado’s conservation community who participated in this week’s fly-in say the state’s outdoor-recreation and tourism-based economy should not be sacrificed for the promise of jobs that still may be decades away.
“The outdoor industry sustains thousands of jobs that depend on outdoor recreation in Colorado and throughout the West,” said Suzanne O’Neill, executive director of the Colorado Wildlife Federation. “With all of the questions surrounding oil shale’s financial viability, it would be irresponsible to trade any of those jobs for promised, but never delivered, employment from oil shale.”