Lamborn oil shale bill seen by Boehner as possible transportation funding fix

Republican Doug Lamborn’s bill to speed up oil shale production in western Colorado has been packaged with House Speaker John Boehner’s American Energy and Infrastructure Jobs Act (HR 7) as a means of funding the nation’s crumbling transportation infrastructure. But critics point out commercial oil shale production is potentially decades away and may never come to fruition.

Shell in-situ oil shale research project in Colorado's Rio Blanco County (USGS photo).
Lamborn’s Protecting Investment in Oil Shale the Next Generation of Environmental, Energy, and Resource Security (PIONEERS) Act (pdf) would open up 2 million acres of federal land in Colorado, Wyoming and Utah to speculative oil shale development. It would also provide royalty relief for the major oil and gas companies researching the process.

“The Obama Administration has gone out of the way to block access to America’s vast oil shale reserves, keeping jobs and American energy security under lock and key,” Lamborn said in a release before chairing an Energy and Minerals Subcommittee hearing on his bill today. “We cannot afford to continue to keep one of America’s greatest natural resources buried under burdensome regulation and federal red tape.”

While the Obama administration, as part of a settlement with environmental groups, has been taking a “fresh look” at leasing and royalty rules passed in the waning days of the Bush administration, oil shale research, development and demonstration (RD&D) has been proceeding slowly on several federal leases.

The experimental process involves super-heating rock, extracting organic kerogen and converting it into crude that must then be further refined. The process requires anywhere between three and five barrels of water for every barrel of oil – a major concern in one of the most arid areas of the nation.

Shell Oil has been one of the research leaders, spending upwards of $200 million so far, but a heavily subsidized project by Exxon on Colorado’s Western Slope in the early 1980s went bust and devastated the local economy. ExxonMobil is one of the companies eyeing another round of RD&D leases issued by the Obama administration.

A Shell spokeswoman did not provide comment on the PIONEERS Act in time for this article, but in the past told the Colorado Independent that the Dutch company is purposefully moving slowly on the process.

“We are deliberately taking a cautious approach to oil shale technology development,” said Shell’s Kelly op de Weegh. “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.”

The Shell website states, “A commercial decision would be middle of the next decade and possibly later depending on the sequence and outcome of research activities.”

“The fact remains that the fundamental problem with oil shale is the rock itself,” Wyoming rancher and former federal land manager Bill Eikenberry testified today. “Aside from the fact that the leading companies are not American – they are Dutch, French, and Estonian – until there are technologies, there are no jobs, there is no energy, and there is no revenue.”

Rep. Scott Tipton, a freshman Republican who represents the Western Slope district where the research is being conducted, held field hearings in Grand Junction this summer in an attempt to speed up the process. His office did not return emails today requesting comment on tying the Lamborn bill to Boehner’s transportation funding bill.

In an exchange with Interior Secretary Ken Salazar this week, Lamborn questioned pending hydraulic fracturing regulations on federal lands, confusing natural gas drilling (shale gas) with oil shale. He also said oil shale production would create more than 350 jobs (see C-Span video below), but an industry official today testified “millions of jobs” could be created.

“Congress can’t change science,” said David Abelson, oil shale policy analyst for Western Resource Advocates. “For a hundred years top scientists have been trying to figure out how to develop oil shale, but nobody has been able to come up with a technology that works on a commercial scale.”

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