Oil shale isn’t yet commercially viable but on Wednesday the U.S. House Committee on Natural Resources passed Rep. Doug Lamborn’s bill to speed up its production in the West anyway.
Extracting fuel from oil shale can require anywhere between three and five barrels of water for every barrel of oil — one of the many reasons why it is more costly than producing conventional crude oil. Experts say commercial oil shale production is potentially a decade away, if it ever happens at all. Yet H.R. 3408, the “Pioneers Act,” would revive a 2008 plan by the Bureau of Land Management to open about 2 million acres of public lands in Utah, Wyoming and western Colorado to oil shale drilling.
“We already face a water shortage in the West that threatens farmers and ranchers,” said Bill Midcap of the Rocky Mountain Farmers Union. “We simply cannot gamble away our water on oil shale speculation at the risk of losing our farming and ranching economy that we depend upon for our food and fiber. A farm economy that is crucial for our State and that is helping our State out of the recession. We should use existing research and development projects to determine how much water will be needed before we consider commercial leasing of oil shale.”
Conservation groups challenged the plan on grounds that the analysis of impacts and the process were flawed and a new proposal re-evaluating the plan is due out soon. Lamborn’s bill (pdf) would mandate commercial leasing on 125,000 acres of public lands by 2016 even though the technology isn’t in place.
“Lamborn’s approach to oil shale is ‘Ready or not here it comes,’ and we are not ready,’’ the National Wildlife Federation’s Kate Zimmerman said. “There are still very important questions to be answered about the impacts of extracting oil shale on Colorado communities, on water quantity and quality and on fish and wildlife. Let’s wait for the results of the existing research into oil shale technology that is already taking place on public lands in Colorado and Utah before we give away more public resources.”
Oil shale was behind the huge western Colorado bust of the 1980s, when Exxon shut down a massive project that threw communities and families into economic and social turmoil. Nonetheless House Speaker John Boehner recently pointed to new oil shale legislation as a way to pay for transportation projects in the next five years — a check that may be hard to cash.
“Republicans on the House Natural Resources Committee botched Rep. Lamborn’s oil shale legislation hearing, which showed just how ridiculous the bill is,” said Matt Garrington, co-director of the Checks and Balances Project. “In two hours, the committee majority voted down guaranteeing oil shale technology to be American-made, ensuring that oil shale extraction won’t harm water supplies for municipalities and agriculture, and requiring commercial oil shale to be a proven revenue generator before handing over 2 million acres of public land for speculation. House Republicans did manage to preserve taxpayer handouts for oil companies by giving away oil shale at bargain-basement rates, undermining Speaker Boehner’s goal of raising transportation funds.”
The Lamborn bill would set royalty rates for oil shale starting at 5 percent for five years – compared to about 12.5 percent for extracted offshore oil and gas – and gradually raise the rate over several years. If they were ever paid, Garrington added, the lower royalties would mean less revenue for local governments, which would then shoulder the burden of costs associated with energy development such as new schools, hospitals, emergency services, roads, and other utilities.
The Pioneers Act is one of three bills concerning domestic energy that the committee approved. The GOP also voted to jump start offshore oil production and open up the Arctic National Wildlife Refuge to drilling. Republicans plan to attach the bills to a $260 billion transportation package.
“Instead of legislating seriously,” said David Goldston, director of government affairs for the Natural Resources Defense Council, what the Republicans have done is put out “an inventory of all the worst ideas they’ve had for the last two decades.”
Lamborn’s bill still must pass the House and if it does, like the other measures the House Committee on Natural Resources passed Wednesday, it will face opposition in the Democrat-controlled Senate.