energy

Controversy Looms Over Oil Shale

By David Frey, 7-30-08

Shell’s oil shale facility in western Colorado is experimenting with “freeze wall” technology, intended to allow workers to heat the shale underground and pump out the fuel without harming groundwater.

New regulations intended to steer the removal of vast resources of oil shale in Colorado, Utah and Wyoming have drawn praise from supporters and fierce criticism from opponents, underscoring the controversy that hangs over an energy source that gets more and more attention as fuel prices climb.

Environmentalists blasted the proposed regulations as an attempt by the Bush administration to ramp up energy development in its waning days. In Colorado, where the oil shale is in less supply but is considered easier to reach, Sen. Ken Salazar has accused the administration of trying to “set the stage for a last minute fire sale” of oil shale leases. He has joined his brother Rep. John Salazar and Rep. Mark Udall, a fellow Democrat, in calling for a year-long moratorium before allowing any oil shale development. Gov. Bill Ritter, also a Democrat, has also opposed the new regulations.

Supporters say the new rules are necessary if development of oil shale, believed to be years away from being commercially viable, is ever going to happen.

“I think it’s going to be a while for all of these (alternative fuel sources) to be significant players,” said Jerry Boak, director of the Colorado Energy Research Institute at the Colorado School of Mines. “That doesn’t mean we shouldn’t be pursuing them.”

The Bureau of Land Management published proposed regulations on commercial oil shale development last Tuesday. They would let energy companies pay lower royalties than they pay for drilling on other federal lands as an incentive.

The Interior Department believes the fuel, trapped within sandstone under the three states could result in up to 800 billion barrels of recoverable oil. Technology for reaching the oil shale is still being developed, though. Critics question whether it will ever be feasible.

The issue is laden with painful memories, too. Western Colorado’s last oil shale boom left the region crippled after Exxon unexpectedly stopped its operations in 1982 on what became known as Black Sunday.

“Really, until there is an identified, commercially-viable technology to extract the oil from the shale, we don’t see a reason to lease,” said Mike Braaten, governmental affairs and energy coordinator for the city of Rifle, Colo., which was devastated after Black Sunday. Rifle’s city council has urged the federal government to hold off on oil shale leasing until after a thorough analysis of the environmental and economic impacts.

A spokesman for Sen. Wayne Allard, R-Colo., criticized Democratic legislators for their opposition to oil shale. Allard has called for a moratorium on development until at least 2011, said spokesman Steve Wymer, but he supports pursuing oil shale as a possible fuel alternative.

“It is irresponsible – and Sen. Salazar and Congressman Udall have done it for political gain – to try to stand on the Western Slope like white knights and try to keep off the oil companies,” he said.

Wymer said Allard supported a short-term royalty discount as an incentive to oil shale development.

Rising oil prices has prompted more interest in oil shale, but even boosters think it will be many years before it could be extracted. Shell oil company, which is believed to be farthest along in its development and operates a research facility on private and public land north of Rifle, said it doesn’t anticipate making a decision on the viability of oil shale until early in the next decade.

“There is something perversely absurd about reading in excruciating detail a comprehensive set of regulations that have been drafted for an industry that the administration admits does not exist,” said Carbondale energy expert Randy Udall, brother of Mark Udall, a staunch oil shale critic.

Environmentalists worry about impacts, including water use, energy use and impacts on the land, that could come in pursuing what they say is an uncertain fuel source.

“Bush is posturing, basically, and his administration is basically misleading the American public, citing high gas prices today and the solution of oil shale tomorrow. In fact, oil shale development will take years,” said Frank Smith, of Western Colorado Congress.

“We don’t know how much stuff we’re going to get out of the rock,” he added. “They shout from the rooftops that this is the answer, but then they’re whispering from behind the house that they don’t know how much they’re going to get out of the resource.”

Boak, of the Colorado School of Mines, said the issue is so controversial that Bush may be unable to get the proposed regulations in place before leaving office.

“There is a fondness for demonization in this business,” he said. “But everything is a mixed bag. On one hand, Republicans do seem a little heavily focused on the drilling side. On the other hand, Democrats seem entirely focused on the renewables side.”

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