COLORADO’S ‘YOGI BERRA’ MOMENT

Oil Shale Opportunity Knocks Again on Colorado’s Door

By Headwaters News, 5-01-07

This is like déjà vu all over again,” Yogi Berra, famed New York Yankees catcher, once said.

But he wasn’t speaking about oil shale in Colorado. Today, the state’s West Slope communities are revisiting that old boom from two and a half decades ago.

On May 2, 1982, tumbling oil prices, escalating costs and high interest rates forced Exxon to close down its Colony Oil Shale Project, putting thousands of employees out of work and shutting down the hopes and expectations of businesses that built their future on Exxon’s rosy prognostications about that project.

A quarter century later, the Bureau of Land Management has approved research projects – five in Colorado and one in Utah – to showcase new technology for getting oil out of the stubborn rock that encases it.  The Grand Junction Sentinel reported that on Monday, the BLM gave Oil Shale Exploration Co. the go-ahead to reopen the White River mine near Rangeley, Utah.  That mine, which has been closed since 1985, will originally send its oil shale to Canada for processing, but eventually a “surface retort,” the processing plant will be moved to the mine site.

In Colorado, the five companies that will be conducting research operations on oil shale deposits in that state will take lessons learned from the Exxon project all those years ago and use them as a foundation for the new projects.  Royal Dutch Shell and some of the other companies operating research sites in Colorado are considering projects that pull the oil out “in situ,” or process it where it is.

Because not all oil shale deposits are equal, with some layers thick, and some thin, some deposits hundreds of feet below the surface, others deeper, the processes needed to extract the oil must be different as well.  The Grand Junction Sentinel provided an in-depth look at the varying processes under consideration for the various oil shale leases.

But it’s a long way from research to production, with one federal official pegging the advent of appreciable oil shale production in Colorado sometime around 2025.  There are a number of issues that need to be worked out, and Gov. Bill Ritter and his staff are scrambling to meet deadlines imposed by the Energy Policy Act of 2005.  The state must complete by this summer a draft environmental impact statement on commercial oil shale development – which is separate from the research projects discussed above – and state officials said that timeline is simply too tight.

The Grand Junction Sentinel reports that state officials must, before commercial oil shale development can commence, solve such issues as water availability for such projects, infrastructure needs such as roads and services, the effect of oil shale development on the region’s social and economic sectors, and create regulations for such development.  These are complex issues, and Ritter’s administration is feeling a bit overwhelmed by the gargantuan task.  Colorado’s U.S. Sen. Ken Salazar said he’s considering revisiting the Energy Policy Act to give states more time to respond to the Interior Department.

More time is just what Jim Spehar, a columnist for High Country News’ Writers on the Range, urges Colorado to take.  Spehar, who lived through oil shale’s last boom – and bust – in Colorado, said state officials can take a couple of important steps to protect the state from a second bust cycle.  They can demand that the oil shale economy not be built on government subsidies, and they should save some of the boom revenue in a rainy day account, so when the boom goes away next time, the state will have something to cushion the fall.

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