Why the Time Might Be Right for Oil Shale
During the 2008 legislative session, high energy prices throughout the United States turned a spotlight on the hazards of depending on overseas energy suppliers. As calls to develop domestic energy resources increased in volume and chants of "drill, baby, drill" rang out at political rallies, then-Senator Ken Salazar (now Secretary Salazar) and his allies were unable to extend the moratorium on commercial leasing regulations for another year, and it expired at the end of September.
Secretary Salazar has consistently maintained that he supports the development of oil shale if it can be done in a way that minimizes negative impacts on the human and ecological communities of Shale Country. Several energy companies - notably RD&D lease holders Shell, Chevron, and AMSO - echo this sentiment that oil shale development must be "done right" or not done at all. But with a bout of soaring energy prices fresh in their memories and geopolitical instability rippling through global energy supply lines - lines increasingly stretched thin by rising demand from developing nations like China and India - a growing portion of Americans believe that the United States must move faster to develop more of the energy sources within its borders, including offshore oil deposits deep under the ocean floor and the oil shale buried under the Western Slope of the Rocky Mountains.
Advocates for tapping more of our domestic energy sources persuasively point to a variety of national security and economic benefits that would accompany such development. Many of the world's richest oil and gas supplies lie in places wracked by perpetual political instability or controlled by governments that view the US in less-than-friendly terms. Reliance on these unreliable suppliers poses a threat to America's national security that can be reduced by increasing production of domestic oil and gas resources.
Developing our domestic energy resources is not a panacea. In this globalized century, it is no longer credible to argue that the United States can drill its way out of this energy crisis. It is even time to reassess the late-twentieth-century dream of American energy independence in a fossil-fuel-driven world economy. Nevertheless, the development of major domestic energy sources like oil shale would be a significant step toward gaining greater national control over our energy supply. Oil shale has the potential to shift the center of gravity in the US petroleum supply away from the Persian Gulf and to the Americas, thus freeing the nation from our reliance on unfriendly oil producers overseas.
What's more, such a shift would curtail the enormous transfer of wealth that results from US dependence on foreign oil. If more oil were produced in the United States, Americans would direct their dollars into energy industry jobs closer to home rather than send huge amounts of capital to overseas oil suppliers.
The history of efforts to develop an oil shale industry on the Western Slope is not encouraging, but oil shale advocates point to several changes since the last bust that make the industry finally viable in the twenty-first century. First and foremost, global oil production has leveled off and may have reached its peak. In contrast to the 1970s, when oil prices were artificially driven up by the OPEC oil embargo, escalating energy prices today reflect increasing global demand for a truly limited resource. The anomalous oil price whiplash of 2008 not withstanding, the relatively stable price trajectory created by this tightening market - and the steady revenue streams an upward trajectory will create - provide an economic incentive for development and make it easier for companies to invest in new resources and new technologies without fearing sudden market fluctuations that might kill new development. Oil shale is near the top of the list of promising new fossil fuel resources to invest in because it is richer in energy than other remaining unconventional resources.
The energy companies at work in Shale Country today believe that, even if crude oil prices level out, oil shale's moment may finally be at hand. As Shell spokesman Tracy Boyd recently put it, "Regardless of where oil prices are, we think the opportunity is great and the benefit is great. We plan to continue our slow and methodical approach and stay the course." Although a commercial industry is still a decade or two in the future, the new generation of in situ technology that Shell and its counterparts in Shale Country are methodically investing in has the potential to make oil shale development economically and environmentally viable. And at a moment when national security concerns are converging with economic anxieties in a troubling pattern, the prospect - and potential ramifications - of developing this massive domestic energy resource staggers the mind.34