Sustaining a Better Future
[T]he recent striking demand in industrial life for oil in its many forms, the failure of domestic wells to meet this demand in full, the rapid advance in the price of petroleum, the warning of geologists and government experts that the underground supply of oil cannot much longer be depended upon to supply the ever increasing demand, all unite in pointing unerringly to the one permanent supply of the raw material which we have-the deposits of oil shale. Whether we wish it to be so or not, we shall soon be forced to resort to the oil shales for our supply of oil. Regardless of the number and complexity of problems to be solved in establishing the oil shale industry on a commercial basis, yet they must be solved, and it remains for the American mining engineer, chemist, and inventor to provide the solution. . . . The successful retorting of oil from shale and the establishment of the oil shale industry on a permanent and profitable basis is the great problem of this decade. No other phase of our industrial life can compare with it. The finger of fate points towards it.
- Victor Clifton Alderson, president of the Colorado School of Mines, in The Oil Shale Industry, 1920.
There's a saying in Colorado, a saying that we imagine is popular in awkward conversations between strangers in Shale Country bars, but a saying that nonetheless gets at a sincere sentiment beneath its corniness: "Oil shale has a fantastic future - it always has, and it always will."61
People on the Western Slope can be forgiven their cynicism. After nearly a century of listening to pronouncements like Victor Clifton Alderson's, and despite numerous scientific and technological advances, they find the resource still in the ground. Perhaps the new generation of in situ technologies will finally prove successful, but at the moment even the energy companies admit that it is too early to know.
Meanwhile, the industry's earlier fumbles have shaken the Western Slope in ways that continue to reverberate. The Black Sunday bust in 1982 was devastating, but after a period of doldrums the region's economy recovered and embarked on a long-term amenity boom. The slack from the oil shale bust has been taken up by service workers, retirees, second-home owners, and cybercommuters, and Western Slope communities are thriving in ways that are not likely to be greatly undone by the current recession. With the recent oil and gas boom already straining local resources even as it adds more wealth to the regional economy and helps to mitigate the local impact of the nation's current economic woes, residents are understandably wary of what another wild ride with oil shale might mean for their communities and quality of life.
But the residents of Shale Country are not the only stakeholders in the matter. American society relies on abundant energy. It was not a coincidence that the rise of the Fossil Fuel Age, which unleashed enough energy to significantly reduce the labor burden on human beings, corresponded with the end of slavery and the expansion of democratic government. Today, people in developed and developing nations depend on easily available energy to drive large segments of the economy, to transport themselves over long distances, and to power a variety of everyday items that increase both productivity and quality of life. Simply put, abundant and affordable energy from fossil fuels has made life better for countless people around the world.
We believe that the Fossil Fuel Age is winding down. But until the next era arrives, Americans and people around the world will continue to demand enough energy to maintain and improve their quality of life. Until renewable sources are ready to shoulder this burden, fossil fuels such as oil, coal, natural gas - and perhaps oil shale and their other unconventional counterparts - will continue to be important and necessary energy sources.
As the world moves toward a renewable energy future, oil shale may well be the end game of the Fossil Fuel Age. But it is a very big play. Although the social and local economic challenges are momentous and the environmental questions are serious and significant, the world class proportions of the oil shale in the Green River Formation and the national security impetus to secure a domestic energy supply seem certain to continue attracting the interest of energy operators, especially whenever the price of oil jumps a tier.
Twice in the past century, interest in oil shale has swelled into a full-fledged boom. These earlier rushes grew out of periods of national anxiety about the energy supply, when the federal government encouraged the creation of an oil shale industry in hopes of developing a secure and abundant domestic energy source. Despite intense efforts, neither boom produced commercially viable technology for extracting oil from the rocks, and the federal government withdrew its support of the nascent industry once public anxiety about energy had subsided. Instead of establishing a new industry, without viable technology or long-term commitment from the government, both booms ended in sudden busts that battered the communities of Shale Country.
It would be a mistake to presume that the failures of the past necessarily predict the future for oil shale. Our world today would be very different if people throughout history had walked away from endeavors after only two (or five or a dozen) unsuccessful attempts. But studying the tumultuous history of oil shale in the Green River Formation will help energy companies, government officials, and Shale Country communities deal more effectively with the next round of potential oil shale development. Examining the causes of the previous booms and the reasons for their failure provides a variety of applicable lessons for those who see oil shale on our nation's energy horizon.
This time around, the industry seems to be taking a more deliberate and methodical approach to oil shale, refusing to buy into the false polarity that confidence leaves no room for caution. We value the current commitment of major industry players like Shell, Chevron, and AMSO (which is part-owned by French supermajor Total) to the research and development of a process that will be "done right." Doing it right in Shale Country will mean developing operations that address not just the technical challenges of oil shale recovery but that are also mindful of social, economic, and environmental consequences. However, just as "the Exxon bust" painted operators with a broad brush in the early 1980s, the industry today runs the risk that its image will be shaped by the least cautious and deliberate operator in Shale Country. Companies that build a solid foundation in Shale Country communities will be best positioned to survive the fallout from another high-profile failure of one of their competitors.
For energy companies in Shale Country, building a solid foundation within the community means inviting public participation and engaging with local concerns. We heard a story once about an energy company executive who organized a series of public meetings around the Western Slope at which residents could voice their concerns and get information about development. At one particular meeting, the executive sat with a pad of paper in front of him, nodding his head as one person after another shared their views, but never once did he take out his pen and make any notes. Public involvement in the process must mean more than feigning interest. Companies should work to create a mutually beneficial relationship with the communities they affect (and depend upon for workers, schools for their children, social services, etc.) to identify community hopes and advance them. This type of long-term investment promises real benefits and is a necessary component of success, not just a philanthropic option, in Shale Country.
While all nonrenewable resources, even those as vast as oil shale, will eventually dwindle, sustainability is the key term for energy companies seeking to build relationships with Shale Country communities. In local economic terms, it signifies business models that will promote planned growth rather than boom-and-bust chaos. Beyond the purview of the local chamber of commerce, it denotes operational plans that demonstrate a commitment to preserving the area's unique and fragile environment. Companies should work to ensure (and demonstrate to residents) that, due to thorough research and development, careful selection of sites, and new extraction technologies, production will extend over a career-length (or longer) time horizon and preserve a healthy environment that can be enjoyed for generations.
This is a great deal to ask of the energy companies. A century ago, these sorts of socioeconomic and environmental concerns would not have even been on the radar of a mining company. In fact, a century ago, the terms "socioeconomic" and "environmental" were not even part of miners' vocabularies. But the history of the West is well-supplied with examples of people acting in haste without pausing to consider the consequences of their actions for other people or the natural world. And after generations spent reckoning with their legacies of economic boom and bust cycles and environmental damage, we know now that theirs is an example to learn from rather than emulate.
If the boom does come, Western community leaders, energy developers, policymakers, and residents are fortunate to have a great selection of historical and contemporary case studies to draw upon as they chart a course through their own unique moment. In many ways, particularly with regard to social impacts, the earlier oil shale boom and the area's current oil and gas boom both offer valuable lessons that these stakeholders can apply to the next round of potential oil shale development.
The environmental impact is harder to predict because new technology is being tested at the RD&D lease sites. As they develop their processes, companies must do everything they can to respect and sustain the health and integrity of Shale Country's ecosystems, water resources, and air quality. As environmentalists often note, the price of resource development grows exponentially when it does environmental damage that requires long-term or perpetual management. The responsibility of reckoning with these costs is too often postponed and pushed onto a succeeding generation. In the worst cases, the harm to the environment can be irreversible, such as the extinction of a species. In these cases, absolute measures of value - such as the price assigned to a barrel of oil or a gallon of gasoline - cannot meaningfully account for the external costs of energy development.
Americans today are more attuned to environmental issues than ever before, and natural resource extraction is often the subject of national debates. Previews of the public's environmental concerns about oil shale development may be found in the debates over drilling on the Roan Plateau, in the Arctic National Wildlife Refuge, and in the waters off of our shores. That these areas have attracted nationwide attention is a reminder that, although residents of the Western Slope will feel the impact most keenly, the development of oil shale is far from just a local issue. A great number of sincere people throughout the nation (and around the world) care deeply about such beautiful places and their environmental health as much or more than they care about the price of gas. In an arena where public perception and sentiment can weigh equally with scientific data in determining the worthiness of a project, energy companies cannot ignore public opinions about their environmental impacts.
No report - not even one professing to cover "what every Westerner should know" - can anticipate all of the issues that will be raised by oil shale development on the Western Slope of the Rocky Mountains. There are too many uncertainties. But there is one guarantee: There will be unintended consequences. Of all of the questions surrounding oil shale in the coming years, the most important question facing the stakeholders in Shale Country and elsewhere is this: Will we have sufficient nimbleness, agility, and will to respond when those consequences appear?