The House Subcommittee on Energy and Mineral Resources heard testimony this morning on a bill to expand oil shale development efforts.
At a hearing notably lacking most of the Democratic members of the subcommittee, Republican Representative Doug Lamborn introduced his Protecting Investment in Oil Shale the Next Generation of Environmental Energy and Resource Security Act (or, with a fair amount of acronymical latitude, the PIONEERS Act). According to Lamborn, the bill is intended to “set clear rules” for oil shale development and break “the Obama Administration’s strangle hold” on domestic oil shale resources.
(Below the jump: Read about the bill’s familiar provisions, its powerful new supporter, and on-the-ground policy considerations it raises.)
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Jason Hanson, coauthor of What Every Westerner Should Know About Oil Shale, gave the closing plenary address at the 31st annual Oil Shale Symposium at the Colorado School of Mines in Golden today. Giving a talk entitled “The ABC’s (and X’s) of Scouting the Future for Oil Shale Development,” Jason spoke to the audience of energy company executives, scientists, and interested stakeholders from around the world about what it has taken historically to create a significant and real opportunity to develop oil shale, and what it might take to convert that opportunity into a viable oil shale industry on the ground with the potential to play a role in the United States’ future energy mix.
The 31st annual Oil Shale Symposium is underway at the Colorado School of Mines in Golden, Colorado, this week. This morning, Ronald Johnson of the US Geological Survey gave a presentation sharing the results of the Survey’s recently completed assessment of oil shale resources in place in the Green River Formation in Wyoming. The Survey found that 1.44 trillion barrels of oil are locked in the rocks beneath Wyoming, although they made no attempt to estimate how much of that oil is economically recoverable because no economically viable method has yet been developed for getting the oil out of the rocks. The Wyoming oil shale is dispersed over a wider area and less rich on average than that in Utah or Colorado, but in total compares well with in-place estimates of the resource in the Unitah Basin (1.32 trillion) Piceance Basin (1.53 trillion).
If you’re keeping score, that amounts to a grand total of 4.29 trillion barrels of oil shale in place throughout Shale Country. That new number is quite a bit higher than the 1.2-1.8 trillion barrel estimates that were common only a few years ago.
Business |
Posted by jhanson
Sep
06
2011
When Natural Soda, Inc., applied for an RD&D lease in January 2010 to develop oil shale under the second round of proposals solicited by the BLM, many observers of the oil shale industry were not familiar with the company. But for anyone familiar with the baking soda industry, Natural Soda is a powerhouse. According to a profile by Dennis Webb yesterday in the Grand Junction Daily Sentinel, the company is the second-largest producer of baking soda (aka, sodium bicarbonate) in North America.
Natural Soda uses an in situ solution mining process to extract baking soda from nahcolite deposits roughly 2000 feet underground in Rio Blanco county. Their product is so popular that the company is having trouble keeping up with demand, and it is currently building a new facility to double its processing capacity by 2012.
Many of Natural Soda’s 10,000 acres of nacholite leases overlie rich oil shale areas, and the company has applied for an RD&D lease to test an in situ process for extracting kerogen from the shale deposits after the nahcolite has been removed. The company’s oil shale lease application is currently under consideration by the BLM, and the agency recently moved the application a step closer to approval.
Yesterday in Grand Junction, Colorado Representatives Scott Tipton and Doug Lamborn heard testimony about the recent progress - or lack thereof - being made in Shale Country since the Bureau of Land Management agreed to take a “fresh look” at the Programmatic Environmental Impact Statement and commercial leasing program finalized in 2008. Acting in their capacity as members of the House Subcommittee on Energy and Mineral Resources, the two held a field hearing focused on, in the words of the event’s title, “American Jobs and Energy Security: Domestic Oil Shale and the Status of Research, Regulation, and Roadblocks.”
As Gary Harmon reported in the Grand Junction Daily Sentinel, Shell executive Dan Whitney headlined a list of nine witnesses that also included representatives of federal and local government and industry trade groups but none of the environmental organizations that have been leading critics of oil shale development. Whitney complained that revisiting the rules is “a waste of taxpayer money” because nothing significant has changed in Shale Country since 2008. Instead, the revision process creates uncertainty and stifles research and development activity. Environmentalists counter that the the PEIS and the rules, issued at the end of the Bush Administration, were flawed from the beginning and need to be reconsidered. A pair of lawsuits brought by a coalition of environmental groups prompted BLM’s agreement to revisit the process.
Although the announced purpose of the hearing was to explore some of the regulatory roadblocks facing the oil shale industry, some environmental groups suggested that the hearing was designed to further a pro-development agenda. David Ableson of Western Resource Advocates told Ben Markus at Colorado Public Radio that the Congressmen “in decided who would testify have leaned heavily toward finding people who would support their pre-conceived thesis.”
Water |
Posted by jhanson
Aug
22
2011
The Natural Resources Defense Council recently released a report on the impact oil shale development might have on water resources throughout the Colorado River Basin in an era of climate change. Not surprisingly, the authors suggest that a commercial-scale oil shale industry would demand more water than the basin has available to give.
The authors calculate that a “full-scale” industry of more than 1.5 million barrels per day would amount to adding a city one-and-a-half times larger than Denver* to the Colorado River Basin. “Water is life in the arid West,” the report says early on, “and already there is not enough to meet current demands.” Thus, if an oil shale industry does develop on the Western Slope of the Rockies (a possibility that the authors urge policymakers to rethink), the ripples would be felt by agriculture, cities, and users throughout the basin all the way to Southern California.
The report, entitled Between a Rock and a Dry Place, was announced in a press release last week and is available in full on the NRDC’s website. Its broader overview of the impact oil shale could have on the entire basin complements and expands upon Western Resource Advocates’ recent reports on the potential impact of oil shale development on water resources in Colorado and Utah specifically.
For an overview of how oil shale and water might mix, see “Water: More Precious Than Oil?” in What Every Westerner Should Know About Oil Shale.
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Readers of What Every Westerner Should Know About Oil Shale know that activity in Shale Country has historically depended on encouragement, legislation, and subsidies from the federal government. And the government typically acts in response to concerns about the nation’s oil supply, particularly when those concerns are expressed by high oil prices.
Today, with oil prices once again pushing toward record highs, Wyoming Republican Senator John Barasso is once again trying to ratchet up the federal government’s support for the oil shale industry. The American Energy and Western Jobs Act (PDF) he introduced in the latter half of May (with fellow Wyoming Republican Mike Enzi and Utah Republicans Mike Lee and Orrin Hatch as cosponsors) proposes a variety of measures that the senator believes would increase domestic oil and gas production, including provisions that would roll back Interior Secretary Ken Salazar’s most significant actions regarding oil shale. If passed, the bill requires the Department of the Interior to issue ten more RD&D leases and would finalize the commercial leasing rules issued in 2008.
The Bureau of Land Management is already considering applications for three new RD&D leases. However, the new leases mandated by Barasso’s bill would be for much larger tracts - larger even than the leases approved in 2007 - reinstating the more generous dimensions offered in the final days of the Bush Administration. (View a PDF of the RD&D leasing offer that Barasso’s bill would reinstate.)
The commercial leasing rules at issue, also set during the final days of the Bush Administration, include a controversial royalty rate that environmental groups and then-Senator Ken Salazar criticized as too low to provide a fair return to taxpayers. A coalition of environmental groups sued over the royalty rate, prompting the Department of the Interior to agree to a settlement recently in which the BLM pledged to take a “fresh look” at the commercial leasing program. If the rules are reinstated by Barasso’s bill, the environmental lawsuit is likely to be renewed.
Read more about Barasso’s bill in this article by Dennis Webb in the Grand Junction Daily Sentinel and in this piece by Matthew Davis on NewWest.org.
Ecology |
Posted by jhanson
May
24
2011
Norman McClean memorably wrote that “Eventually, all things merge into one, and a river runs through it.” When it comes to energy production in the West, he couldn’t have been more right. And particularly when it comes to the rivers that flow through Shale Country. Although energy companies have rights to much of the area’s water, the water requirements for oil shale development are a potential dealbreaker for the industry and a problem numerous companies are working hard to solve.
Jeff Thomas explored the energy-water nexus as it pertains to oil shale and a full spectrum of other energy resources in an informative article for NewWest.org. For more information on the questions and concerns surrounding oil shale’s water use, take a look at the “Water: More Precious than Oil?” section of What Every Westerner Should Know About Oil Shale.
While most of the attention in Shale Country focuses on federal lands and the BLM’s leasing program, companies with significant private lands and state leases in Utah are steadily pushing ahead to develop their holdings. And production on these lands may be closer than many people realize.
Executives with several oil shale companies told attendees at yesterday’s Unconventional Fuels Conference at the University of Utah that their technology was ready to be implemented as soon as they can get the necessary permits. Red Leaf Resources vice president Laura Nelson touted her company’s “EcoShale” modified in situ process - in which mined shale brought to the surface and heated inside of clay-lined capsules - and said that Red Leaf was ready to begin building a mine and a processing facility in the Unita Basin next year, with plans to produce 9500 barrels of oil per day by 2014. Harri Mikk, an executive with Enefit who is managing the Estonian company’s recent entry into Utah, reiterated the company’s plans to begin commercial production of its surface-mine-and-retort process on private lands near the White River by 2017, with goals of producing 50,000 barrels per day within a few years.
For some people, the plans of Red Leaf and Enefit to move forward with development on non-federal lands demonstrates that the oil shale industry can get started without federal leases. These oil shale skeptics question the need to earmark public lands for oil shale before the industry has proven its viability. However, Enefit’s Harri Mikk was quick to point out that his company can produce much more oil if it is allowed to tap the federal reserves at the White River Mine. In the White River area and throughout Shale Country - especially in the Piceance Basin - the federal government controls most of the richest deposits.
Learn about Shale Country Real Estate and Private Lands in Shale Country in What Every Westerner Should Know About Oil Shale. Read more about the Unconventional Fuels Conference put on by the University of Utah’s Institute for Clean and Secure Energy, including more information about the potential for development on private lands, in this article written by Brandon Loomis for the Salt Lake City Tribune.
“I would like to see some sort of document that includes the facts, from a source that doesn’t have an agenda,” Garfield County assessor Jim Yellico told the assembled representatives of government, industry, and the environmental community at the BLM’s oil shale scoping meeting in Rifle last week. “I think we can get the truth. I think it’s out there.”
The truth may be out there. But then again - after years of searching unsuccessfully for consensus on what oil shale development might entail - it may not. It may be that the “facts” pertaining to oil shale are so passionately and continually disputed because the truth about development and production has not been settled yet. Like one of the X Files, the truth may be out there, but in the here and now the case remains open.
As the BLM’s scoping meetings draw to a close, David Frey has published an article on NewWest.org that edges into the data disputes (and, reading between the lines, the philosophical disputes) at the heart of most of the issues surrounding oil shale development. Frey also provides a helpful overview of how events stand in Shale Country today as the BLM staff head back to their offices to consider the comments they heard at the meetings and draft a new PEIS.