The air over Shale Country is largely clear and free of pollution, features that have earned it protection under the Prevention of Significant Deterioration (PSD) provisions of the Clean Air Act. The Environmental Protection Agency (EPA), the federal agency charged with overseeing air quality throughout the nation, enforces strict limits on air pollution throughout the region. These constraints - particularly those driven by a recent ruling that extends the EPA's authority to regluate greenhouse gasses such as carbon dioxide under the Clean Air Act, as well as the potential for forthcoming federal legislation that caps greenhouse gas emissions - are poised to have a significant impact on the siting and permitting of oil shale operations.
Most parts of Shale Country are designated Class II under the Clean Air Act's PSD provisions, meaning that the federal government will allow only moderate increases in ambient air pollution over the region. However, interspersed with the potential shale lease sites are a number of places that have near-pristine air and special value as wilderness, national monuments, national parks, and other protected areas. These Class I areas are held to even stricter air pollution standards, and their proximity to potential lease sites promises to drastically limit acceptable emission levels upwind.
The BLM has cataloged 10 places designated Class I by the federal or state government within 50 miles of prospective shale deposits:
Clearly, with high standards for air quality in Shale Country and so many protected national treasures potentially downwind, federal clean air regulations will play a significant role in permitting or siting oil shale operations.
Although the regulation of air quality falls under the jurisdiction of the EPA, the BLM is certain to take it into account when reviewing oil shale lease applications, and the proximity of these Class I areas may help determine the conditions imposed by the BLM on commercial leases. Such conditions might include requiring companies to use existing Best Available Control Technologies (BACT), or the agency may dictate technological improvements to clear air safeguards before approving a company's plan of operations. Although BACT is considered a lower standard because it utilizes available technology as opposed requiring the invention of new technology, either condition may be viewed as onerous by oil shale operators.57
Whether the federal government calls the air they breathe Class I, Class II, or something else, many residents of Shale Country view pure air as a major part of their quality of life. Meanwhile, some people who currently live near oil and gas development sites perceive ill health effects from airborne pollution generated by those operations. Although not as clear cut as the pollution regulations of the Clean Air Act, this negative perception (and possible fact) of the health costs associated with energy development may become an equally large problem facing the oil shale industry. To appreciate the importance of perceived public health risks in our energy policy, one needs only to stop and consider when the last nuclear plant was built.58
The requirements of the Clean Air Act are more data-oriented and straightforward than reckoning with people's perceptions, but no recent data is publicly available to assess the air quality impact of modern oil shale extraction methods. However, the oil shale industry viewed the Clean Air Act as a constraining factor during the previous boom, and the law seems poised to play that role again unless operators can find ways to reduce expected emissions.
One of the key questions surrounding the development of viable twenty-first-century oil shale operations is how regulators can protect air quality without unduly limiting the growth of a commercial industry. Indeed, whether a commercial-scale industry of a few million barrels a day is even possible under the Clean Air Act remains an open question. Already air quality concerns have delayed gas drilling in the Vermillion Basin near Dinosaur National Monument so that the EPA can conduct further study. And under the federal PSD system, which allows for only so many increments of pollution total in an area, the first operations to go online (or even operations from the current conventional oil and gas boom), especially if they are allowed to apply the lower standard of BACT, could use up the pollution quota and shut latecomers out of development opportunities entirely.59
Air quality impacts from the development of an oil shale industry will not be limited to the extraction site or the nearby vicinity. The potential for increased power demands, particularly with in situ operations, raises concerns about pollution from the construction of new power plants. The way in which operators generate the energy for heating the shale underground will have a significant impact on the amount of pollution generated by the operation.
Based on the process proposed by Shell, which uses electricity to provide the down-hole heat, the RAND analysis estimates that an operation producing 100,000 barrels a day would require 1200 megawatts. From this estimate, Western Resource Advocates (WRA) and an associated coalition of environmental organizations further infer that such an operation would require a power plant "as big as any in Colorado history, large enough to serve a city of 500,000 people" that would cost roughly $3 billion to build and consume 5 million tons of coal (assuming it is coal fired) while emitting 10 million tons of greenhouse gasses annually. A commercial-scale industry of a million barrels a day would require 10 of these plants and, again according to WRA, 5 new coal mines.60
The potential for substantial greenhouse gas emissions from the otherwise "lighter touch" in situ method may prove to be a dealbreaker under stringent clean air regulations, all the more so as concern about global warming gains credence with the American public. The EPA's April 2009 decision to regulate climate-changing greenhouse gasses such as carbon dioxide under the Clean Air Act, if it is upheld by the courts, is likely to up the ante on companies looking for ways to reduce the overall carbon intensity of their oil shale operations.
Companies planning on the electric heating of the underground shale are aware of this potential pitfall and are searching for low-carbon solutions. Shell is working to develop more efficient heaters that will maximize their energy returned on energy invested (a measure the industry refers to as EROIE). AMSO believes that heating the rock more quickly than Shell plans to - 3 to 12 months as opposed to several years - will offer an increased level of energy efficiency. Companies such as Chevron are looking for methods that do not depend on electricity and will leave only the faintest of carbon footprints.
The most direct way for these companies to reduce the carbon intensity of oil shale may be to harness lower-carbon sources than coal to power their operations. Natural gas presents an attractive alternative in this respect because it requires less water and emits less carbon dioxide than other fossil fuels, and recent advances in extraction techniques have allowed energy companies to dramatically increase their estimates of recoverable gas reserves in Shale Country and worldwide. (This bounty is a double-edged sword, however, as abundant natural gas reserves may relieve some of the pressure to develop new fossil fuel sources like oil shale.)
While natural-gas-fired power plants would present a lower-carbon alternative than traditional coal-fired power plants, a few Shale Country operators such as Shell have publicly mused about the possibility of pursuing even cleaner energy sources to provide at least part of the power needed for their in situ processes. The Western Slope boasts prodigious wind, solar, and geothermal resources waiting to be tapped. Could turning the oil shale fields into a laboratory for renewable energy technologies as well as new oil production processes be the way forward under the limitations of the Clean Air Act?