Watching Government: Reexamining oil shale

Sept. 5, 2011
Two days before the US Department of State released a final environmental impact statement for the proposed Keystone XL pipeline project, a US House subcommittee held a field hearing involving another unconventional oil resource closer to home than Alberta's oil sands.

Nick Snow
Washington Editor

Two days before the US Department of State released a final environmental impact statement for the proposed Keystone XL pipeline project, a US House subcommittee held a field hearing involving another unconventional oil resource closer to home than Alberta's oil sands.

The House Energy and Natural Resources Committee's Energy and Minerals Subcommittee heard testimony in Grand Junction, Colo., on Aug. 24 to discuss the status of US oil shale's "research, regulation, and roadblocks."

The US has nearly 75% of the world's recoverable oil shale, but its development has been hindered by booms and busts created by inconsistent federal policies, US Rep. Doug Lamborn (R-Colo.), the subcommittee's chairman, noted in his opening statement.

While the 2005 Energy Policy Act directed the Department of Energy and Bureau of Land Management to expand their work on oil shale, the Obama administration "has stonewalled its production, diverted resources that could be used for oil shale [research and development], and continues to put up roadblocks," he charged.

Meanwhile, Brazil, Estonia, Jordan, China, and other countries with significantly smaller deposits support substantial oil shale industries, Lamborn said.

The hearing included testimony from several US oil shale development proponents, but no opponents. Interior Sec. Ken Salazar has said repeatedly that several significant questions need to be resolved. Helen Hankins, BLM's Colorado state office director, said many of these were the results of moving ahead too quickly in the 1960s and '70s, "which left a legacy of spent shale piles, contaminated runoff, and multimillion dollar cleanups."

Requirements, questions

Lessees now will be required to test their technologies and answer fundamental questions about how the resource can be safely and economically developed on a commercial scale, Hankins said, adding that understanding potential impacts of development on western lands, wildlife, and watersheds is equally important.

Anu Mittal, director of the Government Accountability Office's Natural Resources Division, testified that water availability may be limited by increased demand from municipal and industrial users, potentially reduced supplies from a warming climate, the need to fulfill obligations under interstate compacts, and decreased withdrawals from the Colorado River system to protect threatened and endangered fish species.

"The long cycle time of research and high up-front capital requirements of an oil shale project need broad and consistent government support to establish a commercial industry," observed Dan Whitney, heavy oil development manager at Shell Exploration & Production Co., which has pursued seven pilot projects in Colorado already.

Commercial technologies with economic recovery rates and acceptable environmental impacts are essential, he said, adding, "The road to commercialization is likely to be measured in decades, not years."

More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com