In Oil Shale Hearings, Opinions Sharply Split

In Oil Shale Hearings, Opinions Sharply Split

Shell's experimental oil shale facility in western Colorado. David Frey photo.

NewWest.NetTo boosters, it’s almost a magical elixir for the world’s energy woes. To opponents, it’s more akin to snake oil. Even more than most other fossil fuels, oil shale meets with a sharply divided reaction, and after two weeks of public hearings across Utah, Wyoming and Colorado, federal officials have received an earful from both sides.

But beyond the bluster, those in the middle feel left in a vacuum of straight talk.

“I would like to see some sort of document that includes the facts, from a source that doesn’t have an agenda,” Jim Yellico told Bureau of Land Management officials at a meeting in Rifle. Colo., on Tuesday.

Getting straight facts, though, is a challenge.

The BLM held a series of seven open houses in the three states where oil shale is most abundant. Found in the high desert on 16,000 square miles in northwest Colorado, eastern Utah and southern Wyoming, the rock traps a petroleum substance called kerogen. Geologists have estimated 1.5 trillion barrels of oil could be recoverable from this rock – the equivalent of an untapped Saudi Arabia of oil – but releasing has been a challenge. Its popularity grows, though, as oil prices climb.

Past methods have been energy intensive, water intensive and left behind a scarred landscape.  The Bush administration launched a research, demonstration and development plan on federal lands to allow energy companies to experiment with new techniques to reach the fuel.

In the waning days of the administration, the White House amended land use plans in the three states to make public lands available for commercial-scale operations on nearly 2 million acres. It also set royalty rates at 5 percent for the first five years of production, rising 1 percent each year to a 12.5 percent maximum.

Environmentalists filed a pair of lawsuits to block the move. The Obama administration reached a settlement, pledging to take a fresh look at commercial oil shale with an eye particularly on water demands and royalty rates. The series of open houses was part of the process of drafting a new programmatic environmental impact statement on the plan, and it opened the door for a new round of battles over the controversial energy source.

After hearing comments ping-pong from one side to the other, a frustrated Yellico asked if the BLM could get to the truth beneath the rhetoric. As county treasurer, Yellico says he can see the financial benefit of a robust oil shale industry in western Colorado. As a resident, he says, he doesn’t want to see environmental concerns thrown out the window.

“That’s what I asked then, and I’ve asked the question a few more times,” he said. I think we can get the truth. I think it’s out there.”

But where? Oil shale is an unconventional fuel source and technologies to release it are experimental. That has left government officials guessing about its potential, and its pitfalls. Oil shale advocates promise the best. Environmentalists fear the worst.

“I’ll be the first to acknowledge there’s all sorts of unknowns out there,” said Mike Chiropolos, of Western Resources Advocates, an environmental group that has urged caution on oil shale development.

Many energy companies have promised new experimental techniques have a smaller footprint than earlier techniques. Many rely on in-situ processes that heat the rock underground, unlike previous techniques that mined the rock and baked it in massive ovens.

“The cleaner we can produce, the more we can produce,” Ray Ridge, founder of Excalibur Industries Inc., said at the hearing in Salt Lake City. “A lot of opponents believe there are no clean methods of oil shale extraction, which is not true and there are alternative solutions.”

Some companies say they can use a barrel of water or less to extract a barrel of kerogen, but estimates vary wildly. A report last October by the Government Accountability Office found oil shale development “could have significant impacts” on water quality and quantity, but because the technologies are unproven and the size of oil shale operations is unclear, “the magnitude of these impacts is unknown.”

The GAO found some methods could use as much as 12 barrels of water per barrel of oil produced.

“Literally it could transform western Colorado’s economy with a dramatic shift from existing agricultural processes to this extractive industry,” Chiropolos said. While oil shale companies have pledged low-water techniques, they have also grabbed some 1 million acre feet of water rights in Colorado.

“Are you going to take them at their word?” he asked.

Environmentalists also worry that the processes could release dangerous chemicals into groundwater, that massive power plants would be needed to fuel the operations, increasing air pollution, and that the drilling operations would leave an industrial footprint on wild lands, threatening species like the greater sage grouse.

“It’s all well and good to be able to feel good about things like that, but it still doesn’t put food on the table or fuel in our transportation,” said Ed Cooley. A Rifle native, Cooley is plant manager for Shale Tech International, a research and development company.

The company doesn’t have an official position on the PEIS process, Cooley said, but he does. He’s concerned the government “caved” to environmentalists’ lawsuits, backtracking on the Bush plan for no reason. Commercial leasing should go forward, he said. Environmental concerns can be dealt with project by project.

“I just don’t think people have all the facts and they’re not interested in the facts,” Cooley said.

“If the government pulls it off the table, then the problem will be 25 years from now when there is a need, a real need for it, then we won’t be able to use it because we took it off the table. It’s become a political resource, not a scientific resource.”

Officials expect to release a PEIS by December 2012. To comment on the process, click here.