An oil shale action plan for the 21st century

Public discussion of oil shale development in Colorado, Utah and Wyoming has been on the back burner for some time. Many of us are old enough to remember Black Sunday — the day in 1982 when Exxon shut down the Colony Oil Shale Project. No one wants a return to that boom and bust era.

But many of us believe oil shale in the three states is a resource that should be developed to help make the nation energy secure for decades.

The National Oil Shale Association (NOSA) proposed a plan of action at a Congressional Field Hearing in Grand Junction on June 1. Congressmen Bishop of Utah and Tipton of Colorado led the delegation that heard testimony from oil shale and natural gas experts.

NOSA recommended Congress and the Federal Administration include the oil shale in the three states in the nation’s strategic energy plans and approve the formation of an advisory board to recommend how best to develop the vast resource for the benefit of local economies and the nation.

NOSA members believe the building of small demonstration plants is the responsible next step in the development of the resource.

There are many differences in what is being proposed now than what was going on in the 1970s and ’80s. At that time, there was a large federal government program advocating accelerated commercial production of shale oil. The nation had experienced an OPEC oil embargo, and people were forced to wait in lines for gasoline at service stations across the nation. President Carter and Congress reacted by providing financial incentives to companies for production of domestic unconventional fuels.

Oil and gas and mining firms rushed to Colorado and Utah to try to meet the challenge and take advantage of the federal program. Unfortunately, at the height of the euphoria, oil prices dropped from about $40 to near $10 per barrel, the government lost interest, and the boom ended.

The community of Battlement Mesa was built with private funding to accommodate thousands of workers and their families that were expected to be needed for a commercial industry only to become a ghost town until it became a retirement mecca. Communities in the area were left with improved infrastructure, but a reduced tax base to support it. Jobs were lost, and real estate prices tanked.

The recovery to normalcy took a decade.

During the ensuing years there was little interest in oil shale, but small oil companies in Texas began to use precision directional drilling and selective fracturing (now called fracking by adversaries of its use) to get oil and gas from oil reservoirs thought to be uneconomic.

As a result, the nation is on track to become the largest oil producer in the world. Unfortunately, for the long term, oil production decline is very fast for fractured unconventional reservoirs, and the cheap oil from those reservoirs has already been produced. So the nation will still need oil shale as a long-term domestic, nondeclining supply of oil to fuel its military and civilian transportation needs.

NOSA is waiting for Congressional action on its recommendations.

— Glenn Vawter – National Oil Shale Association