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Environment


ENVIRONMENT

Initial oil shale development activities within the United States will most likely occur in Colorado, Utah or Wyoming, because these states contain the thickest and richest oil shale deposits in the nation. Each of these states have large, uninhabited areas where oil shale projects could be constructed, such as the center of the Piceance Creek Basin in Colorado shown below.

DebequeWhile this would appear ideal for this new industry, these same areas may be attractive for recreation and sporting activities or they may be environmentally sensitive for any number of reasons. In order to address all of these concerns, proposed oil shale development projects will need to comply with a large number of permitting requirements, and meet public expectations, before any construction is authorized by federal, state and local government agencies.

An oil shale project cannot be built without receiving the required environmental, construction and operating permits. This is true even if the project is built on private land, although the process and the number and type of permits will be somewhat different on public and private land. Existing Federal and state environmental laws assure that projects comply with strict regulations. Federal environmental laws include: the Clean Air Act; the Clean Water Act; the Safe Drinking Water Act; the National Environmental Policy Act (NEPA); National Historic Preservation Act; and the Resource Conservation and Recovery Act, among others.

Each state has its own rules, regulations and permits. These include the following: ground water discharge permit; dam safety permit; stream alteration permit; water rights permit; drinking water permit; and the permit to mine. On a local level, counties require that projects secure construction permits, which assure the project complies with local ordinances and building codes. The county may require a project to mitigate environmental or socioeconomic impacts as conditions for issuing permits.

Many of the federal, state and local permits require public hearings and allow for a public comment period. This allows the public to voice concerns, which must then be considered by the agencies. The public input may require that the permits contain special stipulations that address issues raised. So, while an oil shale project will necessarily have environmental impacts on a region, the multiple levels of rules and regulations assure that every project must comply with the environmental laws and employ best practices and technologies to minimize or mitigate those impacts.

FINAL_NOSA-social -eco-consider
ENVIRONMENT – Printable .pdf
NOSA Brochure – More info on pages 13 – 18 in our brochure.

Studies Misrepresent Future Oil Shale Impacts
National Oil Shale Association

There have been studies released by Colorado entities that misrepresent the potential impacts of future oil shale development. While the path of oil shale development is unclear, the studies referenced below portray large-scale growth scenarios that are based on overstated assumptions, and yet have been used by state officials and others to create misleading perceptions about the impacts from future oil shale development.

1) Northwest Colorado Socioeconomic Analysis and Forecasts, Associated Governments of Northwest Colorado (AGNC), April 2008, prepared by BBC.
This report forecasts two growth scenarios in northwestern Colorado. The base case projects growth associated with the current level of natural gas drilling and development, and the second scenario is the base case plus oil shale development.

In their formal presentation, BBC stated, “oil shale breaks our model”, meaning that there are not enough specifics known about future oil shale development in Colorado to use their model for predictions. So they simply assume that the population growth occurring with oil shale development will be the same as the growth that occurred in the remote area of Fort McMurray, Alberta, Canada as the tar sands were being developed.

NOSA Response
There is no basis to assume that the BBC projections would accurately portray the growth patterns that might occur in Colorado, or that oil shale development will require the same levels of employment as tar sands development.

Oil shale will develop incrementally and will have to meet all regulatory requirements as production levels increase over time. There is no assurance today that any significant shale oil production will be achieved, but studies such as this one tend to create public fear and may stymie the current efforts by industry to perfect technologies that can meet regulatory, economic and public expectations.

2) Water on the Rocks – Oil Shale Water Rights in Colorado, Western Resource Advocates, March 2009
Western Resource Advocates (WRA) is a nonprofit environmental law firm. The theme of this report is that the diversion of water to Colorado’s front-range communities is a better use than using western slope water for oil shale development.

NOSA Response
In WRA’s inventory of water rights held by energy companies, they overstate the amount of water held by “oil shale interests” by adding in the entire water right holdings of the Colorado River Water Conservation District and the Yellow Jacket Water Conservancy District. The report states that because some part of their holdings could conceivably be used for oil shale purposes, it is justified to add the entire holdings of both Districts to the inventory. In reality, none of these holdings are specifically intended or designated for oil shale development. WRA also includes numerous water rights in their total inventory that they acknowledge have been abandoned.

Because of these faulty assumptions, the report overstates the actual amount of rights held by energy companies by 74% in terms of flow, and by 187% in terms of reservoir storage capacity. This study also over projects water consumption, in barrels of water per barrel of shale oil, by citing the URS Phase I report.

Summary
None of these reports assess the anticipated benefits of oil shale development, such as revenue distribution of royalties and taxes, economic development opportunities, and sustainable employment opportunities (including potentially filling the employment gap when gas drilling is completed).

While it is acknowledged that the future levels of shale oil production are not clear, the mischaracterization of oil shale’s potential impacts only serves to unnecessarily heighten public anxiety. Realistically, this enormous domestic energy resource can play a role in reducing our reliance on foreign supplies of petroleum.

Summary of Mischaracterizing Studies 2013 – Printable .pdf

Social & Economic


SOCIAL AND ECONOMIC BENEFITS

According to the Department of Energy (2004) “The national and public benefits resulting from commercialization of a domestic oil shale industry include:

  • Reducing GDP impacts of higher oil prices by $800 billion by 2020.
  • Reduced balance-of-payments deficit, due to increased domestic fuel production, reduced imports, and lower world prices for crude oil and price of gasoline at the pump.
  • Increasing direct federal and state revenues from taxes and royalties.
  • Creation of tens of thousands of new jobs and associated economic growth.
    The social benefits of an oil shale industry can be significant, and include the following:
  • Economic expansion and diversification for the region.
  • Educational growth, skill development, and opportunities to educate and train a sustainable workforce.
  • Increased opportunities for existing local businesses and growth of opportunity for new business development.
  • Fiscal support for public sector infrastructure including enhancements.
  • Long-term employment opportunities including high paying jobs in the oil shale and supporting industries

Achieving a balance between the social benefits and social impacts of oil shale development is a key objective for industry, government and all stakeholders.

ENERGY AND NATIONAL SECURITY ENHANCEMENT
There are two important concerns related to energy and national security that stem from the nation’s over-reliance on imported petroleum.

  • First, importing so much petroleum has made the United States vulnerable to geopolitical pressures, including the need to station military forces in hostile areas of the world.
  • Second, the military requires a secure supply of petroleum products to fuel its ships, vehicles and planes.

The production of shale oil and other sources of domestic transportation fuels here in the United States can help to reduce the impacts of both energy and national security concerns.
Until about 50 years ago, the United States was self-sufficient in its supply of petroleum, and the price of the gasoline produced from it was stable year after year. However, as domestic supplies of conventional petroleum could no longer meet demand, the nation began to import petroleum from abroad. In the 1970’s, the Organization of Petroleum Exporting Countries (OPEC) cut off petroleum supplies to the United States. It resulted in gasoline shortages and long lines at gas stations. In recent years there have been dramatic swings in fuel prices when petroleum ranged from $30 to $140 per barrel and gasoline cost over $5 per gallon in some parts of the U.S. Price volatility has become a constant factor in crude oil markets. The United States imports more than 50% of its petroleum. Around 20% comes from the OPEC, half of which comes from the Middle East.
Defense Readiness Concerns include:

  • Dependence on foreign oil
  • Dependence on foreign refined fuels
  • Higher fuel costs

Many military operations have a mission of maintaining political stability in oil producing regions of the world or along the shipping lanes used by oil tankers headed to the U.S. The DOD has long recognized the vulnerability of the oil supplies, which, in reality, represent the lifeblood of both the U.S. military strength and the U.S. economy.

Deposits of oil shale, coal and tar sands are large enough to produce unconventional fuels in quantities sufficient to meet the needs of DOD and reduce the nation’s reliance on imported oil or decades into the future..

Jobs-Created by Oil Shale
SOCIAL-AND-ECONOMIC-BENEFITS – Printable .pdf
NOSA Brochure – More info on pages 10 thru 12 in Brochure.

Booms & Busts


BOOMS AND BUSTS – A DIFFERENT PERSPECTIVE

From many recent press accounts, a reader would be led to believe that all of the impacts from past oil shale development were negative. That is not the case. In the 1970s, over $100 million from the Oil Shale Trust Fund was distributed to local communities to improve infrastructure and services. During this same period, the town of Battlement Mesa was built with private oil shale industry funds (picture below). Battlement Mesa is now a thriving and diverse community in Western Colorado.
battlement-mesaCitizens in the region are still enjoying the benefits derived from that oil shale era. It was a period when the Federal government was pushing for energy independence and offered financial incentives to build large synfuel plants. The communities in the oil shale region were not prepared for the influx of population that was projected to occur. A steep decline in oil prices and change in government policy resulted in the cancellation of most oil shale projects in the 1980s. Today the population in the region has grown, a robust energy business has evolved, and services and infrastructure have kept pace.
The area is much better prepared for an oil shale industry than it was 30 years ago. Nonetheless, funds will become available to communities from oil shale severance taxes, property taxes, and Federal lease bonus payments and royalties to improve infrastructure and services. Government policies should be put in place to ensure that these funds are made available to local communities in a timely manner.

BOOMS-AND-BUSTS – Printable .pdf
OIL-SHALE-HISTORY-REVISITED-Rev1

Myths


OIL SHALE FACTS AND FICTION

The following is presented to clarify some misconceptions about oil shale.

FICTION: We don’t need oil shale. We can just use renewables and non-fossil fuel alternatives to meet our future energy needs.

FACT: During the next 50 to 100+ years the United States will need a secure domestic supply of hydrocarbon fuels especially for airline travel and ground transportation. The demand for gasoline, diesel and jet fuels will continue to increase and domestic supplies of conventional petroleum are declining. Even with increased conservation and fuel substitution, the percentage of petroleum imported from outside our borders will not decline appreciably. Growing worldwide demand will result in higher fuel prices, shortages of world supplies and political instability. Oil shale is one of the domestic bridge fuel supplies that can see the nation through to a society less dependent upon foreign fossil fuels.
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FICTION: Oil shale development is moving ahead too quickly. It must be slowed down by stopping work on the commercial leasing. Regulations are not needed because a commercial industry will not emerge for many years.

FACT: Oil shale development is moving at a slow and deliberate pace and not rushing to commercialization. Current research, development and demonstration programs are focused on answering important questions:
1. Will the technologies perform as expected,
2. Can commercial projects be profitable,
3. Can projects meet environmental regulations and perform in a responsible manner, and
4. How will socioeconomic concerns be solved? Projects are moving at different rates depending upon the status of the technology being employed and the technical and economic risks involved, but all are indicating that large scale commercial plants will not go into operation for at least a decade. However, today developers need to know the requirements for leasing federal oil shale resources in order to make informed investment decisions.
—————————————————————————————————————————– FICTION: Oil shale processing uses more energy than it produces. It would be better to process pop tarts or potatoes.

FACT: Net energy is created though the retorting of oil shale. Depending upon the technology employed and the richness of the resource, estimates range from a ratio of 3:1 to 6:1. The size, concentration and quality of the oil shale resource in the Western U.S. make it an ideal domestic source of gasoline, diesel and jet fuels.
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FICTION: Oil shale development has too many health, wildlife and environmental unknowns, and it is too risky and dangerous, so commercial development must await completion of all research, development and demonstration.

FACT: The basic methods of producing oil and gas from oil shale are well known. Commercial oil shale projects have been in operation in Brazil, China, Estonia and other parts of the word for decades. Large-scale semi-commercial plants were operated in the United States in the 1960-80’s. It is only the newer techniques under development that still need to be demonstrated. There is a wealth of knowledge that can be drawn upon by engineers and scientist. The ranges of technical, socioeconomic and environmental factors can also be established so the public and government officials can judge the impacts and benefits of development.
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FICTION: There is not enough water available to support oil shale development in Colorado, Utah and Wyoming. Stream fisheries will be eliminated. Water will become too dangerous to drink because of contamination by elements like arsenic, boron and selenium.

FACT: Water is needed for oil shale processing. The amount varies with technology but is in the range of 3 barrels of water per barrel of upgraded shale oil produced. Water is currently available within the upper Colorado River Basin to support a commercial industry, and many developers already have rights to use that water. However, a commercial oil shale industry would use only a small percentage of the water in the Basin. It would not dry up rivers or endanger fisheries as water use is strictly regulated by appropriate agencies. Water will be stored in reservoirs during the spring runoff for use during dry periods of the year. A no-discharge strategy will be employed wherein contaminated water will be treated and used internally, and contaminated water will not be returned to local water sheds.
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FICTION: Shale oil is a dirty, inferior hydrocarbon fuel.

FACT: Oil shale deposits in the Western United States are the most concentrated hydrocarbon resource in the world. One ton of oil shale will produce 25 gallons or more of shale oil that can be refined into excellent gasoline, jet fuel, diesel and other petroleum products. The shale oil content in a ton of oil shale is greater than the oil contained in a ton of rock from a conventional oil reservoir. Production of shale oil can be conducted in a manner that meets or exceeds all environmental regulations.
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FICTION: All the impacts of oil shale development are negative and so significant that it should not be allowed to develop.

FACT: An oil shale industry will provide numerous benefits to local communities, states, the Federal government and the general public. These benefits are realized through public sector revenue distribution (e.g. tax, royalty, use and license fee revenues for affected units of government); economic expansion and diversification (e.g. increased opportunities for local small businesses); long-term employment opportunities (e.g. high paying full time jobs in a sustainable industry); education and skill development; and fiscal support for infrastructure improvements (e.g. schools, hospitals, transportation and public services).
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FICTION: There is no need to lease Federal oil shale lands since there are plenty of private oil shale lands.

FACT: Much of the highest quality oil shale resource in the world is under U.S. Federal ownership. It is this resource that has the best chance of supporting a first generation oil shale industry that is economic and sustainable. Therefore, it is in the interest of the nation to make this resource available to industry. The oil shale lands in private hands are either small tracts not amenable to commercial development or geologically less attractive for processing using the newer technologies now under development.
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FICTION: There is no solution to dealing with greenhouse gases (GHG) produced from oil shale processing. Giant coal fired power plants required to support an oil shale industry will be large sources of GHG.

FACT: Greenhouse gases produced from oil shale processing can be captured, and put to beneficial use or sequestered. Techniques are under development by oil shale and other industrial firms to meet regulations when they are enacted. Not all technologies under development require large external sources of electric power. The gas produced during oil shale retorting is sufficient to supply the retorting energy needs of most processes. Electric power required for an oil shale industry can be generated from sources other than coal, such as co-generation, natural gas, solar or wind turbines.
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FICTION: Spent shale is a hazardous material and blows-up like popcorn when produced.

FACT: Spent shale is not a hazardous material. A recent finding by the U.S. EPA confirms that conclusion. Spent shale embankments resulting from semi-commercial oil shale operations in the Western United States in the 1960-80’s are stable landfills, support vegetation and have not contaminated surface or ground waters. Techniques developed in that era and experience from similar industries are planned to be demonstrated by current developers. Spent oil shale from above ground processes does not expand like popcorn but does have a slightly larger volume than the original rock primarily because of voids introduced by grinding. There is no surface disturbance from spent shale disposal associated with in-situ oil shale processing because it remains in the ground.

More info on pages 19 thru 21 in Brochure – NOSA Brochure
Oil Shale Facts and Fiction Final – Printable .pdf