Here is a Letter to the Editor that recently appeared in the Grand Junction Daily Sentinel, June 24, 2018
Oil Shale Action Plan
Public discussion of oil shale development in Colorado, Utah and Wyoming has been on the back burner for some time. Low oil prices and the exodus of major oil companies have contributed to the reduction in interest by developers. Many of us are old enough to remember Black Sunday – the day Exxon shut down the Colony Oil Shale Project in 1982. No one wants a return to that boom and bust era. But, many of us believe oil shale in the three states is a huge strategic oil and gas resource that should be developed in a responsible manner to help make the nation energy secure for decades.
There are many differences in what is being proposed now than what was going on in the 1970's and 80's. 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. Oil and gasoline prices were on the rise. President Carter and Congress reacted by providing financial incentives to companies for production of domestic unconventional fuels. Oil & gas and mining firms rushed to Colorado and Utah to try to meet the challenge and take advantage of government loans and oil price guarantees. 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. Hundreds of millions of dollars were spent on projects that never happened. 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. 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. A recovery to normalcy took a decade.
During the ensuing years there was little interest in oil shale as the nation was fat, dumb and happy to continue to import larger and larger amounts of oil from abroad and endure swings in gasoline prices as OPEC exercised its monopoly in oil markets. Wars ensued in the Middle East as the U.S was forced to protect oil interests in the region. Then, an exciting technological advance began to change the world energy picture. 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 deposits thought to be uneconomic. As a result, the nation is on a track to become the largest oil producer in the world outpacing Saudi Arabia and Russia. This is great news for the nation and the world. But, there is also not-so-good news. The oil production decline is very fast for fractured unconventional reservoirs, and the cheap oil from unconventional reservoirs has already been produced. So, the cost of new production will increase and make foreign production more competitive. Also, many of the fractured reservoirs produce natural gas, and not oil. As a result, there is a glut of natural gas that has driven its price down and sent producers looking for ways to export it to Asia in a liquified form through ports on the West Coast. The bottom line: the nation will need a long term domestic non-declining supply of oil to fuel its military and civilian transportation needs.
Considering this background information, the National Oil Shale Association (NOSA) proposed a plan of action at a Congressional Field Hearing in Grand Junction on June 1, 2018 . 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. The Executive Director of NOSA, Gary Aho, further recommended Congress approve the formation of an Advisory Board to revisit the mandates of the 2005 Energy Policy Act, that were never implemented, and recommend an action plan to Congress within 9-months. The proposed Board would include representatives from Federal agencies, State and local governments. NOSA members believe the building of small demonstration plants is the responsible next step in the development of the oil shale resource. Part of the reason for past failures, like the demise of the Colony Project, was that companies attempted to build huge multi-billion-dollar plants before adequate information was available to keep technical, financial, social and environmental risks at an acceptable level. The information obtained from a demonstration scale program will provide necessary information to developers, government agencies, investors and the public to sensibly commercialize the oil shale resource in the future. NOSA is waiting for Congressional action on its recommendations.
Glenn Vawter serves on the Board of Directors of the National Oil Shale Association - a not-for-profit educational organization. He can be contacted at atpv@comcast.net.
Further information about oil shale is available from Executive Director, National Oil Shale Association, P.O. Box 411, Rifle, Co 81650, 970-618-0294, oilshaleus@gmail.com, www.oilshaleassoc.org. ...
