Oil shale myths persist
An article in the Denver Post on Dec. 18, citing Randy Udall and Steve Andrews as experts on oil shale, presents only innuendoes and ridiculous analogies to make a case against even considering oil shale in our future energy mix. Articles like this do nothing to inform the public about the facts and serious issues facing us if oil shale is developed. The truth is economics will play a major role in whether development occurs, just like the escalating price of natural gas stimulated drilling for it on the Western Slope after years of relative inactivity. The Canadians developed a tar sands recovery business that is much akin to oil shale. They are producing 1 million barrels per day of crude oil that is coming to the United States. Their development progressed after Exxon and the other major firms gave up on oil shale here in the States. The synfuels initiatives created by the Carter administration were abandoned, leaving firms high and dry in this country while the Canadian business government partnerships succeeded there. The Denver Post article intimates that if only 100,000 barrels per day is produced from oil shale, it should not be developed because it is such a small percentage of our national needs. With that logic, we should not drill one oil well, build one small hydroelectric plant, erect one wind turbine farm or put solar panels on our roofs. Let’s face it, the nation will need all the petroleum it can produce in the near- to mid-term, while other energy sources and conservation hopefully take hold. Is oil shale a resource worth developing? The reserves are huge, measured in the trillions of barrels, but that is misleading because it is a leaner resource than conventional crude oil. But if we had all the crude oil we needed, it would be a moot point. As one begins looking down the scale of hydrocarbon-bearing materials, it is necessary to see which ones are most easily converted to oil, since that is our need. Coal has a high carbon content, but compared to oil shale, it is much more expensive and difficult to convert to oil. That is why we burn it. Oil shale is actually like any other mineral resource. One must look at the value of the ore in place (say about $40-$50/ton now), and then assess the cost of recovering it. Technologies anticipated in the last boom and bust were not proven, and research has been at a standstill, except for Shell’s work. The pending BLM Oil Shale R,D&D lease program is, in my opinion, the right way to proceed. Bidders were asked to propose a novel, economic and environmentally compatible technology to test on a 160-acre tract. If the technology is ultimately proven successful, the bidder has the right to expand the lease to 5,120-acres for commercial development. BLM is expected to announce the lease awards next spring. The availability of oil shale resources is not, however, the issue facing companies. Claims patented decades ago are in private hands, and projects using mining and surface retorting could be rekindled fairly quickly. So why aren’t the majors back at it?There are easier ways to make a return on investment. Having played a role in the last oil shale boom and bust, and viewing what is happening today, I am skeptical we will see a boom of any real proportion in the near term unless there is a real energy crisis. With oil prices subsiding, the public is getting used to $2-plus for gasoline, oil companies are under attack and pressure is not there to do anything significant.Congress has given the Department of Energy the mandate to come out with a plan for oil shale development in February 2006. Then we shall see how it is received and if it is acted upon.R. Glenn Vawter was a senior vice president of Tosco Corp., one of the developers of oil shale technology and a partner in the Colony Oil Shale Project. He is an energy and environmental consultant living in Glenwood Springs.
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