Today, May 2, marks 30 years since Black Sunday
May 2, 2012
RIFLE, Colorado – Today is the 30th anniversary of Black Sunday, the day in 1982 that Exxon, then the largest company in the world, pulled the plug on its Colony Oil Shale Project near Parachute.
The May 2, 1982, announcement of the pullout, which came as a surprise to local and state government officials, instantly put more than 2,000 people out of work, plunged Garfield County and the surrounding region into a recession, and had a lasting ripple-effect on the economy of the entire state.
No commemorations of Black Sunday are planned in Rifle, the town most heavily affected by the boom/bust cycle of the late 1970s and early 1980s, according to local officials.
“What, a commemoration of getting hammered?” asked Garfield County Commissioner Mike Samson with a laugh.
Samson, a retired Rifle High School teacher representing the western end of Garfield County, was a Rifle City Council member in 1982.
Recalling that he and his young family were getting ready for church on Black Sunday, Samson said the phone rang and he remembered it had “that ring to it where you say, ‘I don’t want to answer that.'”
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But he did, and heard for the first time, from a Denver newspaper reporter, that Exxon had shut down its oil shale project.
The decision had “a crippling effect all through the economy,” he remembered. “We had a lot of people that had to leave, and that was devastating.”
Businesses failed, schools lost students in droves, and governments feared for their financial futures, Samson said.
And the entire episode “left a bitter taste in a lot of people’s mouths” over “the cold way Exxon did it,” without notice or assistance in dealing with the resulting economic collapse.
Exxon had not been on the job for long in May 1982, having bought the Colony project from the Atlantic Richfield Company (ARCO) in May 1980 for $400 million, according to a report published by the Center of the American West research organization.
ARCO and other energy companies had already been working on research and development projects in Western Colorado, aimed at squeezing an organic substance known as kerogen out of rock layers buried deep beneath the surface.
Kerogen, known as an “immature” version of organically produced petroleum, can be refined to make fuel.
It is believed that up to 1.5 billion barrels of shale “oil” is contained in the Green River Formation of western Colorado, southern Wyoming and eastern Utah.
This region’s oil shale deposits have been touted for a century or more as a possible solution to U.S. dependence on foreign sources of oil.
In partnership with The Oil Shale Company (TOSCO), Exxon started working on plans for an unprecedented $5 billion development, described in a “white paper” issued by Exxon.
That included hiring a workforce of up to 22,000 to create multiple open pit mines on a 22-square-mile property up Parachute Creek. The company also planned construction of a wholly new town at Battlement Mesa with a projected population of 25,000.
Just two years later, with Battlement Mesa not yet half built, the company’s board of directors concluded it was losing too much money and needed to cut its losses and shut down the Colony project.
In the wake of that decision, other energy companies began packing up their own oil shale operations, causing a regional recession.
Still, Samson remains guardedly optimistic about the future of oil shale, which he called “one of those things, maybe it’s gonna happen, and maybe it won’t.”
If the industry threatens to dry up the Colorado River basin through excessive water consumption, as has been warned by oil shale’s critics, Samson said he will oppose large-scale development.
But he remains hopeful about rumored technological extraction methods that use very little water.
“I feel this is an industry that has some potential,” he declared, and he has faith in the industry’s ability to find a way to extract the kerogen from the rock economically and in an environmentally acceptable way.
Others, however, feel differently.
Andrew Gulliford, a historian and author of “Boomtown Blues: Colorado Oil Shale” (1989, University Press of Colorado), said his research into the oil shale boom and bust revealed that Exxon had drawn up “secret shutdown clauses” in its contracts related to the oil shale project.
Those clauses, he said, enabled Exxon to painlessly withdraw from the industry at any moment, without worrying about the aftermath.
The clauses were not divulged to state and local government officials, Gulliford continued, leading him to muse, “Hopefully we’ve learned, if anything, not to trust the oil companies. They make big plans for the booms, but there’s never any plan for the bust.”
He said that while it may be possible to economically extract oil from shale in an environmentally sound manner, “They don’t need larger oil shale leases, and they don’t need federal subsidies, to do it.”
Oil shale has been in the headlines lately, thanks to a renewed debate about the amount of public lands, and other public resources, that should be devoted to promoting oil shale development.