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My Side

Robert A. Loucks

Recent events have increased the stakes in a future oil-shale development. Oil prices pushing $50 per barrel along with predictions and statements by all manner of folks show a greatly increased awareness of the problems resulting from U.S. dependency on imported hydrocarbons. For example, the chief economist of Wells Fargo bank sees oil prices impacting economic growth. The national GDP and retail sales are, among other indices, negatively affected by rising fuel cost. Recession may be a possibility. Closer to home for retirees such as myself, is the significant shock on the stock market caused by uncertain and high oil costs. We old folks depend on income from our invested savings and pensions to cover all our needs. As the stock market drops, so does our spendable income. Also, trips of which we have dreamed and for which we’ve saved for years have vanished because we can’t afford the cost of gasoline or jet fuel. It becomes more and more obvious that the United States is suffering from our lack of dependable domestic sources of petroleum and that the world is running out of available hydrocarbon resources. We eventually will have to substitute some other forms of energy for hydrocarbon. Renewable energy advocates are properly sensitizing us to this critical need. The fact remains, however, that, even under the most optimistic of scenarios, solar and wind power make little impact on our energy usage in the foreseeable future. The energy costs to enable appropriate facilities are immense and will require possibly even more hydrocarbon than currently planned. Nuclear power advocates are met with strong resistance because of operating and political memories. Even new nuclear power plants require lots of hydrocarbons to build. There are incalculable negotiations needed to get these alternatives operating. The conclusion, therefore, is simple. We need to provide a domestic supply of hydrocarbon free from terrorist threats and political strategies for probably the next century. The most logical source for this hydrocarbon is the massive oil shale resource in the Green River formation of Colorado, Utah and Wyoming. A notable problem is that residents of that area are still smarting from the devastating collapse in 1982. The lives of many with long memories were disrupted by that abrupt and surprising stop of what had appeared to be a promising oil-shale development.The facts of the matter are that, despite years of research by both public and private groups who should have known all the risks and challenges, there is no proven method to remove the oil from the shale rock economically. It is not simply a matter of oil reaching $50 or more a barrel.There are bright spots. Shell Oil is pursuing a new method. Estonia has, for years, produced thousands of barrels of oil from its deposits of shale. A resourceful method has been created by an Alberta company which has operated well for an extended period of time. However, none of these methods have been proven successful on Green River shale. We need a research and development facility to proof-test all likely candidates for the local resource, including auditable capital and operating costs, net water consumption, net energy production and net income. These tests must be overseen by an independent group such as the Colorado School of Mines or the RAND Corp. to absolutely ensure the credibility of the data and remove all traces of overpromotion too frequently associated with oil shale history. We must allow this small, low-impact test facility to proceed. It must be understood that this is not another 1970-80 no-holds-barred boom. The results of this effort will be necessary to fit an appropriately sized and reputable oil-shale industry into our country’s energy supply picture. Sincerely, Robert A. Loucks weblog: http://www.livejournal.com/users/spentshaler


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