Oil shale… this is something that has been talked about and around since I first started looking into energy when I was a Boy Scout back in the early ’70s. One of my first merit badges was for nuclear energy. Here we are 30+ years later (man am I getting old) and we still have not recognized our ability to exploit this source.
For a second, let’s think about how 5 million barrels a day of domestic production might impact our international trade balance. We could, reduce our dependence on foreign oil sources and be better able to leverage our demand in the foriegn policy arena. Maybe quit using Venezuelan oil? If we increase production, maybe we could be a net exporter of oil… reduce our Chinese trade deficits and have a little more foreign policy leverage in that critical part of the world as well. So many different permutations and options that would be available to the policy makers.
U.S. Oil Shale Resources Are Three Times Larger Than the Current Oil Reserves in Saudi Arabia YET CONGRESS RECENTLY VOTED TO MAKE IT ILLEGAL TO DEVELOP U.S. OIL SHALE RESOURCES
With oil prices at an all-time high, Americans are facing escalating gas, diesel, and aircraft fuel increases. Oil prices are projected to increase further.
Congress, however, has made it illegal to develop vast domestic oil resources in large parts of the United States.
The most startling Congressional prohibition on domestic oil production concerns the recently enacted ban on the development of oil shale resources in parts of Colorado, Utah, and Wyoming in the Green River Formation. According to a Rand Study estimate, this reserve contains over one trillion barrels of oil, with 800 billion barrels fully recoverable, or three times the current oil reserves as Saudi Arabia:
The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.5 to 1.8 trillion barrels. Not all resources in place are recoverable. For potentially recoverable oil shale resources, we roughly derive an upper bound of 1.1 trillion barrels of oil and a lower bound of about 500 billion barrels. For policy planning purposes, it is enough to know that any amount in this range is very high. For example, the midpoint in our estimate range, 800 billion barrels, is more than triple the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, 800 billion barrels of recoverable resources would last for more than 400 years.
(James T. Bartis, et. al., “Oil Shale Development in the United States: Prospects and Policy Issues” (Santa Monica: RAND Corporation, 2005), p. ix. http://rand.org/pubs/monographs/2005/RAND_MG414.pdf) (emphasis added)
The same RAND study indicated that technology exists today that would allow oil shale extraction and that the process would be cost effective once the price of a barrel of oil was $95 (p. x). The price of a barrel of oil today is around $130.
However, Shell Oil has been investing in technology that would make extraction much cheaper than standard pit mining:
Shell Oil Company has successfully conducted small-scale field tests of an insitu process based on slow underground heating via thermal conduction. Larger scale operations are required to establish technical viability, especially with regard to avoiding adverse impacts on groundwater quality. Shell anticipates that, in contrast to the cost estimates for mining and surface retorting, the petroleum products produced by their thermally conductive in-situ method will be competitive at crude oil prices in the mid-$20s per barrel.
(James T. Bartis, et. al., “Oil Shale Development in the United States: Prospects and Policy Issues” (Santa Monica: RAND Corporation, 2005), p. x. http://rand.org/pubs/monographs/2005/RAND_MG414.pdf)
In short, if the Congress removed its prohibition, America could develop a substantial amount of its oil needs from domestic oil shale resources rather than relying on foreign governments.
The Energy Policy Act of 2005 specifically declared that it was the policy of the United States to recognize oil shale as a strategically important domestic resource. Section 369 states:
DECLARATION OF POLICY.—Congress declares that it is the policy of the United States that—
(1) United States oil shale, tar sands, and other unconventional fuels are strategically important domestic resources that should be developed to reduce the growing dependence of the United States on politically and economically unstable sources of foreign oil imports;
(2) the development of oil shale, tar sands, and other strategic unconventional fuels, for research and commercial development, should be conducted in an environmentally sound manner, using practices that minimize impacts; and
(3) development of those strategic unconventional fuels should occur, with an emphasis on sustainability, to benefit the United States while taking into account affected States and communities.
(Energy Policy Act of 2005, http://www.epa.gov/oust/fedlaws/publ_109-058.pdf)
Yet, buried in a Department of Interior appropriations bill passed in December 2007 was an amendment that prevented establishing regulations for leasing land to drill for oil shale. The House passed that amendment, proposed by Rep. Mark Udall of Colorado, on June 27, 2007, by a vote of 219-215.
On May 15, 2008 in a 15-14 vote, the Senate Appropriations Committee rejected an amendment by Sen. Wayne Allard (R-CO) to allow oil shale drilling and overturn the Udall moratorium.
As you can see by the votes on the two issues above, this is an issue that is resulting in a split across the congress folks. We need to get them over the hump on this one.