Research and development leases could transition to commercial development
By Bob Berwyn
SUMMIT COUNTY — The Bureau of Land Management is preparing to lease a pair of 160-acre parcels in western Colorado for additional oil shale research and development.
The new proposal once again raising questions about whether any public land should be devoted to pursuing the dream of exploiting the potentially vast energy resources locked in the oil-rich rocks of the west slope. All the documents related to the leases are online at this BLM website.
On the surface, the goal is tempting. By some estimates, the shale patches in western Colorado and eastern Utah could produce more oil than the Middle East. But the question remains whether it’s worth devoting public resources like land and water to pursue technologies that still appear elusive.
It always depends who you ask. The conservation community seems dead-set against not only additional leasing, but oil shale development in general. Their position on new leasing is that energy companies already have access to enough land. Environmental groups have also forged alliances with ranchers and recreational stakeholders to broaden the appeal of their anti-fossil fuel message.
Critics of shale tend to point to the past, claiming that the infamous collapse of the nascent oil shale industry three decades ago is reason enough to oppose any additional efforts.
“Here we go again. Just 30 years ago, ExxonMobil pulled out of the oil shale business and left the regional economy of Western Colorado in ruins,” said Matthew Garrington of the Checks and Balances Project. ‘Today’s announcement shows that oil companies have more than enough access to move forward with oil shale research and are doing just that. In fact, the recommended plan by Secretary Salazar would allocate nearly a half million acres for more oil shale research.”
But at least one expert with the Colorado School of Mines says that repeating the same rhetoric over and over isn’t helping the public understand the issues.
Jeremy Boak, Director of the Center for Oil Shale Technology and Research at the Golden-based school says emotional arguments could erode the credibility of conservation groups and ultimately be exposed as fraudulent.
Boak said some companies are close to demonstrating viable production.
“Shell has done virtually the whole process, but they’re being really cautious,” he said in a previous interview. “They know there’s resentment on the West Slope.”
He also discounted the argument that it requires too much energy to develop the resource. Some of the latest estimates show that the return on energy investment could be as high as three-to-one or even five-to-one. In other words, every barrel of oil used in the production process yields three to five barrels in return.
In parts of Utah were the shale is higher grade, the ratio could be as high as 10 to one.
“That’s better than the return on corn-based ethanol,” he said.
Opening up additional R&D leases could help determine once and for all whether oil shale production is viable. As it is, Boak said, the land-use process has been tilted against the energy companies.
They’re biasing the selection of land away from the potentially most productive areas,” Boak said. “In the basin with the richest oil shale, they’ve removed 85 percent of the land. They’ve sort of concluded not to allow anybody new to the game.”
Water is another huge issue in the West, although Boak said the energy companies already claim at least conditional water rights for their energy production needs.
The two new proposed R&D leases are in Rio Blanco County, Colo., about 35 miles southwest of Meeker, where ExxonMobil Exploration Company and Natural Soda Holdings Inc. have submitted plans of operations for the in-situ development of oil shale.
Each proposed RD&D lease is a 160-acre tract with an associated preference lease area of up to 480 contiguous acres. The preference lease areas are reserved for possible conversion to a commercial lease, pending the results of the companies’ RD&D work and additional BLM review.
“RD&D leases provide the opportunity for industry to test and develop technologies to determine whether they can be viable on a commercial scale,” said Kent Walter, field manager for the White River Field Office. “This critical research, development and demonstration work will also help us answer important questions about the water demands and potential impacts of commercial-scale development, so that we can forge a responsible and orderly path forward if the technology proves viable.”
The proposals stem from the November 2009 call for nominations for oil shale RD&D leases. This 2009 call followed an initial round of nominations in 2007 in which six RD&D leases were issued. To date, technological and economic conditions have not combined to support a sustained commercial oil shale industry in the United States.
The two proposals encompass adjacent areas and are analyzed in one environmental assessment. The EA, plans of operation, maps of the area under consideration and other related details can be viewed on the WRFO website by going to http://www.blm.gov/co/st/en/fo/wrfo/Oil_Shale_-_Round_2.html.
Prior to drafting the environmental assessment, BLM held a 30-day public scoping period last spring to identify issues and concerns related to the two proposals. BLM held public meetings in Meeker and Rifle, Colo.
BLM will accept public comments on the EA through June 16, 2012. Written comments can be mailed to Paul Daggett, BLM WRFO, 220 E. Market Street, Meeker, CO 81641, or sent via email to firstname.lastname@example.org. Please note “2nd Oil Shale RD&D EA Comments” in the subject line for all emails. For more information, please contact Paul Daggett at (970) 878-3819.