Summit County Citizens Voice

U.S. House strips a $25 million subsidy for oil shale research from a federal budget bill.

Congressman Jared Polis leads efforts to redirect funds toward budget deficit reduction

By Summit Voice

SUMMIT COUNTY — Wednesday’s vote by the U.S. House to remove a federal $25 million subsidy for oil shale research probably won’t end the dream of developing vast quantities of fossil fuel in northwestern Colorado, but it may give some energy companies reason to pause before they put their own money on the line.

The subsidy was stripped away from an energy and water appropriations bill in a 208-207 vote after Colorado Democrat Jared Polis offered an amendment to redirect the funds toward deficit reduction.

The bill still has to go through the Senate, said Western Resource Advocates’ David Abelson.

“Historically, everybody who has invested in this has lost money,” Abelson said, adding that he doesn’t think that energy companies will end their development efforts.

“There are deep pockets and large multinational corporations involved in this research and they need to stand on their own in this,” he said.

“We shouldn’t be throwing good money after bad on oil shale research that won’t produce energy for the foreseeable future,” Polis said. “Dumping another $25 million of taxpayer money into oil shale research makes no sense when there isn’t commercially viable technology that will turn it into oil and many energy companies consider it such a low priority.”

The Colorado delegation voted along party lines, with Democrats Diana DeGette and Ed Perlmutter supporting the amendment and Republicans Scott Tipton, Doug Lamborn, Mike Coffman and Cory Gardner voting no.

Several companies are pursuing development of the resource and the Bureau of Land Management is in the process of offering additional leases for research and development.

It’s a tempting fruit: There are potentially billions of barrels of oil in the crumbly shale of northwest Colorado and northeast Utah, but the amount of energy and water needed to produce usable fuel is substantial.

In other areas, shale oil is mined and processed in refineries. In northwest Colorado, companies are looking at in situ development; in other words, heating the shale in place, underground to squeeze the oil from the rock.

After putting up billions for oil shale over the last several decades, federal taxpayers have nothing to show for it,” said Ryan Alexander, president of Taxpayers for Common Sense.

Some researchers, including Jeremy Boak, director of the Center for Oil Shale Technology and Research at the Colorado School of Mines, believe that energy companies may be close to developing the technology needed to develop the resource.

Oil shale and shale oil sound similar, but they are completely different.

Oil shale is not commercially viable. Oil shale is a rock that contains a waxy substance, kerogen, that, when intensely heated, liquefies to produce a precursor to crude oil. Oil shale reserves in the U.S. are concentrated in Colorado, Wyoming and Utah.

The best available information reveals that commercial oil production from kerogen each year could consume up to 50 percent more water than the entire Denver Metro area consumes annually. This is a dangerous proposition for the arid West amid water shortages, Polis said in his prepared statement.

Shale oil, on the other hand, is commercially viable. Shale oil is liquid oil locked up in shale formations underlying Montana, North Dakota and a region of land stretching across Wyoming, Colorado, Nebraska and Kansas. Using techniques used in natural gas drilling, companies are able to recover the liquid oil.

Filed under: Colorado, energy, Environment, oil shale Tagged: | Bureau of Land management, Colorado, energy, Environment, Jared Polis, oil shale