Oil shale optimism met with warnings
This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

GRAND JUNCTION, Colo. - If visiting members of the Senate's Committee on Energy and Natural Resources were seeking local support for the federal government's latest foray into oil shale development, they got it here Thursday.

But Utah and New Mexico Republicans Orrin Hatch and Pete Domenici, along with Colorado Democrat Ken Salazar, also heard enough caveats to fill the City Council chambers, site of the committee's field hearing.

A parade of state and county officials from Colorado and Utah, including Utah Lt. Gov. Gary Herbert and Uintah County Commissioner Mike McKee, testified in general support of the new push for accelerated oil shale development - codified last year in the 2005 energy bill that committee chair Domenici guided through the Senate, including the Oil Shale and Tar Sands Development Act, which Hatch co-sponsored.

"We know that oil shale will be needed at some point for our self-sustainability and energy independence," said Herbert.

Those same local officials, however, also had loads of questions, and not a few concerns.

As tantalizing as the estimated 1.2 trillion barrels of potential oil reserves in shale deposits under western Colorado, eastern Utah and southern Wyoming is, what's it going to cost? The region is already groaning under the weight of an unprecedented surge of oil and gas development. Who will pay for the new infrastructure? Who foots the social and environmental costs that large-scale oil shale development will bring? And who is accountable if the boom goes bust, as it did two decades ago?

"We really need to get this right," said Russell George, executive director of the Colorado Department of Natural Resources. "If we miss this chance, we may not get another for many decades to come."

Western Coloradans are still feeling burned by the last oil shale tsunami. When oil prices collapsed in 1982, so did oil shale development. Thousands lost their jobs, and local governments were left to pay the bills.

Hatch maintains that things are different now. Oil priced at $70 a barrel has changed everything. Oil shale development is not just desirable, it's necessary.

"The gigantic untapped oil shale and tar sands resources found in Utah, Colorado and Wyoming are sufficient to meet our energy needs, while also contributing to the ever-increasing global demand for liquid fuels," Hatch said. "Experts agree that the United States has more recoverable oil in tar sands and oil shale in this small tri-state region than in the entire Middle East."

Despite what supporters call significant leaps in oil shale technology since the bust, the challenge of extracting the resource continues to pose at least as many questions as answers.

The oil in oil shale is actually called kerogen, a waxy hydrocarbon that hasn't undergone the geologic heat and pressure necessary to create petroleum, and the shale is a type of hard sandstone called marl. Until the 1980s, the only known way to extract oil was to heat the marl to about 1,000 degrees Fahrenheit. The heavier hydrocarbons that are produced are then processed into "syncrude," used to make diesel or jet fuel. A ton of rock yields about a barrel of oil, or 42 gallons.

Nobody knows at what point the process becomes economically viable. In the 1980s it failed the profitability test. But six companies in Colorado and Utah awarded research and development leases by the Bureau of Land Management are creating variations on the process. One project, by Shell in Colorado's Rio Blanco County, involves drilling 1,000-foot holes and inserting large heaters into the ground. After three or four years, oil and gas are released from the kerogen and distilled at the surface.

Shell calls the process a more environmentally friendly alternative to strip mining for the oil shale. But questions remain about environmental impacts.

Christopher Treese of the Colorado River Water Conservation District told Senate committee members that not even energy company researchers yet know how much water it will take to squeeze the oil out of the ground.

"What we don't know vastly outweighs what we do know," Treese said. "Regardless, significant quantities of water will be required."

Given all that, officials and environmentalists are urging the federal government to go slow in seeking the answers. An ongoing environmental study on the impacts of oil shale development is set to be finished by 2007. At that time, the BLM is also scheduled to begin issuing commercial leases.

That's way too soon, according to Steve Smith, Four Corners regional director for the Wilderness Society.

"The BLM should let companies conduct extensive and long-term research and development activities - and carefully examine the results of that research - before it considers holding a commercial lease sale," he said.

jbaird@sltrib.com

Abundant reserves: Utah and Colorado officials voice support for tapping the resource
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