An Estonian firm’s plan to develop oil shale resources in Utah has sparked a political ruckus inside the small Baltic nation.
According to Estonian media reports, opposition members of parliament are challenging the competence of Economic Affairs Minister Juhan Parts in light of a recent report that the Eesti Energia’s Utah venture, known as Enefit American Oil, could lose millions.
The report found that Utah ore shipped to Germany for testing is not releasing its petroleum bounty as easily as hoped. The test shale mined from the Uintah Basin is “stronger and drier” than the Estonian material Enefit is used to working with, company officials said.
“While the results were positive, more fine dust was generated than we expected. Oil shale in different parts of the world has different qualities and every process has to be modified to account for those differences,” Enefit American CEO Rikki Hrenko wrote in an e-mail. “We’re reviewing decades of research on U.S. shale to help determine what changes will work best. This is not unexpected and we have a clear plan of action to move forward.”
Estonia’s largest employer, Eesti Energia is a publicly owned power company that is becoming a world leader in processing oil from shale using a proprietary retorting technology.
A Tallinn newspaper reported that its Utah project, which the government has invested heavily in, could lose $100 million if the Estonian technology fails. But if it works, the company stands to make billions and trigger a boom in Utah oil shale.
That’s easier said than done, experts say. Estonian oil shale is a proven winner, while questions remain about the quality of the Utah ore.
“If you develop new technology, you have to do a lot of work, not base decisions on a few tests,” Ingo Valgma, director of the Department of Mining at the Tallinn University of Technology, told public broadcaster ETV.
He believes oil production from Utah shale is not a matter of five to six years, as Enefits predicts, but more a question of decades.
Eesti Energia CEO Sandor Liive assured the Estonian public that the for-profit Utah venture is on track and will be operating by 2016 or 2017 as planned.
“We are preparing the necessary measures for environmental licenses, we are conducting geological studies, we have done the first tests on the oil shale [found in Utah], so in reality we are doing great,” Liive told ETV.