This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Shouldn't anyone stop and think about hitching their region's economic future to something called "waxy crude?" It sounds like something that ads for various cleaning compounds promise to remove from your home.
Yet the Utah Governor's Office of Energy Development has just wrapped up its seventh annual Waxy Crude Workshop. That's a real thing. A gathering of folks, held last week in Duchesne, who get together to sing the praises of a particular kind of hydrocarbon. It's something that, we are told, can boost the economy of the Uinta Basin if only some efficient way could be found to get the sludgy, but low-sulfur, petroleum to refineries.
Blame for the failure, so far, of this commodity to re-energize the area's extractive economy is placed by locals — and a report built significantly around the opinions of an anonymous "industry insider" — on the shoulders of the federal government, specifically the Bureau of Land Management, for supposedly not being aggressive enough in allowing more drilling rigs and, even more important, a large pipeline.
The downside of being rich in waxy crude is that the stuff is way too thick to go through a regular pipeline and would require a special kind, one where the commodity is heated to at least 105 degrees so as to stay in a liquid form.
The basin's current output, about 77,000 barrels a day, now has to be trucked to refineries in the Salt Lake City area. That's bad for producers because trucking is expensive and because a limited number of refineries within reach means there's no competition to bid up the price.
But with the price of oil generally around $40 a barrel, and drilling activity stagnating around the region, it is hard to imagine how it makes sense to build any new and expensive infrastructure. Especially through sensitive lands. Especially in neighborhoods already suffering, as the Uinta Basin does, from serious air pollution problems.
Any profitable future for waxy crude depends on the price of oil not only going up a great deal, but staying there for a long time. Something neither it, nor any other commodity, can be trusted to do. Just ask all those coal companies that are declaring bankruptcy.
Even if the price of oil did go up enough to justify piping waxy crude, and digging up tar sands, the chances of it staying there for prolonged periods — enough to allow any region to build up a strong economy and firm tax base — are slim indeed.
Utah's leaders, in the public and private sectors, should be busy finding ways to diversify the state's economy and to move, along with the rest of the world, to the post-fossil fuel world that we all know is coming.