E. Utah officials fired up about oil shale after Estonia visit
Uintah County officials who toured Estonian oil shale mines and processing plants last week say they believe the company that developed them will deliver on promises of up to 2,000 jobs doing the same thing in eastern Utah.
Now they want state and local tax incentives to help make happen the dream of plentiful U.S. energy that's been knocking around eastern Utah and western Colorado for decades.
It has been knocking around for so long, in fact, that some call it a pipe dream because of technological challenges. But a county commissioner who made the Baltic trip is convinced the Estonians who bought a share of Utah's shale mean business.
"If we weren't confident that they were going to do this and go forward," Commissioner Mark Raymond said, "I don't know that we'd go to all the trouble that we're willing to at this point. We're very satisfied."
That means the county will look for tax incentives it can offer, he said, and press for state help as well. Enefit American Oil, a subsidiary of the Estonian national company that has burned oil shale for electricity for decades, is projecting 1,000 to 2,000 jobs at an oil-producing plant south of Vernal, perhaps as soon as five years from now.
Raymond, fellow Commissioner Mike McKee, county Economic Development Director Tammie Lucero and Sen. Kevin Van Tassell, R-Vernal, toured the Estonian sites on their June 24-July 2 trip. The county paid for its three officials to go, though the cost was not immediately available. Van Tassell said he paid his costs a little more than $3,000 out of his campaign fund.
"If we've got somebody wanting to invest $300 million to $500 million in my district," Van Tassell explained, "I wanted to see for myself, get to know the people we'll work with."
Senate President Mike Waddoups, R-Taylorsville, also encouraged Van Tassell to make the trip and report on the operations, the Vernal senator said.
He came back, like Raymond, convinced that Enefit's plans are real. Having burned crushed kerogen-laden rock to produce most of Estonia's electricity for years, the company's parent, Eesti Energia, is building a new-generation plant to heat rock and extract petroleum. The company will take core samples from Utah for testing in Europe before building the Uintah County plant.
Environmentalists, fearing both a strip-mined landscape and a drain on the Green River, have long characterized oil shale as infeasible. After all, energy companies that considered the resource in the 1980s backed away without ever producing oil.
Last year, the Colorado-based public-interest law group Western Resource Advocates published a report titled Fossil Foolishness, noting research that says shale can produce, at best, twice the energy content that it takes to heat the rock and extract oil. The report also questioned whether the West has enough excess water for a massive shale development. That compares to a 20-to-1 net energy gain in traditional oil drilling.
Estonians told the Uintah County contingent that their process creates twice the energy it takes to produce, Lucero said, and local officials took that as a positive sign. The company also said it uses no water for oil production, she reported, but does use some for dust suppression.
Enefit officials did not respond this week to requests for an interview.
As long as oil stays above $70 or so per barrel, Van Tassell said, it appears Enefit's process could pan out in America, and at a new plant Eesti is building in Jordan.
"They're very determined," Van Tassell said. "Right now, with the [current] economics, they're very positive about it. I believe that they have every intention of coming and working and putting a plant on line."
But Matthew Garrington, an energy and public-lands specialist with the public-interest Checks and Balances Project, sees reasons to be skeptical. He researched old newspapers and found promises of imminent oil shale booms dating as far back as 1910, and repeated ever since.
The economics still stack up against oil shale, he said, and the nation should be wary of policies seeking to advance development of this energy source.
"It's a complete fantasy," he said, "and it's a story we've seen every decade for the last 100 years."
Enefit American Oil expects to begin commercial fuel production from a privately held oil shale strip mine near Vernal by 2017, potentially making 50,000 barrels a day within a few years of start-up. More production is possible if the company develops a federally leased underground mine near the White River.