Foes cite oil shale’s environmental uncertainty, while industry laments regulatory waffling

As predicted, testimony at Wednesday’s House Subcommittee on Energy and Mineral Resources oil shale field hearing in Grand Junction produced more industry hand wringing over federal regulatory uncertainty and environmental push-back over an unproven energy source.

Spearheaded by Western Slope U.S. Congressmen Scott Tipton, R-Cortez, and Doug Lamborn, R-Colorado Springs, the meeting was entitled “American Jobs and Energy Security: Domestic Oil Shale, the Status of Research, Regulation and Roadblocks.”

“Lack of policy and regulatory consistency from one administration to another makes the investment climate even more risky and potentially untenable,” said Dan Whitney, heavy oil development manager for Shell Exploration and Production Company. “There are already adequate checks and balances provided in existing regulatory programs.”

So reviewing current rules already on the books, which is what Interior Secretary Ken Salazar announced with his “fresh look” at oil shale rules earlier this year, is an “inefficient and unnecessary use of taxpayer money and is a significant deterrent to capital investment,” according to Whitney.

But conservation groups point out that oil and gas companies have had decades to perfect technology that makes full-scale oil shale production commercially viable and have failed to do so. Meanwhile, they add, companies have plenty of private and federal land to continue testing on without the 2 million acres of public land offered up by the Bush administration in 2008.

Oil shale production involves heating rocks to extract organic kerogen – a precursor to oil – that is then refined into gasoline. Unlike shale oil and gas, oil shale has never been produced on a commercial scale in the United States. The world’s largest reserves of oil shale are in the Green River Formation of northwest Colorado, southwest Wyoming and eastern Utah.

“During Wednesday’s field hearing led by Reps. Lamborn and Tipton, both the congressmen and witnesses repeated century-old rhetoric in an effort to promote oil shale as an ‘environmentally responsible’ energy option,” reported the non-profit watchdog Checks and Balances Project. “And while we managed to fill up our bingo sheet, we hardly won anything. The hearing resulted in the same failed ideas on energy policy and a lack of leadership for real solutions to our growing energy problems.”

Checks and Balances offered up an Oil Shale Bingo card (see completed card below) to track repeated promises from industry and politicians about the potential of oil shale production. However, critics say the process would industrialize the Western Slope, consuming far too much water and conventional power while increasing heat-trapping greenhouse gas emissions by up to 75 percent over conventional oil.

Exxon laid off 2,200 workers at its Colony Oil Shale Project in Battlement Mesa in 1982, devastating the economy for years. Nearly 30 years later oil shale is still not being produced commercially.

“Oil shale continues to be a laggard,” Randy Udall of the Association for the Study of Peak Oil & Gas – USA told the Colorado Independent in an earlier interview. “It continues to be a no-show, and one must really wonder whether oil shale is ever likely to be a significant player in U.S. energy supplies.”

Still, Tipton insists the Bush administration rules, which included royalty rates and leasing terms for federal lands, need to be implemented without interference from former Colorado Sen. Salazar and the Obama administration.

“The road to viability for the oil shale industry is reliant on a predictable regulatory structure and an environment in which companies can invest in research and development and create jobs,” Tipton said. “The proper implementation of our environmental and safety regulations already on the books is a far better strategy than adding additional layers of bureaucracy to the process.”

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