Oil on Water: Shale Oil Industry Mixing It Up With Aid of Federal Bailout Package

oil shale specimen photo

Oil Shale Specimen. Image credit: Los Angeles Times, Michael Brands

One estimate has oil shale extraction needing 10 barrels of water per barrel of oil produced. And, with Colorado's proposed oil shale operations at full capacity, by mid-century, the industry could require as much as 14 times more power than currently generated by the state's largest power plant. These estimates are very imprecise, because the technology is unproven. You might wonder, "Why so much water and energy? And what do do about it?" See the illustration and answer below.A recent Los Angeles Times article, "Energy dispute over Rockies riches," reported:

Shell has the most mature technology, which it has been experimenting with at its Mahogany test site, near Rifle, Colo. Tucked into a rolling landscape of empty range land, the company has sunk heaters half a mile into oil shale seams and subjected the rock to 700-degree temperatures. Over weeks or even months, a liquid known as kerogen is produced, which can be refined into diesel and jet fuel.

To prevent the brewing hydrocarbons from spoiling groundwater, the heated rock core is surrounded by 20-to-30-foot-thick impermeable ice walls, frozen by electric refrigeration units.

Unbelievably, according to the LA Times, the oil shale extraction industry was included in the Federal $700 billion bailout package. Would that include a foreign-owned company like Shell? You'd hope not...but who knows?

So here's the answer.

Because the potential water resource impacts of large scale oil shale extraction encompass downstream states which do not directly benefit from the proposed activities, and because direct Federal incentives are being offered for oil shale extraction on extensive public lands, a full environmental impact statement (EIS) is needed on the total likely scope of oil shale extraction, per National Environmental Policy Act (NEPA) requirements. Obviously the study would have to look at a range of impacts, given the low precision associated with the cited estimates.

The situation does not call merely for studying site specific, individual pilot project impacts as implied would take place in this BLM release-based report. Looking at oil shale impacts, one small project at a time, the potential combined risk to the nation is masked. That incremental approach is like assessing the added security threat posed, one oil tanker from the Middle East at a time.

Especially because California's water may potentially be affected, commensurate with the ultimate scope of oil shale extraction on public lands, the entire oil shale industry, including all prospective projects in the US West, needs a full EIS, covering estimates out to mid-century.

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