Sideswiped on shale

Moratorium on federal rules could put technology on ice

Rocky Mountain News

Monday, May 19, 2008

Another opportunity to remove barriers to the production of homegrown energy may have been squandered.

This time it was in the U.S. Senate, where last week Democrats on the Appropriations Committee on a party-line vote upheld a moratorium blocking regulations until Oct. 1 on the limited production of oil from the massive shale deposits beneath Colorado and Utah.

At least 500 billion barrels of oil from those deposits are considered recoverable, more than double Saudi Arabia's proven reserves.

The technology allowing the responsible extraction of oil shale is clearly not ready for prime time. Shell Oil has invested millions of dollars on an underground method that should require less energy and less water, and cause less surface disruption than above-ground procedures. The company won't decide whether to go forward with commercial production until 2010. Even if it does, it may be another decade before that oil goes to market.

Still, does anyone believe that our civilization will have walked away from fossil fuels by then? That's why it would be shortsighted indeed to leave oil shale producers in regulatory limbo.

Without a road map from the Bureau of Land Management, industry officials say they can't expand test sites into commercial-scale production as the technology matures. Investors may decide to stop risking their capital on oil shale and instead focus on other projects with more-certain returns.

So we're baffled by the Senate vote. It killed a measure by Republican Colorado Sen. Wayne Allard that would have ended the moratorium. After all, actual production is nowhere near the horizon. But a hostile or uncertain regulatory environment could ensure that this potentially significant addition to the nation's energy portfolio never gets a chance.

To be sure, some legitimate concerns about the economic and environmental impacts of oil shale production were aired Thursday by Gov. Bill Ritter at a Senate energy committee hearing in Washington. Among other things, the governor cited uncertainties about the amount of water and energy that would be needed for extraction, along with the impacts large-scale production might have on ground water and wildlife on the 360,000 acres of federal land in Colorado that could be developed.

Ritter wants development limited to five existing, 160-acre test sites in Colorado, with any commercial leasing restricted to 25,000 acres where current lease holders have a right of first refusal - after results from the test sites are complete.

Unfortunately, the governor is also supporting legislation by Colorado Sen. Ken Salazar. It would delay any final leasing regulations for at least 27 months after passage, which might well stick a fork in this fledgling technology.

The regulations are embodied in the Draft Programmatic Environmental Impact Statement (don't you love bureaucratese?), which bars oil shale exploration on any federal lands where energy production is not allowed for environmental reasons. It also requires commercial operators to abide by federal, state and local rules.

If the regulations moved forward, we could learn whether Ritter's worries were prescient. Energy companies might also discover they can't profitably run a commercial-scale operation and comply with existing air-quality or water-purity standards.

We'll never know unless the technology is allowed to develop. And there's a chance it won't until the moratorium is lifted and the draft regulations go into effect.

• May 20, 2008

  12:37 a.m.

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  jacka writes:

  Thanks Bill Ritter and Ken Salazar.

  Bringing home the investment and jobs to Wyoming, North Dakota, Nebraska, Kansas, Texas and Utah.

  Foregoing revenue (tax) increases they so desperately love to fund more/bigger government programs and the redistribution of wealth.

• May 20, 2008

  1:22 a.m.

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  mikeyg writes:

  And Democrats blame Republicans for high energy prices and dependancy on foreign oil! What unmitigated gall. They sqash any and all energy development in this country unless enviros sign on to it - which means any and all energy development.

  Nukes, nope, no more TMI's. Dams, nope, fish conservation. Wind, nope, bird conservation. Oil, nope, enviromental impact. Solar, nope, community zoning restrictions.

  Oh, yeah, they do like corn ethanol, uses more energy to grow and produce than it delivers, drives up food costs in nearly every aisle of the supermarket, and if every tract of land capable of growing corn were used for ethanol it would supply 18% of our total transportation energy needs.

  Of course, it's all the Republicans fault, though. Dem Democrats sure are smert, huh?

• May 20, 2008

  5:45 a.m.

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  VVVV writes:

  Never say never. This isn't the first time oil shale has been "developed" and it surely won't be the last. Maybe by the time it is allowed, the price of oil might actually justify the insane amount of energy it takes to liberate this oil from the shale. Until then, I'm not willing to blow a future investment on the potential for miniscule profit today.

• May 20, 2008

  5:50 a.m.

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  angka writes:

  "Never" get the chance? That's absurd, and it betrays your true intent. Did Meg Collins write this editorial?

• May 20, 2008

  6:59 a.m.

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  greenleaf writes:

  Based on an article from a couple of months ago in the RMN, The amount of energy and water required to extract oil from the shale deposits would be exorbitant. To produce millions of barrels daily from the lease sites would require 10 large coal fired power plants to supply the heating rods which would be used in the process. In other words to produce millions of barrels of oil would require the burning of many thousands of tons of coal first. One of the goals of the project is to avoid surface disturbance, but, again, we would only be trading disturbance at the shale site for disturbance at the coal site. Western coal is usually strip mined.

  Then there is the matter of water: over 200,000 acre feet per year to produce oil at the rate of 2 barrels of water to produce 1 of oil. Any ideas where we will get the water folks? Obviously it has to come from farmers and ranchers by paying them to dry up their fields. This is a good thing?

  This concept reminds me of corn ethanol, another wasteful energy idea. Can any concept that requires so much energy and creates so much pollution and uses so much water in the arid west be good for anyone but the extraction and power industries?

  We have other options: Conservation alone could trim 10% or more of our oil needs. Cellulose based biofuels (not to be confused with food grain based) that use forest, landscape and agricultural waste will eventually trim even more. New technology now in advanced R+D will give us cars with reasonable range that get the equivalent of 70-100 miles per gallon. These would be powered by electricity generated from a range of sources including solar, wind, nuclear, geothermal, wave action and not from oil. This technology alone could free millions of Americans from carbon based fuel transportation. Why race to "the bottom of the barrel" when better options are either available today or in the years before oil shale could be commercially exploited?

• May 20, 2008

  8:32 a.m.

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  peterpi writes:

  Froward and greenleaf, minor inconveniences connected with oil shale such as lack of water resources, water table pollution, burning large amounts of coal to extract oil, poor energy used/energy released ratios, etc. don't bother Sasquatch. The moment he saw 500 billion barrels of oil, his eyes lit up. He wants his gas guzzling ways quenched now and forever. Conservation? As his buddy Cheney said, that's for sissies and grandmothers. Never mind it will take millions of acre feet of water to extract the goo from the oil shale rock. Never mind the energy needed to convert the goo into gasoline. Nothing says proud American like big burly trucks and SUVs that get gallons per mile, and to hell with the environment.

• May 20, 2008

  8:36 a.m.

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  peterpi writes:

  I'm not exaggerating on the water. One barrel of shale oil needs 2 - 3 barrels of water to extract. 500 billion barrels of shale oil means massive amounts of water.

• May 20, 2008

  9 a.m.

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  davis_x_machina writes:

  When figuring the water required in the extraction of oil from shale don't forget to include that water which is fouled beyond human use in situ in the aquifers affected by this activity.
  Actually bigfoot solar and wind have been ready for quite a while just at appropriate levels of application just ask the folks utilizing it on appropriate scales.Then there are the as yet relatively minor technologies such as tidal http://home.clara.net/darvill/altener... and wave generation http://www.wavegen.co.uk/.Still trying to figure just what it is that the conservatives wish to conserve.

• May 20, 2008

  9:51 a.m.

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  CheapEnergyNow writes:

  Greenleaf,

  A week or so ago you asked me about pumped storage as an energy storage technology. I didn't answer you. Their was actually a bill presented to the Colorado legislature that would have promoted pumped storage in the state, HB 1222. I know because I testified before the Energy and Transportation subcommittee. Pump storage uses the cheapest source of power at night (renewable or just extra fossil power) and stores it to be released the next day when required. The addition of pump storage basically makes the grid into a hybrid system. The Democrates, the PUC and environmentalist shot down the bill because it conflicts with their desire to have wind and solar only. The take away that I got is that they don't want solutions, the problems are much more valuable.

• May 20, 2008

  11:08 a.m.

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  Big_D writes:

  Harvest Bakkan and keep working on the technology on the limited test sites. Using 2 barrels of precious water for 1 barrel of oil doesn't work for Colorado. This time may come but not yet with easy access to gulf and Bakkan resources. Instead of bitching maybe you should work on a better technology. I always thought using an oil based solvent to extract may work better. You could just refine it out of the mix and reuse it instead of using a modified version of centuries old method. The technology they use now is pretty primitive and inefficient.

• May 20, 2008

  11:20 a.m.

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  mikeyg writes:

  Shell is the major player in Colorado's shale market. They've invested quite a bit in the Glenwood-Grand Junction corridor. They're economic modeling has shale turning profit if oil remains above $49/barrel (provided regulations and restrictions don't change).

  The enviros posting on here scream and yell about water usage, as if once used the water is gone. Horse pucky! Shell and other oil shale extractors have technology that recycles the same water over and over and over again. Just another liberal enviro red herring.

  The major roadblocks to utilizing this trapped American energy source are twofold: environmental obstructionism and uncertainty in energy prices. This article deals with the radical environmental obstructionism of the Democrats, who would rather Americans learn to live more like third-world citizens than tap our energy reserves.

  The oil companies are also not convinced that prices will remain high for long enough to justify the massive investment required. Me thinks they know something we don't and that the media isn't reporting on: oil has about 4-5 years at high levels and then it will tank. The only questions are will Democrats continue to add regulations and restrictions on shale extraction that will drive the profit point above $49/barrel? And as high as they drive extraction costs, will the certain collapse of oil prices go below whatever that profit point is?

• May 20, 2008

  11:25 a.m.

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  Big_D writes:

  Trythinking,

  http://www.leg.state.co.us/CLICS/CLIC...

  What didn't pass? Explain in depth and why without your conjecture. It looks like the main bill passed so what are you talking about?

• May 20, 2008

  12:22 p.m.

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  CheapEnergyNow writes:

  Big_D,

  I was responding to an old thread that included a question from greenleaf.

  The bill has been sent forward to a "Study" to determine if hydropower can be considered renewable. It also says nothing about pump storage.

  http://www.leg.state.co.us/clics/clic...

  It states that "the inclusion of hydropower (not pump storage)as an eligible energy resource could displace other eligible energy resource (one's we like better such as wind and solar) under Amendment 37."

  Seems pretty clear to me. They want to study if hydropower, the oldest most dependable renewable resource, is renewable. Why do we need to study it? Only because it will make less room for wind and solar, under amendnment 37. You need to ask are we trying to increase renewables for the good of the planet, or for the good of the wind and solar industries?

• May 20, 2008

  1:33 p.m.

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  peterpi writes:

  You guys can scream about the nasty enviro Democrats all you want, but the Democrats didn't create Americans' insistance on big gas guzzlers, the Democrats didn't create rising Asian oil usage, the Democrats didn't create rising Chinese car demands, the Democrats didn't create the current oil speculation bubble.
  There's a way for an immediate drop in oil price futures. Not 5 years, not 10 years. Now. But it involves using common sense and a little self-sacrifice. Words that neocons are scared to death of.
  Millions of Americans wil be buying or leasing new cars, vans, trucks, and SUVs this summer. Suppose that they decided to cut down on image and buy something practical. Supoose they bought a vehicle that got 25 or 30 MPG instead of 15 or 20. Pass up that big, burly, (dare I say it?) macho ego-gratifying truck, and get a smaller truck that still fully meets most American truck buyers' (suburban males commuting to work and hauling groceries) needs. Buy a crossover instead of an SUV. A midsize car instead of a wallowing boat.
  If huge numbers of people did that, the speculators hyping up the price of oil would flee so fast, it would make the Saudis weep. The price of oil would drop to more economically rational levels.
  Yes, it's a pipe dream, but so is Vincent's vision of vast volumes of gasoline from shale.

• May 20, 2008

  2:01 p.m.

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  mikeyg writes:

  peterpi, you're right, nasty enviro Democrats didn't create many of the things you cite in your first paragraph - but neither did Republicans. Americans of all stripes have demanded the gas guzzlers, and Americans of all stripes have invested much in China and India to help them begin to lift their 1B+ people out of abject poverty.

  But, nasty enviro Democrats did help create the current oil speculation bubble. Whether you care to admit it or not, nasty enviro Democrat public policy has restricted the US from exploring for, extracting and refining our own oil for decades. By keeping major sources of oil out of the world's supply it DOES drive oil prices up. Simple law of supply and demand.

  Conservation can only do so much. Do you know that we currently use the exact same amount of oil nationally in 2008 as we did in 1978? Yet our country and economic activity are vastly larger. This is because of conservation strategies in place and improved upon for thirty years. Republicans and Democrats buy big, macho trucks. And Republicans and Democrats buy hybrids.

  I have no doubt that American innovation will once again lead the world to practical solutions. Investment in technologies, tinkering entrepreneurs and dedicated scientists will all be a part of the ultimate solution. But along the way we have to do all we can to ease the pressures on working families caused by drastic increases in energy (and subsequently food) prices.

  The enviro extremists who control the Democratic party have zero concern for working families. Zero. They actually prefer middle America devolve to third-world living standards over utilizing the current energy resources we have available to us. Of course, when you're the rich white educated elite (Obama's main voter demographic, moreso than blacks) you don't much care about the masses who "cling to guns and God", do you?

• May 20, 2008

  2:04 p.m.

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  Big_D writes:

  Trythinking,

  I get it you were not telling the truth. You just decided to make up something so you could blame it on the Democrats and never thought anyone would call you on it. The bill passed and you are far from honest.

• May 20, 2008

  2:26 p.m.

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  sunshinestate writes:

  Don't you know that the interior west is to be inslaved in the name of this energy production??
  Stepping down the pace of the planned works,at least until the passing of the Bush Administration, will not "stick a fork in fledging technology", but pushing full steam ahead may stick a fork in Colorado. Perhaps if you knew what the rest of the country thinks about the future state of affairs in Colorado (this is written from Florida,a state wonderfully absent of such pressures)the boomers and promoters would do some fork 'stikin themselves.

• May 20, 2008

  2:32 p.m.

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  StraightTalk writes:

  This post doesn't really fit here, but I remember seeing someone asking for a breakdown of where the money goes to produce a gallon of gasoline. I'm not sure if the question was ever answered. I was listening to Mike Rosen's radio program this morning while driving to the YMCA. He talked about a website that provides this information. It is: http://www.energy.ca.gov/gasoline/mar...

  Here's the latest breakdown (May 12, 2008):
  Retail price: $3.92
  Crude Oil Cost: $2.96
  Refinery Cost & Profits: $0.23
  State Underground Storage Tank Fee: $0.01
  State and Local Sales Tax: $0.29
  State Excise Tax: $0.18
  Federal Excise Tax: $0.18
  Distribution Costs, Marketing Costs and Profits: $0.06

  The figures look legit. I wonder if the "gas tax holiday" being proposed by McCain and Clinton is just the Federal Excise Tax, or if it includes State & Local Taxes. I would assume it would just be the Federal portion.

  Comments anyone???

• May 20, 2008

  3 p.m.

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  peterpi writes:

  McCain and Clinton can't do a darn thing about state and local taxes. The gas tax holiday they're talking about is limited to the federal excise tax. Does anyone really believe that 18 cents on $3.60 gas would make a lot of difference to most folks? Driving conservatively -- no stomping on the gas pedal on green lights, easing to a stop for traffic signals and stop signs, maintain 65 on the highway, getting an oil change if it's time, etc. -- would save the average driver more than this gimmicky idea. Plus, the Highway Users Trust Fund would lose billions of dollars needed for highway maintenance.

• May 20, 2008

  3 p.m.

  Suggest removal

  Big_D writes:

  StraightTalk,
  The sad part is that the 2.96 goes into the pockets of the producers like Saudi, Argentina, Iran, UAE, and a lot of other countries that don't like us and a few that will tolerate the others in the name of profit. I will bet every cent of financing of the attack on 911 came from this money.

• May 20, 2008

  3:08 p.m.

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  peterpi writes:

  StraightTalk, the state and local sales and excise taxes your figures mention are for California. I don't think they're that much in Colorado. Colorado has a fee that was originally called the Large Underground Storage Tank fee. The name was changed after someone noticed the acronym that name created.

• May 20, 2008

  3:11 p.m.

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  Big_D writes:

  Bigfoot apparently missed the fact that wind energy in Colorado jumped to 775 Megawatts in 2007. The one in Weld produces something like 400 Megawatts. Not ready? They are already in the game bigfoot in mouth.

• May 20, 2008

  3:27 p.m.

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  StraightTalk writes:

  peterpi, if they slapped a LUST fee on me, I'd be on welfare.

• May 20, 2008

  3:48 p.m.

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  mikeyg writes:

  peterpi, you're typical of most liberals, talking out of your butt with partial information as if you know it all. So when people who don't pay attention to issues they think you actually know what you're talking about.

  Case and point this time, your faux knowledge of the LUST fund. It stands for LEAKING Underground Storage Tank trust fund. It exists to contain harmful chemicals, including petroleum products, that can seep from underground storage tanks into groundwater or streams. It was changed to the Petroleum Storage Tank Fund in 2005. It's also an acronym used by the EPA in every state

  Large? okay, whatever, smart guy.

• May 20, 2008

  3:53 p.m.

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  CheapEnergyNow writes:

  Big_D,

  You are right the bill passed. They have decided to study whether rain falling from the sky, making power, evaporating and falling from the sky again is renewable. They haven't included hydro over 30 MW or pump storage as renewable they are going to study it. Thanks for straightening me out. Let’s next study whether snow is cold and white.

  Are you claiming that the democratically control legislator has approved of hydropower above 30 MW and pumped storage is now considered renewable?

  Did you actually read what passed?

• May 20, 2008

  4:06 p.m.

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  CheapEnergyNow writes:

  Big_D,

  Calm down. I was answering greenleaf's question from last week about using pump storage to help wind and solar be more dispatchable. It was a direct answer to a direct question from a thread that ended for me on a Friday evening. My comment must have hit a nerve with you. I was asked by my representative to testify on behalf of his bill to include hydro above 30 MW and pumped storage as renewables under Amendment 37. I showed up with engineering data, facts and explanations as to why it should be included. The democrats didn't want to hear it. In fact my testimony did not even make it into the record. By the way I own a hydro power plant and have 25 years of experience in the renewable industry both hydro and wind. The last report that I got that it was heading for a study, the black hole for something this cut and dried. You could say I misspoke, but since I’m a republican I lied. The bill apparently did pass, but not a bill that defines hydro as renewable, but a bill that studies it.

• May 20, 2008

  5:29 p.m.

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  greenleaf writes:

  Trythinking,

  Thanks for answering the question about pumped storage ( I didn't know what it was called). Is there any reason it is encountering resistance such as the need for additional reservoirs and infrastructure, or a shortage of logical sites? I also wonder how much energy is lost in the process, in other words: how efficient is it?

  What is your own opinion of it? Also thanks for the link to information regarding concentrated solar, that looks promising. I hope you forgive me for asking so many questions but as I stated in the last thread, I am a botanist and don't very often have the opportunity to learn something from the guys on the supply side such as yourself. This also gives you an opportunity to educate the open minded among us and influence the debate as I try to do. As I'm sure you know, there's never much chance of reaching those whose minds are already shut.

  Its important to keep trying.

  Thanks

• May 20, 2008

  5:31 p.m.

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  peterpi writes:

  mikeyg @ 3:48,
  As Steve Martin would say, "Well excuuuuuuse me!" I thought the "L" stood for "Large". It probably stood for "Leaking" as you said. Either way, they changed the name because of the acronym. Nobody wanted to lust after storage tanks.

• May 20, 2008

  5:32 p.m.

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  me2 writes:

  Oil shale is not petroleum. It comes from leaves. Some people call it high grade vegatable oil.

• May 20, 2008

  8:29 p.m.

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  cashmoney writes:

  People keep saying oil will go back down! Don't be so sure. Most of these third world countries don't feel like giving there oil away to the US anymore. Unless demand goes down expect to see oil on the rise. Just keep in mind if oil hits $200 a barrel the US will be importing 1 Trillion dollars of oil a year. Basically that money is just being sucked out of the US economy. Hope we don't see any hurricanes in the Gulf this year that could easily send gas to $10 a gallon. Imagine what that would do!

  Say what you want about oil shale but it's development would release the US as a hostage of foreign oil. I'd like to see some of that Trillion a year put into the pockets of Americans and help keep the economy going.

  It' going to get a heck of a lot worse before it get any better.

  Best of Luck

• May 21, 2008

  8:58 a.m.

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  CheapEnergyNow writes:

  greenleaf,

  The overall system efficiency for pumped storage is about 70%, which by the way is about the same system efficient for a Prius battery system. The Prius example works very well. A Prius stores excess fossil energy (coal power) and excess renewable energy (wind power) and releases it when it is more valuable and required. By saving this energy, you reduce the need for additional fossil energy during the next acceleration.

  The great thing is how well pumped storage works with the total grid system. Excess wind or coal power at night has a very low value. If you reduce the output of a coal plant at night the efficiency drops and the emissions per MWhr increase. Pump storage allows for the coal plant to run at maximum efficiently 24 hours per day. Pump storage works well for over building wind resources. If you total needs are 100 MW, in Colorado you would need to build 300 MW of wind, because of the 33% capacity factor for wind. Even if you do so, some times you will have 0 wind power and other times you will have 300% of your needs. Storing it makes all the sense in the world.

  As with any hydro project you get a one for one trade off with head (elevation change) and flow. A 100-foot head with a 100-acre foot reservoir would store the same amount of energy as a 1000-foot head project with a 10-acre foot lake. In this case Colorado has a great potential for very high head, low water need storage. We have exactly the right type of topography, we have a need to store water and a great, but intermittent wind resource.

  This is why I was so perplexed that our legislature and PUC is against having pump storage counted as renewable.

• May 21, 2008

  9:14 a.m.

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  greenleaf writes:

  Trythinking,

  Thanks, that's great information and is actually very encouraging. Maybe between concentrated solar and some pumped storage for the wind and coal components of the grid we could do some great things in the mountain states.

  I too am perplexed by the legislature's disapproval.

  Just a thought, I wonder if in arid areas if some other mass could substitute for water. Unfortunately the ideas I imagine look like something out of Rube Goldbergs fertile mind with towers and hoists, massive blocks, gears and generators. I'm obviously out of my element here, but I wonder if a wider application would be possible or practical.

  Thanks for the information, you taught me something and perhaps a few others as well. That's a good thing!

• May 21, 2008

  9:33 a.m.

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  CheapEnergyNow writes:

  There are some very cool technologies that are getting a hard look. One replaces the generator on a wind turbine with an air compressor. During high wind periods, it pumps compressed air into a manmade cavern. The energy is stored as high-pressure air, which can be recovered using a conventional steam turbine. My biggest complaint is that non-technical people are picking technology winners. The politicians (and their lobbyist) need to set energy goals and the get out of the way. Otherwise, you end up with the whole corn based ethanol debacle.

• May 21, 2008

  6:08 p.m.

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  greenleaf writes:

  Trythinking,

  Don't get me started on corn ethanol! What a disaster. Its just a handout to big agriculture at the expense of the world!

  I love this wind capture idea. Is it new, I've never heard of it?

  I need to commend you and give you encouragement trythinking. We need to have more engineers like yourself exposing us to the latest ideas and technologies, and telling us when ideas we bring to the forum are half-baked. So many people read these forums that it could lead to some good things.

  Actually, my friend, using corn ethanol as an example, the non-technical people are choosing a few energy losers! I'll look forward to hearing more of your ideas.

  Thanks!