3:21pm

Thu May 5, 2011
Energy

Colorado Oil Shale History Scrutinized

In Cheyenne Thursday, federal land managers are wrapping up their final public meeting on a proposed plan that is expected to map out the future of oil shale mining on public lands.  The Bureau of Land Management is taking what it calls a “fresh look” at the energy resource in Wyoming, Utah and Colorado, as the Obama Administration considers shelving a controversial Bush Administration plan that opened up nearly two million acres of land for potential leasing.  The agency will now begin writing what’s expected to be another exhaustive study and that’s reopening an ages-old debate.

Oil shale has always been the future for American energy, says historian Andrew Gulliford, who teaches history and environmental studies at Fort Lewis College in Durango.  Gulliford likes to point to an article in 1918 in National Geographic that started the frenzy that he says continues today.

"It was major projections about how Colorado’s oil shale was going to take off as an industry and it stirred all sorts of interest and people came over on the train and oil shale stocks started selling like hot cakes," Gulliford says.

But that train west got sidetracked in the Midwest.

"Liquid crude was found in Oklahoma and in Texas and the whole industry shifted for a different kind of resource," he adds.

Fast forward to the oil embargo years of the early 1970's when the federal government stepped in – in earnest – channeling public research and development dollars to private oil companies.  It was a race to figure out how to unlock the oil-like substance of kerogen from the Green River Shale formations that lie deep in the earth below Colorado, Utah and Wyoming.

"The bust of 1982 is still a fresh wound for some," says Keith Lambert, who taught school in the western Colorado town of Rifle when the infamous Black Sunday crash occurred. 

"When it collapsed as soon as the federal money dried up, it put a huge halt to that whole process and devastated this area of the country," says Lambert, who's now Rifle's mayor.

Today, just as he did back in the eighties, Lambert continues to urge federal land managers to take a tempered approach to oil shale leasing.  Lambert says only if done right, can it benefit communities like his. 

The Obama Administration has said it’s sensitive to this.  But it remains to be seen whether rising prices at the pump may increase pressure to fast-track development of unconventional reserves like oil shale.

The BLM has been holding public meetings on the matter from Salt Lake City to Denver in recent weeks, as the agency decides whether to scrap a 2008 Bush Administration plan that made up to 1.9 million acres of lands potentially available for oil shale leasing. 

The BLM’s oil shale program manager in Washington D.C., Vincent Vogt, says much has changed even in just three years, including a decision by the federal government that the greater sage grouse is eligible for Endangered Species Act protections. 

He adds: "The US Geological Survey has done some more work with the oil shale resource, so there’s just some new information that needs to be considered."

Still, the BLM has said that oil shale deposits in the Green River formation hold an estimated 1.5 trillion barrels of recoverable oil; more than all of the combined reserves in Saudi Arabia.

"Our country needs energy in every form, there is clearly a path forward where our energy needs can be supplemented with oil shale while also managing and mitigating the impacts of development," said Shell Oil's Tracy Boyd, during a public comment session at a BLM hearing Thursday in Golden. 

Boyd said the BLM’s review of the Bush-era plan would only hamper the country’s efforts to reduce its dependence on foreign oil.  Shell holds a lease on public land in remote northwest Colorado where it’s experimenting and studying how to make oil shale commercially viable.

"If one only focuses on environmental concerns without also considering socio-economics, national energy needs, and the facts and realities of the situation, then even a no-development policy is unsustainable," Boyd said. 

Boyd declined a request for an interview after the hearing.  But even Shell has conceded that commercial oil shale development is still years away.  A year ago, the company pulled its controversial request for water rights along the Yampa River. 

The scarcity of water in the region has long been one of the biggest hurdles in front of oil shale mining. 

Historian Andrew Gulliford says back in the 1970s, oil giant Exxon had proposed to pipe water from the Missouri River over the Continental Divide to support the oil shale industry.   

"It’s not a stigma, it’s a historical reality," Gulliford said.  "We simply do not have the technology and the technology that exists would cost too much in terms of the energy generated."

But while oil shale certainly has its skeptics in the region, it still has boosters, even within the federal government.  Some say the fact that the potential fuel source is so vast means it can’t be ignored as conventional energy gets more expensive and more in demand. 

The BLM says it will weigh all of this in the coming months, as it puts the issue on a "aggressive schedule."  The agency expects to have a draft environmental review of oil shale up for another round of public comment in December.

Editor's Note: Historian Andrew Gulliford is the author of "Boom Town Blues: Colorado Oil Shale."   Listen to an extended interview with Gulliford about oil shale's history in Colorado at the link below.