Oil Shale Cheerleading Overlooks Hard Questions

Every so often, especially when there is anxiety about energy prices or security, you hear cheerleading about oil shale. There are trillions of barrels of the stuff, all lying within the friendly borders of Colorado and Utah, we're told. Dig it up and we can enjoy worry-free guzzling forever.

Last week, a House subcommittee held a hearing to talk up the prospects for harvesting the rock that burns.

First, a few semantic distinctions must be drawn. Oil shale is not the same as shale oil. Shale oil is honest to goodness crude oil locked away in shale rock formations. Examples of such formations include the Bakken in North Dakota and the Eagle Ford in Texas. About half a million barrels of shale oil per day are produced in the U.S.

Oil shale, on the other hand, is a misnomer. It's not oil. It's an organic substance called kerogen, a low-grade hydrocarbon locked away in sedimentary rock. Heating kerogen produces an oil-like fluid that can be refined into fuel. So, in the interest of clarity, we'll call it kerogen.

There are no commercial kerogen operations anywhere in the U.S. There's a good reason why - producing kerogen costs more than producing conventional crude oil. You have to heat the stuff up to between 650 and 1,000 degrees, either by digging it up and putting it into a surface oven called a retort, or heating it in place and bringing it up via production wells. The latter is called "in situ" production.

In Jimmy Carter's push for energy independence, which he called the "moral equivalent of war," kerogen was one of Carter's armored divisions. Exxon fired up a big kerogen boom in western Colorado in the late 1970s. The big boom turned to a big fizzle when the dodgy economics of the boondoggle forced Exxon to pull the plug on May 2, 1982, a day still known as "Black Sunday" around those parts.

Still, those who see no alternatives to an oil-based energy economy periodically trot out kerogen as the next great hope. Hence, the August 24 subcommittee hearing, where the Government Accountability Office spotlighted another problem with kerogen production besides high costs - water. Specifically, the high volumes of water that kerogen production would demand of an arid region where water quarrels are never-ending. Some analysts estimate that kerogen production would require more water than is currently consumed by the 1 million residents of the greater Denver metro area.

Shell and other energy companies interested in getting into the kerogen game - if it pays, which is still an open question - have acquired enough water rights for start-up projects, but scaling up is another matter. Both Colorado and Utah follow the first-come, first-served Western water doctrine - water rights must be obtained from the state or purchased from other rights owners.

Developing a kerogen industry will take 15 to 20 years, by GAO's reckoning, and in the meantime, there is likely to be stronger competition for water. In the affected areas of Colorado, for example, population growth by 2030 will increase urban and industrial water demand by 76 percent over the 2000 level. That's without planting a kerogen industry in the region. Local officials believe they have enough water rights to meet municipal and industrial water demand growth, so the kerogen producers might have to buy up water rights now held by farmers.

GAO figures there might be enough water to support a surface kerogen industry, but in-situ production and its higher water needs would run up against physical limits - the amount of water in rivers - and legal limits - the amount that rights holders may withdraw.

Then, there is the small matter of climate change and the thinner snowpacks and longer droughts that might come with it.

Amidst the clamor for developing kerogen James Spehar, a former mayor of Grand Junction, Colorado, posed hard questions to the subcommittee that arose from Black Sunday's long memories.

• Can a Colorado River Basin that might already be an overdrawn bank account support a water-intensive energy industry?
• Is Congress planning to subsidize kerogen at a time when all energy subsidies are under the microscope?
• Will the Interior Department lease public lands before commercial-scale kerogen production is successfully demonstrated, creating a gift for speculators?
• What will be done to assist local communities lacking resources and infrastructure to cope with the socio-economic impacts of a kerogen boom?
• Will a kerogen push trade lasting jobs in agriculture and outdoor recreation for boom-and-bust energy jobs?
• Is the federal government determined to rush a kerogen industry into being before the hard questions have been answered?

Demanding answers to such questions is not obstructionism, but a prudent willingness to learn from past mistakes, plan ahead soberly, and understand the full range of impacts that digging up the rock that burns could impose.

Look before you leap. And remember the old saying about those who don't learn the lessons of history.