— USGS (@USGS) March 2, 2015
From The Grand Junction Daily Sentinel (Anne-Mariah Tapp and David M. Abelson):
As the new Congress ramps up in the coming weeks, energy policy will quickly top the list of priorities. Debates over the Keystone Pipeline, natural gas exports, and climate change may dominate, but they won’t be the only issues demanding Congress’ attention. In the West, the link between energy development and water use has never been more dire. And for the Colorado River Basin’s 40 million residents —and the water they depend on — a critical piece of legislation on the docket is the PIONEERS Act.
The PIONEERS Act seeks to jumpstart the non-existent oil shale industry in Colorado, Utah and Wyoming for private gain at the expense of Colorado River Basin water resources. Oil shale, the poor cousin of the shale oil and fracking boom, is technically feasible to extract, but in 100 years of dogged attempts by the federal government and the oil industry, extracting it has never turned a profit. Now provisions in the PIONEERS Act attempt to improve the economics by providing federal subsidies in the form of cheap public land and below-market royalties.
In securing passage of the PIONEERS Act in the past three sessions of Congress (each time the bill has been thwarted in the Senate), Colorado Reps. Doug Lamborn and Scott Tipton have maintained that oil shale development, should the technologies be successfully commercialized, would require little water. This claim seems to be based solely on public assurances made by the oil industry. However, recent water court filings by oil shale developers now cast doubt upon these assurances, and it’s time for Lamborn and Tipton to reconsider their endorsement of the industry.
In recent months, oil shale industry leaders Chevron Oil and ExxonMobil have undercut Lamborn and Tipton’s lead talking point. Chevron filed a lengthy report in Colorado water court showing that the company’s proposed oil shale development activities alone would require up to 125,000 acre-feet of water per year. That’s enough to supply more than half of Denver Water’s 2.3 million customers. ExxonMobil is seeking rights to even more water than Chevron, saying oil shale’s water demands “are anticipated to be higher than that of other sectors.” Other companies across the Colorado River Basin are also pursuing water rights to support oil shale operations.
For those of us who actually depend on Colorado River water to live, from the headwaters in Colorado to the delta in California, these projected water demands are alarming. By 2050, when oil shale supporters predict a mature industry might flourish, the competition for water could be extreme, pitting vital agriculture and recreation economies against a burgeoning population and water-intensive energy demands. If oil shale indeed develops at a large-scale, the family farm — the bedrock of our rural communities and a critical economic driver for our region — will face a full-court press from industry for water rights.
Even without oil shale development, water providers throughout the Colorado River Basin will be hard-pressed to meet existing and future demand. Colorado’s Water Plan, published in December 2014, indicates that by 2050, the gap between water availability and demand will be roughly 500,000 acre-feet, more water than the cities of Denver, Salt Lake City and Albuquerque collectively use in a year. Oil shale gets scant attention in this analysis, but developing these deposits would increase the gap and further strain water supplies.
As James Eklund, director of the Colorado Water Conservation Board, has noted, “No single issue will have a more direct impact on Colorado’s future than our ability to successfully and collaboratively manage our life-giving water.” This challenge is not unique to Colorado. States throughout the West are grappling with complex supply and demand questions.
As Congress takes up the PIONEERS Act and considers whether to fast-track oil shale development in the Colorado River Basin, it’s time to examine supporters’ key talking point that oil shale won’t use much water. We must remember the court filings and hold our elected officials accountable. There is too much riding on the myth that oil shale wouldn’t require much of a far more precious resource: water.
From The Grand Junction Daily Sentinel (Gary Harmon):
An oil shale industry in Colorado, Utah and Wyoming is likely to be about one-third the size it had been envisioned, an industry association said. Instead of a 1.5-million barrel-per-day industry, the more likely scenario is a 500,000-barrel-per-day industry, according to estimates by the National Oil Shale Association. The estimates were dramatically reduced “in light of a more pragmatic view of what an industry might look like in 50 years or so,” the association said, in an estimate that also noted that oil shale production would demand less water than had been previously believed.
The United States in 2013 consumed 6.89 billion barrels of petroleum products or 18.89 million barrels per day, according to the U.S. Energy Information Administration.
The oil shale association’s estimate is based on production of 225,000 barrels per day from in-situ means, or heating shale deep below the surface; 200,000 barrels per day from retorting shale on the surface; and 75,000 barrels per day from modified techniques, such as heating it in an earthen capsule, which is left in place.
Additional information about water demands of each technique sharply lowered the association’s estimate of water use from its 2013 estimate of 1.7 barrels of water per barrel of oil. Depending on approach, production from oil shale could require between 0.7 barrels of water per barrel of oil to 1.2 barrels of water per barrel of oil. Production of 500,000 barrels per day could demand between 16,400 acre feet to 28,900 acre feet of water per year…
The reduction in the anticipated size of an oil shale industry is the result of new information that came to light this year, the association said.
“Projects have matured, and some developers have taken a new look into technologies that dramatically reduce water needs,” the association said. “However, estimates are still preliminary and may change as projects reach commercialization.”
Here’s an essay about the risk of doing nothing about climate change from Allen Best writing for The Mountain Town News. Click through and read the whole thing. Here’s an excerpt:
Bill McKibben, a writer and activist, has made the most cogent arguments. Two years ago, after crunching the numbers, he concluded that private companies own five times more carbon in the ground than the world can possibly absorb. “On current trajectories, the industry will burn it, and governments will make only small whimpering noises about changing the speed at which it happens,” he wrote in an essay titled “A Call to Arms” that was published in the June 8 issue of Rolling Stone.
He identifies a clear problem. “The fossil-fuel industry, by virtue of being perhaps the richest enterprise in human history, has been able to delay effective action, almost to the point where it’s too late,” he wrote. [ed. emphasis mine]
McKibben’s 350.org has been fighting the Keystone XL pipeline, which would export Alberta’s bitumen to refineries along the Gulf Coast. It’s largely a symbolic fight, as Michael Levi points out in his book The Power Surge. The tar/oil sands would, if fully developed, elevate atmospheric concentrations of C02 by 60 ppm. At current rates of tar/oil sands mining, that would take 3,000 years, he says. Isolating the climate debate to Alberta’s bitumen, he says, is a mistake.
But Keystone XL represents business as usual. We need accelerated change. The United States should follow the lead of British Columbia in levying a carbon tax. My impression of B.C.’s tax is that it not precisely the best model. We need a revenue-neutral tax, accelerating over time, giving the private sector clear market signals to instigate changes.
Henry Paulson, the former treasury secretary in the Bush years, made this case in an 1,800-word essay in the New York Times on June 22. A few days later, a group that includes Paulson, former New York City Mayor Michael Bloomberg, Stanford’s George Schultz, who is another former treasury secretary, and a number of other high-profile individuals — including billionaire Tom Steyer — released a report titled “The Economic Risks of Climate Change in the United States.”
“Oil shale has been the next big thing in Colorado for over a hundred years” — Ed Quillen #ColoradoRiverApril 26, 2014
From The Grand Junction Daily Sentinel (Gary Harmon):
Microwaving rock in northwest Colorado could turn the oil shale business inside out, said a Grand Junction inventor who is working to restart oil shale at a time when many are pulling away from it. Using equipment small enough to be loaded onto two trucks traversing the surface could result in minimal surface disturbance, said Peter Kearl, a Grand Valley native who heads Qmast LLC, http://www.qmast.com, the company pursuing the project.
Not only would his technology disturb little of the surface, it also would likely produce — rather than use — water, Kearl said.
It could be run using natural gas from the Piceance Basin itself as a fuel source and leave behind subterranean caverns that could be used for carbon sequestration, Kearl said.
Most approaches to developing oil shale, from retorting it above the ground to mining and in-situ heating in large expanses, have run afoul of environmental and cost concerns.
Rather than employing a “big-risk, big-reward” approach such as that of Royal Dutch Shell before it pulled out of oil shale entirely last year, Kearl said he’s hoping to use a more measured approach and achieve more reliable and regular results.
Several other oil shale ventures are pushing ahead in Utah, and Kearl acknowledged that it might be easier to test his technology across the state line.
“But I’m a Colorado boy,” he said, voicing his preference for developing oil shale in the Centennial State.
He has a geology degree from what was known then as Mesa College and a degree in hydrogeology from the University of Nevada.
It also helps that the richest, though deepest, deposits of the Green River Formation’s oil shale are in the northwest corner of Colorado. Colorado, Utah and Wyoming contain the world’s largest deposits of oil shale that contain as many as 4.2 trillion barrels of oil, according to recent estimates.
Applying microwaves to heat- targeted areas of rock makes more sense than heating large areas using other methods of heating, Kearl said.
“The fundamental physics are definitely on our side,” he said.
The process would send the microwave equipment down a well to heat the hydrocarbon-bearing rock to the point that it would release crude oil that then could be collected by conventional drilling, he said.
The technology could tap shale on steep slopes from the side, allowing the oil to simply flow out, he said.
He presented his idea in 2012 at the SLAC National Accelerator Laboratory on the Stanford University campus.
The more targeted approach he advocates could prove to be a financial success, Kearl said.
A well 300 meters deep could produce revenue of $80 million, based on $100-per-barrel crude prices, he said.
Kearl and his partners are working to arrange financing of $5.5 million for a test. That step is difficult because the federal government appears to be uninterested in making available any more land for research, demonstration and development leases.
The effective ban on experimentation “thwarts inventiveness,” Kearl said.
So he’s also looking for a small parcel of land, a quarter of an acre would do, on which to test his technology, including his estimate that he could produce about half a barrel of water for each barrel of oil he produces.
The patented microwave technology he’s considering wouldn’t require a large electricity supply, he said, because the process also would produce natural gas, which could be used to fire the generators for the microwave equipment.
Read the post with Ed’s quote here.
From The Grand Junction Daily Sentinel (Dennis Webb):
ExxonMobil and Natural Soda Holdings Inc. have edged another step closer to undertaking oil shale research-and-development projects with the Bureau of Land Management’s approval of their development plans. The approvals are for the company’s research, demonstration and development leases on federal land southwest of Meeker in Rio Blanco County. The projects still must undergo review by the Colorado Division of Reclamation, Mining, and Safety.
For ExxonMobil, its project marks a renewed attempt to commercially extract petroleum from oil shale after what was then Exxon shut down its Colony Project in 1982. That shutdown resulted in some 2,000 workers losing their jobs and caused economic repercussions for years from Glenwood Springs to Grand Junction.
Natural Soda, meanwhile, has extensive experience with another kind of mining at a site just north of its federal lease. It injects hot water underground to solution-mine for baking soda, known as nahcolite in its natural form. On its lease, it proposes first removing the nahcolite using its normal process, then producing oil from underground by heating it using either a downhole burner or a closed-loop steam system.
ExxonMobil also is proposing an in-situ, or in-place, development project involving heating the oil shale underground and then pumping out the oil — a process different from the Colony Project, which involved surface mining and heating of oil shale. Exxon wants to hydraulically fracture the oil shale, fill the fractures with conductive material and then electrically heat the shale.
The companies acquired the leases under a second round of R&D leasing conducted by the BLM. The leases initially cover about 160 acres but potentially can be enlarged by some 480 acres for commercial development if certain conditions are met.
Shell, Chevron and American Shale Oil hold R&D leases in Rio Blanco County from the earlier round of leasing — including three leases in Shell’s case — with the potential to convert each lease to nearly eight square miles for commercial development. But while AMSO continues to work on an in-situ project, Chevron, and more recently Shell, have ended their oil shale projects in connection with their leases. Shell had done the most work of any company on an in-situ shale project in Colorado before shutting it down last year.
In approval documents for the ExxonMobil and Natural Soda plans, BLM White River Field Office manager Kent Walter wrote that each proposed action “with mitigation represents an opportunity to develop domestic energy sources and to inform and advance knowledge of commercially viable production, development and recovery technologies of oil shale resources consistent with sound environmental management. It also will provide a basis for informed future decisions about whether and when to move forward with commercial scale development and allow for the assessment of its impacts on the environment.”
David Abelson, an oil shale policy advisor for the Western Resource Advocates conservation group, said that if history is any indication, there’s a strong likelihood the latest projects won’t prove economically viable.
But he added, “One thing I think we have learned over the years is to proceed cautiously so we don’t repeat what happened in western Colorado in the early ‘80s.”
He said both Shell and Chevron showed a big difference from companies’ past practice in acknowledging failure early on rather than proceeding to the point where shutting down a project is economically devastating.
He said ExxonMobil and Natural Soda also will operate under a framework governing the second round of leases that requires more reporting regarding protection of air and water quality and other concerns.
“And that is good public policy. That’s the basis for making smart decisions,” he said.
ExxonMobil repeatedly has emphasized the desire to take a prudent, step-by-step approach to its new oil shale undertaking, something reiterated in its development plan.
“It is recognized that development of a commercial(ly) viable in situ oil shale technology will require a paced approach to thoroughly evaluate and optimize technology viability, with appropriate focus on environmental protection, water conservation and responsible land use,” the company said in the plan.
It plans to first conduct an appraisal phase involving drilling one or more test wells to ascertain the oil shale resources within the lease, along with groundwater monitoring wells to do baseline testing of water quality before further work ensues.
It currently estimates a resource of 600 million barrels of oil are contained in the shale within its lease.
The appraisal phase would be followed by three experimental phases, first to establish the ability to install the technology in the test zone, secondly to heat the zone, and then to do a pilot test to determine commercial viability on a field scale.
“ExxonMobil has consistently proposed a staged and deliberate development program that allows for technical advancement while minimizing the potential for environmental impacts,” its plan says.
Natural Soda also is outlining a phased approach in its plan, starting with a monitoring well to be drilled as soon as this year. That would be followed by steps such as building processing facilities, installing heating elements, operating the facilities and expanding and replicating the process over a period of up to nine years.