Source of this article - Los Angeles Times, December 28, 2008
A trove of oil shale may be a boon. But the science to extract fuel is imperfect, and locals worry about their water supplies, which ultimately feed Southern California reservoirs.Julie Cart
Reporting from Salt Lake City — A titanic battle between the West's two
traditional power brokers -- Big Oil and Big Water -- has begun.
At stake
is one of the largest oil reserves in the world, a vast cache trapped beneath
the Rocky Mountains containing an estimated 800 billion barrels -- about three
times the reserves of Saudi Arabia.
Extracting oil from rocky seams of
underground shale is not only expensive, but also requires massive amounts of
water, a precious resource crucial to continued development in the nation's
fastest-growing region.The conflict between oil and water interests has
now come to a head. On Oct. 31, Congress allowed a moratorium on oil shale
leasing to expire. That paved the way for the Bush administration to finalize
leasing rules last month that opened 2 million acres of federal land to
exploration.
Oil companies say that at a time of increasing foreign oil
dependence, it would be unconscionable to forgo exploiting oil shale's
potential.
"Considering the magnitude of this resource -- it is so huge
relative to other hydrocarbon resources around the world -- it merits taking a
look at trying any method we can, safely and responsibly, to get at it," said
Tracy C. Boyd, communications and sustainability manager for Shell Oil
Co.
Oil shale companies acknowledge that the technology required to
superheat shale to extract oil is unproven. They also acknowledge that they are
uncertain how much water would be needed in the process, although some experts
calculate it would take 10 barrels of water to get one barrel of oil from
shale.
That water-to-oil equation has inflamed officials in the upper
Rockies, who are raising the alarm about the cumulative effect of energy
projects on the region's water supplies, which ultimately feed Southern
California reservoirs via the Colorado River.
"There are estimates that
oil shale could use all of the remaining water in upper Colorado River Basin,"
said Susan Daggett, a commissioner on the Denver Water Board. "That essentially
pits oil shale against people's needs."
Even with the precipitous drop in
oil prices and the staggering start-up costs and risks associated with oil shale
exploration, oil companies are rushing ahead.
"As long as we continue to
be a nation that is hooked on liquid fuel," said Boyd, "we need to look at
anything we can do to tap the sources of energy in this
country."
Prospectors have known about the oil shale deposits in the
Rockies for more than a century, but the technology to extract it has remained
imperfect, expensive and polluting.
A variety of experimental methods
have been developed. Although details are closely held, the broad outlines are
similar.
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.
Other companies' methods are more akin to open pit mining, in
which millions of tons of rock are excavated and then fed into a massive
above-ground cooker.
All of the processes require prodigious amounts of
water, either for the electrical plants needed for heating and freezing or for
the web of industrial facilities needed to extract the oil.
But for all
the years of research into oil shale extraction, there is little hard
information on exactly how much water would be drained from the
region.
In its recent environmental review of proposed oil shale
projects, the federal Bureau of Land Management, which oversees energy leasing
on public lands, was unable to estimate the industry's region-wide water
use.
Mike Vanden Berg, the Utah Geological Survey's principal researcher
for oil shale projects, said, "I still don't know how much water is used. . . .
No one does."
Meanwhile, already- parched Western states bracing for more
growth are completing water supply inventories. A Colorado study projected that
by 2050, with the state's oil shale operations at full capacity, the industry
will require 14 times more power than currently generated by the state's largest
power plant.
The study's sobering bottom line is that meeting oil shale's
energy demands could require more water than Colorado is entitled to under an
interstate compact.
"Can groundwater be protected?" asked Harris Sherman,
executive director of the Colorado Department of Natural Resources. "Areas where
this technology will be used are all tributaries for the headwaters for all of
the seven Colorado Basin states."
Despite the objections, oil shale
development has been pushed forward by a series of recent actions. In an effort
to encourage the fledgling industry, officials said, new regulations allow oil
shale operators to pay unusually low royalty rates. The system calls for
producers to pay 5% for the first five years, increasing 1% each year until
reaching 12.5%, the standard federal oil and gas royalty rate.
In recent
weeks, the industry was included in the $700-billion government bailout package
with investment and tax incentives to help oil shale producers build refineries
and other expensive infrastructure.
Though the region's elected officials
support efforts to discover new sources of domestic oil, they say that with so
many unanswered water questions, public land managers should be slowing the pace
of development, not speeding it up.
The governors of Colorado and Wyoming
have expressed concerns about the venture's effect on water in their
states.
Not so, Utah. The state contains the least-rich shale deposit but
is the most enthusiastic booster of the unconventional oil source. Gov. Jon
Huntsman Jr. recently declared Utah "open for business as it relates to oil
shale."
The renewed push for oil shale development comes at a time when
conventional energy companies are being blamed for squandering and fouling water
across the West.
Wyoming and Montana are squabbling over water quality
concerns about coal-bed methane drilling. Colorado and New Mexico towns have
discovered benzene and other dangerous chemicals in their wells, with energy
projects the suspected culprits.
Ranchers in the region say their crops
and livestock suffer as oil and gas production drains underground aquifers.
Sportsmen complain that rivers and streams are being compromised by the energy
industry.
The Environmental Protection Agency, in official comments to
the Bureau of Land Management, expressed concerns about the possibility that oil
shale production would deposit "salts, selenium, arsenic, and polynuclear
aromatic hydrocarbons in groundwater."
Craig Thompson found many of the
same compounds when he studied groundwater pollution from an abandoned oil shale
project in western Wyoming that began during the last oil shale boom, in the
1970s. Despite 30 years of cleanup efforts, he said, the aquifer is still not
free of chemicals.
"Development of oil shale is a groundwater nightmare,"
said Thompson, a chemist. "Oil shale serves as the floor for the aquifer. When
you heat up the aquifer, it dissolves nasty stuff like fluoride and arsenic and
selenium and cyanide . . . the list goes on."
For now, with the support
of Congress and the Bush administration, oil companies appear to have the upper
hand.
That might change with President-elect Barack Obama's selection
this month of Colorado Sen. Ken Salazar, a former water lawyer, to head the
Department of Interior.
Salazar, a Democrat, has criticized the breakneck
speed at which oil shale efforts are advancing.
"Over and over again the
administration has admitted that it has no idea how much of Colorado's water
supply would be required to develop oil shale on a commercial scale, no idea
where the power would come from and no idea whether the technology is even
viable," Salazar said last month.
But as long as the demand for fuel
remains high, the dream of squeezing oil from rock will probably
persist.
"Oil shale is the last refuge of the hydrocarbon pioneers,"
Thompson said. "It's always been that last refuge because it's such a poor
excuse for a fuel. Here's a commodity that's been developing for 100 years, and
we still don't know anything about it."