The Politics of Oil Shale

[REWahoo]

Some interesting snippets from this Fortune article on oil shale development on federal land:

"You'd think with gas prices topping $4 and consumers crying uncle, Congress would be moving fast to spur development of a domestic oil resource so vast - 800 billion barrels of recoverable oil shale in Colorado, Utah and Wyoming alone - it could eventually rival the oil fields of Saudi Arabia.

You'd think politicians would be tripping over themselves to arrange photo-ops with Harold Vinegar..., the brilliant, Brooklyn-born chief scientist at Royal Dutch Shell whose research cracked the code on how to efficiently and cleanly convert oil shale - a rock-like fossil fuel known to geologists as kerogen - into light crude oil.

You'd think all of this, but you'd be wrong.

Last month, the U.S. Senate's Appropriations Committee voted 15-14 to kill a bill that would have ended a one-year moratorium on enacting rules for oil shale development on federal lands (which is where the best oil shale is located). Most maddening of all - at least to someone like myself not steeped in the wacky ways of Washington - the swing vote on the appropriations committee, U.S. Sen. Mary Landrieu, D-La., voted with the majority even though she actually opposes the moratorium."

[NOTE: For those of you not familiar with Senator Landriew, she's the lady who did such a remarkable job in blaming everyone else for the Katrina response as the then Governor of Louisiana.]

The article has lots of political spin from Republican U.S. Sens. Orrin Hatch of Utah and Wayne Allard of Colorado, but if the following statements are even close to being true, I'd support immediately ending the moratorium on developing this resource:

Senator Hatch: "...Corn needs about 1,000 barrels of water for the energy equivalent of a barrel of oil....On the other hand, the Department of Energy estimates that oil shale will require three barrels of water for every barrel of oil."

"...One acre of corn produces the equivalent of 5 to 7 barrels of oil. One acre of oil shale produces 100,000 to 1 million barrels."

Add the dramatic escalation in food costs, and this would to make a compelling case for focusing more resources towards oil shale development and less towards bigger fields of corn.

[Zathras]

My understanding, which could well be wrong, is that the rate at which we can get oil out of shale is very low.
The amount of energy which goes into generating oil out of oil shale is very high.
Yes, it can be done, but it doesn't produce all that much net increase in energy.
I am very curious about what they mean when they say that shale can also be drilled/mined in a relatively 'clean' manner.
I agree with you though, as you said, if what they say is true, we should be mining/drilling the shale deposits. I am just doubtful it is true

[dex]

Why wonder when there is wikipedia
Oil shale - Wikipedia, the free encyclopedia

If it cost $20/bbl to extract ; I doubt the energy imput is high.

has announced that its in situ extraction technology in Colorado could become competitive at prices over $30 per barrel ($190/m3), while other technologies at full-scale production assert profitability at oil prices even lower than $20 per barrel ($130/m3).[56][57][58][43] To increase the efficiency of oil shale retorting, several co-pyrolysis processes have been proposed and tested.[59][60][61][62][6

[kcowan]

Originally Posted by REWahoo

Add the dramatic escalation in food costs, and this would to make a compelling case for focusing more resources towards oil shale development and less towards bigger fields of corn.

Barry Ritholz wrote:

US Policies with an impact on Energy:

• Limit areas available for offshore drilling;
• Stopped the planned rise of CAFE standards for automobiles;
• Restricted Nuclear Power generation of Electrical;
• Federal Reserve policies since 2001 led to a very weak US dollar (raising Oil prices);
• Energy Conservation Policies? None
• Provided little or no Incentives for Hybrid Automobiles;
• No major US R&D research on energy;
• Game changing breakthroughs over the past decades in solar, battery, or energy generation technologies? None
• Failed to raise efficiency standards for appliances for decades;
• Iraq and Afghanistan Wars contributing to Middle East tensions
• Kept CAFE standards for light trucks/SUVs much lower than autos;
• Ridiculous Corn Ethanol policy (driving food prices higher as Oil rises);
• Mass transit system is not a priority;
• No special capital gains treatment for VC alt.energy investment
• Failed to aggressively promote efficiency improvements for residential energy use, transmission of power, or consumption;
• Amongst the lowest Gasoline Taxes in the developed world;
• Limited Hydro-electric power generation;
• Created a Tax incentive (ADCS) that encouraged purchases of large inefficient vehicles;
• Aggressive tax incentives for Battery Technology development? None
• Exempted light trucks, SUVs, and Pickups from gas-guzzler tax;
• Discouraged Clean Coal, including Gas Liquification from Coal;
• Limited or non-exisitent State Tax Incentives for building Energy Efficient Homes;
• Failed to aggressively promote compact fluorescent light bulb;
• Allowed Tax Credits for Residential Solar Power to Expire;
• Americans, on average, live further from where they work than Europeans do;
• No special Capital Gains Tax treatment for Clean Energy Technology Development;

He calls it collectively the George Castanza strategy. With a track record like this, I don't think oil shale harvesting is going to help with the current crisis. In fact, it is not even on his list. The Canadian Tar sands took 25 years to develop.

[ziggy29]

Originally Posted by REWahoo

[NOTE: For those of you not familiar with Senator Landriew, she's the lady who did such a remarkable job in blaming everyone else for the Katrina response as the then Governor of Louisiana.]

Minor point of order: Landrieu is a *senator* from Louisiana. Kathleen Blanco was the governor.

It's borderline criminal that we are not willing to develop our own resources instead of allowing an ever-increasing amount of our wealth to go to countries with maniacal leaders who would just as soon see us dead, and are more than willing to use our transferred wealth against us.

[REWahoo]

Originally Posted by ziggy29

Minor point of order: Landrieu is a *senator* from Louisiana. Kathleen Blanco was the governor.

I knew it all along - just checking to see who was paying attention.

[Trek]

Our country runs off oil shale. It's what allows us to be virtually energy independent with oil shale supplying 90% of our energy needs. We're the only country in the world in that regard, but we're already exporting our technology to other countries.

Estonia to build Jordan's first oil-shale power plant

World Energy Council

[packrat44]

In 1975 - 1976 I worked as a mining engineer on a joint project between Standard and Gulf Oil on extracting kerogen from oil shale in Wyoming. The project was halted when OPEC opened the oil supply and prices dropped.

This is definitely a viable way for the US to reduce their dependency on foreign oil over the long term. It is capital intensive and there is a long time until producing. As in the mid '70s, there is the fear that after large expenditures that the OPEC nations could simply crank up production and lower the cost of crude thereby putting the hurt to the oil shale project. There is also the politics. Can you imagine Al Gore or any politician from an oil producing state voting for such a project?

[Zathras]

As long as it is the 'in situ' type instead of surface or strip mining I don't see that much of a problem with the environment.
The energy input required and rate of production would be my number one concerns.

[ziggy29]

Originally Posted by packrat44

This is definitely a viable way for the US to reduce their dependency on foreign oil over the long term. It is capital intensive and there is a long time until producing. As in the mid '70s, there is the fear that after large expenditures that the OPEC nations could simply crank up production and lower the cost of crude thereby putting the hurt to the oil shale project. There is also the politics. Can you imagine Al Gore or any politician from an oil producing state voting for such a project?

As far as politicians go, some of them may have had an easy time explaining to their constituents why they opposed oil shale with $20 oil and $1 gas, but "green" arguments tend to get trumped by severe economic needs. The same argument that mollified people with cheap oil may not work for any but the most hard-core greens today.

As for oil producing states, how many are there? Most are not, at least not to the point of expensive oul being a net gain for their district or state's economic condition.

[jambo101]

Originally Posted by Trek

Our country runs off oil shale. It's what allows us to be virtually energy independent with oil shale supplying 90% of our energy needs. We're the only country in the world in that regard, but we're already exporting our technology to other countries.

Estonia to build Jordan's first oil-shale power plant

World Energy Council

"Our country runs off oil shale" I'm deducing by the link that we are referring to Estonia.
Canada also extracts oil from shale its a messy job as all the oil has to be steamed out of the shale, a process that uses a huge amount of fresh water which has to be treated before it can be returned back to the environment.

[chinaco]

I do not have a problem digging it up or drilling in ANWR or off the coast of florida or california...

I think it can be done without wrecking the environment.

I also think we should continue to pursue alternative energies.

[brewer12345]

I think coal to liquids and claen coal generation is a lot more viable in the near term. But since the feds last year pulled the rug out from under the coal guys who actually signed up to be partners with the feds on that one, I am not holding my breath for anyone to bend over and be screwed by the govt any time soon.

[JPatrick]

Term Limits........A beginning to a brighter future...

[ziggy29]

Originally Posted by chinaco

I do not have a problem digging it up or drilling in ANWR or off the coast of florida or california...

I think it can be done without wrecking the environment.

I also think we should continue to pursue alternative energies.

I think BOTH near-term exploitation of traditional sources AND commitment to ramp-up of alternatives are critical. One without the other is no answer at all.

Problem is, neither side in government is willing to offer up both needs. One side seems determined to drill our way out of it, and the other is holding out for widespread deployment for sources that aren't ready for widespread deployment yet.

[Texas Proud]

Originally Posted by packrat44

In 1975 - 1976 I worked as a mining engineer on a joint project between Standard and Gulf Oil on extracting kerogen from oil shale in Wyoming. The project was halted when OPEC opened the oil supply and prices dropped.

This is definitely a viable way for the US to reduce their dependency on foreign oil over the long term. It is capital intensive and there is a long time until producing. As in the mid '70s, there is the fear that after large expenditures that the OPEC nations could simply crank up production and lower the cost of crude thereby putting the hurt to the oil shale project. There is also the politics. Can you imagine Al Gore or any politician from an oil producing state voting for such a project?

I saw an interview with some energy people last night... they said that OPEC countries have to much on thier plate with all the other things they need to do inside their countries... so they have not, nor does it look like they will, been investing in new production... and they can not turn the spigot on any more.... so alternative investments are great now... but will not be online for 10 to 20 years...

[Razor]

There is no shortage of oil right now. The price of oil is determined by speculators in the commodity market. The bubble will burst just as it did in the housing market.
We won't drill our way to lower prices.

[packrat44]

Originally Posted by brewer12345

I think coal to liquids and claen coal generation is a lot more viable in the near term. But since the feds last year pulled the rug out from under the coal guys who actually signed up to be partners with the feds on that one, I am not holding my breath for anyone to bend over and be screwed by the govt any time soon.

Our Government does appear to be one of the major stumbling blocks to our country lowering its' dependance upon foreign oil. Maybe the consumers (voters) need to shout louder.

[ERD50]

Originally Posted by brewer12345

I think coal to liquids and claen coal generation is a lot more viable in the near term. But since the feds last year pulled the rug out from under the coal guys who actually signed up to be partners with the feds on that one, I am not holding my breath for anyone to bend over and be screwed by the govt any time soon.

Except those 'clean coal' technologies require about 30% more coal for the same energy out. So, less pollution, maybe less GW, but more coal mined and more environmental damage from that mining. I'm not certain there is a 'winner' in there.

Conservation still strikes me as so much easier, so much more obtainable than some alternatives. If we are serious about reducing pollution or energy consumption, I say ban any new construction or expansion of fossil fuel plants. That will drive conservation (as prices rise) and spur alternative, renewable energy sources.

-ERD50

[Ed_The_Gypsy]

The late, lamented Allis-Chalmers once had an absolutely beautiful process for cooking oil shale. It produced over 100% of the kerogen content by analysis. (The process recovered more kerogen than the solvent-based analysis showed that was used to determine the kerogen content.) Oh, yeah: No water required.

I worked for a process technology company that was brought in to consider different means to remove sulfur from the off-gas and I got to fiddle with the process design. It was a marvelous process.

I was thinking about it just today. I don't know what ever happened to it. Found nothing specific on the internet. Some day I may find my notes and be able to track it down.

There are other spectacular energy-mining processes in the world that you will never hear of. I know of at least one other.

No conspiracies, just "not-invented-here". Big companies support their own technologies--no matter how crappy--not other peoples'.