After a century’s worth of lessons, government needs to stop picking the same loser
May 10, 2012 Leave a comment
Matt Garrington, Denver-based co-director of The Checks and Balances Project, offered the following statement and facts regarding today’s Subcommittee on Energy and Environment hearing discussing the failed energy source, oil shale.
“Chairman Hall and others have argued against clean energy, saying the government shouldn’t pick winners and losers. Yet today they’re holding a hearing on the all-time loser of energy sources, oil shale.
“For over a century, hundreds of millions of taxpayer dollars have been sunk into failed oil shale projects. Still, we have never had a viable commercial oil shale industry in this country.
“If the Science committee doesn’t think government should be in the business of picking winners and losers, they should stop wasting the taxpayer money on hearings to try and generate support for losers like oil shale.”
- In 1981, the Reagan administration approved a $1.2 billion loan guarantee for Exxon’s Colony oil shale project on Colorado’s Western Slope. One year later, on May 2, 1982 – what became known as Black Sunday – Exxon announced it would abandon its involvement in the Colony project. Overnight, about 2,200 employees and thousands of others who had moved to the state to support a burgeoning oil shale industry were out of a job. The devastation to local communities and economies took decades to recover from.
- Unocal Corp.’s Parachute Creek project has been called the most successful oil shale venture in U.S. history. In this case, successful meant that over a decade, tens of millions of dollars in taxpayer subsidies were sunk into the project until Unocal called it quits in 1991. Parachute Creek’s energy production peaked at 1.5 million barrels, but even then Unocal still lost $7 million on the project.
- The House passed a bill sponsored by Rep. Doug Lamborn in February to sink more money into oil shale in return for the promise of royalties that would fund highway repairs. The Congressional Budget Office scored the oil shale bill as having “no effect on revenue,” and days after Rep. Lamborn’s bill passed, Chevron announced it was divesting its oil shale research in Colorado.