Could be a sequel to Abraham Lincoln: Vampire Hunter

Alan Prendergast at Westword tells the story of Rep. Jared Polis’ successful effort to stop a new $25 million giveaway for the failed energy source oil shale. And he starts it with the best headline we’ve ever seen: Jared Polis, zombie killer, dispatches undead oil shale subsidies

(Also, thanks for the shout out Alan)

Excerpt:

You might think that the idea of killing off an unnecessary subsidy for a technology that’s never been demonstrated to be commercially viable — or, for that matter, environmentally tolerable — would be a no-brainer. Shelling out public funds and tax breaks to well-heeled energy companies so they can rip up rocks and cook them, in the hope of producing a crude version of crude oil, just seems wrong. Especially if you’ve lived in Colorado long enough to remember Exxon’s abrupt pullout from its gung-ho pilot project on the Western Slope in 1982, which wiped out thousands of jobs overnight. (For a brief history of a century of dashed hopes about oil shale, check out this report from the Checks and Balances Project.)

Read Alan’s full story.

New Push For Oil Shale Is Continued Failure

On May 1, 1982, nearly 10,000 people worked at Exxon’s Colony Oil Shale project on Colorado’s Western Slope. Twenty-four hours later, Exxon shut the Colony project down. Thousands of people were left jobless and the region’s economy was devastated. This week marks 30 years since the disaster at Colony; what was to become known as Black Sunday.

While Colony is the most dramatic example of the failure of oil shale as a commercial energy source, it’s far from the only one:

  • In 1991, Unocal closed the country’s “most successful” try at an oil shale project in Parachute Creek, Colo. After a decade of trying, the project had swallowed tens of millions of dollars in taxpayer subsidies, and Unocal lost $7 million.
  • In 1981, Chevron and Conoco Shale oil began work on their Clear Creek project, located on a private 25,000-acre site north of De Beque. Construction at the site was halted in 1984.
  • In the 1970s, four companies acquired a federal prototype C-b oil shale lease. The lease was suspended in 1987 and pumping on the production on the lease was stopped in 1991. No oil was ever produced from this lease.

Time has apparently healed oil company wounds for politicians to push this failed resource. There is a new push to drill for this unproven energy source. Spearheading this push is a handful of Congressional heels, Rep. Doug Lamborn (R-Colo.), Rep. Scott Tipton (R-Colo.) and Rep. Mike Coffman (R-Colo.). They recently teamed with Speaker John Boehner to push Lamborn’s PIONEERS Act through the House.

The giveaway is a continuation of a 100-year sink of tax dollars and public lands used to develop oil shale. All have failed. Yet today, industry lobbyists, and the politicians that take money from them are trying to throw more good taxpayer money after bad in an effort to distract from rising gas prices and increase government handouts to oil and gas companies.

Oil shale itself is a misnomer. It is actually rock containing an organic substance called kerogen. The rocks haven’t been in the ground for enough time or under enough pressure to become oil. Oil companies need to recreate geological forces to produce any energy from it. Ideas for developing oil shale have included baking acres of land at 700 degrees for three to four years and even detonating an atomic bomb underground.

The lack of an efficient way to create energy from this rock – which has the energy density of a potato – hasn’t stopped oil companies from using it as a reason to spend money to snatch up public land, or politicians from giving it to them.

If Lamborn, Tipton, and Coffman have their dithers, they would create a host of new giveaways to oil companies such as:

  • Over 2 million acres of public lands for oil shale speculation, even though the oil industry has said, on the record, that it will be at least until 2020 before they know whether commercial oil shale is even possible.
  • “Bargain basement” oil shale royalty rates of 5 percent (compared to a rate of 12.5 percent for onshore oil and gas and 18.75 percent for offshore oil) which would slash revenue to the federal treasury and for local governments, who need the funds to offset the associated costs of energy development such as new roads, utility lines, schools, and fire and police services.

Oil companies themselves have admitted that oil shale is an unready energy source. In fact, Shell Oil, which is recognized as a leader in oil shale research, says the earliest that commercial oil shale technology could be available is next decade, and possibly later: “A commercial decision would be in the middle of the next decade and possibly later depending on the sequence and outcome of research activities.”

Far more valuable to these companies than any potential profit they might receive from extracting a non-cost competitive energy source is the ability to increase their claims to Western lands. Oil companies already have permits to drill on 38.4 million acres of public BLM land, an area larger than the state of Georgia. Of that land, 57 percent remains unused. Congressmen Lamborn, Tipton and Coffman should tell their oil industry benefactors to use the land they have before pushing a bill that would give more of our public land to oil companies for a return that is the equivalent of small potatoes.

 

Chevron backs out of oil shale development

On Wednesday, The Colorado Independent reported that Chevron was pulling out of oil shale development in western Colorado.

“Chevron has notified the Bureau of Land Management (BLM) and the Department of Reclamation, Mining and Safety (DRMS) that it intends to divest its oil shale research, development and demonstration lease in the Piceance Basin in Colorado,” the company announced Tuesday. “While our research was productive, this change assures that critical resources — people and capital — will be available to the company for other priorities and projects in North America and around the globe. We will work with the BLM and DRMS to determine the best path forward, timing and other issues.”

This comes just weeks after the House passed the PIONEERS Act, which included H.R. 3408 – a bill that pushed for oil shale development and research as a method to fund the transit bill. Yet, as we all know by now, oil shale has failed to become a viable, commercially-sound energy resource and the Congressional Budget Office (CBO) said it would not produce any revenue.

[The CBO] projected that Boehner’s bill would, over 10 years, leave the highway trust fund $78 billion in the red, and the Interior Department is looking at slashing the amount of land available for oil shale research to 462,000 acres.

While Chevron recognizes that oil shale is not worth the millions of dollars in wasted research and development, others, including Rep. Doug Lamborn do not get this.

“Oil companies have been trying to pull the sword from the stone for nearly a century. Oil shale has no King Arthur,” said Matt Garrington of the Checks & Balances Project. “Chevron’s decision to pull out of oil shale is yet another reason why [U.S. Rep. Scott] Tipton [R-Colorado] and Lamborn should quit saying that melting rocks into oil will somehow fund critical repairs to our roads and bridges.”

NRDC: CBO Concludes that Oil Shale Fail Equals Transportation Fail for the Boehner Package

As The Checks and Balances Project reported earlier this week, the Congressional Budget Office (CBO) has determined that Rep. Lamborn’s oil shale bill would yield zero revenue. But prior to CBO’s evaluation, Lamborn seemed to echo the same conclusion:

The fact that oil shale would not be able to contribute to the nation’s financial future did not seem to faze the primary sponsor of the PIONEERS Act, Representative Doug Lamborn from Colorado, who admitted to the Denver Post last week that oil shale “is not a real contributor to the highway transportation needs we have.” A remarkable pivot given that when the PIONEERS Act was introduced in November, Lamborn stated that one of the critical points of the bill was to “…create good paying American jobs and generate new revenue without raising taxes on families and small businesses.”

The National Resources Defense Council (NRDC) reported, “the very reason the Boehner package exists, is to generate revenues through increased drilling in order to cover a budgetary shortfall in the nation’s transportation funding.” Lamborn committed quite the “oil shale fail” prior to next week’s floor vote, which was already “uncertain.”

The Balance Sheet for September 14, 2011

THE BALANCE SHEET                                                                                 Sept 14, 2011
Our weekly update to unravel the industry and political spin around the energy debate

IN CASE YOU MISSED IT

IS REP. LAMBORN PROMOTING UNSAFE CX?
On Friday, Rep. Doug Lamborn’s Energy & Minerals Subcommittee held a hearing to examine categorical exclusions (CX). During the Bush years, BLM officials used CX to avoid conducting scientific review prior to green lighting drilling permits. In May of 2010, Interior Secretary Ken Salazar reformed the use of CX in drilling permitting to avoid its abuse and protect air quality, water quality and wildlife. Naturally, the oil and gas industry was unhappy to lose the ability to take reckless shortcuts on public lands. So enter Big Oil campaign contribution recipient Rep. Lamborn who claims that a lack of unsafe CX is hurting the oil industry.

BLM PLAYS OFFENSE
During the same hearing, the Bureau of Land Management went on the offensive, announcing it would proceed with a rulemaking procedure to solidify Sec. Salazar’s reform. “[Interior] Secretary [Ken] Salazar should be applauded for continuing to ensure we have responsible energy development in the West,” Matt Garrington, Deputy Director of the Checks and Balances Project, told The Hill. “We have seen what happens when oil-and-gas companies take shortcuts, and it’s not pretty.”

PROTESTERS HIGHLIGHT CLINTON’S CONNECTION TO KEYSTONE
The thousands of protesters staked out in front of the White House didn’t miss the connection between Secretary of State Hillary Clinton and the Keystone XL pipeline. The Checks and Balances Project captured video interviews of protesters making their voices heard during one of the final days of demonstrations.

DID YOU KNOW?

API JOBS REPORT: STRONG ON HYPE, WEAK ON FACTS
Last week, Colorado-based Headwaters Economics issued a rebuttal to the American Petroleum Institute jobs report. Headwaters Economics’ research highlighted a few areas where the facts didn’t uphold API’s hype:

API hype

  • Increasing regulatory burdens on the oil and gas upstream sector will result in higher development costs, which can potentially hinder the growth of production, tax revenues, and job creation.
The facts

  • According to the Bureau of Labor Statistics, in 2011 the energy industry has boomed, adding roughly 10,000 jobs a month, and drilling activity is approaching a thirty-year high.
  • When it comes to land-based oil and gas drilling in the United States, there is little evidence that state and federal regulations are hampering industry’s ability to respond to market signals such as price, the “primeness” of a resource play, and technology.
  • The energy sector remains highly volatile, and a   review of its history would suggest future repetition of boom-bust cycles.

COMING UP THIS WEEK

WAS THERE A PROBLEM WITH OFFSHORE DRILLING?
On Thursday, the House Energy and Minerals Subcommittee is meeting to review proposed legislation concerning the Interior Department’s overhaul of offshore drilling policy. Our prediction – Rep. Lamborn and others will attempt to downplay the seriousness of the BP spill and try to get the words “regulations” and “jobs” in the same sentence as many times as possible. This hearing comes as  evidence is mounting regarding a potential new oil spill at BP’s Macanda oil well. The hearing is at 10 a.m. in 1324 Longworth.

CONTACT

Twitter: @CandBP | Email: tips@checksandbalances.org

Tip Sheet: Industry and House members push for drilling shortcuts despite legacy of pollution

**BREAKING NEWS** While testifying at Rep. Lamborn’s hearing BLM deputy director Mike Poole announces a rulemaking plan to, “set guidelines for use of categorical exclusions from detailed National Environmental Policy Act analysis for drilling certain wells.” Ben Geman at The Hill has the story  **BREAKING NEWS**

Industry groups and Washington politicians including Western Energy Alliance, Rep. Doug Lamborn (R-CO), Chairman of the House Energy & Minerals Subcommittee, and Sen. John Barrasso (R-WY) are trying to use obscure, bureaucratic tools known as “categorical exclusions” to weaken air and water protections in an effort to hand over more public lands to oil and gas company CEOs. Earlier this year, Sen. Barrasso introduced legislation to eliminate May 2010 leasing reforms, and last month Western Energy Alliance was able to put the reform on hold when they won an initial lower federal court ruling. Today, Rep. Lamborn’s subcommittee will hold a politically charged hearing on the subject.

“It’s unfortunate that Rep. Doug Lamborn is using his power as chairman of the Energy & Minerals Subcommittee to create political theater on behalf of the oil and gas industry,” said Checks and Balances Deputy Director Matt Garrington. “We saw what happens under a ‘see no evil, hear no evil’ approach to energy development when these same sort of shortcuts led to the BP Gulf oil spill disaster.”

The use of “categorical exclusions” – which exempt drilling permits from scientific review – has a legacy of pollution that includes the BP Gulf oil spill disaster, air pollution levels in the Rocky Mountains that rival Los Angeles and huge declines in western wildlife populations.

Oil and gas companies already receive more than $15 billion each year in special tax breaks. These efforts to rollback protections are about more taxpayer-owned public land giveaways to oil and gas company CEOs, who use the lands to drive up share prices and get bigger bonuses.

Background

Five years ago, President Bush signed the Energy Policy Act of 2005 into law. This sweeping legislation systematically removed a number of air, water, resource and wildlife protections for oil and gas development on public lands. Specifically, Section 390 of that bill expanded the use of “categorical exclusions” allowing the Bureau of Land Management (BLM) to avoid scientific review when granting drilling permits to oil and gas companies.

Here are some findings in a 2009 study by the bipartisan Government Accountability Office (GAO):

  • The Bush administration applied these shortcuts with increasing frequency, using them in 28 percent of all onshore drilling permits granted from 2006 to 2008.
  • In 85 percent of the cases sampled, these shortcuts were applied illegally, and drilling permits were improperly issued.

This “see no evil, hear no evil” approach to public lands management led to unchecked pollution and development. Here are a few examples:

In May 2010, Interior Department Secretary Ken Salazar began cleaning up the mess by issuing a series of leasing reforms that included curtailing the abuse of “categorical exclusions” in the permitting process. The reforms have been a huge success. Drilling permits that have been subject to proper scientific review are expected to increase 40 percent this year. The Interior Department is on the right track and should stand strong in the face of Lamborn and Barrasso’s purely political attacks.

 

SUPPORT FOR REFORMS

The reforms to “categorical exclusions” and oil and gas leasing reforms that were announced in May 2010 were met with sweeping support from sportsmen, conservation groups, and several editorial boards, including the Los Angeles Times, the Denver Post, the Grand Junction Sentinel and the Salt Lake Tribune. And just last month, former agency officials including U.S. Forest Service Chief and BLM Acting Director Mike Dombeck, U.S. Forest Service Chief Dale Bosworth and BLM Director Jim Baca sent a letter of support to President Obama.

 

INDUSTRY ACCESS TO PUBLIC LANDS FOR DRILLING

The oil and gas industry is already sitting on more than 6,500 unused drilling permits and idle leases covering millions of acres. If Rep. Lamborn and Sen. Barrasso really cared about developing American energy, they would support “Use it or lose it” legislation to encourage development of drilling leases already issued to oil and gas companies.

TIMELINE

August 2005 President George Bush signs the Energy Policy Act of 2005, weakening air, water, and wildlife protections from drilling, and expanding the use of “categorical exclusions.” These would later be illegally used under his administration to allow industry to avoid scientific review of drilling permits.
May 2010 Secretary Ken Salazar issues two critical oil and gas leasing reforms, including:

October 2010 The Government Accountability Office issues a scathing, 72-page report outlining the Bush administration’s illegal use of “categorical exclusions.”
March 2011 The Interior Department releases a report showing industry has failed to develop or even conduct exploration on 57 percent of existing onshore leases covering 21.6 million acres.
May 2011 Sen. Barrasso introduces S.1027, The American Energy and Western Jobs Act, which is intended to rescind the Salazar leasing reforms.
July 2011 Sen. Mike Lee (R-UT) and other Republican legislators launcha partisan attack on the “Master Leasing Plans” oil and gas leasing reform in a letter to Sec. Salazar, despite the fact that the policy will reduce conflicts on public lands and pave the way for future energy development.BLM data is released showing the industry has failed to develop over 6,500 onshore drilling permits, primarily in western states.
August 2011 The oil and gas industry wins a lower court ruling to block implementation of IM 2010-118, the “categorical exclusion” drilling reform.

Bingo! We win nothing; Oil shale still a failed idea

During Wednesday’s fielding hearing led by Reps. Lamborn and Tipton, both the Congressmen and witnesses repeated century-old rhetoric in an effort to promote oil shale as a “environmentally responsible” energy option.

And while we managed to fill up our Bingo sheet, we hardly won anything – the hearing resulted in the same failed ideas on energy policy and a lack of leadership for real solutions to our growing energy problems.

Below is a recap of the day’s testimony:

 

 

 

Oil shale reserves are going to be a lifesaver. (10/11/56)

  • Gary Aho, Board Member of National Oil Shale Association: Developing oil shale in the western US would create tens of thousands of high paying jobs, reduce the nation’s dependency on foreign oil, improve the balance of trade, enhance national security, provide a stimulus to the economy, and generate tax revenues for all levels of government.

The U.S. could be producing oil shale in 10 to 15 years. (06/08/79)

  • Dan Whitney, Oil Development Manager for Shell Exploration and Production Company: The road to commercialization is likely to be measured in decades not years.

The American petroleum industry seems once again to be turning its attention to the development of shale oil resources… (08/09/80)

  • Anu Mittal, Director, Natural Resources and Environment Division of the Government of Accountability Office (GAO): The federal government as spent $22M on oil shale research.

…As foreign petroleum prices continue to rise and political situations create new doubts about the availability of Middle East oil. (08/09/80)

  • Michael Hagood, Director, Program and Regional Development for Idaho National Laboratory: In the meantime, the U.S. will need to pursue securing access to reliable supplies of energy and at the same time lessen its dependence on politically and economically unstable sources of oil imports.
  • Dan Whitney: Shell has pursued the technical and commercial development of the In situ Conversion Process (ICP) for oil shale since the early 1980s as a means to produce from oil shale.
  • Brad McCloud, Executive Director of Environmentally Conscious Consumers for Oil Shale: There is even more unrest in the Middle East

A committee hearing looking toward development of fuels from oil shale. (04/02/51)

  • Subcommittee on Energy and Mineral Resources Oversight Field Hearing on “American Jobs and Energy Security: Domestic Oil Shale the Status of Research, Regulation and Roadblocks.”

The shale covered a large area. (10/06/16)

  • Rep. Lamborn: “The United States is blessed with tremendous oil shale resources.”
  • Rep. Lamborn: “Nearly 75% of the world’s recoverable oil shale is estimated to be located in this country and we have appropriately been called the ‘Saudi Arabia of oil shale’.”
  • Rep. Lamborn: “Most of that shale is located right here around us, where according to the U.S. Geological Survey, the Western United States may hold more than 1.5 trillion barrels of oil.”

Thousands of acres of land rich with oil shale. (04/30/17)

  • Anu Mittal: The thickest and richest oil shale within the Green River Formation exists in the Piceance Basin of northwest Colorado and the Uintah Basin of northeast Utah.

Oil shale hailed as future source of oil. (09/26/23)

  • Michael Hagood: As world oil demand and prices continue to rise there will be increasing efforts to develop more of the unconventional fossil energy resources, such as oil shale.
  • Anu Mittal: As you know, being able to tap the vast amounts of oil locked within U.S. oil shale could go a long way toward satisfying our nation’s future oil demands.

Commercial oil shale development seems assured. (09/28/80)

  • Dan Whitney: Shell has often said, we intend to develop oil shale in a manner that is economically viable.

Shale oil will undoubtedly play an important role in meeting growing fuel demands. (10/31/53)

  • Dan Whitney: Properly developed, they could be a major component of US energy security.

Oil shale is believed to hold promise as a reserve supply of petroleum. (09/01/26)

  • Brad McCloud: The U.S. is sitting on a massive reserve of oil.
  • Rep. Lamborn: “Enough [oil shale] to provide the United States with energy for the next 200 years.”

A new era in oil production of the country. (10/06/16)

  • Brad McCloud: Companies like Shell, Chevron, American Shale Oil and Red Leaf Resources are continuing to develop exciting and new technologies that may lead to commercial viability and meet growing national and international energy needs.

Nearing a commercially feasible level. (04/02/51)

  • Thomas Sladek, Director of Ockham Energy Services: Enefit American Oil has acquired the Oil Shale Exploration Company project in Utah, which could, in time, produce 57,000 barrels of shale oil per day.

Scientists forecast that within three years they can demonstrate a practical method of oil shale operation. (10/18/46)

  • Michael Hagood: Realizing a sizeable oil shale industry can contribute significantly to U.S. energy security, but its establishment and impact could take several years.
Follow

Get every new post delivered to your Inbox.

Join 536 other followers