House Energy and Power Subcommittee promotes failed oil shale speculation, despite century of failure and new reports that world’s leading firm could lose big on Utah oil shale project

“It’s disappointing to see Rep. Whitfield and House Republicans recycling the same old failed energy ideas. Despite being awarded billions in taxpayer funds, all these oil shale speculators have to show is failure. We need real energy solutions, not more speculation and failed investments,” said Ellynne Bannon, western lands program manager for the Checks and Balances Project.

Key Facts

  • The Obama Administration has moved forward with new research and development leases for oil shale on public lands. In November 2012, the U.S. Bureau of Land Management finalized two new oil shale research, demonstration, and development leases to ExxonMobil and Natural Soda.
  • Oil shale is not oil. It is a rock that has to be heated to 700 degrees or more over months, or even years, in order to be processed into oil. Taxpayer dollars have already funded $3.2 billion dollars in loan guarantees and $3.7 billion in price guarantees to oil companies for oil shale with nothing to show for it except failed projects.
  • Some oil shale advocates like to point to the nation of Estonia as proof that oil shale can be a viable energy source. Unfortunately, Estonia isn’t saying the same thing about U.S. oil shale.  The CEO of Eesti Energia, Enefit’s parent company, a world leader in oil shale development has acknowledged that oil shale isn’t profitable and that “we have time” to wait and “we will not make any real investments” in the U.S. until the oil shale industry in Estonia is at a “new level.”
  • Just last month Enefit, a company trying to produce oil shale in Utah, came under fire from a key investor – the Estonian government – when it was revealed that the company could lose up to $100 million dollars on their project in Utah. It was also reported that Enefit’s Utah project has proven to be “unexpectedly difficult to do, and that tests indicate that Utah oil shale requires more energy to break down than expected, resulting in higher carbon dioxide emissions.

Natural Resources Committee can’t continue 112th’s land use approach in the 113th

“Those who cannot remember the past, are condemned to repeat it.”
George Santayana, Life of Reason, Reason in Common Sense

Over the course of the 112th Congress, we stood witness to an approach to public land use that has swung spectacularly out of balance. Nowhere is this more evident than in the actions of the House Natural Resources Committee (HNRC). So as the curtain rises on the 113th Congress, we wanted to take a moment to remember the past two years, lest the nation be condemned to repeat them.

Any lip service paid by the HNRC’s leadership to a balanced energy approach has been thoroughly disproven by their actions. Rather than take a smart approach that creates the most energy while protecting our water, communities and resources for future generations, Hastings and his team spent the 112th falling over themselves to continue billions in taxpayer-funded handouts to oil and gas companies.

Under the leadership of Chairman Doc Hastings (R-Wash.) and his lieutenants, Rep. Doug Lamborn (R-Colo.) and Rep. Robert Bishop (R-Utah), HNRC focused on promoting the long-failed oil shale experiment. Their oil shale swindle would have given two million acres of public land to oil companies for oil shale speculation, while providing bargain basement royalty rates.

The bill (H.R. 3408), sponsored by Rep. Lamborn, would have provided no energy and no revenue to Americans – just millions in taxpayers handouts to the oil and gas industry.

House Speaker John Boehner named Lamborn’s bill a funding source for his highway bill, but an analysis from the nonpartisan Congressional Budget Office found that the bill would generate zero revenue.

The extremism of the HNRC didn’t stop there.  The committee also failed to address or even investigate the causes of the Deep Horizon spill in the Gulf of Mexico, or to consider policies needed to prevent a further spill – despite the billions in damages BP caused. To the contrary, HNRC voted multiple times to lift the temporary safety moratorium that was installed following the Gulf of Mexico spill.

The majority on the HNRC also fought tirelessly to secure more of our public lands – forests, canyons, waterways – for oil and gas drilling. Hastings and his peers ignored facts like record-level production, decreased nominations by oil companies and that new deposits like the Bakken Field and Eagle Ford are located on privately owned land.

Instead, they continually complained that oil and gas companies, which reaped some $136 billion in profits in 2011, and collected billions in taxpayer-funded handouts, were being mistreated.

The HNRC also failed to protect any new public lands as wilderness. This makes the 112th the first Congress since 1966 to not do so.

In the new Congress, Rep. Hastings remains HNRC chairman. Rep. Lamborn remains chair of the Subcommittee on Energy and Mineral Resources, and Rep. Bishop will remain chairman of the re-named subcommittee on Public Lands and Environmental Regulation. This means there is no reason to believe the balance of land use will correct itself.

Let’s hope that the American people remember the past, and let these politicians know they don’t want it repeated.

ICYMI: Denver City Council supports BLM’s smart approach to protect water from oil shale speculation

On Monday, the Denver City Council issued a proclamation supporting the “research first” approach to protect western water, taken by the Bureau of Land Management’s (BLM) in its recently issued Programmatic Environmental Impact Statement (PEIS). By taking this action, Denver joined the list of communities throughout Colorado’s Front Range and West Slope that have publicly supported the BLM’s common sense, balanced approach to oil shale speculation. Local officials in these communities are particularly concerned about oil shale’s potential impact on the state’s already overstressed water supply.

denver_oil_shale_proclamationThe council rarely takes political positions but decided to weigh in on this important issue. The proclamation passed overwhelmingly, with a final vote of 8-2. The council explained that projections show Colorado’s water demands will increase 50 to 80 percent over the next 35 years. The Government Accountability Office reported that full-scale oil shale development could use as much as 140 percent of the water used by the Denver metro area alone.

“It is a responsibility for us as leaders on behalf of the constituents of Denver to express these concerns to ensure my grandchildren and their grandchildren have water to drink, take a bath in and cook with,” said Councilwoman Debbie Ortega.

“This is central to our business,” said Councilman Chris Nevitt. “We are not going too far out on a limb on a position that has been articulated by the Department of Natural Resources and Democratic and Republican governors alike.”

To date, oil companies have failed to find a commercially viable technology that converts oil shale rock into oil. Because of the uncertainty around what technology would be used for industrial-scale oil shale development, the impacts to water quantity and quality are unknown.

The BLM’s new PEIS sets aside 1,000 square miles of public land to conduct oil shale research and development. It also states that BLM will not grant commercial leases until “the lessee satisfies the conditions of its RD&D lease and meets all federal regulations for conversion to a commercial lease.” One of the most important conditions would be demonstrating the impact to both water quantity and quality.

Elected officials from cities and towns throughout Colorado have expressed their support of the BLM’s position.

Front Range officials sent a letter of support for the new PEIS to Sec. Ken Salazar:

“Oil shale development could pose significant risks to both water quantity and quality in the Colorado River watershed. As elected officials along the Front Range of Colorado – whose communities depend on water from the Colorado River Basin – we strongly believe it is essential that any final plan guiding the development of oil shale on our public lands, must first prioritize a thorough understanding of the potential impacts this industry would have on our water resources

Recently, the Front Range Water Users Council – which collectively meets the water demands of approximately 80% of Colorado’s population – requested that the BLM closely analyze the potential broad scale impacts of oil shale development before considering commercial leasing of public lands. We strongly agree, especially given that this year’s drought has severely strained our water supplies and there is no relief in sight. The drought underscores the fact that we cannot afford to take risks with our water and compromise Colorado’s farms and ranches, our world-class outdoor recreation economy, and our growing communities.”

West Slope officials also expressed their support for the PEIS in a letter:

“It is smart to require that research and development of oil shale and tar sands technologies be completed and the impacts analyzed before moving forward with a commercial leasing program.

Our public lands are enormous economic drivers in the Intermountain West. Tourism, recreation, hunting and fishing, ranching, and other industries provide billions of dollars of revenue and hundreds of thousands jobs throughout the three-state region.

The BLM has acknowledged in the Draft PEIS that the potential impacts of development on communities, water and air are largely unknown but potentially significant.

These lands are our heritage, and for many, our livelihoods. It is critical that we know more about the impacts of oil shale and tar sands development before putting communities, water and air at risk.”

Round up of local elected official’s expressions of support:

Denver City Council

Front Range local elected officials

Thornton letter (Denver suburb)

West Slope/mountains Colorado, Wyoming, Utah local elected officials

Town of Carbondale

Pitkin County

Routt County

City of Grand Junction

City of Rifle

Town of New Castle

Oil shale: Energy’s pink unicorn

Norquist's pink unicorn

Grover Norquist, founder of the right wing, anti-tax group Americans for Tax Reform, recently spoke out about the folly of spending tax dollars on pink unicorns, since they don’t exist. Following his logic, government shouldn’t create handouts for oil shale, since it doesn’t exist as an energy source.

We want to see if Mr. Norquist is willing to join us in calling for an end to all oil shale subsidies.

After a century of efforts to turn oil shale into a viable energy source, no commercial industry for it exists. And, that’s even after the federal government has risked billions in taxpayer-backed handouts to oil companies in the name of oil shale, including a brand new $50 million subsidy that was just introduced in Congress.

Mr. Norquist’s position on pink unicorns came in response to Sen. Lindsay Graham’s (R-SC) statement about voting for tax increases. Norquist claims that spending cuts to ‘match’ tax increases won’t ever happen (In other words, the cuts will never come to exist, like pink unicorns).

“If you had a pink unicorn, how many dollars in taxes would you raise to trade for the pink unicorn? Since pink unicorns do not exist in the real world, it’s never occurred to me to worry about the senator from South Carolina.”
– November 28, 2012, NPR

Oil shale is the pink unicorn of energy.

Commonly confused with the shale oil being drilled for in the Bakken and Eagle Ford fields, oil shale is actually a rock that contains a fossilized organic substance called Kerogen. Kerogen was never subjected to the titanic heat and pressure that forms liquid oil. To take the place of Mother Nature’s process, oil shale speculators have to superheat the rocks to 700 degrees or more over months or even years, to create oil.

After a century of investment and research, oil companies haven’t found a way to duplicate those geologic forces in a commercially viable way.

In late November, the nonpartisan budget watchdog group Taxpayers for Common Sense released a report examining the billions of tax dollars that have been risked on oil shale speculation. Nearly $7 billion taxpayer-funded handouts in the form of loan and price guarantees for oil shale were made to oil companies in just the 1980s alone.

Coincidentally, just as Taxpayers released their report, Rep. Ralph Hall (R-TX) introduced a bill (H.R. 6603) with $50 million in new government handouts for the pink unicorn of energy, oil shale.

And, Rep. Hall is trying to give away this money even though companies involved in oil shale speculation say they don’t want or need taxpayer subsidies.

“We’re not asking for any special treatment[.] We’re asking to be able to proceed as any other industrial development would.
– Rikki Hrenko, CEO of Enefit American Oil, Bloomberg, February 27, 2012

Hall’s bill comes even after a Congressional Budget Office (CBO) analysis found that opening up public lands to commercial oil shale development would provide zero revenue.

That CBO analysis was sparked by Speaker Boehner and Rep. Lamborn’s proposal to use oil shale royalties to fund transportation projects. That plan had a number of flaws, including the fact that there is no commercial oil shale industry to generate royalties, and that another section of the bill slashed any potential royalties to bargain basement levels.

Oh, and Rep. Lamborn said oil shale wouldn’t help transportation funding.

After the Lamborn bill went nowhere in the Senate, the House again tried to prop-up oil shale by including new spending on oil shale research other legislation.  Cooler heads prevailed, and the amendment offered by Reps. Jared Polis (D-CO) and Gerry Connolly (D-VA) that struck funding for oil shale research from the appropriation, passed.

Rep. Hall’s bill is the third attempt by supposedly conservative members of Congress to prop up an industry that says it doesn’t need or want subsidies.

Maybe Mr. Norquist’s influence is waning in Congress, because Republicans continue to offer up pink unicorns as solutions to real energy challenges. We hope that he will lend his voice to the chorus of Americans asking our government to stop giving billion-dollar oil companies more of our tax dollars for a rock that supplies as much energy as a pink unicorn.

– Artwork by Ben Topf

Oil shale industry front group misleads public on support for radical oil shale plan

The industry front group, Environmentally Conscious Consumers for Oil Shale (ECCOS) deliberately misled the public and trumped up support for a radical plan that puts our water and communities at risk from oil shale speculation. The group’s Executive Director Brad McCloud purposefully misrepresented stakeholder comments submitted on the Interior Department’s draft proposals for the research and development of oil shale. Today, the Checks and Balances Project released our factual analysis of the comments, which tells a far different story than what ECCOS claimed.

Earlier this month, Brad McCloud, Executive Director of ECCOS, stated that most of the stakeholder comments were in favor of the radical Bush-era plan at a press conference in Grand Junction, Colo. Unfortunately, it seems that Mesa County Commissioner Meis and the Grand Junction Chamber of Commerce were used as props in an effort to put out more misinformation about oil shale. McCloud wrongly characterized the controversial plan developed under the Bush administration has having received the most support.

Our comprehensive audit of stakeholder comments to the Interior Department found:

    • 72 comments – or 51 percent – don’t support the Bush oil shale plan;
    • 52 comments – or 37 percent – support the Bush oil shale plan; and
    • 77 comments – or 55 percent – support the BLM’s approach, the BLM plan, a stronger conservation approach, or a “research and development” approach.

Ironically, it appears that ECCOS actually undercounted the number of supporters for the Bush-era plan while completely ignoring the fact that the majority of stakeholders actually don’t support it.

A closer look at ECCOS explains why McCloud so badly misrepresented the survey results.

The nonpartisan group SourceWatch has identified ECCOS, as a front group created by the Grand Junction-based energy lobbying firm EIS Solutions. Since ECCOS files with the I.R.S. as a 501(C)(4) organization, ECCOS doesn’t have to disclose its donors. However, its leadership and public record show strong ties to the oil industry.

For instance, Executive Director McCloud is also a project Manager for EIS Solutions, as was former Executive Director Curtis Moore. And, when Moore first set up ECCOS, he used his EIS email address to register the ECCOS website, as well as EIS Solutions corporate phone number and street address.

EIS Solutions is a significant player in Western oil and gas issues. Earlier this year, they released a report commissioned by the American Petroleum Institute with trumped-up charges that public lands and water protections were too onerous for the oil and gas industry.

ECCOS spokespeople tend to follow oil shale’s century-old tradition of varying the story they tell about oil shale based on their audience. In their brochure, ECCOS claims oil shale is on the verge of economic viability right now, and the cost of oil shale production is approaching parity with conventional oil at today’s oil prices.

Yet in an open letter in late 2010, former Executive Director Curtis Moore wrote, “No one is proposing massive oil shale development today. That time — if it ever comes — is decades away.” And, on a separate occasion Mr. Moore admitted, “Oil shale may not yet be ready for prime time.”

McCloud also can’t keep the story straight on what ECCOS actually does.

ECCOS’s 2010 tax return – which McCloud was responsible for filing – listed among its itemized expenses $79,465 to attend, “local trade shows, service clubs, and classrooms to advocate environmentally responsible development of oil shale reserves.” (emphasis added) This seems disingenuous, since McCloud testified twice to the House Subcommittee on Energy and Mineral Resources that ECCOS is not an advocacy group.

Given their disregard for the truth, it would be interesting to know what kind of classroom ‘education’ on oil shale ECCOS has brought to Colorado schools.

That’s ECCOS’s staff leadership’s industry connections. Moving on to its board of directors we find Laura Nelson, the current Vice President of Energy and Environmental Development of Red Leaf Resources, an oil shale company based in Utah.

Families and business owners in the West are aware of the dangers that oil shale development could pose to our water. They want a responsible, common sense approach to determining whether or not oil shale will ever be a viable energy source. Since it is their water supplies, air and land that could be affected, their input should be thoughtfully considered, not spun by groups like ECCOS to try and help industry’s agenda.

The story behind The Road to Nowhere

Jeff Hartley, a lobbyist for oil shale company Red Leaf Resources, interviewed with Utah-based NPR affiliate KCPW in early August. Mr. Hartley used the interview to try to spin the facts and deny that the Seep Ridge Road project is a taxpayer-funded subsidy for Red Leaf.

The project, dubbed the “Road to Nowhere” in the Salt Lake City Weekly, cuts through Uintah County and ends at the county border to benefit Red Leaf’s proposed oil shale project and tar sands speculation. Earlier proposals for the road would have gone all the way to I-70 but met stiff opposition in neighboring Grand County.

Let’s be clear. Others in the oil and gas industry would benefit from the project. But without Red Leaf’s heavy involvement, elected officials would not have dumped tens of millions of dollars into the Seep Ridge Road project. Red Leaf was front-and-center in the effort to secure tax dollars for the “Road to Nowhere.”

In November 2007, Red Leaf Founder Todd Dana and Red Leaf VP Laura Nelson gave a presentation before a joint Vernal City Council and Uintah County Commission special meeting. In response to the Red Leaf presentation, Uintah County Commissioner Mike McKee stated one of the “greatest needs” of the Red Leaf project “is the repair of Seep Ridge Road which has heavy traffic.” Fellow Uintah County Commissioner Mark Raymond echoed those sentiments describing the paving of Seep Ridge Road as “big issue” for oil shale development.

In March 2008, Nelson became the lead for the entire energy industry as point of contact for the Independent Petroleum Association of Mountain States (now the Western Energy Alliance).

Just one month later, the Utah Legislature appropriated $2 million for the project. State Rep. Kevin VanTassell (R-Vernal) pushed for the funding and represents the area where Red Leaf’s operation is located. Uintah County spent another $2 million of public funds, while the industry pledged only $1 million. The industry’s funds were allocated for “the estimated cost of preparing an environmental-impact statement and preliminary engineering drawings for an improved road.”

That same year, Red Leaf pledged a modest $100,000 industry challenge grant to help fund the initial expenses for the Seep Ridge Road paving project.

Red Leaf’s investments are paying off. Paving of the Seep Ridge Road began last month and will cost taxpayers $85.5 million.

So far, the project has received $30.5 million from Uintah Transportation Special Service District and $20 million from the Permanent Community Impact Fund Board. Interestingly, Commissioner McKee sits on the Permanent Community Impact Board.

Throwing taxpayer money at oil shale hasn’t worked so well over the last century. Exxon’s Colony Oil Shale Project received a $1.1 billion loan guarantee in 1981, only to go bust one year later. Unocal received $114 million in federal price supports and went bust in 1991.

Hartley told KCPW that the Red Leaf project will be up and running within 18 months, describing the indefinite delay caused by failure to do proper groundwater analysis as a “procedural” step. The larger companies involved in oil shale such as Shell have said that oil shale is at least a decade or more away from commercial viability.

Oil shale companies should prove that the technology works and that scarce western water supplies won’t be ruined in the process. We shouldn’t be throwing any more taxpayer support – in the form of direct subsidies, loans, infrastructure improvements, or bargain-basement royalty rates for public land access – before we know the economic viability of a project.

Buyer beware since this “Road to Nowhere” has the all makings of a huge taxpayer subsidy to another failed oil shale project.

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.

After a century’s worth of lessons, government needs to stop picking the same loser

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.

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.

 

Oil Shale: A Century of Failure

Wednesday, May 02, 2012, marks 30 years since Black Sunday hit the Western Slope of Colorado, putting thousands of people out of work and devastating the region’s economy. Just two days prior, the Checks and Balances Project released a report, which examines 100 years of failed investment in oil shale.  

Executive summary

Since 1917, when a government official persuaded a Nevada parole board to release a prisoner so the inmate could develop his oil shale extraction idea, experts, insiders, executives and the federal government have dumped billions into efforts to tap oil shale, leaving nothing but failed projects behind.

The oil industry has had plenty of help. The federal government crafted oil shale policies that have effectively transferred thousands of acres of public land to oil companies and have created a leasing structure that could potentially transfer billions of dollars of public wealth to the oil companies. Never before have we given this much to an industry that has yet to show commercial success.

Not one single oil shale project since the first attempts in the late 1920s has ever produced commercial fuel from shale rocks. In fact, one of the few direct results of the federal support has been premature oil shale booms that have ultimately busted.

For all the efforts the American taxpayers have made toward developing oil shale for the oil industry, every effort to sustain commercial production of the resource in the last century has failed.

And the optimism for oil shale is here again, especially amid rising oil prices.

Yet oil companies that obtained research oil shale leases atop rich deposits in northwest Colorado still say it might be another decade before commercial oil shale production ever begins, echoing those headlines from the past 100 years.

Download the full report.

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