Eyes on Enefit: Conflicting Claims

Eyes On Enefit LogoFor over a century, conflicting claims have surrounded the rock called oil shale. Estonian oil shale company Eesti Energia, and its U.S. arm, Enefit, are no exception to this rule. Whether it’s company executives, other oil executives or financial experts, we’ve seen numerous inconsistencies about Enefit’s financial health, technological capability, impact on the environment, and its Utah project.

 

 

Technology

What Enefit says in the U.S. What Enefit says in Estonia
“And most importantly for our project in Utah, and for our activities here in the U.S., we also have demonstrated proven commercial shale oil production. We have our own proprietary technology. We have our own operating plants. And we’ve been operating those plants for more than 30 years. And we produce about 1 million barrels a year.”
– Rikki Hrenko, CEO of Enefit America Oil. Transcript of API/Colorado School of Mines Briefing. June 19, 2012.
“But it is not a big surprise that a new technology [Enefit 280] does not work right away.”
– Sandor Liive CEO, Eesti Energia. BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees. November 30, 2012.
The company’s technology “does not need to be proven,” says [Enefit] Chairman Harri Mikk, who points out that Enefit has successfully operated an oil shale plant in Estonia for decades.
Utah Business. August 1, 2011.
+Note Mikk has since resigned from Enefit’s Board Chair
According to [Sandor] Liive, [oil] shale has so far been produced in Estonia by employing the trial and error method. The old Eesti Energia production plant is a proof of that – over the years, the solutions used there have been almost completely changed.
BBC Monitoring Europe, via Postimees. May 4, 2010.
“The tests are not promising,”
Eesti Energia internal document obtained by Eesti Ekspress. Estonian Public Broadcasting. January 24, 2013.

Utah Project

What Enefit says in the U.S. What Enefit says in Estonia
“And most importantly for our project in Utah, and for our activities here in the U.S., we also have demonstrated proven commercial shale oil production. We have our own proprietary technology. We have our own operating plants. And we’ve been operating those plants for more than 30 years. And we produce about 1 million barrels a year.”
– Rikki Hrenko, CEO of Enefit America Oil. Transcript of API/Colorado School of Mines Briefing. June 19, 2012.
“The [Utah] tests are not promising,”
Eesti Energia internal document obtained by Eesti Ekspress. Estonian Public Broadcasting. January 24, 2013.
“This is a simple mining project. The mining component is nothing unique to oil shale. This is a simple mineral processing project.”
– Rikki Hrenko, CEO of Enefit America Oil. Transcript of API/Colorado School of Mines Briefing. June 19, 2012.
The Salt Lake Tribune recently reported that Enefit is experiencing difficulties applying its technology to Utah oil shale deposits, and specifically that the company hasn’t been able extract oil from the oil shale ore mined in Utah as easily as executives had hoped and promised.
Utah oil shale becomes political punching bag in Estonia. Salt Lake Tribune. January 25, 2013.
Ingo Valgma, director of the Department of Mining at the Tallinn University of Technology in Estonia, said that he believes oil production from Utah shale is not a matter of five to six years, as Enefit predicts, but more a question of decades.
Utah oil shale becomes political punching bag in Estonia. Salt Lake Tribune. January 25, 2013.
Eesti Energia’s spokesperson says that the applied development technology needs enhancing. Eesti Energia has invested EUR 33.3mn [$43.1 million] in the Utah project since 2011, including EUR 29.6mn [$38.6 million] in the acquisition of the Utah-based oil shale exploration and development company. Eesti Energia is projecting an additional EUR 37mn [$48.2 million] investment in the Utah shale oil project by 2016.
Esmerk. January 18, 2013.

Environment

What Enefit says in the U.S. What Enefit says in Estonia and what oil executives say
A proven, efficient and environmentally sound means to help Utah become energy independent while providing long-term jobs for local families.”
Enefit Utah website.
“I worked in Estonia for several years. You’re exactly right. The old antiquated surface retorts that they use there are pretty nasty business. They produce a lot of semicoke. You know, they call them the Estonian Alps…. you would never want the retorts that are operating — operating in Estonia to come to the United States.”
– Anton Dammer, NOSA Board Member and former Senior Vice President of Red Leaf. CQ Transcript—House Committee on Science, Space and Technology, Subcommittee on Energy and Environment. May 10, 2012
[Oil shale is] commercially viable… And it can be done in an environmentally responsible manner.”
– Rikki Hrenko, CEO of Enefit America Oil. Transcript of API/Colorado School of Mines Briefing. June 19, 2012.
“…our production involves the emission of lots of carbon dioxide.”
– Sandor Liive, CEO, Eesti Energia. Interview Eesti Paevaleht website via BBC Monitoring Europe. July 4, 2011.

Commercial Viability

What Enefit says in the U.S. What Enefit says in Estonia and what Moody’s says
[Oil shale is] commercially viable. It is proven. We’re doing it on a large scale commercial production basis in Estonia and have been for decades. And it can be done in an environmentally responsible manner. “
– Rikki Hrenko, CEO of Enefit America Oil. Transcript of API/Colorado School of Mines Briefing. June 19, 2012.
“True, most of the investments are made under various subsidy schemes because even current free market prices are not high enough to make investments financially profitable.”
– Sandor Liive, CEO, Eesti Energia. Interview, Eesti Paevaleht website via BBC Monitoring Europe. July 4, 2011.
“And most importantly for our project in Utah, and for our activities here in the U.S., we also have demonstrated proven commercial shale oil production.”
– Rikki Hrenko, CEO of Enefit America Oil. Transcript of API/Colorado School of Mines Briefing. June 19, 2012.
In January 2013, Moody’s credit agency downgraded Eesti Energia’s bonds to negative, citing the evolving “business risk profile” of the company, and its inability to maintain profitability “given CO2-intensive oil-shale based generation assets.”
Moody’s changes outlook on Eesti Energia’s Baa1/P-2 ratings to negative. January 8, 2013.

Not even Enefit’s executives can agree whether or not oil shale is ready for prime time in the U.S. Oil shale companies like Enefit must prove they viable commercial technology that won’t harm our water or communities before they get any more public land.

This blog is part of a series about Enefit, known at home in Estonia as Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

Eyes on Enefit: Under fire for risky investments

Eesti Energia, known as Enefit in the U.S., has been under fire from both the Estonian press and high-level Estonian officials for its poor investment record. As Raimo Poom, a columnist for Estonian publication Eesti Paevaleht wrote:

Eyes On Enefit Logo

“Eesti Energia’s plan to build up a huge shale oil industry raises a lot of questions; financing the plan is the most questionable decision taken by the government lately.”
— Raimo Poom, Columnist, Eesti Paevaleht, May 22, 2010 via BBC Monitoring Europe

According to the former deputy CEO of a subsidiary of Eesti Energia’s biggest oil shale processor:

“Eesti Energia’s activities largely look like an unplanned adventure, and this type of export of oil shale-related know-how is simply adventurism.”

– Mati Pallasma, former deputy of VKG OIL AS, subsidiary of VKG, Postimees, April 8, 2011 via BBC Worldwide Monitoring

Even Eesti Energia itself acknowledged that the present time is “financially, the most complicated period of time for us… [and] will be the most difficult time.”

Photo of Narva Power Plant. Source: The Baltic Course

Photo of Narva Power Plant. Source: The Baltic Course

Here are a few examples of Eesti Energia’s questionable investment strategies and what opinion leaders and financial experts inside and outside of Estonia had to say about them.

Eesti Energia and Estonian government are accused of pushing through a large investment based on “legally questionable basis”

Eyewitness, an Estonian investigative journalism show, accused Eesti Energia and the Estonian government of “pushing through” large investments in the new blocs of the Narva power plants, despite the fact it was, “legally incorrect and based on incorrect data.”

State Audit Office chief auditor Tarmo Olgo said building the Narva blocs at a total cost of 1 billion Euros ($1.3 billion U.S. dollars*), “is not necessary as it won’t contribute anything to the market,” and that, “it is not economically feasible…”

So, it’s not surprising then, that Eesti Energia sought in January to abandon operations at the plant, after the company found, “the new station would be unable to produce electricity for a competitive price.”

Eesti Energia abandoned the second phase of the plant – a 400 million euro investment [$522 million U.S. dollars*] less than one year after the cornerstone laying ceremony.

Standard & Poor’s downgrades Eesti Energia’s bonds to negative, while Moody’s raises concerns over risky Lithuanian investment prospects

Eesti Energia’s failed investments aren’t limited to oil shale. The company also considered investment in Lithuanian nuclear power plant, despite credit rating agencies’ reservations.

Standard & Poor’s Rating Services said that [sic] has revised the outlook on…Eesti Energia AS to negative from stable to reflect the risk that the company’s credit quality will weaken due to possible participation in a prospective nuclear power plant in Lithuania.

– Eesti Energia outlook cut to negative on possible nuclear plant investment – S&P, Thomson Financial Super Focus, August 28, 2007

The Moody’s rating agency says in a comment concerning the new nuclear power plant concession bill supported by the government in Lithuania, that proceeding with the plan would jeopardize the power utilities Eesti Energia’s and Latvenergo’s credit ratings.

– NPP Project threat to power utilities’ rating- Moody’s, Esmerk, DELFI.ee, May 14, 2012

Lithuanians back out of deal with Eesti Energia due to company’s debt burden

Eesti Energia’s home government isn’t alone in expressing doubt over the company’s investments. Other governments have shown wariness toward Eesti Energia as well. Lithuania backed out of a privatization deal with Eesti Energia because of the company’s debt burden of one billion litas ($379 million U.S. dollars**).

One more argument against selling RST, a profitable and stable company, to Eesti Energia is the Estonian company’s debt burden of almost a billion litas, which limits its investment possibilities.

– Estonians to seek compensation over aborted sale of Lithuanian power grid, Baltic News Service, March 3, 2004

If a history of failed investment sounds familiar to Eastern Utah and Western Colorado residents, it should. Oil shale development in the region has had a similar track record of failure. Given this shared history, it makes sense for oil shale companies like Enefit to prove they have developed a technically and commercially feasible way to produce oil shale before they are given more access to public lands and resources.

*Calculated using the Euros to U.S. Dollars conversion rate on February 27, 2013

**Calculated using the Litas to U.S. Dollars conversion rate on February 27, 2013

This blog is part of a series about Enefit, known at home in Estonia as Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

Eyes on Enefit: Oil shale extraction an environmental threat

Eyes On Enefit Logo

Contaminated groundwater, 600-foot high piles of oil shale waste that spontaneously ignite, and the emission of “lots of carbon dioxide”; all of this comes from a company that claims to be “highly dedicated to lessening the environmental impact of our production processes.” A look at the facts reveals that, despite its claims, Estonian oil shale company Eesti Energia’s operations have been anything but environmentally friendly.

For several decades Eesti Energia, an Estonian government-owned corporation, has been extracting oil shale, and using it to generate Estonian electricity at a stunning environmental cost. In the United States, Eesti Energia is known as Enefit. In 2011, Enefit bought the largest privately held oil shale reserve in Utah, and since then it has been experimenting with oil shale found on that land.

Since Eesti Energia has brought its oil shale technology to our shores through Enefit’s Utah project, we think a quick review of the company’s environmental record is in order. That way, Utahns can see what could be in store for them.

A polluted lake near an “ash” mountain in NE Estonia. Source: EcoCrete Project

First off, let’s see what the Estonians think of oil shale. A member of the Estonian Parliament described oil shale waste as a problem “for which there is no solution at present.” Researchers at Estonia’s Tallinn University of Technology and the Estonian Fund for Nature describe the oil shale industry’s environmental impacts as “huge.”

Scientists at Tartu University and the Institute of Ecology even wrote a paper in which they explain how Estonian oil shale’s waste is hazardous.

“[The] Processes of oil shale mining, combustion in power plants, and thermal processing in chemical plants generate a huge amount of solid waste…Semi-coke dumps surrounding the plants of oil shale thermal processing. Semi-coke is a residue classified as environmentally harmful due to its components like sulphides, volatile phenols, benzo(a)pyrene, etc.”

– “Artificial Mountains in North-East Estonia: Monumental Dumps of Ash and Semi-Coke.” Tartu University and the Department of North-East Estonia. 2005.

In fact, these waste products are so unstable, they have been known to spontaneously combust and contaminate groundwater and soil. As of 2005, 27 percent of oil shale landfills in Estonia had self-ignited.

“Observation of groundwater and soil illustrate that the environment close to burning landfills is contaminated with molybdenum, copper, sulphate, arsenic, oil products, and PAHs…”

– “Life Cycle Analysis of the Estonian Oil Shale Industry.” Estonian Fund for Nature and Tallinn University of Technology. 2005.

In spring 2012, The Baltic Course magazine reported that one of these massive oil shale waste piles caught fire during the winter, and still continued to burn. The magazine also noted there is, “no universal solution to extinguish such a fire.”

In addition to water and ground pollution, Eesti Energia’s CEO, Sandor Liive admitted producing energy from oil shale creates significant global warming pollution, or “lots of carbon dioxide,” as he puts it.

“The risk concerning the price of carbon dioxide is relatively high for Eesti Energia because our production involves the emission of lots of carbon dioxide.”

–  Sandor Liive, CEO Eesti Energia. Interview with Eesti Paevaleht. BBC Monitoring Europe. 04 July 2011.

Arial photo of a pile of oil shale ‘ash’ in Estonia. Source: EcoCrete Project.

Eesti Energia isn’t the only company experimenting with the rock that admits oil shale has negative environmental impacts. In 2012, Anton Dammer, a former Senior VP at oil shale company Red Leaf Resources, testified to Congress:

“I worked in Estonia for several years…The old antiquated surface retorts that [Eesti Energia] use are pretty nasty business…They produce a lot of semicoke. You know, they call them the Estonian Alps…I can’t tell you exactly all the technical details of it, but it’s – it’s much improved, but you would never want the retorts that are operating – operating in Estonia to come to the United States.”

– Anton Dammer, Senior Vice President of Red Leaf [Resources]. CQ Transcript, House Committee on Science, Space and Technology, Subcommittee on Energy and Environment. 10 May 2012.

Eesti Energia’s environmental track record shows its claims of environmental friendliness ring hollow. Oil shale production’s health and environmental risks present a clear case against allowing oil shale companies increased access to public lands. Until they can prove they have a commercially viable technology that won’t pollute our communities’ air and water supplies with harmful waste, they shouldn’t receive more handouts.

This blog is part of a series about Enefit, known at home in Estonia as Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

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

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