Feds have eyes on oil shale | VailDaily.com

Feds have eyes on oil shale

Donna Gray

GLENWOOD SPIRINGS – A push to develop oil shale as a strategic resource important to America’s defense got a shove forward late last month at a meeting in Salt Lake City. The U.S. Department of Energy hosted the March 30 meeting aiming to convince local governments in Utah and Colorado, congressmen and potential developers that oil shale is important to America’s defense. According to the federal agency, petroleum reserves are dwindling and oil shale can provide a domestic supply of fuel for military hardware.In December, the Department of Energy’s Office of Naval Petroleum and Oil Shale Reserves issued a report that predicts a shortfall in the worldwide oil supply within the next 20 years as demand continues to rise. America needs a strategic plan to develop oil shale as an alternative fuel before oil reserves give out, the Department of Energy says. The Piceance Basin in western Colorado, eastern Utah and southern Wyoming holds one of the world’s richest deposits of oil shale. At the turn of the last century, the U.S. Navy set aside those resources as the Naval Oil Shale Reserve to preserve the resource for future strategic use.Interest in the plan by the U.S. Department of Defense will likely drive the plan, said Jim Evans, executive director of the Northwest Colorado Council of Governments, who attended the Salt Lake City meeting.”They are very much interested in it. They have had a real problem in Iraq over distributing fuel,” he said. The Department of Defense is aiming to have a standard fuel, possibly jet fuel, that could come from oil shale “because it is a secure domestic resource and it works for jet fuel,” he said.”They are prepared to go forward with some type of purchase plan so it would be a guaranteed market and perhaps a guaranteed price, and that alone could be the driving force for the plan to go forward,” Evans said. At a hearing before the U.S. Senate Energy and Natural Resources Committee May 1, lawmakers will consider tacking on a section to the national energy bill authorizing the strategic oil shale plan to go forward, Evans said.If it’s sanctioned, and funded by the federal government, the plan could focus on the oil shale reserves either in Colorado or Utah. Because the March 30 meeting was in Salt Lake City, Glenn Vawter said he believes a research facility could be located in Utah. Vawter is a retired executive with TOSCO, one of the primary players in the development oil shale in Parachute during the 1970s boom.”I think it will be in Utah because it’s a bit more open (than Colorado). They want the development and more employment. They don’t have the big boom of the tourism industry,” Vawter said.However, Evans said he thinks the Piceance Basin just north of Rifle could be a good target because Shell Oil already has a research program in place on 22,000 acres it owns in the basin.Both Evans and Vawter are concerned about repeating the mistakes of the oil shale boom and bust in the ’70s.”On its face, the plan emphasizes research and development, and that is the right approach,” Vawter wrote in the Glenwood Springs Post Independent. “But it disturbed me that a goal was established of some 2 million barrels a day of shale oil production in the next two decades. I understand the government managers need this goal to impress Congress and the Administration that the effort, and cost to the taxpayers, is worthwhile in the larger scheme of things. But it is certainly the way to scare the local public into a revolt against the plan.”Evans is also worried about seeing the same social and economic impacts of another energy boom and bust. The last bust took place on what is locally known as Black Sunday, May 2, 1982, when Exxon abruptly closed its Colony Oil Shale plant in Parachute, putting 2,100 people out of work in one day.”We’re concerned that the plan not depend on the price of oil, (that) if it drops to $20 it won’t shut down,” he said.Vail, Colorado

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