Shell says that even though it's no longer pursing water rights on the Yampa River right now, it's in no way backing off its larger ambitions for oil shale. (Photo courtesy of the US DOE)
Extracting oil from oil shale takes a lot of water. Most of the oil shale in the U.S. is in areas where there’s not a lot of water. Conrad Wilson reports, one big oil company seems to be walking away from oil shale for that reason. But not everyone thinks that’s the case.
Transcript
Extracting oil from oil shale takes a lot of water. Most of the oil shale in the U.S. is in areas where there’s not a lot of water. Conrad Wilson reports, one big oil company seems to be walking away from oil shale for that reason. But not everyone thinks that’s the case.
In the Western US, some energy companies are betting big on oil shale. That’s a process of basically heating up a shale rock into a liquid that’s eventually refined into oil. But the global recession and the threat of climate change might be giving those companies second thoughts. Add to that a increasingly limited water supply, and oil shale looks like a risky investment.
The process of creating oil shale is energy intensive and uses a lot of water. That’s a problem in the arid West. As the population grows, the value of water is increasing.
Royal Dutch Shell has the most invested in developing an oil shale technology that works. So earlier this year when the company announced it was pulling away from water rights, it sent shock waves through the industry.
“I read that decision as Shell’s acknowledgment that oil shale is a long way off and that this was a really controversial filing and that in a sense it’s not worth it.”
That’s Claire Bastable of the Western Energy Project. It’s an environmental group that keeps on eye on energy issues in the West. Shell had been pursuing water rights on the Yampa River, in the Northwest portion Colorado.
“Shell’s decision was a big deal. We’re talking about 15 billion gallons of water. … It would have basically taken the Yampa River, which is one of the the last free flowing rivers in the West and diverted a huge proportion of it to Shell for potential oil shale development.”
Bastable says the 15 billion gallons Shell was seeking is about three times the amount the city of Boulder, Colorado uses in a year.
But, Shell knows a lot of oil can be extracted from the oil shale. It’s estimated that there are 800 billion barrels of usable oil in the shale – in Wyoming, Colorado and Utah.
Dr. Jeremy Boak researches oil shale development at the Colorado School of Mines. He says Shell could be simply postponing extracting that oil. Boak believes oil shale has a future, but it’s still decades away.
“With all of the comments they’ve made about what the time scale for oil shale, Shell has been pretty comfortable that this is going to take time.”
Shell says that even though it’s no longer pursing water rights on the Yampa River right now, it’s in no way backing off its larger ambitions for oil shale.
The company wouldn’t provide someone to comment for this story, but in a statement the company said:
The “ultimate goal is to create a commercial oil shale recovery operation that is economically viable, environmentally responsible and socially sustainable.”
That statement adds timing depends on government regulation and the market. The company could be waiting to see what the government does about climate change and how that affects fossil fuel costs. Shell could also be waiting for oil prices go up before deciding whether oil shale worth the effort.
Eric Kuhn heads up water management for the Colorado River District. He monitors much of the state’s water West of the Continental Divide. Kuhn says there’s probably enough water for oil shale development right now, but it’s hard to say for how long.
“I don’t think they’re dropping the filing changes anything. I think those companies are dedicated to and still have a plan to develop the oil shale resource if they can find a technology that is economically productive or if they can produce the oil shale at a competitive price, I think they will do it.”
Environmentalists in the region hope they won’t. They say Shell’s decision not to pursue the water right now should be a signal to others… oil shale just might not be worth the effort.
For The Environment Report, I’m Conrad Wilson.