Shell Walks Away From Oil Shale

  • 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.

Related Links

Regulating Hydrofracking

  • Natural gas well drilling site. (Photo courtesy of Argonne National Laboratory)

A new drilling technique called
hydrofracking has opened up previously
inaccessible natural gas fields all
over the country and created a boom
in natural gas production. But it’s
also generated a lot of controversy,
since hydrofracking is exempt from
almost all federal regulations.
Samara Freemark reports
that legislation currently moving through
Congress would change that:

Transcript

A new drilling technique called
hydrofracking has opened up previously
inaccessible natural gas fields all
over the country and created a boom
in natural gas production. But it’s
also generated a lot of controversy,
since hydrofracking is exempt from
almost all federal regulations.
Samara Freemark reports
that legislation currently moving through
Congress would change that:

Hydrofracking involves pumping millions of gallons of water, sand, and chemicals a mile into the ground to break up rock and extract gas. But since 2005 the technique has been exempt from federal environmental legislation like the Clean Water Act and Safe Drinking Water Act.

Now some members of Congress have introduced a bill to restore federal oversight over fracking. Kate Sinding is with the Natural Resources Defense Council, which supports the bill.

“So what has been proposed is known as the FRAC act. And what that would do is restore regulatory authority over hydrolic fracturing which means we would have some federal standards about how to regulate this activity. And it would require the public disclosure of the fracturing fluids that are used in fracturing fluids.”

That’s an important point for fracking opponents, who say those chemicals have contaminated wells and groundwater across the nation.

For The Environment Report, I’m Samara Freemark.

Related Links

Fighting Over Oil and Water

  • The richest oil shale deposits lie in the Piceance Basin, which runs northwest of the town of Rifle, Colorado. The bands of dark grey along the edge of this snow- capped ridge are oil shale. (Photo by Shawn Allee)

In the future, keeping your gas tank full could make disputes over water in the American
West a lot worse. It’s because energy companies hope to develop the oil shale industry.
Getting oil from shale requires lots of water, and the richest oil shale deposits happen to be
in the dry state of Colorado. Shawn Allee headed there to see why a fight over water and
oil could be in the works:

Transcript

In the future, keeping your gas tank full could make disputes over water in the American
West a lot worse. It’s because energy companies hope to develop the oil shale industry.
Getting oil from shale requires lots of water, and the richest oil shale deposits happen to be
in the dry state of Colorado. Shawn Allee headed there to see why a fight over water and
oil could be in the works:

Oil companies have their eyes on vast oil shale deposits in western Colorado, Utah and
Wyoming.

The federal government says companies could pull 800 billion barrels of oil out of that shale.

That’s about three times the proven oil reserves in Saudi Arabia.

Oil shale’s an impressive resource but it depends on water and there’s not much available
there.

How much would an oil shale industry need?

Shell Oil PR guy Tracy Boyd says the simple answer is that it will likely take his company
three barrels of water to extract one barrel of oil.

It’s because oil shale doesn’t really have oil in it – it’s got something called kerogen.

“You can heat this kerogen up. If you do it really slow, which we do for about 3.5 –
4 years, by putting heaters down in the rock formation, (you) produce a crude-oil
like material but with a little processing this is the first product we get out of it
which basically transportation fuels.”

Heating the ground require loads of electricity from new power plants and generators, and
they’d be cooled by water.

Oil companies are just experimenting with shale right now, but they’re securing rights to
water just in case.

Shell’s latest water claim is on Colorado’s Yampa River.

When Shell filed its court papers – some town governments warned they might fight the
claim.

One of these towns was Parker – a Denver suburb hundreds of miles east of the oil shale
region.

Frank Jaeger runs Parker’s water district.

Jaeger says, like other Colorado cities, Parker plans to expand.

“We know approximately what our numbers are and it will be somewhere in the
neighborhood of 150,000 people. In order to assure 150,000 people for another
150 years from now, I have to be proactive, I have to be at the front of the line for
the next drop of water available in the State of Colorado.”

Oil shale developers and cities across Colorado are set to fight over the water they might
need for the future, but some feel oil companies already have an edge.

“They’re actually one step ahead of the game.”

David Ableson is with Western Resource Advocates, an environmental group.

Ableson says energy companies tried developing oil shale several times in the last century.

They failed, but each time, they bought more water rights – just in case.

Now, they’ve got loads of water rights – and if the industry takes off, they’ll use them.

That could stop cities like Denver and its suburbs from getting water they hoped to have for
new homes and businesses.

Ableson says this isn’t just a Colorado fight, though.

He says some congressmen sell the idea of oil shale as an energy source the whole country
can depend on – even though its future could get tied up in Colorado water courts.

“And so, folks who are looking at this issue who do not live in CO, UT, or WY, need
to understand that when an elected official says, “this can solve our energy woes,”
that it’s actually a far more complicated situation than that and if there are severe
water impacts, that makes it much less likely that you could develop that
resource.”

The energy industry claims the concern over water is overblown – they say they just might
not need all that much water.

Ableson says that’s only true if oil shale fails. But if it succeeds, and we fill up on oil shale
gasoline – he predicts some towns or industries in the West will be left dry.

For The Environment Report, I’m Shawn Allee.

Related Links

Mining vs. Old-Growth Forest

  • Dysart Woods in southeast Ohio is an old-growth forest. Many of the trees are more than 300 years old. (Photo courtesy of dysartwoods.org)

The need for cheap energy is coming into conflict
with efforts to preserve a forest. Coal mining companies are using a technique that causes the land to subside and sometimes changes natural underground water systems. Environmentalists say mining underneath a forest preserve could destroy the ecosystem. The Great Lakes Radio Consortium’s Lisa Ann Pinkerton reports on environmental activists who are defending the
forest:

Transcript

The need for cheap energy is coming into conflict with efforts to preserve a forest.
Coal mining companies are using a technique that causes the land to subside and sometimes
change natural underground water systems. Environmentalists say mining underneath a forest
preserve could destroy the ecosystem. The Great Lakes Radio Consortium’s Lisa Ann Pinkerton
reports on environmental activists who are defending the forest:


For decades, the coal mining industry has been using a technique of extraction called
long wall mining. Industry officials say it’s the most effective way to get the bituminous
coal out of the ground. In traditional room and pillar mining, the land above is not disturbed.
But the long wall machine leaves no support for the 1000-foot tunnel created in its wake. After
the coal is extracted, the ground caves in, causing the land to sink.


Dysart Woods, in southeastern Ohio, is slated for such a fate. The conservation group,
Buckeye Forest Council, wants to block the woods from mining. Its members believe long
wall mining will destroy the old-growth forest. The four hundred and fifty acres, fifty-five
acres of the trees are more than 300 years old. Fred Gittis is an attorney who has volunteered
his services to protect the woods.


“And these woods are precious, and they are among the last old-growth forest areas remaining,
not only in Ohio, but in this part of the country. Recently a documentary was filmed in Dysart Woods, because it has some of the conditions that would have existed at the time of George
Washington’s life.”


Gittis argues state should repeal the mining permit granted for Dysart Woods. Ohio Valley
Coal was granted the permit in 2001. As steward of the woods, Ohio University disputed the
permit for three years. But last November, it agreed to drop its appeal, in exchange for $10,000 from the state to study the forest’s water, as it is undermined. Ohio Valley
Coal Company would drill the wells needed. But the Buckeye Forest Council says a study doesn’t
solve the problem.


“First of all it is just a water monitoring project. It offers no protection to the woods.
Second of all, they don’t have the base line data right now to compare to what it normal.”


That’s Susan Heikler, Executive Director of the Buckeye Forest Council. When Ohio University
accepted the mining permit, her organization took up the fight. The group worked with lawyer
Fred Gittis and nationally known experts to review the science of the Coal Company’s mining
plan. Gittis says the Council’s experts were not impressed.


And, both hydrogeologists and mining experts have indicated that the basic science related
to this mining permit is, not to be insulting but, junk.”


The plan calls for long wall mining within 300 feet of the old-growth forest. However,
experts from the Buckeye Forest Council say a 1500 foot buffer around the woods
is the only way to insure the protection of the hydrology – the natural water system that
sustains the forest.


In a major concession two years ago, the Coal Company agreed not to long wall mine directly
under Dysart Woods. Instead, room and pillar mining is planned. The Company says that will
delay subsidence for centuries to come. Attorney Fred Gittis says without core samples from
directly under the woods, the company doesn’t have the data to back up this claim.


“If you don’t know what that rock is, if it’s soft like claystone or shale, it can collapse.
And so its pretty basic stuff.”


Attorneys for the company declined to be interviewed for this story. In statements, the
Company defends its lack of data by pointing to exemptions they were granted by the Department
of Mineral Resources. The Company stands by its assertion that, quote, “trees and other surface
vegetation will absolutely not be affected by mining.” But in September, the story changed. In
court, a mining consultant for the company, Hanjie Chen, testified that the forest floor would
sink 5 inches. Attorneys for Ohio Valley Coal abruptly stopped his testimony after this
statement. But Gittis says the damage to the coal company’s case is already done.


Although Buckeye Forest Council rested its case in July, the defendant, Ohio Valley Coal is
still adding witnesses and dragging out the case. Fred Gittis says the Company is trying to
exhaust the Buckeye Forest Council’s legal funding. He adds that this is why he volunteers his
expertise.


For the time being, mining under the old growth forest has been pushed back until the hearings
conclude in November.


For the Great Lakes Radio Consortium, this is Lisa Ann Pinkerton.

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