Oil shale, our feel-good rock

 

Oil shale has made big news this past year. Congress has ordered the leasing of federal oil shale lands, and would-be developers are reporting advances in both conventional retorting and innovative, in-situ extraction technologies. Yet somehow I don’t get a warm, fuzzy feeling that oil shale is going to help me out at the gas pump any time soon.

The reason is history. It is a well-established American tradition, whenever fuel prices are high and supplies are short, to trot out the oil-shale pony.

For 90 years, oil shale has been portrayed as America’s ace-in-the-hole — a huge source of liquid fuels that, once developed, will let us thumb our noses at those greedy and often troublesome foreign crude oil suppliers. But in truth, oil shale, despite its enormous energy potential, has never done anything more than make us feel good.

Oil shale is a sedimentary rock that contains hydrocarbon energy as kerogen, an undeveloped form of petroleum that can be extracted as shale oil and converted into liquid fuels. The world’s richest oil shale deposits are in Colorado, Utah and Wyoming, where the extractable shale oil amounts to nearly four times the crude oil reserves of Saudi Arabia.

These oil shale deposits first came to attention in 1916, four years after rapidly increasing numbers of automobiles and trucks had made the nation a net importer of petroleum. Then, the government’s announcement that Western oil shale could satisfy the nation’s liquid fuel needs "forever" sent prospectors, miners, speculators, and entrepreneurs rushing to oil shale country. Oddly, the notable absentees were the big oil companies, which were then, as they are now, the only logical entities that could develop oil shale and nationally market and distribute the derived fuel products on a large scale. Instead, Big Oil looked for more crude. It quickly found it in Texas, and oil shale was forgotten.

Until World War II, that is, when liquid-fuel supplies again became critical. Because Big Oil wasn’t about to do it, the federal government successfully developed a demonstration oil shale mine and extraction plant in Colorado. In 1951, the government tried to give this project to Big Oil to continue development, but its offer was rejected.

Then in 1960, the Atomic Energy Commission’s "Plowshare Program" sought peaceful uses for nuclear bombs. One possible use was to "rubble" underground oil shale and then extract the oil. But the AEC’s proposal to conduct joint tests with Big Oil was turned down.

Seven years later, with the end of cheap, abundant crude already in sight, speculators again rushed to oil shale country, this time to acquire claims in anticipation of an inevitable development boom. Again, the oil companies watched from the sidelines.

Following the 1973 OPEC oil embargo, Big Oil, wallowing in windfall profits and under intense public and governmental pressure to develop domestic energy sources, finally didn’t have much choice. So in 1980, several oil companies began major oil shale development in Colorado.

But just two years later, oil prices suddenly fell flat, a drop that some industry observers suspected wasn’t entirely coincidental. Claiming that shale oil would no longer be competitive with crude, Big Oil didn’t merely suspend development pending higher crude prices — it dropped oil shale like a hot potato.

The recent record fuel prices have thrust oil shale back into the news and, as always, it’s making everyone feel good. Because it looks like it’s doing something about high fuel prices, Congress feels good; because it is publicly, however minimally, involved in oil shale research, Big Oil feels good; and, believing that oil shale development may eventually cut fuel prices, many consumers feel good.

But Big Oil is no more motivated today to commercialize oil shale than it was 90 years ago. With billions of its dollars invested in foreign crude-oil pumping and shipping facilities, it makes little sense to commit the capital necessary to develop oil shale when shale oil production will only lower crude prices.

Nevertheless, Big Oil will keep its hand in the oil shale game, patenting extraction technologies and tying up federal leases, both to demonstrate concern about current high fuel prices and as a hedge against whatever the future may bring.

But meaningful shale oil production? Not in this generation. In fact, not until Big Oil has pumped its last barrel of crude. Until then, oil shale will do nothing more than what it’s always done — make us feel good.

Steve Voynick is a contributor to Writers on the Range, a service of High Country News (hcn.org). He lives and writes in Twin Lake, Colorado.