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terrays | Feb 26, 2009 11:40 AM

Oil shale is kind of like online journalism -- there's such potential there, but from the looks of it, we may never figure out how to make a profitable industry of it. Which must partly explain the contradictions in Ken Salazar's latest plans for the resource.

Yesterday, the secretary of the interior announced he'll be scrapping a set of research, development and demonstration leases in Colorado and Utah approved by the Bush administration six days before Obama's inauguration. Salazar called the leases "flawed," and the product of a rule-making process that was, "under the last administration, turned upside down" -- driven by political agendas instead of scientific timelines. He objected to the size of the leases (at 640 acres they were four times larger than the initial six RD&D leases doled out in 2006), and said the low royalty rates included in their terms would have "sold taxpayers short."

Then he reiterated the significant unanswered questions that still surround around oil shale: How many more booms and busts can communities be expected to weather?  The technologies currently under development are extremely energy intensive, will shale ever prove viable on a commercial scale? Why, with the threat of climate change hanging over us, would we pour more resources into such a dirty, dirty energy source? How much water will commercial production require and where the heck (in the over allocated, arid west) will it come from?

“The previous administration, in testimony in front of congress, said there was no way to foresee commercial production until 2016 or beyond," Salazar said. "Under questioning, they said they honestly didn’t know when it would move forward.”

From all that, it would seem Salazar is well aware of the subtle, irrational glint that can appear in people's eyes when they ponder the estimated 800 billion barrels locked away in that Lost Dutchman, the Green River Formation. So it's surprising that he aims to promptly replace the Bush administration leases with his own.

"I do believe we will offer a second round of RD&D leases, and we will," said Salazar.

He didn't offer any specifics on the next set of leases, stating instead that details will be worked out during the 90-day comment period opening tomorrow.

Various western lawmakers see Salazar's latest action as part of a larger trend. They've criticized him for, in the words of Rep. Doc Hastings, R-Wash., "walking away from utilizing American's energy resources to become less dependent on foreign countries."

Maybe we can hope that Salazar is moving away from some domestic energy sources, at least those of the fossil fuel variety. After all, Salazar recently put coastal drilling on hold and, during yesterday's press conference, emphasized the importance of incorporating renewable sources into the nation's energy portfolio. But when and if more RD&D leases do materialize, one pertinent question will be, "why are they needed?" To date, not much progress has been made on the six RD&D leases already out there. Shell holds three of them but, according to a company spokesman, is still working on formulating plans for the first of those. Development on at least two of the other parcels, according to the websites of the companies that hold the leases (link 1, link 2), is moving slowly as well. 

 

 

 

 

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