Environmental activists delayed the launch of an environmentally friendly oil shale project in southeastern Utah’s Unita Valley, pending the outcome of more study of the project’s expected effect on groundwater near the site.
State Approved Project
Earlier this year the Utah Division of Oil, Gas, and Mining awarded an oil shale production permit to Red Leaf Resources, an energy company that emphasizes environmentally friendly oil shale production. Nevertheless, Living Rivers, a Moab, Utah-based environmental activist group, objected to the permit, claiming Red Leaf’s project would jeopardize groundwater in the region.
In late June, Red Leaf and Living Rivers agreed to let the Utah Water Quality Division study the project and release a report before Red Leaf begins resource production in the region. In the interim, the company’s permit will be set aside, and Red Leaf Resources plans to seek a new permit once the state water agency’s review has been completed.
Setting aside the permit while state environmental officials perform more studies will cost Red Leaf a substantial amount of money, however. In March, Red Leaf announced a $200 million joint venture with French energy giant Total SA to produce oil under thousands of acres of land in Utah. The companies had hoped to begin operation within 18 months of receiving their permit.
Oil Shale vs. Shale Oil
The United States has enormous reserves of oil shale, concentrated primarily in Utah, Wyoming, and Colorado. Oil shale is something of a misnomer because it is neither oil nor necessarily found in shale rock. It is sedimentary rock that contains kerogen, a solid, organic material that, when heated to high temperatures, releases petroleum-like substances. These substances can be processed into liquid fuels.
Oil shale is different from shale oil, also known as tight oil. Shale oil is conventional oil found in shale rock, often along with natural gas. Unlike oil shale, shale oil can be extracted using the twin modern technologies of horizontal drilling and hydraulic fracturing, or fracking. In the United States, shale oil, is found in prodigious amounts in such places as the Bakken Formation (North Dakota and Montana), Barnett Formation (north central Texas), Eagle Ford Formation (south Texas), and Utica Shale (eastern Ohio).
Emerging Energy Source
Though it has enormous potential as an energy source, oil shale development has been held back by the challenges posed by its extraction. Oil shale must be mined and converted to fuels through a multistep process. In the case of the Red Leaf Resources/Total SA joint venture, the waxy shale would be dug up, placed in a clay-lined mine cavity, and heated with gas to at least 650 degrees Fahrenheit to convert the kerogen to oil and natural gas.
The dramatic rise in the price of oil in recent years, coupled with advances in extraction technology, have made shale oil and shale gas the most highly sought-after newer energy sources in the world. Similar strides in technology may also make oil shale commercially viable in the near future. For now, however, Red Leaf Resources and Total SA will have to await the results of Utah’s Water Quality Division’s analysis.
“The United States has over two trillion barrels of oil shale, but, for now, those resources are off-limits,” notes Daniel Simmons, director of state policy at the Institute for Energy Research.
“Most of the oil shale is on federal lands, and the Obama administration has shown no interest in the exploration and development of these prodigious energy reserves,” Simmons explains. “That is why projects on private or state lands, like the Red Leaf Resources project, are so important. The future of energy in the United States is bright, but only if we have access to the vast resources beneath our feet.”
“Red Leaf has pioneered state-of-the-art environmentally friendly technologies,” said Jay Lehr, science director for the Heartland Institute. “Even conventional production technologies have proven to have minimal environmental impact, so allowing Red Leaf to produce oil shale should be a no-brainer. It is a shame this oil project, along with the wealth creation and job creation, is being put in limbo.”
Bonner R. Cohen, Ph. D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.