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.
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