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The Siren Song of Shale

June 16, 2006

First, let's get our terms straight. "Oil shale" is neither.

The host rock is not shale, strictly speaking, but a mixture of clay and calcium carbonate.

Inside the rock is the goopy stuff that some members of Congress have hailed as the next fossil fuel Holy Grail. But it’s not petroleum, strictly speaking. It's immature oil that didn't go through the heat and pressure gauntlet that turned ancient organic matter into the powerful elixir that runs modern industrial civilization.

Tales of abundant oil shale have circulated around the central Rockies for ages. The Ute Indians spoke of “mountains that burn.” Burn, yes, but not well enough to push your car anywhere without costly and difficult processing. If light, sweet crude oil is the champagne of fossil fuels, shale oil is the watery convenience store beer.

Never mind the party poopers, say starry-eyed promoters like Congressman Richard Pombo (R-CA). There could be 1 trillion to 2 trillion barrels of shale oil beneath the arid landscapes of Colorado, Utah, and Wyoming. Just dig it up, the shale hypesters say, and we can guzzle wastefully to our hearts' content for decades to come.

Easier said than done. The conventional shale oil production method is to mine enormous amounts of rock, crush it, cook it in giant ovens called “retorts,” collect the vapors, and add hydrogen to the goo so that refineries can turn it into something that cars can burn. The most likely sources of hydrogen for upgrading are water or natural gas, both of which are in short supply.

It’s a lot of effort for paltry return. Shale’s version of the mother lode is a ton of rock that yields 30 gallons of oil. Refine it and you get about 15 gallons of gasoline – barely enough to move one Honda Civic from San Diego to San Francisco.

If shale production sounds like a costly, risky investment, it is. During the oil price spikes of the 1970s, Jimmy Carter hit on shale “synfuels” as a sure-fire way to put one over on OPEC. Oil companies followed the federal lead and planted shale pilot projects all over northwestern Colorado. There was even wild talk in DC of turning Colorado and its neighbors into energy colonies and sweeping away local authority to quibble over tiresome details such as water, waste disposal, and making sure the shale oil boomtowns had enough cops and schools.

The boom turned into a boondoggle, and then a bust that left a bad taste in Coloradoans’ mouths that persists to this day. When conventional oil prices plunged in the 1980s – thanks partly to improved motor vehicle fuel efficiency – the air went out of the shale balloon lickety-split. The abandoned remains of the old pilot plants can be seen today.

Unfortunately, the fuel efficiency drive fell victim to low oil prices, complacency, and the odd notion, held by way too many “conservative” politicians like Pombo, that conserving energy is not conservative. Energy efficiency is for sissy liberals.

Two decades later, thanks to that kind of addled thinking, we’re back in the oil dependence soup we were in during the Carter years. Except that the problem is much worse, because the global competition for oil is a lot tougher, the oil market is prone to greater volatility, and climate change has become much more than an interesting research topic. And don’t forget the looming risks of peak oil.

So, as President Bush says, we’re addicted to oil. What’s the answer that some congressional leaders are serving up for curing our oil addiction? Why, let’s use more oil. Hence, the old PR slogans about an imminent oil shale cornucopia are being dusted off and we’re having another go at an oil shale boom.

Ignore the cheerleading politicians for a minute. What would it really take to bring oil shale to market? The RAND Corporation took a sober look at the matter in a 2005 report prepared for the National Energy Technology Laboratory. RAND figures that a production level of 1 million barrels of shale oil per day is more than 20 years away. A production rate of 3 million barrels daily – equivalent to about 14 percent of current domestic oil consumption – is at least three decades in the future.

Not all the shale in the ground is recoverable. The midpoint of RAND’s estimated recoverable range is 800 billion barrels. That’s still a lot – equivalent to 104 years worth of present domestic oil consumption. But recall your exponential arithmetic. A resource that would last 100 years at present use rates will last only 55 years if consumption grows by 2 percent per year.

There are two ways to produce shale, both problematic. The aforementioned conventional method is dirty, expensive, creates horrendously large piles of spent shale to dispose of, and uses a lot of water that ranchers and towns would like to have for themselves. Unless oil prices are consistently at $70 to $95 per barrel for a dozen or so years initially, RAND says that surface retorting probably won’t pay.

The second method, which is experimental, is being researched by Shell. If it proves feasible, it could be economical with oil prices at $30 per barrel, or so Shell says. Shell’s big idea is to leave the shale rock underground. Heat the shale “in situ” and bring up the vapors for refining. With all the dirty work kept below ground, Shell’s technology wouldn’t leave ugly shale tailings above ground to wreck the scenery, scare off wildlife, and pollute water supplies.

To make it work, Shell would have to apply technology on a heroic scale. Shell would warm the source rock with the world’s largest wall heater – 1,000-foot electric rods. The production area would have to be isolated from surrounding groundwater by the world’s largest chest freezer – an ice wall created by circulating a refrigerant through the rock.

How much energy would all this heating and cooling use? RAND estimates that a middling-high shale oil production rate of 100,000 barrels per day would need 1,200 megawatts of dedicated generation capacity. Gas produced in tandem with the shale oil could be used to generate the necessary power.

Another way would be to build coal-fired power plants. That would exacerbate our climate problem. To produce 1 million barrels of oil from shale per day through the in-situ method, generating the necessary power from conventional coal plants would let loose 100 million tons of carbon dioxide into the atmosphere. As the RAND report points out, shale oil production would entail “significantly higher” greenhouse gas emissions than occurs with conventional oil production and refining.

Shell is not sure yet whether any of this will work. As company officials told a Senate field hearing in Colorado this month, the company may be better off selling its natural gas on the market than using it for shale oil production. By 2010, company representatives say, they’ll know enough to decide whether commercialization will pay.

Of more immediate concern to the locals are impacts on the water supply. Either way you produce shale oil – dig and burn on the surface, or heat below ground – the industry would demand scarce water for processing, cleaning, power plant cooling, and upgrading of shale oil into a refinable feedstock. For example, according to a rule of thumb in the energy business, 25 gallons of water are withdrawn for each kilowatt-hour generated from coal. A 1,000-megawatt plant running at an annual average capacity of 80 percent would generate more than 7 billion kilowatt-hours annually. Do the math.

Producing 1 million barrels of oil from shale per day through the surface retort method would leave behind 300 million tons of salt-filled shale tailings per year. Rain and snow falling on the spent shale would send high levels of salty leachate into streams that discharge into the Colorado River. Elevated salinity already causes $500 million to $750 million in damage in the U.S. part of the Colorado River Basin every year, according to the Bureau of Reclamation.

Water equals litigation. With the West’s population growing and drought continuing, an oil shale industry imposing heavy water stress on an arid region could find itself ensnared in a wasp’s nest of costly lawsuits and public ill will.

Wouldn’t it be easier to produce more oil by saving it? Congressman Sherwood Boehlert (R-NY), chairman of the House Science Committee, has proposed an increase in motor vehicle fuel economy standards that would save 2.6 million barrels of oil per day by 2025 – more than twice as much oil as shale could produce by then.

Efficiency is the cleanest, most reliable energy resource around. Efficiency doesn’t load the atmosphere with heat-trapping gases, pollute water, or impose a heavy industry on rural communities ill prepared to cope with the burdens it brings.

As Congressman Jim Leach (R-IA) says, raising fuel economy standards is the “greatest no-brainer issue in Congress.”

Will Congress take Boehlert’s common-sense path to energy security or fall for a replay of oil shale hype? It’s anyone’s guess at this point.