Since the early 1980s, oil shale has not been on the U.S. energy policy agenda, and very little attention has been directed at technology or energy market developments that might change the commercial prospects for oil shale. This report presents an updated assessment of the viability of developing oil shale resources in the United States and related policy issues. The report describes the oil shale resources in the western United States; the suitability, cost, and performance of available technologies for developing the richest of those resources; and the key energy, environmental, land-use, and socioeconomic policy issues that need to be addressed by government decisionmakers in the near future.

Key Recommendations:

Business as Usual. The following are recommended whether or not oil shale is a candidate for early efforts toward commercial production.

• Oil shale should be part of the Department of Energy’s research and development portfolio. Significant long-term research opportunities are associated with both surface retorting and in-situ retorting. A benefit of even a small federal program (i.e., a few million dollars annually) would be the continued availability of a small cadre of scientific and engineering professionals who would be deeply knowledgeable of oil shale development issues.

• Consideration should be given to establishing a national oil shale archive that would hold and preserve information on oil shale resources, technologies, and impacts of development. We fear that, with the passage of time, important information will be lost.

• Analysis should be directed at lease program implementation options, such as combining adjacent lease tracts in a lease offering and provisions for ensuring or promoting extensive recovery of resources within lease tracts.

In Support of Commercialization. Once clear indications are in hand that major firms are ready to invest in scaling up and demonstrating oil shale technologies, government attention should be directed at gathering long lead time information required to support future decisionmaking with regard to permitting and leasing.

Early action is appropriate for the following:

• Development and implementation of a research plan directed at establishing options for mitigating damage to plants and wildlife and reducing uncertainties associated with ecological restoration.

• Research directed at mathematical modeling of the subsurface environment, combined with a multiyear hydrological, geochemical, and geophysical monitoring program. (This in the event that major industrial investments are directed at in-situ retorting.)

• Research directed at establishing and analyzing options for long-term spent shale disposal. (This in the event that major industrial investments are being directed at mining and surface retorting.)

• Regional air quality modeling directed at determining preferred locations for federal leasing and informing decisions on air quality permits for initial commercial plants.

• Development of a federal oil shale leasing strategy for the Green River Formation, along with appropriate analytic and procedural approaches for timing and selecting sites for lease offerings, establishing lease provisions, and avoiding measures that will constrain future development.

Development at a Measured Pace. Many uncertainties regarding technology performance and environmental and socioeconomic impacts remain unresolved.

While the above “early action” recommendations will serve to narrow uncertainties and reduce the risks of making poor decisions, resolution of the most critical issues associated with strategically significant levels of production will not occur until the initial round of large-scale commercial facilities are constructed and operated—
a point that is at least 12 years down the road. A particularly pressing issue is the viability of in-situ retorting because this approach may offer a more profitable and far more environmentally benign alternative to mining and surface retorting. The prevailing information shortfalls suggest that oil shale development should proceed at a measured pace.

Public Participation. Because oil shale development could profoundly affect local residents and other stakeholders, their inputs into federal decisionmaking need to be sought and valued early in the process. The same holds true of the affected state governments, tribal governments, and the wider citizenry, including nongovernmental organizations representing citizens supportive of environmental protection, wildlife conservation, and alternative land uses. An opportune time to broaden public involvement is in conjunction with the preparations for a new round of federal leasing of oil shale tracts.

Toward this end, the federal government should consider fostering the creation of a regionally based organization dedicated to planning, oversight and advice, and public participation. Various venues are possible for this, including the Western Governors’ Association and the Colorado and Utah state governments.

Visit Oil Shale Development in the United States: Prospects And Policy Issues Download Page

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James T. Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine
Prepared for the National Energy Technology Laboratory of the U.S. Department of Energy

Contents:

Preface ........................................................................................ iii
Figures and Table............................................................................vii
Summary ..................................................................................... ix
Acknowledgments.......................................................................... xvii
Abbreviations ............................................................................... xix
CHAPTER ONE
Introduction...................................................................................1
About This Study ..............................................................................2
Contents of This Report .......................................................................3
CHAPTER TWO
The U.S. Oil Shale Resource Base ...........................................................5
Oil Shale Resources in Place ...................................................................5
The Green River Formation.................................................................5
Other Oil Shale Deposits in the United States ..............................................8
Recoverable Resources in the Green River Formation.........................................8
Resource Ownership ...........................................................................9
CHAPTER THREE
Oil Shale Technologies ..................................................................... 11
Mining and Surface Retorting ............................................................... 11
Mining Oil Shale .......................................................................... 12
Surface Retorting .......................................................................... 13
Technical Viability and Commercial Readiness ........................................... 14
Costs ....................................................................................... 15
In-Situ Retorting............................................................................. 17
Thermally Conductive In-Situ Conversion.................................................. 17
Technical Viability and Commercial Readiness ........................................... 18
Costs ....................................................................................... 20
Timeline for Oil Shale Development ........................................................ 21
CHAPTER FOUR
The Strategic Significance of Oil Shale.................................................... 25
Direct Benefits of Domestic Oil Shale Production .......................................... 26
Economic Profits .......................................................................... 26
Employment Benefits...................................................................... 27
Reductions in the World Price of Oil ....................................................... 28
Enhanced National Security ................................................................. 30
Confounding or Inconclusive Arguments ................................................... 31
Summary..................................................................................... 32
CHAPTER FIVE
Critical Policy Issues for Oil Shale Development ........................................ 35
Environmental and Social Impacts .......................................................... 35
Land Use and Ecological Impacts ......................................................... 35
Air Quality................................................................................. 38
Greenhouse Gas Emissions ................................................................ 40
Water Quality ............................................................................. 40
Socioeconomic Impacts.................................................................... 42
Constraints to Strategically Significant Production.......................................... 44
Production Costs .......................................................................... 44
Market Risk................................................................................ 45
Leasing of Federal Lands................................................................... 47
Water Consumption....................................................................... 50
CHAPTER SIX
The Development Path for Oil Shale...................................................... 53
Business as Usual............................................................................. 54
Toward Industrial Development............................................................. 55
Early Actions............................................................................... 55
A Measured Approach to Development ................................................... 55
Public Participation........................................................................ 56
APPENDIX
Cost Estimation Methodology and Assumptions......................................... 59
Bibliography ................................................................................ 63

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