Unconventional Oil Resources Not Ready for Primetime
(Washington, DC) – Today the House Committee on Science, Space, and Technology’s Subcommittee on Energy and Environment held a hearing entitled, “Supporting American Jobs and the Economy Through Expanded Energy Production: Challenges and Opportunities of Unconventional Resources Technology.” The purpose of the hearing was to examine challenges and opportunities associated with expanding development and use of a range of unconventional oil and gas resources. However, the majority of the hearing discussion was focused on the development of oil shale.
Oil shale refers to a fine-grained sedimentary rock containing organic matter known as kerogen, from which oil and gas can be extracted. To extract the oil, the shale must be intensely heated over long periods of time, either on the surface or deep underground. The resultant liquid must then be separated before it can be collected. The majority of oil shale resources in the United States are located in the Green River Formation in Colorado, Utah, and Wyoming. Despite a century of government support and industry attempts to develop oil shale, there are no commercial oil shale projects in the U.S., and many industry experts agree that years of research and development will be needed to develop commercially ready and environmentally sustainable technologies and processes.
Ranking Member of the Investigations and Oversight Subcommittee, Rep. Paul Tonko (D-NY), standing in for Ranking Member Brad Miller (D-NC), said in his opening statement, “Every time oil prices have spiked or that we have become concerned about a major disruption in oil supplies, oil shale gets a new look. Why we continue to use public funds to pursue this energy source is truly a subject for research. The oil companies and the federal government have poured millions of dollars into research, demonstration projects, and subsidies to find an economically viable way to develop this resource. Yet it is still years, if not decades away from being economically, technologically, and environmentally viable.”
He continued, “I have listened as many of my Republican colleagues questioned the wisdom and need for public investments in renewable energy resources either through support of research or through tax incentives. But when it comes to offering subsidies to one of the wealthiest and most profitable industries in the world – the oil industry – their generosity knows no bounds. ”
Ms. Anu K. Mittal, the Director of Natural Resources and Environment at the U.S. Government Accountability Office (GAO) testified about an October 2010 GAO report on oil shale development. She described a number of environmental concerns and uncertainties that need to be addressed prior to commercial development of oil shale, highlighting the impact on water quantity and quality. Ms. Mittal said, “Developing oil shale and providing power for oil shale operations and other associated activities will require significant amounts of water, which could pose problems, especially in the arid West where an expanding population is already placing additional demands on available water resources.” She also pointed out that industry experts believe that oil shale development is at least 15-20 years away.
When asked what the Federal agencies could do to prepare for oil shale development, Ms. Mittal recommended that the appropriate role would be in research and testing that establishes baseline environmental conditions. Furthermore, she recommended modeling of groundwater movement and the interactions between surface water and groundwater to aid in understanding the transport of contaminants from oil shale operations.
Mr. Tonko said, “There is no greater indicator of a region’s economic potential – its ability to sustain human life and industry – than its access to clean water… Given the current and looming shortages of water in many areas of the West, I cannot imagine why we would consider trading water – a renewable, vital resource for which there is no substitute, for a non-renewable resource that we can only obtain with very costly, highly damaging and destructive methods. Land and water are not – or should not be – treated as disposable goods.”
“The public is tired of seeing an increasing portion of their paycheck go to the most profitable companies in the world, along with an outsized portion of their tax dollars in the form of tax breaks for the oil and gas industry. Subsidizing oil shale has never lowered our gasoline prices or led to our energy independence. I do not believe it ever will,” said Mr. Tonko. “In spite of years of government support for research and development – since the early 1900s – this resource has proven to be much more bust than boom. The high cost of delivering this energy will inevitably translate into high retail prices for refined products. It is time we took a different path and invested in alternative energy sources. The oil industry has the financial resources to pursue this further if they believe it is viable.”
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