RBC I Progress has been made in oil shale research and development in the United States during the past year. Similar advances have been made outside U.S. borders.
Technologies for ex-situ and in-situ processes are much more advanced than those anticipated for use and tested in the 1970 to 1980 era. The approach to project development is entirely different than the rush to commercialization of the last boom.
The current development approach is deliberate, staged and focused upon finding technical solutions that are economically viable, environmentally acceptable and sustainable. Projects will meet regulatory standards not enacted in the previous era in order to proceed.
Virtually millions of tons of oil shale have been mined and millions of barrels of shale oil produced around the world, including from experimental plants here is the U.S. The experience gained from these projects is giving developers an important tool to advance their technologies toward ultimate commercialization.
Recent shale gas development has created a new industry around the world. The presence of gas and oil in shale rocks, not to be confused with oil shale, has been known for decades, but it is the development of new drilling and stimulation technologies that has made the resource economically attractive.
Oil shale is on the brink of a similar renaissance as new technologies are developed and older technologies are optimized for its production.
The facts about oil shale are often obscured by myths that have been perpetuated for decades by those that either wish to discredit the potential of this huge energy resource, or are simply misinformed.
The alleged low energy content and energy recovery efficiency of oil shale; extreme water usage needed to develop it; and unsolvable climate change implications are examples of publicized myths that are not based upon facts derived from testing and analysis.
There are significant challenges facing a developer hoping to move toward building a commercial oil shale project in the U.S.
Technology risk is one challenge. In-situ technologies have not yet been tested at a scale that provides adequate confidence to design a commercial project. Ex-situ technologies commercialized abroad have advanced beyond the experimental stage, but still need to be demonstrated using U.S. oil shale.
Companies are investing in their proprietary technologies without U.S. government funding to solve these technical problems.
Technology development is not the most significant challenge. The lack of a consistent U.S. federal policy for oil shale leasing and regulation, similar to what already exists for other minerals and for oil and gas, is restraining long-term investment in the development of the resource. States that have oil shale resources also have differing policies toward oil shale development.
The federal government controls the best oil shale resource, so it has a unique and vested interest to help facilitate an oil shale industry if it can be done in an environmentally acceptable manner.
Lastly, fossil energy development is discouraged on a national basis, and by some states. It is within this context that companies determine where to invest their finite financial and human resources.
About the Author
R. Glenn Vawter is a management consultant with experience in the nuclear, oil and gas, mineral and oil shale sectors. He lives in Glenwood Springs, where he owns and operates ATP Services LLC. He is a graduate of the Colorado School of Mines, attended the Harvard Business School, and was an executive with energy, aerospace and mineral development firms. He serves on the BLM’s Northwest Colorado Resource Advisory Council representing the energy and mineral sectors.
