President Bush’s call to lift a ban on offshore drilling has also revived the argument to lift the moratorium on oil shale leases. It sounds like a sensible idea. After all, by some estimates, there is as much oil as Saudi Arabia, Iran, Iraq, Venezuela, Nigeria, Kuwait, Libya, Angola, Algeria, Indonesia, Qatar and the United Arab Emirates combined–trapped in rock right under our very own soil in places like Utah and Colorado. (A Rand Corporation study estimates recoverable oil shale reserves in the Green River Formation that sprawls across the western United States at 800 billion barrels, or three times the proven oil reserves of Saudi Arabia.)
But these arguments and projections have a cautionary echo to me. Back in the 1980s, my very first job for the Los Angeles Times was covering the oil industry, and many of those stories involved oil shale. I wrote not only about the giants like Exxon who were putting billions into the effort, but also a mom-and-pop operation in Vernal, Utah. All were convinced that if only oil would ever reach $40 a barrel (imagine that!), this would turn into a paying proposition.
Instead, the price of oil collapsed–taking with it many of the companies and the environmentally scarred communities that had invested so much in the oil-shale effort. Now we are again at a moment of possibility for oil shale. The technology is better, and there certainly seems no end in sight for sky-high energy prices. But given the experiences of the 1980s, Colorado Senator Ken Salazar seems to have be making a sensible argument in this morning’s Washington Post:
The governors of Wyoming and Colorado, communities and editorial boards across the West agree that the administration’s headlong rush is a terrible idea. Even energy companies, including Chevron, have said we need to proceed more cautiously on oil shale. With more than 30,000 acres of public land at their disposal to conduct research, development and demonstration projects (in addition to 200,000 undeveloped acres of private oil shale lands they own in Colorado and Utah), they already have more land than they can develop in the foreseeable future.
So why is the president hurrying to sell leases for commercial oil shale development in the West’s great landscapes? A fire sale will not lower gas prices. It will not accelerate the development of commercial oil shale technologies.