|Buckets and cables show the history of tar sands extraction efforts in the Book Cliffs east of Sunnyside and East Carbon. While the BLM announcement on Tuesday related to oil shale research and development, the BLM is also reviewing the lease process for both tar sands and oil shale. Experts in the energy field have said production in both areas may now be economically viable due to recent developments in technology.|
The United States Bureau of Land Management announced on Tuesday that the eight proposals for oil shale research development and demonstration will be further considered by the federal agency.
The oil shale program is considered one of the most viable options for boosting domestic energy production by the federal agency and researchers.
Since June 2005 when the BLM called for proposals in the Federal Register, 20 companies have submitted applications to participate in the program.
Assistant BLM director for minerals, realty and resource protection Tom Lonnie indicated that the12 applicants whose proposals were eliminated had been judged as not having fulfilled the requirements set by the federal agency's request for proposals.
The eight applicants with proposals advancing in the consideration process include Chevron Shale Oil Company, EGL Resources Inc., Exxon Mobil Corporation, Oil-Tech Inc., Oil Shale Exploration and Shell Frontier Oil & Gas.
BLM officials noted that Shell Frontier submitted three proposals that will continue through the federal agency's application process.
"Oil shale is a domestic resource with staggering potential," said BLM director Kathleen Clarke.
Former director of the Utah Department of Natural Resources, Clarke explained that an estimated 1.2 trillion barrels of oil exist in the form of domestic oil shale reserves.
The amount of the estimated oil reserves would be adequate to meet domestic energy needs for 100 years.
The two companies applying for leases in Utah are Oil Shale Exploration and Oil-Tech Inc.
The two companies applied for federal leases in Uintah County, located approximately 50 miles south of Vernal.
The remaining six proposals still under consideration by the federal agency would operate just across the Utah-Colorado border in Rio Blanco County.
BLM officials indicated that the next phase of the review process will be an analysis completed under the U.S. National Environmental Protection Act.
"NEPA analysis will further ensure that oil shale development on federal lands is conducted with environmental and economic responsibility," said Clarke.
If approved, the oil shale program applicants will receive a 160-acre lease on public lands, with additional rights to 4,960 acres for future commercial leasing.
In the 1980s, oil shale and tar sands development turned belly-up after research showed that extraction of the energy resources was not economically viable.
However, considering the recent developments in technologies, some energy experts believe extraction of oil shale may again be economically viable.
The struggle that faces potential developers is extracting crude oil from oil shale.
Conventional oil deposits are created by the natural heating and cooling of the earth, which heats oil shale to a point where the oil flows from it and creates a deposit.
Because the companies are trying to simulate natural processes, developers are faced with additional challenges.
The first is heating oil shale deposits, sometimes located thousands of feet below the surface to 600 or 700 degrees Fahrenheit.
Six of the eight applicants propose heating the rock in-situ or in place.
In order to extract the oil after it has seeped from the shale, surrounding rock is typically frozen to prevent the oil from seeping to other areas.
The process typically requires inserting heaters into shale deposits, according to BLM officials. The heaters may not be recoverable, leaving a cost to developers.
Further complicating matters, the process historically requires a significant amount of water.
The high demand leaves experts unsure on what the process will do to water quality and resources.
Another process for extraction would involve mining the oil shale and performing the heating above the surface. However, that may lead to larger environmental concerns regarding reclamation.
With the onsiderations in place, researchers and developers face the obstacles relating to the economics and the environmental concerns.
NEPA evaluations are expected to be completed by spring, with a potential for development leases awarded sometime during the summer.
The BLM has been instructed by the U.S. Congress to develop a leasing program to support the commercial development of oil shale and tar sands on federal public lands.
Details of the program are expected to be released before August 2007.
BLM officials indicated Tuesday that the federal agency has initiated a programmatic environmental impact statement to support commercial oil shale and tar sands leasing on public lands.
Information regarding the PEIS is available online at http://ostseis.anl.gov/.
Should research and development show an economically viable, environmentally sound process for oil shale extraction, commercial production is expected to begin sometime after the August 2007 date.