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OT Why The Oil Companies Don't Develop Oil Shales.

Discussion in 'Uncategorized Threads' started by JBrooks, Jun 10, 2008.

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  1. JBrooks

    JBrooks TS Member

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    "The technological advances on oil shale development are extensive. Shell, which has spent 28 years and $200 million on oil shale R&D, would be able to extract huge amounts of high-quality crude. There are environmental impacts, particularly with water usage and CO2 emissions, but those are issues which can be addressed over time. The reserves are estimated at 800 billion barrels, triple the reserves of Saudi Arabia. When put into production, Shell could produce over one million barrels per day and possible up to five million per day. We currently consume 21 million barrels per day and import another 10 million barrels."

    So why aren't we producing our own oil from our own oil shales in Colorado? No Surprise here.

    " By Jon Birger, senior writer

    NEW YORK (Fortune) -- You'd think this would be oil shale's moment.
    You'd think with gas prices topping $4 and consumers crying uncle, Congress would be moving fast to spur development of a domestic oil resource so vast - 800 billion barrels of recoverable oil shale in Colorado, Utah and Wyoming alone - it could eventually rival the oil fields of Saudi Arabia.
    You'd think politicians would be tripping over themselves to arrange photo-ops with Harold Vinegar (whom I profiled in Fortune last November), the brilliant, Brooklyn-born chief scientist at Royal Dutch Shell whose research cracked the code on how to efficiently and cleanly convert oil shale - a rock-like fossil fuel known to geologists as kerogen - into light crude oil.
    You'd think all of this, but you'd be wrong.

    Last month, the U.S. Senate's Appropriations Committee voted 15-14 to kill a bill that would have ended a one-year moratorium on enacting rules for oil shale development on federal lands (which is where the best oil shale is located). Most maddening of all - at least to someone like myself not steeped in the wacky ways of Washington - the swing vote on the appropriations committee, U.S. Sen. Mary Landrieu, D-La., voted with the majority even though she actually opposes the moratorium.

    "Sen. Salazar asked me to vote no. I did so at his request," Landrieu told The Rocky Mountain News. A Landrieu staffer contacted by Fortune doesn't dispute this, but notes that Landrieu did propose a compromise which Republicans rejected.

    Arghh!

    She was speaking of U.S. Sen. Ken Salazar, D-Colo., who has emerged as the Senate's leading oil shale opponent. Salazar inserted the aforementioned moratorium into an omnibus spending bill last December, and in May he proposed a new bill that would extend the moratorium another year.

    Salazar's efforts have essentially pulled the rug out from under Shell (RDSA) and other oil companies which have invested many, many millions into oil shale research since the passage of the Energy Policy Act of 2005, which established the original framework for commercial leasing of oil shale lands. (Last year, oil shale represented Shell's single biggest R&D expenditure.)

    Salazar says he's simply trying to slow things down in order to ensure environmental considerations don't get trampled in the rush to turn western Colorado into a new Prudhoe Bay. But, ironically, his bid to extend the moratorium comes at a time when his fellow Senate Democrats have been blasting Big Oil for not reinvesting enough of their profits into developing new sources of energy.

    I recently spoke with Republican U.S. Sens. Orrin Hatch of Utah and Wayne Allard of Colorado, the two lawmakers working hardest to end the oil shale moratorium. Here are some excerpts from the interviews:

    Fortune: Why do you consider developing oil shale such a high priority?

    Sen. Hatch: We have as much oil in oil shale in Utah, Wyoming and Colorado as the rest of the world's oil combined. Liberals and environmentalists can talk all they want about wind, solar and geothermal - all of which I'm for - but last time I checked, planes, trains, trucks, ships and cars don't run on electricity. 98% of transportation fuel right now is oil. Ethanol is the only real alternative, and we're seeing that ethanol has major limitations.

    It's pathetic. Environmentalists are very happy having us dependent on foreign oil. They're unhappy with us developing our own. What they forget to say is that shipping fuel all the way from the middle east has a big greenhouse gas footprint too.

    Fortune: Any hope of changing Sen. Salazar's mind? After all, he says he's not opposed to oil shale production in principle.

    Sen. Allard: His mind seems pretty set. His argument is, if we delay this, it gives us an opportunity to phase it in gradually. But he's got it turned around. We need the rules and regulations in place first. When the oil companies go to bid on their leases, they need have some idea what their royalties might be and what their remediation requirements might be [for restoring the land at spent drilling sites].

    Fortune: Have you talked to Shell about this?

    Sen. Allard: We have, and they've indicated a great deal of frustration. They've put it this way: Look, we can't continue to invest millions and millions of dollars in this kind of research without seeing some light at the end of the tunnel.

    Fortune: Sen. Salazar insists he just wants to take things more slowly.
    Sen. Hatch: Sen. Salazar and the Colorado governor [Democrat Bill Ritter] say they don't want it to happen too fast. Well, the existing law that I sponsored [which became part of the 2005 energy act] makes it abundantly clear that each governor gets to decide how quickly developments should move forward in their respective states. [Salazar and Ritter] know that. What they're really doing is making sure that the governor of Utah and the governor of Wyoming never gets to make that decision for themselves.

    Fortune: One of Sen. Salazar's environmental concerns involves water and the big draw on local water supplies required for oil shale production. Based on my reporting in western Colorado last year, this seems like a legitimate concern. What's your take on this?

    Sen. Hatch: Let's compare it to ethanol. Corn needs about 1,000 barrels of water for the energy equivalent of a barrel of oil. That's a crazy amount of water, but it's worked out alright so far because corn is grown in rainy areas, for the most part. But if you want to increase the amount of ethanol, you're going to have to go to irrigation, and then there will be major water limits on how much we can afford to grow.

    On the other hand, the Department of Energy estimates that oil shale will require three barrels of water for every barrel of oil.
    Fortune: Of course, water is a lot scarcer in western Colorado than it is in Iowa.

    Sen Hatch: It is, but remember the oil companies are going to use and recycle the water. And while we're on the environmental impact, let's talk about land use and wildlife habitat. One acre of corn produces the equivalent of 5 to 7 barrels of oil. One acre of oil shale produces 100,000 to 1 million barrels.
    Fortune: With gasoline at $4, why this isn't this more of a front-and-center issue for consumers and voters?

    Sen. Hatch: I'm generally the last guy to lambaste the media, but generally you do not hear these facts. We're sending $600 billion annually to enemies of our country. If one acre of oil shale produces 1 million barrels of oil, that's 1 million barrels that we would not be importing from Russia and the Middle East. People are going to go berserk when they find out that all along we had the capacity, within our own borders, to alleviate our dependency in an environmentally friendly way.

    Ironically, the local governments in Colorado's oil shale areas do support oil shale development, but it's being stopped by the ski-resort elites. A couple months ago, an article came out about how the city of Aspen was being besieged with building applications equating to about $2 million in development a day. Now if those nice, rich people in Aspen really cared about the environment, they might save an acre or two of those beautiful forests they're building on and support some oil-shale development in the not-so-nearby and not-so-beautiful oil shale areas of Colorado.

    Fortune: Has oil shale development always been a partisan issue or is this something new?

    Sen. Allard: It is something new. The issue with the Democrats now is they want to cut off any source of carbon. And there are those in the Senate who believe the more expensive you make gasoline, the less driving people do and you force conservation by making driving so expensive people can't afford it.

    FIRST PUBLISHED: JUNE 6, 2008: 2:14 PM EDT"
     
  2. Bomber61

    Bomber61 Member

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    Great information guys.

    Bomber
     
  3. SeldomShoots

    SeldomShoots Active Member

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    This is great information. It is truly sad to see how many politicians go along with others for the ride instead of exercising their own judgment. If stip mines for coal can be reclaimed, why couldn't the oil shale areas? Hell, the thought alone that we are going to mine or drill said area could cause the Saudis to relax on the price of crude a little. Its also too bad that Kansas goverment force the oil wells to be capped. At this point, every little bit would help. John
     
  4. H82MIS

    H82MIS TS Member

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    I would like to see a list of names of those C*** *****RS on the U.S. Senate's Appropriations Committee that voted against this,,,,
     
  5. Hap MecTweaks

    Hap MecTweaks Well-Known Member

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    I smell a ton of rats in this operation and it's progressively getting worse. The oil executives told the congressional hearing panel their refineries are operating at 75 to 80% percent capacity. Then, we hear the tankers full of crude are sitting off shore waiting to unload? Waiting for what again? Rats at the federal level, at state level and the tycoon level are destroying middle class America!! I don't look for this nonsense to stop anytime soon either. Politicians as crooked as a barrel of corkscrews, a liberal minded press convincing the masses all is well, a two party system which operates about the same in compromising our American way of life is disgusting! Shame on the lack of informed American voters for allowing this travesty to develop in the first place! :-( Hap
     
  6. markdenis

    markdenis TS Member

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    Oh but Hap!...it is the American duty to vote....don't matter if we vote the same scum back in office or new ones...it is our American duty! Gas is simply not high enough yet to change the way American's conduct their voting habits. It might take $15.00 to $20.00 a gallon for voters to say enough is enough.
     
  7. Wayne In ny

    Wayne In ny TS Member

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    Looks like we get a high percentage from Canada.
     
  8. R.Kipling

    R.Kipling Well-Known Member

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    This is a perfect example of why I have been telling every R official I've talked to, written to, or bumped into for the last 15 years, that they need to get into the electronic news business. The D's certainly have been successful at it, and Bloomburg - Christ!

    The Governors of Utah and Wyoming need to file a federal law suit against Salazar and Ritter for intentional interference with state commerce; then, get their PR departments busy on a media blitz. It would raise some stink, but it would get things moving. PC insures that it will never happen, but it would be the correct thing to do.

    Perhaps, .......... never mind, this stuff just raises my blood pressure.

    Kip
     
  9. JBrooks

    JBrooks TS Member

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    OICU812,

    The vote was a straight party vote. All Democrats voted to keep the moratorium on developing the oil shales and all Republicans voted to lift the moratorium.

    And people on here keep saying there is no difference between Republicans and Democrats. Well, that is just not true. It is easier to blame everybody than it is to admit that at worst, there is the lesser of two evils.
     
  10. 6878mm

    6878mm Member

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    You are missing the point, irregardless of WHERE the oil comes from, YOU will pay the benchmark price
     
  11. H82MIS

    H82MIS TS Member

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    Thanks JB,, just as I suspected,,,(what a bunch of numb nuts)
     
  12. Hap MecTweaks

    Hap MecTweaks Well-Known Member

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    Mark, how true. The going rate of voters is about 1 in 4 that vote. Of those, how many do you think of as "informed" as I said above? I'd guess about 90% vote along party lines only! The devil himself could be the candidate, he'd still get the votes along those party lines. Party duty be dammed! Hap
     
  13. markdenis

    markdenis TS Member

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    It simply amazes me why people vote for someone to keep the other from winning and at the same time knows nothing about the person they voted for. I was a candidate in an election once and had asked a person if they voted. His response was "No I have voted in these elections before but I didn't vote in this election because I didn't know enough about either candidate to cast a fair vote." To this day, I thought that was one of the smartest voters I had ever met!
     
  14. Big Jack

    Big Jack Well-Known Member

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    Between the tree huggers, the oil company CEO's,& the politicans (who only worry about thenselves) you can look foreward to five or six dollar per gallon gas soon. When you can't afford to drive we will hear about the necessary price increases in crude oil and refining fees due to lack of usage. A real catch 22? Shale oil should be develoved and drilling should be started within our boundries to eliminate our dependence on foreign oils. We need addittional refineries and the result would let the camel herders sit on their oil. They can't eat it, we still have the worlds breadbasket. Let them start paying thru the nose for their necessities & reduce our national debt. I don't look foreward to leaving my great grand children to pay for our follies.

    Big Jack
     
  15. JBrooks

    JBrooks TS Member

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    6878mm,

    No, you are missing the point. It is called the Law of Supply and Demand. It is not a law passed by people, it is just as much a natural law as the law of gravity. You may be able to temporarily affect it but not for long.
     
  16. shot410ga

    shot410ga Well-Known Member

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    In the early 1970's there were a number of Shale oil extraction facilites in Colorado. I use to drive by them. Wonder what happened to them?
     
  17. gun fitter

    gun fitter TS Member

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    VOTE REPUBLICAN. Tell everyone you know that complains about oil prices about our shale reserves and the Democtats vote. An ass is an aproprate mascot tor the party!

    Joe
     
  18. JBrooks

    JBrooks TS Member

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    Amazing, all this time up and not one person blaming Bush for the Democrats stifling our oil production.
     
  19. bocephus

    bocephus Member

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    Ok ok I'll say it....IT'S BUSH'S FAULT that the liberal weenies are stifling our oil production.

    hmmm I think there might be a hint of truth in that....

    Wake up America!
     
  20. Big Al 29

    Big Al 29 TS Member

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    Why would they?

    They are making billions with no R & D, exploration, etc...

    We need refineries but Bilg Oil will not spend the money when they are already making billions without.

    No competition. I say the government should break up the Big Oil companies and make some God Damn competition.

    Jeff
     
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