OIL SHALE 2050 2 Western Resource Advocates Report, I Think You’Ll Agree
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This report was written by David M. Abelson, with invaluable guidance from Anita Schwartz, Joro Walker, Rob Dubuc, Karin P. Sheldon, Mike Chiropolos, Peter Roessmann, Nicole Theerasatiankul, Rob Harris, Bart Miller, Jason Bane, Barney White, and Jason Hanson. The project was funded by a grant from the William and Flora Hewlett Foundation. ABOUT WESTERN RESOURCE ADVOCATES Western Resource Advocates is a nonprofit conservation organization dedicated to protecting the West’s land, air, and water. Design: Jeremy Carlson Western Resource Advocates 2260 Baseline Road, Suite 200 Boulder, CO 80302 Tel: (303) 444-1188 Fax: (720) 786-8054 www.westernresourceadvocates.org INTRODUCING © Copyright March 2012 PROFESSOR ROCK Professor Rock will point out key educational features throughout this report. T S T EN T Forward: Message from the President 1 Introduction 3 1 What Oil Shale Is … and What It Isn’t 9 A Brief History of Failed Attempts to Commercially Develop Oil Shale 10 No Shortage of Rock, But Is Any Liquid Fuel Economically Recoverable? 12 Oil Shale Development Technologies 13 TABLE OF CON TABLE 2 Down to the Last Drop 14 How Much Water Would Be Needed? 16 Putting Water for Oil Shale in Context: Competition for Water Is Increasing 18 How Is Water Used for Oil Shale Development? 21 3 A Poor Energy Source with Huge Climate Impacts 24 Challenge #1: A Poor Energy Source 24 Challenge #2: High Greenhouse Gas Emissions 27 4 What About the West’s People, Wildlife, and Economics? 29 5 Regulating Oil Shale: Protecting the Public Welfare 34 Why Regulations Matter 35 What About the Money? 37 6 Tar Sands: Oil Shale’s Water-Intensive, High-Carbon, Air-Fouling, Strip-Mining Cousin 39 Turning Asphalt into Fuel 40 7 Conclusion 41 Fueling Our Future 42 This report is largely an educational tool, concentrating on the salient issues central to the ongoing debate over the wisdom and feasibility of producing liquid fuel from oil shale. F The first car I ever bought was a blue, two- door Peugeot Deux Chevaux that we just about drove into the ground. Today I drive a Honda Accord, a car that barely shares the same vehicular DNA as my beloved old Peugeot. If I were to buy a new car today, I would consider fuel and mileage options that weren’t readily available when I chose my Honda. The Toyota Prius, the first really commercially successful hybrid electric vehicle, was introduced worldwide just 10 years ago. Toyota sold fewer than 30,000 Prius models in 2001; by April 2011, the company had sold more than 2 million cars worldwide, including more than 1 million in the the President from Message United States.1 At the end of 2011, we marked the first full year that all-electric cars were available in the United States. It may be a cliché to talk about how quickly technology changes, but it’s a lesson we would be wise to remember as we consider our energy future. We can’t think about what our vehicles might look like in 40 years without considering what kind of fuel we’ll use to power them. It is a question of ORWARD particular importance when it comes to an issue such as oil F shale development: Will we be spending the next several decades developing a fuel that consumers won’t even use? As the debate over potential oil shale development in the western United States continues, Western Resource Advocates (WRA) has focused on understanding the nature of the oil shale deposits; the state of the technologies companies are trying to advance; the environmental, economic, social, and climate impacts of exploiting these deposits; and what development would mean for our energy demands and goals. This report explores these matters. This report is largely an educational tool, concentrating on the salient issues central to the ongoing debate over the wisdom and feasibility of producing liquid fuel from oil shale. Many of the issues discussed in this report are framed from the perspective of the year 2050. Why 2050? First, it is a baseline that states commonly use to project water demands. It is also roughly the date by which such companies as Royal Dutch Shell predict they might be in a position to produce large quantities of oil from shale, depending on the results of current research and testing. 1 David Schepp, “Toyota Prius Hits Million-Sale Milestone in U.S.,” Daily Finance, April 6, 2011, http://www.dailyfinance.com/2011/04/06/toyota-prius-hits-million- OIL SHALE 2050 sale-milestone-us/ (accessed November 18, 2011). 1 WHY 2050? By the year 2050, economists, biologists, climatologists, and a variety of other scientists predict huge changes to the West. Their models forecast that there will be less water in the Colorado River Basin, with escalating demand from a rapidly growing population. The population of the state of Colorado is projected to swell by 57% over the next 30 years. Utah, the second-driest state in the nation, anticipates a 105% increase in its population by 2050. Because of this growth, in Colorado alone, municipal and industrial water demands are estimated to increase by as much as 83%. By 2050, the competition for water will be fierce and will only be compounded by climate change. Decisions we make today about a host of concerns, including whether or not to develop oil shale, will directly impact the amount of available water in 2050. As a result of climate change, water in the Colorado River Basin is projected to decrease anywhere from 5% to 20% by 2050. Current projections conclude that we will rely heavily on water currently used for agriculture to cover growing municipal and industrial demands. By 2050 we might be less reliant on fossil fuels for planes and automobiles. Alternatives might include electric cars powered by renewable sources, or biodiesel made from algae, or energy sources that researchers are not yet exploring. As today’s teenagers approach retirement age, what will the environment look like? If water demands, population growth, and climate projections hold true, these teenagers will likely face a far different environment than the one that currently sustains our western communities and economies. As we found in our research, any reasonable analysis of commercial oil shale production would make it hard to conclude that this is a wise energy pursuit. After reading this report, I think you’ll agree. Karin P. Sheldon President, Western Resource Advocates S E ocat E ADV RC U SO N RE R E st WE 2 I Energy policy — and its nexus to economic policy — is a pressing issue that warrants ON our nation’s continued focus. At Western Resource Advocates (WRA), we abide by CTI the idea that a healthy economy depends on a healthy environment. We also believe that innovation yields positive economic benefits. That is why we advocate for clean RODU energy solutions, including development of T emerging technologies, while identifying IN strategic uses of fossil fuels to bridge the gap between “business as usual” and our future renewable energy economy. The more we delve into oil shale, the more concerns we have about oil shale as an energy source in general, but also its potential negative impacts on the environment and on other land and energy development initiatives. The debate over oil shale is not just a discussion about a potential source of energy. At stake in the debate over oil shale are water supplies and how states would balance competing needs for this dwindling resource. Also at stake is the quality of the air we breathe. Already, because of fossil fuel development, certain rural areas of Colorado, Utah, and Wyoming have worse air quality than Los Angeles. Sustainable communities are also at risk, as towns in western Colorado are already beginning to bend under the strain of energy development. One question that needs to be addressed is whether these communities can support an additional influx of workers, many of whom would likely be temporary. These and other issues are central to an assessment of oil shale development. The oil shale debate must, likewise, evaluate the potential impacts on our climate. As explained in this report, oil shale is projected to produce roughly 25% to 75% more greenhouse gases than comparable quantities of conventional crude oil. Colorado has adopted the vitally important goal of reducing its greenhouse gas emissions by 80% by 2050. Other states are advancing similar goals. Large-scale production of oil shale would likely undermine these important goals. OIL SHALE 2050 3 WHY INVEST IN OIL SHALE? Recently, students at the University of Colorado met with WRA staff to learn about western energy and water issues. When discussing oil shale, students asked why, with all of oil shale’s drawbacks, companies would invest in oil shale. This question, WRA realized, captures the pith of questions and concerns many in this region have about oil shale. The short answer is that if oil shale were to prove commercially viable, the potential financial returns to an investor could be significant. Any financial investment comes with a certain amount of risk, but oil shale development is particularly hazardous; oil shale has been touted as the beginning of a “new era” 1 in oil production since at least the early 20th century, but 100 years later, it has yet to see commercial success. History aside, RAND Corporation identified several potential benefits that might result from the development of oil shale, including economic and national security impacts.2 Those possible gains, however, must be weighed against the numerous impacts that are discussed throughout this report. Large-scale development of oil shale would come at a significant cost in terms of resources, such as water, and of its overall impact on the environment.