Bush Administration Proposes ‘Fire Sale’ of Rocky Mountains for Oil Shale Development

  • Published on July 23rd, 2008

colorado oil shaleOn Tuesday, the Bush administration moved to accelerate oil-shale development across the Rocky Mountain West. Along with calls to lift the moratorium on offshore drilling, and open up the Arctic National Wildlife Refuge to oil drilling, Tuesday’s release of proposed rules for shale exploration (pdf) by the Bureau of Land Management was merely another shot across the bow in the political blame game over $4-per-gallon gas.

[social_buttons]The draft rules recommend reduced royalty rates for the extraction of oil from shale on 2 million acres of public property in Colorado, Utah and Wyoming. While the government currently charges 12.5% to 18.8% for conventional oil drilling, oil shale development would be set at around 5%.

According to Secretary of the Interior, Dirk Kempthorne, shale deposits in Colorado, Utah and Wyoming could provide 800 billion barrels of oil, enough to meet U.S. demand at current levels “for 110 years.”

But the Interior Department is limited in what it can do. Language inserted in a spending bill by Senator Ken Salazar (D-CO) bars the department from issuing final rules on oil-shale development. Though the moratorium is set to expire this October, Sen. Salazar said on a Denver radio station Wednesday that it would probably be extended for another year, so that the issue of oil shale development could be given a much closer look. Salazar said:

“The administration is trying to set the stage for a last-minute fire sale of commercial oil-shale leases in western Colorado, despite the fact that we are still years away from knowing if the technologies for developing oil shale on a commercial scale are even viable.”

Each barrel could require 1 to 3 barrels of water to produce

Tens of millions upon millions of people all over the southwest rely on water from the Colorado for everything from growing crops to meeting drinking water needs, making it one of the most heavily used and managed water systems in the United States.

One study done at the Los Alamos National Laboratory (Wilson et al.: 2006) projected that it would take 105 to 315 million gallons per day to produce 2.5 million barrels of oil per day from shale. The authors also projected that an industry that size also would result in a regional population growth of 433,000 people, requiring another 58 million gallons per day.

Shell not in a hurry to develop oil-shale

Shell Exploration & Production Co. is working an oil-shale project on three 160-acre parcels in Colorado but the company seems to recognize that the technology to squeeze billions of gallons of oil from the rocks of the Rockies is not high on the company’s list of priorities. According to the Denver Post:

“The company is two years into its 10-year research-and-development leases. Shell will make a decision on commercial leasing closer to the end of that decade, [Shell spokesperson Tracy] Boyd said…The company won’t be ready for commercial leasing until probably 2015, Boyd said.

So, what’s the rush to hand out these oil leases now? Even the BLM report states that “currently, there is no oil-shale industry and the oil-shale extractive technology is still in its rudimentary stages.”

The lack of a domestic oil-shale industry makes it purely a speculative endeavor to project the development of the technology necessary to extract oil-shale, the future demand for oil-shale leases, and the costs of developing those resources.

After another day of falling oil prices, the hurried rush to hand out oil shale leases for hundreds of thousands of acres of the Rocky Mountain West is merely another knee-jerk reaction from a Bush administration that is struggling to gain political favor in an election year. But that begs the question – who’s favor are Republicans trying to gain?

Despite what Republicans would have you believe, this election will be about much more than gas prices. And if Republican strategists think otherwise, they’re in for a big surprise in November.

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Photo Credit: dsearls via flickr Under a Creative Commons License

Sources: Denver Post; Salt Lake Tribune

About the Author

is the founder of ecopolitology and the executive editor at LiveOAK Media, a media network about the politics of energy and the environment, green business, cleantech, and green living. When not reading, writing, thinking or talking about environmental politics with anyone who will listen, Tim spends his time skiing in Colorado's high country, hiking with his dog, and getting dirty in his vegetable garden.


  • How on earth could people be so ignorant? We are transferring the wealth of America over to countries that hate us, while we follow a European green algorithm to not recover our own oil – like a bunch of dumb sheep dogs!!! Those laughing at us most are the Norwegians – who pretend to be so green but are drilling like madmen, mining like crazy, and cutting lumber like Paul Bunyan. The Euros tell us we’re greedy polluters, while they laugh behind our backs as they develop every resource they can get their hands on, while we send a Trillion Dollars a Year over to the Middle East. My God, how damn stupid have Americans become!!! Guess what people: they are all laughing at us… We have trillions of barrels of oil in liquid and shale for just waiting to make our lives less expensive, plus we have trillions of cubic feet of natural gas… But the greenies say, “no, no, no – we hae to be good citizens of the earth – while our lives collapse. How long are we going to play this sucker’s game?

  • @chrispc88

    Most of your arguments are just collections of generalized statements that don't fit together. Little fact to back your presumptions on power either.

    Most interesting is how you attacked the idea of using public transit, where possible, and living near where you work. In your case, moving closer to where you work could mean the difference between having your current 50 mile round trip (13,000 miles in your large, not so efficient vehicle) and a 10 or 20 mile round trip (2,600 to 5,200 miles annually).

    Farmers and blue collar workers moving away from their place of work and into cities would be counter to the whole idea.

    And saying you could do something to help make things better, but won't because you're "only one person" is exactly how things stay the same/get worse instead of getting better. Now you sound like the one who wants others to work to solve your problems for you.

    As for shale, this is a technology that is still experimental. Companies haven't even committed to using shale to produce oil. It's speculation on your part that it would be profitable, and plans to offer substantially cheaper leases for development could be seen as a subsidy (lower leases mean more taxes).

  • I honestly cannot believe how short-sighted some of you are. The obsession with fossil fuels is ridiculous. It will take a minimum of 7 years before we see any results from oil shale development, ANWR drilling, or off-shore drilling. In the end, this is like putting a bandaid on a gunshot wound. The federal government should have the foresight to fund clean, renewable energies.

    P.S. I'm from Colorado, and I'll be damned if I let them turn some of the most picturesque landscapes in the world into a temporary into another wasted opportunity.

  • 800 billion barrels doesn't sound so great if it takes 4 or more barrels to get one barrel of oil to the market.

  • What will they do with the water once it has been used? Obviously, they will re-use it to get more oil.

    All Federal land holdings together with the mineral rights should sold to private owners. The government has no business holding vast tracts of land.

  • I live on the east coast and i pay 4.90 a gallon drive the crap out of Colorado i could care less. I hate hippies.

  • So this means mining out million of tons of shale from the mountains to refine using millions of gallons of fresh water that probably comes out at the end as sludge to get oil so that it can be put in your car and burned to produce CO2. All this so we can possibly reduce oil prices by $.50 a gallon in 20 years. We don't even know how much it would cost per gallon to refine the shale into oil. It could be really expensive seeing as how as of right now it's just in a research phase. Renewable energy resources is where we should put our money and research because of the pure fact that it's renewable and in another 40 years we won't be having this same argument because all the shale will have been mined out and there will be no oil to be refined from it. I'm not even a green type of person, but there needs to be a way for us to produce enough energy for all that will always be there.

  • I'm so sick and tired of this 'green' movement. THOSE THAT ARE PART OF IT (the 'greenies') ARE WHO HAVE CAUSED OUR PROBLEMS!!! You want to blame, Bush, Cheney, SUV's, and everything except yourselves. Each time you cry 'wahh' on every tiny subject someone in Washington bends to your will. Well the average everyday Joe has had it, and we are fighting back. We will drill for out own oil, and use oil shale – like it or not!!!

    Your so called 'solutions' are also laughable. Wind power, yeah, sounds great – until you get into the actual numbers and realize that it would take just as many years to build the infrastructure as it will to gain a benefit from drilling our own oil, and cost a MASSIVE amount more to ultimately the tax payer, as no sane business would fund such a failed prospect – government would have to step in and carry the financial load. Solar has the same problem. Granted, Solar, Wind, Water as a whole put in use together would be a viable alternative, but it will take a lifetime to get all of the infrastructure built to tie them all together into a cohesive unit.

    And for those of you that always say.. buy a smaller car, take mass transit, walk or ride a bike to work… Sorry, not all of us are 5'10" tall, and live within a mile of work. I'm 6'7", and I live 25 miles from where I work. So a small car is simply out of the question for me – as too is walking or riding a bike. Start to consider other peoples lives for a change!!! And I've heard the argument 'why don't you just move closer to work, or move to a city'? Well lets see, I could do that – but I'm only 1 person… if everyone did that, we would all be in a world of hurt because many of us are farmers, and blue collar workers. We're the ones that put your food on your plate and make sure you have clothes on your back! You liberal pukes wouldn't even have the capacity to whine as you do if it wasn't for us who go out and WORK for a living – all the while you look down your noses at us for driving a vehicle that you despise! But you know what, keep complaining and whining, it's all you people seem to know how to do!!!!!

  • Many years ago these deposits were abandoned because of the cost of recovery was to steep. Now with prices far beyond $100. a barrel, it is more economic but still very costly, not only in money but in the damage to the environment.

  • Wow, some of the comments on here are amazing. Have any of you ever seen oil refineries? You guys make it sound like they'd completely dominate the horizon, but we're talking about something maybe the size of a small airport in a state that is absolutely massive.

    About the only sensible argument I've read on here is the pollution it might lead to with the water they use to convert shale into oil.

    We need oil in this country; that is a fact. Without oil this country would shut down and we'd starve or freeze to death or not be able to get an ambulance to our homes or drive to work. Renewable is the future, but it's a long way off, and we need more oil in the meantime.

  • I also live in Colorado. We already have strict watering guidelines and consistently are on the edge of a drought (which is a misnomer in-and-of-itself). We live in a freaking desert here! We don't have water to spare. Many restaurants do not serve glasses of water automatically, you need to request it.

    DenverWater.org has a great ad campaign to get people to conserve. Check out http://www.useonlywhatyouneed.org/

    Basically – we'd be straining another great natural resource if we tapped into the oil shale here in the west…water.

  • Oil drilling in Colorado?! You've got to be insane. I live in Colorado and I can't imagine this beautiful state having massive, filthy oil refineries. The impact on the environment would be intense. The oil companies are reporting record breaking profits. They don't need to be charging what they are charging. I'm so glad Senator Salazar is taking a stand.

  • Posted by cchiovitti, "Bush is a short-sighted moron."

    At least they are making attempts to broaden the U.S. oil industry and possibly lower oil prices in the future. Everyone complains about the problem, and then you complain further when a possible solution is offered. Shale oil is a step in the right direction. Offshore drilling is a step in the right direction. Drilling in Alaska is also a step in the right direction.

    Again, you want cheaper oil prices? The politicians are not to blame, you are. As the consumer you have the power to lessen your own demand for oil. Take a hint from Europe and buy a smaller car. Ride a bike. Use public transportation. Until you do, your complaints are meaningless because you, the consumer, are the idiot.

    We need to add to the oil supply now while investing in new technologies to lighten our dependencies on it in the future. We can have more oil within the next decade, but alternative energy methods will not be adequate for our needs for decades.

  • Hmm… the water issue looks kind of alarming… maybe they can put in a pipeline from the ocean. LOL. Then you'd have a problem with saltwater… by the way, once they use all that water what happens to it? I imagine it must be a horrendous pollutant after its been blasted through shale, or whatever they do with it.

  • I love how it's OK to invest millions of dollars into a new technology like wind power which meets next to none of our national energy needs, but if anyone wants to find a new way to get oil it's suddenly a waste of time.

    Oh, and the stats about how much water it takes to produce oil is very misleading, borderline intentionally misleading. You should compare the water usage to oil production USING THE SAME UNITS OF MEASUREMENT. Then your sentence would read, "105 to 315 million gallons per day to produce 77.5 million gallons of oil per day from shale." 105 gallons of water for 77.5 gallons of oil is pretty good.

    This would allow us to halt rising energy cost while transitioning to renewable sources like wind, solar, and bio. Imagine if we'd started this 10 years ago; we wouldn't be talking about our dependence on foreign oil or 4.50 a gallon fill-ups.

  • This is off topic, but I'm trying to spread the word about a report from the US Energy Information Agency that says that at max production ANWR will reduce the price of a barrel of oil in 2027 by 75 cents. Please help spread the word that not only will it not effect gas prices now, but it will never have a real impact on gas prices.

    Here is a link on digg to the EIA website where the report is available. Please digg it up!


  • Sen. Salazar is right-on. I live in Colorado and let me tell you, it is ALL I can do not to spew obcenties at this idiocy right now. Bush is a short-sighted moron. That's as clean as I can say it right now.

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