August 1, 2011

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Energy Development in Utah

Gov. Gary R. Herbert sent a strong message to Washington during his State ...Read More

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Energy Development in Utah

Weighing the Costs and Benefits

Heather Stewart

August 1, 2011

The company has obtained a large mine permit from the Utah Department of Oil, Gas and Mining, but the permit is under appeal by Living Rivers, an environmental organization that is working to protect and restore rivers in the Southwest.

Red Leaf Resources has completed a pilot project and plans to ramp up to a small mining operation on state land this year. The company’s patented process involves encapsulating mined shale in a clay shell, then heating the shale with natural gas heaters. When the process is completed, the capsule is simply left in place and the surface reclaimed through seeding.

Laura Nelson of Red Leaf points out that the process uses almost no water and emits two-thirds less carbon dioxide than traditional methods of processing oil shale.

An Estonian company, Enefit, recently purchased large oil shale holdings in Utah. The company’s technology “does not need to be proven,” says Chairman Harri Mikk, who points out that Enefit has successfully operated an oil shale plant in Estonia for decades.

Enefit’s process involves mining the shale then transporting it to a plant for processing. Mikk expects it to take up to six years to obtain the necessary permits to begin its Utah operations. At the earliest, the company will produce its first oil in 2019.

Many remain skeptical that developing oil shale is technologically, financially or environment- ally feasible.

None of the BLM’s demonstration projects have moved forward, points out Bloch. “So we don’t know what the true environmental or economic costs are going to be, but what we’ve seen so far is significant amounts of water in a state and in a region that needs every drop of water that it has, significant air pollution, and in a place like the Uinta Basin, which is exceeding federal air quality standards on an annual basis in the wintertime.”

The economics don’t add up either, he says. “If these companies could make synthetic crude for $30 a barrel—which all of them say is possible—they’d be doing it right now.”

Nelson implies that the benefits of developing oil shale resources may outweigh environmental costs. “When we rely on the rest of the world to meet our energy needs, we are simply exporting the environmental problems,” she says.

And helping the country reduce its dependence on foreign oil also has national security implications, says Lucero. “If we need the oil and we need the gas and we’ve got it here, it’s still far better than always importing everything.”

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