Adopted by the House of Representatives on December 17, the
omnibus appropriations bill prohibits funding for oil shale
commercial regulations. Without these regulations, commercial
production of oil shale is impossible.
The oil shale industry experienced several hiccups in the 1970s,
and innovation has a long way to go before the resource becomes
viable, but its potential is enormous. The United States is
estimated to have more than 2 trillion barrels worth of oil shale
resources. Spending bills should not include policy riders that
stand in the way of U.S. energy independence.
A Promising Resource
Dr. Daniel Fine of MIT reported that 750 billion barrels worth
of oil shale have been discovered in Colorado alone.[1] That
amount is enough to potentially power the U.S. economy for many
decades. Furthermore, if full-scale production begins within five
years, the U.S. could completely end its dependence on OPEC by
2020.[2]
The oil shale provision reads as follows:
None of the funds made available by this Act shall be used to
prepare or publish final regulations regarding a commercial leasing
program for oil shale resources on public lands pursuant to section
369(d) of the Energy Policy Act of 2005 (Public Law 109-58) or to
conduct an oil shale lease sale pursuant to subsection 369(e) of
such Act.[3]
Without these regulations in place, these lands will not be able
to be leased and/or developed for exploration of oil shale
production. The technology to collect and refine oil shale is
developing at a rapid pace, and private companies are willing to
invest in it. Shell Oil commenced a research and development
project on oil shale 30 years ago and continues to invest a
considerable portion of its own revenue into commercializing the
shale.
An estimated 1.2 trillion to 1.8 trillion barrels of oil is
available in the Green River Formation, an area which expands
through most of Colorado and parts of Utah and Wyoming.[4] The
recoverable oil refined from oil shale would provide another
resource for fuel production. According to the U.S. Department of
Interior and Bureau of Land Management, a moderate estimate of 800
billion barrels of recoverable oil from oil shale in the Green
River Formation is three times greater than the proven oil reserves
of Saudi Arabia.[5]
The investment in technology and R&D is making the process
cheaper and safer for the environment. In effect, methods of
harvesting oil shale force excess carbon back into the ground. Dr.
Fine estimates that oil shale production could by economical to
produce when oil is selling at $25 per barrel.[6]
Conclusion
The omnibus provisions would undoubtedly slow progress being
made in the oil shale industry, effectively putting another viable,
domestic source of energy "off limits." As such, the oil shale
prohibition would severely reduce the potential for oil shale to
decrease U.S. dependence on imported oil. If Congress passes the
omnibus in its current form, the oil shale provision is one more
reason for President Bush to exercise his veto authority.
Nick Loris is a Research Assistant in the Thomas A. Roe
Institute for Economic Policy Studies at The Heritage
Foundation.