Oil shale emerges as new energy battleground in U.S.
A proposal to tap the world’s largest oil-shale deposits in the western U.S. by heating rocks until petroleum sweats out has become the latest election-year conflict over energy policy.
Companies including Chevron Corp., Royal Dutch Shell PLC, an Estonia utility called Eesti Energia AS, and a joint venture of Genie Energy Ltd. and France’s Total SA, are seeking to tap into as much as 4.29 trillion barrels of oil. Much of it is on lands controlled by the federal government in Colorado, Wyoming and Utah.
“We’re not asking for any special treatment,” Rikki Hrenko, chief executive of Eesti Energia’s U.S. unit, Enefit American Oil, said. “We’re asking to be able to proceed as any other industrial development would.”
The U.S. Bureau of Land Management proposed this month reducing access for research and development of oil shale in the region by threequarters, to 461,965 acres, to protect water supplies. That prompted the Republicanled House on Feb. 16 to pass legislation that would require the agency to conduct at least five commercial lease sales in the oil-shale region by the end of 2015.
Senator Orrin Hatch, a Utah Republican, offered similar language as an amendment to the Senate transportation bill on Feb. 17.
The dispute joins a growing number of conflicts centred on energy policy as the price
We must take a commonsense approach that encourages research and development first. BOB ABBEY, DIRECTOR OF
BUREAU OF LAND MANAGEMENT
of oil and gasoline have both risen and become issues in the presidential campaign. President Barack Obama rejected an application last month to build a pipeline connecting Canadian oilsands with refineries on the U.S. Gulf Coast, which prompted efforts in Congress to override the decision.
The administration says it wants to ensure oil-shale production, like fracking for natural gas, poses limited risk to water resources.
“Because there are still many unanswered questions about the technology, water use, and impacts of potential commercial- scale oil shale development, we are proposing a prudent and orderly approach,” Bob Abbey, the director of the Bureau of Land Management, said in an e-mail on Feb. 24. “If oil shale is to be viable on a commercial scale, we must take a common-sense approach that encourages research and development first.”
Republicans are pushing higher production to help lower gasoline prices, create jobs and add revenue to the U.S. Treasury from royalties.
A rally in oil and gasoline prices may boost oil-shale producers. Eesti Energia said its oil production in Estonia is profitable when oil trades at $60 a barrel, and would be “a little higher” in the U.S. Crude averaged $96.77 on the New York Mercantile Exchange in the past 12 months.
The average price for regular gasoline, at a record for this time of the year, spurred Obama to reiterate support for all energy sources, including oil, natural gas, solar, wind and biofuels.
Eesti Energia, which hired Washington-based lobbying firm Allen D. Freemyer Esq PC after buying leases in Utah in 2011, increased spending on lobbying about 50 per cent to $30,000 in the fourth quarter, according to Senate records.