Energy policy — oil shale: Congressmen Scott Tipton and Doug Lamborn hold a Committee on Natural Resources subcommittee field hearing in Grand Junction

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From the Grand Junction Free Press (Sharon Sullivan):

At Wednesday hearing in Grand Junction, Congressmen Scott Tipton (R-CO) and Doug Lamborn (R-CO) repeatedly criticized the Obama administration, claiming the administration is hindering the domestic development of oil shale…

The few non-industry witnesses allowed to testify at the hearing mentioned other factors hampering oil shale development: Technological challenges, low oil prices discouraging investment, and concerns about environmental impacts…

“Oil shale has relatively low energy content and companies have yet to demonstrate net gains in energy production. In essence, commercial oil shale production could use more energy than it would produce,” Frank Smith, of Western Colorado Congress, said.

[Anu Mittal director of Natural Resources and Environment Division at the U.S. Government Accountability Office presented a] report [that] focused on impacts of potential oil shale development on water resources. “Oil shale will require large amounts of water — a resource that is already in scarce supply in the arid West where an expanding population is placing additional demands on water,” Mittal said.

Some analysts project that large scale oil shale development in Colorado would divert water away from agricultural and urban development. Companies have acquired significant water rights within the Colorado and White River Basins of Colorado, and may apply for additional water rights in the future.

Another panelist attending the hearing, Jennifer Spinti, a research associate professor at the University of Utah’s Department of Chemical Engineering and Institute for Clean and Secure Energy, mentioned that the public also needs to be aware of “ancillary water use” of oil shale development. Construction and operation of a nearby power plant to provide energy for an oil shale project would consume significant amounts of water, as well as would water needed to control dust, she said. Potential water contamination is also a concern, Spinti said…

Tipton questioned Helen Hankins, Colorado State Director of the BLM, about the need for another PEIS.

Hankins replied: “The industry is in its infancy. Water, sage grouse, and plants are potentially threatened. There was litigation in 2009 challenging the PEIS — that’s why the (Interior) Secretary is taking a fresh look. It does not affect the six existing (research and development) leases.”

Tipton repeated “regulatory uncertainty is a factor in delaying oil shale research.”

Hankins responded again that a new PEIS will not affect companies’ research and development on private lands, or on the existing leases. “We’re yet many years away from environmental approval and commercially viable oil shale development,” Hankins said. “It gives us time to review the rules.”[…]

“Energy development is one of the key priorities of Secretary Salazar,” Hankins said. “Oil shale is one component of energy development. When it is commercially viable, and environmentally proven, it will be a source.

“However, the BLM’s mission is ‘multiple use.’ Land use plans consider a variety of factors — watershed health, wildlife habitat, as well as energy.”

More coverage from Meghan Gordon writing for Platts. From the article:

Representatives Doug Lamborn and Scott Tipton, both Colorado Republicans, criticized the Department of Interior’s February decision to take a new look at a November 2008 federal rule for commercial development of oil shale. At a field hearing of the House Energy and Minerals Resources Subcommittee in Grand Junction, Colorado, the pair couched the oil shale policy in the same terms House Republicans have approached other energy issues this session, saying federal regulations should not stand in the way of industry creating jobs, reducing oil imports and increasing national security…

“The road to viability for the oil shale industry is reliant on a predictable regulatory structure and an environment in which companies can invest in research and development and create jobs,” Tipton said. “The proper implementation of our environmental and safety regulations already on the books is a far better strategy than adding additional layers of bureaucracy to the process.”[…]

Dan Whitney, Shell’s upstream manager for heavy oil development in the Americas, said the producer understands the importance of water to western states and is committed to using it responsibly. He said the company would address the issue by maintaining a diversity of water rights to give operations the flexibility of multiple sources, developing extraction and processing technologies that need less water and to honing water-management practices such as recycling and storage.

Shell holds three “research, development and demonstration” leases for oil shale development in Colorado.

More coverage from the Associated Press (Catharine Tsai) via The Denver Post. From the article:

Dan Whitney of Shell Exploration and Production Co. said his industry needs a stable regulatory environment and one in which numerous companies can lease public land for research projects.

Researchers noted their need for funding and suggested a specific program focused on Western oil shale.

And Anu Mittal of the GAO said the U.S. Interior Department should be responsible for gathering data on water conditions now, so any potential effects of oil-shale activity can be detected years in the future. Her agency in October had recommended collecting baseline data.

They were among 10 speakers at the Grand Junction field hearing of the House Energy and Mineral Resources Subcommittee. Rep. Scott Tipton and subcommittee chairman Doug Lamborn, both Colorado Republicans, conducted the hearing.

More oil shale coverage here and here.

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