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Oil Shale Overview: Resources & Potential for Development

Oil Shale Overview: Resources & Potential for Development. WESTAR CONFERENCE October 22, 2008 Bob Randall Colorado Department of Natural Resources. Oil Shale Overview:. Oil shale resource Extraction methods Development timeline BLM activities with federal oil shale resources

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Oil Shale Overview: Resources & Potential for Development

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  1. Oil Shale Overview: Resources & Potential for Development WESTAR CONFERENCE October 22, 2008 Bob Randall Colorado Department of Natural Resources

  2. Oil Shale Overview: • Oil shale resource • Extraction methods • Development timeline • BLM activities with federal oil shale resources • Colorado’s role and perspective

  3. Oil Shale Resource • Organic marlstone • Kerogen • Converted through pyrolysis • Worldwide distribution: • Up to 2 trillion barrels • Domestic distribution: • Between 500 billion and 1.1 trillion barrels • Colorado resource: • Estimated at approximately 500 billion

  4. Extraction Methods • Mine and Retort method • Open pit or underground mine • Retort • Major challenges • Process intensive • Scale • Water intensive • Waste disposal

  5. Extraction methods • In-Situ Processes • Electric-resistance heaters • Superheated steam • CO2 • Microwave • Major Challenges • Groundwater protection • Energy consumption

  6. Challenges to development: • Technology • Economics • Environmental impacts • Air • Water • Wildlife • Socioeconomic impacts • Cumulative impacts

  7. Federal Activities Energy Policy Act of 2005: • Research, Development, and Demonstration (RD&D) Projects • Programmatic Environmental Impact Statement (PEIS) • Commercial leasing regulations

  8. Pending RD&D Projects • 160 acres each • Preference rights to additional 4,960 acres • 10-year term • Focus in Colorado is on in-situ technologies • State permit applications are not likely before 2010. • Oil shale production from RD&D projects is unlikely within the next six years.

  9. Shell’s RD&D Proposal • Electric resistance heaters, with freeze wall to isolate from groundwater

  10. Chevron’s RD&D Proposal • Fracture shale then circulate hot, unconfined CO2 gas through the formation

  11. EGL’s RD&D Proposal • Circulation of superheated steam through closed-loop underground pipeline system

  12. Programmatic Environmental Impact Statement (PEIS) • BLM published Draft PEIS in December 2007 • Final PEIS published in September 2008 • Currently undergoing Governor’s consistency review • Major provisions • Would make 1,991,222 acres available “for application for leasing for commercial development” • 359,798 acres in Colorado • 630,971 acres in Utah • 1,000,453 acres in Wyoming

  13. Commercial leasing regulations • Proposed regulations published in July 2008. • Legislative prohibition expired on Sept. 30, 2008. • Major provisions • Royalty rates (5% or 12.5% after first 30 million barrels) • NEPA compliance • Environmental safeguards • Chargeable production • Minimum bonus bids

  14. Colorado’s perspective • Support for RD&D projects • Will yield important information on technologies, impacts, and potential mitigation. • Recommended “no action” alternative in PEIS • Opposed finalizing regulations • Recommended changes to regulations

  15. For more information, please contact: Bob Randall Federal Lands Coordinator Colorado Department of Natural Resources 303-866-2540 robert.randall@state.co.us

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