In the Bush administration's last days, the Bureau of Land Management opened 2 million acres of public land to commercial oil shale development. A coalition of environmental groups quickly sued, contending the regulations could harm endangered species.
From a pure energy perspective, the land in Wyoming, Utah and Colorado holds much promise. Just a small fraction of it – a 1,200-square-mile area of western Colorado known as the Piceance Basin – holds about 1 trillion barrels, "as much oil as the entire world's proven oil reserves," according to a 2005 report on oil shale by the RAND Corporation.
"This resource base is extremely valuable," says Jim Bartis, a senior policy researcher at RAND and an author of the report. "A 6,000-acre lease would yield something like 12 billion barrels of oil. At a $100 a barrel, we're talking a $1.2 trillion value here."
The catch is that the oil is trapped in rock – shale – that needs to be heated to between 800 and 1,700 degrees Fahrenheit for the oil to be extracted. The process is energy intensive, water intensive, and, the lawsuit argues, contributes to global warming.
Over its lifecycle, from extraction to automobile tailpipe, a gallon of shale oil emits anywhere from as much carbon dioxide as a gallon of conventional oil to 50% more, Bartis says. "The reason it's such a large range is associated with where you get the power and electric power to produce the oil shale – and whether or not you sequester the CO2 or not," he says. Other studies have reached similar conclusions.
Oil shale drilling is hard on the environment in other ways, as well.
First, it is extremely disruptive to local ecology, whether it is drilled the old-fashioned way – with giant surface mines that extend down more than 1,000 feet – or by heating the rock underground until the oil bubbles up from below.
"You're talking about really restructuring the land [if the shale is mined]," Bartis says. "It could take decades before they start refilling in the land from the mining. So if you go the old-fashioned way, you have this traumatic change to the landscape.
"If you go the newfangled way, by heating if up underground, whatever is growing on that surface won't be growing on the surface where you're working, so there will be a one to two decade disruption of the local ecology on the surface where you're drilling."
Second, oil shale drilling uses a significant amount of water for dust control, cooling, upgrading raw shale oil, power production and environmental protection. Estimates for the amount of water needed to produce one barrel of oil range from 2.1 to 5.2 barrels of water per barrel of shale oil.
The particular area that the BLM opened up for commercial oil shale drilling has other potential environmental problems. Located in the Colorado River Basin, the oil shale could contaminate the underground water through leachate, mine drainage and spills. That could harm the Colorado River's water quality.
David Alberswerth, Senior Policy Advisor at the Wilderness Society, one of the plaintiffs along with the Sierra Club, NRDC and other groups, says another concern is the amount of energy oil shale requires for extraction and refining:
"The problem we see is this: Oil shale is basically a fossil fuel. In order to extract that fuel from the ground, you have to have pretty intensive energy inputs, and most of that energy is likely to come from the production of large scale coal-fired power plants."
If the environmental groups' lawsuit prevails, the judge could order the Bureau of Land Management to re-conduct the environmental impact statement – the analysis used as the foundation of the leasing program – and revise the leasing program based on that new evaluation.
Meanwhile, it is unlikely that any new commercial oil shale drilling leases will be approved.
When he took office, Secretary of Interior Ken Salazar suspended another oil shale program – concerning research – also instituted by the Bush administration its last days, and he seems equally unenthusiastic about the commercial leasing program. However, Republican Senators have held up his department's nominees over his blocking of several oil and gas leases in the Mountain West, slowing the department's work.
After this week's revision of the lawsuit, Alberswerth expects the court to issue a briefing schedule for the parties to bring their arguments.
The latest interest in the Mountain West oil shale is part of a long cycle, he explains:
"This whole business of oil shale and its promise is not new. It comes in 20-year cycles.
"The last time there was a great deal of interest in oil shale as a potential means of fueling the country's economy was in the late '70s and early '80s when there was a lot of concern about oil at that time and the price of oil. The federal government even spent quite a bit of money in trying to develop commercialized oil shale, and a lot of big companies were interested in it, but it all went bust because it's never been proved to be commercially viable or environmentally safe.
"Then years pass and people forget about this. Policy makers forget about it or are replaced and then there's a great rediscovery of the potential of oil shale. We're in that part of the cycle right now."