Don't Hold Your Breath on Lower Gasoline Prices from Oil Shale

The spending limitation on the Bush Administration's proposed commercial oil shale development program ends today despite the oil shale industry's inability to develop an efficient and safe process for squeezing oil from oil shale rock. In coming days and weeks, the Bush administration will finalize their leasing regulations, which taxpayer groups and conservationists assert will ultimately cost taxpayers money and could create enormous environmental problems, while failing to lower fuel prices.

"With only a few remaining months in office, the Bush administration and the oil industry's congressional allies will get their wish," said Dave Alberswerth, senior energy policy advisor for The Wilderness Society (TWS). "Now they have set the table for enriching their friends in the oil and gas industry by handing them a taxpayer funded gift basket of public lands. But Americans shouldn't expect their gasoline prices to be lowered anytime soon as a consequence of this unfortunate action because the commercial development of oil shale is at best years if not decades away from reality."

Enacted as part of last year's appropriations bill, the oil shale spending limitation slowed the administration's plans to expedite a commercial oil shale development program that could pose serious threats to the communities, economies, water resources, air quality, energy infrastructure and environment of Colorado, Utah and Wyoming. The Bureau of Land Management (BLM) currently oversees an oil shale research and development program on federal lands, and some companies conduct research on the thousands of acres of oil shale resources they own privately. No company has ever been able to develop oil shale commercially.

The original spending limitation did not affect the BLM's research and development program, which needs to produce more information about the impacts and viability of new oil shale technologies before a commercial leasing program is put in place, according to Alberswerth. Furthermore, the regulations have few environmental safeguards and offer bargain basement royalty rates to the industry that could be costly to taxpayers, he added.

"Short-sighted, irresponsible decision making has placed us on this precipice," said Chase Huntley, an energy policy advisor for TWS. "Don't hold your breath waiting for oil to start flowing. However, you should prepare for egregiously deficient rules to be finalized for a publicly owned resource whose value in the long term could extend into the trillions of dollars."

One of the world's richest deposits of oil shale is found in the Green River Basin of Colorado, Wyoming and Utah but cost effective, energy efficient and environmentally safe methods to wring kerogen from the rock simply do not exist, Huntley added. Oil shale is a sedimentary rock containing kerogen which, when heated to extreme temperatures, yields oil.

For more information on oil shale, please visit our web page: https://wilderness.org/OurIssues/Energy/OilShale.cfm