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Oil Shale Looking Feasible for Future

Posted on: Tuesday, 18 October 2005, 15:00 CDT

By Jerry Spangler Deseret Morning News

Dismissed as a pipe dream for decades, the crude oil locked inside oil shale and sands in Utah, Colorado and Wyoming -- not to mention vast reserves in Alberta, Canada, just to the north -- could, within decades, establish North America as the world's pre- eminent oil producer.

And that, said Sen. Orrin Hatch, R-Utah, will result in a "profound geopolitical shift . . . over the next decade or two as the supply of conventional oil begins to dwindle in the Middle East and the commercial production of our unconventional resources takes off in North America.

"And as this scenario unfolds, I believe the United States and Canada will emerge as the dominant energy powers in the world," he added.

Hatch, speaking Monday at a seminar on unconventional fuels sponsored by the Woodrow Wilson International Center for Scholars at the Canadian Embassy in Washington, D.C., had high praise for Canadian efforts to develop vast oil shale reserves in Alberta, noting that one-fourth of all oil being processed at Utah refineries now comes from Canadian tar sands.

"In Alberta, you have dozens of major oil companies, using a variety of technologies and recovery methods, going after very different types of oil sands resources, and in almost every case doing so for less than $20 a barrel, including during their very tough winters," Hatch said. "It is a gigantic success story, and it began with Alberta's government deciding to promote the development of this resource and not giving up."

The United States currently imports 56 percent of its oil, and, if existing circumstances persist, that is projected to grow to 68 percent within 20 years. With major oil companies now admitting that oil production may be reaching its peak, "and with the economic growth in India and Asia and other regions, it looks like we'll have high oil prices into the foreseeable future," Hatch said.

Worldwide demand for oil grew at 2.5 million barrels per day in 2004, Hatch said, and not only is production failing to meet demand, but new discoveries are not keeping pace.

"For a century, we have relied on a steady supply of light crude, which is the easiest oil to get," he said. "Those days are not quite over, but their decline is in sight, and there is no upside to ignoring the fact. I also recognize that our society will be dependent on liquid petroleum into the foreseeable future. It's not a fact that I like to admit, but it is a fact, nonetheless."

Hatch, who co-sponsored provisions in the Energy Bill to jump- start oil shale and tar sands development in the United States, dismisses the naysayers who point to past boom-and-bust frenzies around oil shale and tar sands as a reason why government should steer clear. As demonstrated by the success of the Alberta developments, governments should play a key role, he said.

"Those who state otherwise, in my opinion, are underestimating either the economic viability of developing our unconventional resources, or overestimating the world's ability to keep up with international energy demand, or both," Hatch said.

And, he added, "Those who doubt that unconventional fuels are economically viable probably are suffering from a neck ailment that keeps them from looking north" to Alberta.

Alberta is now second only to Saudi Arabia in proven oil reserves and ninth in the world in annual oil production, something Hatch said is due to the successful development of oil sands. And "before long," he said, "Canada will inevitably overtake Saudi Arabia as the world's oil giant."

And Canadian reserves pale next to the undeveloped resources in the Rocky Mountains, he said.

"Utah has more recoverable oil in oil sands than the entire U.S. reserve," Hatch said. "That's a significant number, but it is overshadowed by the fact that the largest recoverable hydrocarbon resource in the world rests within the borders of Utah, Colorado, and Wyoming in the form of oil shale."

The Department of Energy estimates that recoverable oil shale in the western United States exceeds one trillion barrels and is the richest and most geographically concentrated oil shale resource in the world.

E-mail: spang@desnews.com

Source: Deseret News (Salt Lake City)

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