This is great news and very promising. We're taking steps to reach possible energy independence down the road. Bush's tax credits on hybrids that kick in this year (2006) are also a very positive development. http://yahoo.reuters.com/financeQuo...tfh60273_2006-01-18_20-37-18_n18216384_newsml U.S. Interior Dept selects oil shale projects Wed Jan 18, 2006 03:37 PM ET WASHINGTON, Jan 18 (Reuters) - The U.S. Interior Department this week selected demonstration projects from energy companies to develop oil shale resources on federal lands in Western states. The United States holds significant oil shale resources in Colorado, Utah and Wyoming, equal to an estimated 800 million barrels of recoverable oil, which is enough to meet current U.S. oil demand for 110 years and help reduce America's reliance on foreign crude imports. Oil shale is sedimentary rock containing organic material that can be crushed and heated to produce oil. The process is a costly one, and virtually all U.S. oil shale projects were abandoned in the early 1980s when crude oil prices collapsed. However, with oil prices expected to average above $50 a barrel for at least the next two years, oil shale development looks profitable again. The Interior Department's Bureau of Land Management sought proposals from energy companies to research, develop and demonstrate oil shale recovery technologies. The BLM received 20 proposals, and accepted eight of them from companies such as ExxonMobil Corp. (XOM.N: Quote, Profile, Research) , Chevron (CVX.N: Quote, Profile, Research) , and Shell Oil (RDSa.L: Quote, Profile, Research) . If the small 160-acre leases prove economically feasible and don't harm the environment, the BLM plans to issue regulations for leasing land for large-scale commercial oil shale development. Republican Rep. Richard Pombo, who chairs the House Resources Committee, authored provisions in energy legislation signed into law last year that called for a government oil shale leasing program. "By tapping the energy we have right here on taxpayer-owned lands, America can decrease our reliance on foreign oil and fight back against OPEC's stronghold on energy prices," Pombo said on Wednesday. © Reuters 2006. All Rights Reserved.
i'd rather spend the money that it will take to get the oil out of the shales on funding for new fuel sources.
There have been significant new developments in the way that shale is extracted that should help any limit environmental side effects. Getting a good portion of our oil from lunatics in the Middle East also has its downsides.
For the headaches that it relieves, it's worth some environmental upset. And I understand that they've gotten quite a bit better at recovering the land after. Sad for the neighborhood though, those deposits are spread over a large area. I also don't know where they're going to find all of the water they need for a project like that. Build a new damn? As for the cost, they called it 'profitable', so it takes no money away from research funds. And their number is off I think...it's not 800 Million barrels, more like 800 Billion barrels of reserve (the US uses about 6B(?) barrels / yr). For reference, this is 3x Saudi's crude reserves. Per RAND could take 20 years to get to 1M barrels per day, and 30 years to 3M. Don't know about this, but that sounds pessimistic. http://www.rand.org/pubs/monographs/2005/RAND_MG414.sum.pdf It also keeps those $$$$ in the US and doesn't send them to the ME. BIG PLUS
Oil companies have been developing new extraction technologies for oil shale. If you aren't familiar with it, basically they strip mine the oil shale and then heat it and seperate the oil from the rest of the stuff. The new technology instead lowers some type of device into the ground that heats the shale directly. Then other devices capture the gases and oil that is split off from the shale. This has two benefits. 1. It stops the strip mining which tends to be the most environmentally devestating part of oil shale development and 2. It tends to get more oil because these heating devices can get into lower levels of shale that normally is unextractable. The only problem with shale mining, and this has been a problem with it either for strip mining or new technology, is that it isn't particularly cost effective and many gas companies still find it cheaper to go to other countries and stick a cheap well and pump out conventional oil. If we're going to wean ourselves off foreign oil then we need to find COST-EFFECTIVE domestic sources of oil or encourage alternative sources of energy. Otherwise, market forces will always bring us back to the Middle East and other areas with cheaper sources of oil.
http://www.cbsnews.com/stories/1998/07/08/60minutes/main13502.shtml Actually it looks like their topic will be the Canadian tar sands, not the shale projects.
Good stuff, bigtexxx. Still, I wonder if oil companies will be a bit reluctant since this might adversely affect the price of oil on the world market and reduce the profit margin for Big Oil.
This is excellent news bigtexxx. It certainly made my day. While I hope we would dedicate even more resources to alternative fuels, I'm glad to know that oil shale projects may be a viable alternative. I do have one question, though. If we do stop buying ME oil, wouldn't that just give China all the oil it needs to industrialize its country? Not that Chinese industrialization is necessarily a bad thing, since a good economy may lead to political reforms. However, Chinese manufacturing growth will come at the expense of the Americans, methinks.
If the U.S. took control of it's energy needs by shale, nuclear or whatever, it would drive the price of oil down globally, very very sharply in fact. This would be a natural, free market reaction by oil to preserve itself and stamp out competition. The U.S. must make up it's mind to pursue alternatives to fruition anyway. That will be the gut check time. Political leaders had no stomach to earmark billions of dollars in research when oil was $11/bbl, or even $30/bbl. It's easy to talk about it now at over $65/bbl, but if/when word or rumor gets out there is a breakthrough, oil will plummet like a stone. China, the U.S. and all consuming nations will benefit. Last comment, we will never stop buying Mideast oil no matter what alternatives emerge. Won't quite happen that way.
Why would the continued development of the world's 8th largest economy (China) be a bad thing for America? I certainly don't believe that to be true. The US's future economic growth will certainly not be based on manufacturing, and it is a complete waste of money in my view to protect jobs that can be performed cheaper someplace else.
Your last statement is true to a certain extent. If we are evaluating the efficiency of production based purely on cost of labor + cost of materials, then yes, it makes sense to have countries like China do the manufacturing instead of the U.S. However, that view doesn't take into consideration certain externalities. The reason why the cost of production is so low in China is partially due to the fact that they have lax environmental standards (which affects all of us) and weak labor protection laws. If the Chinese manufacturers were forced to adhere to the same labor and environmental standards as American manufacturers, I don't think they will be that much more productive.
Yeah I don't think workers in China are necessarily more productive. They're just absurdly cheap. You're right, they are able to do this through blatant disregard for the environment and a legalized caste system with their hukou system, in addition to having nearly a billion dirt poor people.
That's the heart of the matter. Pure greed. Sure, oil shale will be profitable...only because they're assuming $60+ barrel per gallon prices for the next 20 years. It's the same reason why new refineries are opening when previously that sector downsized due to profitability issues. I read some sickening fact that whenever the price per barrel raises one dollar, Exxon-Mobil coins 500 million in profit.... So do people truly think industries want to reduce dependence on a supply limited resource given that its usage rises at least 5% per year? On the corporate side, they're walking a very fine line. Given that theoretical 5% growth rate, they'd need to find oil reserves of a 100 Iraqs in the next 15-20 years to meet demand. If China ever had another coal hiccup that raised their demand for oil last year, the oil infrastructure will be taxed to the point where Clean Coal will be an environmentalist's wet dream. As for China, they have the opportunity to leap past the Brown infrastructure. Unfortunately, due to their size they'll consume 11% of the world's oil regardless (so will India). We will still use 25%, and this assumes our growth rate is flat. Since China is a command economy, it's my hope that if they make an alternative breakthrough, they'll use their manufacturing power to reduce the costs of the invention. I can't say about the American private sector, but the Government side is too unfocused and deluded to put up a strong movement for alternatives. They're busy giving away grants towards improving oil shale and deep sea-drilling...
