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SUPPORTING AMERICAN JOBS 

AND THE ECONOMY THROUGH 

EXPANDED ENERGY PRODUCTION: 

CHALLENGES AND OPPORTUNITIES OF 

UNCONVENTIONAL RESOURCES TECHNOLOGY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

ENVIRONMENT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

THURSDAY, MAY 10, 2012 

Serial No. 112–84 

Printed for the use of the Committee on Science, Space, and Technology 

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Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. RALPH M. HALL, Texas, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

SANDY ADAMS, Florida 

BENJAMIN QUAYLE, Arizona 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 

JERRY F. COSTELLO, Illinois 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

JERRY MCNERNEY, California 

TERRI A. SEWELL, Alabama 

FREDERICA S. WILSON, Florida 

HANSEN CLARKE, Michigan 

SUZANNE BONAMICI, Oregon 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

HON. ANDY HARRIS, Maryland, Chair 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

PAUL C. BROUN, Georgia 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

RALPH M. HALL, Texas 

BRAD MILLER, North Carolina 

LYNN C. WOOLSEY, California 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

ZOE LOFGREN, California 

JERRY MCNERNEY, California 

VACANCY 

VACANCY 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

May 10, 2012 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Andy Harris, Chairman, Subcommittee on Energy and Environment, Committee on Science, Space, and Technology, U.S. 

House of Representatives .................................................................................... 16 

Written Statement ............................................................................................ 17 

Statement by Representative Paul D. Tonko, Acting Ranking Minority Member, Subcommittee on Energy and Environment, Committee on Science, 

Space, and Technology, U.S. House of Representatives .................................... 17 

Written Statement ............................................................................................ 19

Panel One Witnesses: 

Hon. Charles McConnell, Assistant Secretary for Fossil Energy, U.S. Department of Energy 

Oral Statement ................................................................................................. 22 

Written Statement ............................................................................................ 24 

Ms. Anu Mittal, Director, Natural Resources and Environment, U.S. Government Accountability Office 

Oral Statement ................................................................................................. 28 

Written Statement ............................................................................................ 30 

Discussion 46 

Panel Two Witnesses 

Ms. Samantha Mary Julian, Director, Office of Energy Development, State 

of Utah 

Oral Statement ................................................................................................. 59 

Written Statement ............................................................................................ 61 

Mr. Jim Andersen, Chief Executive Officer and President, U.S. Seismic Systems, Inc. 

Oral Statement ................................................................................................. 64 

Written Statement ............................................................................................ 66 

Mr. Cameron Todd, Chief Executive Officer, U.S. Oil Sands, Inc. 

Oral Statement ................................................................................................. 73 

Written Statement ............................................................................................ 75 

Mr. Tony Dammer, Member, Board of Directors, National Oil Shale Association 

Oral Statement ................................................................................................. 79 

Written Statement ............................................................................................ 81 

Discussion 90 

Appendix: Answers to Post-Hearing Questions 

Hon. Charles McConnell, Assistant Secretary for Fossil Energy, U.S. Department of Energy ..................................................................................................... 101 
Page

IV 

Ms. Anu Mittal, Director, Natural Resources and Environment, U.S. Government Accountability Office .................................................................................. 115 

Ms. Samantha Mary Julian, Director, Office of Energy Development, State 

of Utah .................................................................................................................. 119 

Mr. Jim Andersen, Chief Executive Officer and President, U.S. Seismic Systems, Inc. .............................................................................................................. 124 

Mr. Cameron Todd, Chief Executive Officer, U.S. Oil Sands, Inc. ...................... 126 

Mr. Tony Dammer, Member, Board of Directors, National Oil Shale Association ........................................................................................................................ 131 

Appendix 2: Additional Material for the Record 

Letter from Members of Wyoming House of Representatives to Bureau of 

Land Management ............................................................................................... 134 

‘‘Water on the Rocks’’: A Presentation by Western Resource Advocates ............. 137 

Letter from Denver Board of Water Commissioners to Subcommittee on Interior, Environment, and Related Agencies, Committee on Appropriations ...... 152 

Letter from Rocky Mountain Farmers Union to Subcommittee on Interior, 

Environment, and Related Agencies, Committee on Appropriations ............... 154 

Oil Shale Fact Sheet from the Wilderness Society ............................................... 155 

Utah’s Economic Development Plan from Governor Gary R. Herbert ................ 157 

Energy Initiatives and Imperatives: Utah’s 10-Year Strategic Energy Plan ..... 185 

Draft Programmatic Environmental Impact Statement: Possible Land Use 

Plan Amendments for Oil Shale and Tar Sands (May 4, 2012) (Utah) ........... 233 

Oil Shale: A Century of Failure; Report by Checks and Balances Project, 

April 2012 ............................................................................................................. 279 

Not Ready for Prime Time: Prepared by Checks and Balances Project .............. 288 

Resolution of Mesa County, State of Colorado ...................................................... 295 

Mesa County News Release, April 19, 2012, and Resolution No. 2012-12 ......... 300 

Economic Impact of Failure to Implement Legislative Mandates of Sec 369, 

Energy Policy Act 2005, a White Paper by Anton Dammer, M.S., and 

James Bunger, Ph.D. ........................................................................................... 306 

Letter to the Subcommittee from Dr. Dag Nummedal, Director, Colorado 

Energy Research Institute, and Dr. Jeremy Boak, Director, Center for Oil 

Shale Technology and Research, Colorado School of Mines ............................. 315 

U.S. Department of Energy, Office of Naval Petrolum and Oil Shale Reserves, 

November 2008, ‘‘Strategic Plan: Unconventional Fuels Development Within the Western Energy Corridor’’ ........................................................................ 320 
(1) 

SUPPORTING AMERICAN JOBS 

AND THE ECONOMY THROUGH 

EXPANDED ENERGY PRODUCTION: 

CHALLENGES AND OPPORTUNITIES OF 

UNCONVENTIONAL RESOURCES 

TECHNOLOGIES 

THURSDAY, MAY 10, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT, 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 9:33 a.m., in Room 

2318 of the Rayburn House Office Building, Hon. Andy Harris 

[Chairman of the Subcommittee] presiding. 
2 

RALPH M. HALL TEXAS 

U.S. HOUSE OF REPRESENTATIVES 

EDDlE BERNICE JOHNSON, TEXAS 

RANKING MEMBER 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

2321 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6301 

{202l225-6371 

www.science.house.gov 

Subcommittee on Energy & Environment 

Supporting American Jobs and the Economy Through Expanded Energy 

Production: Challenges and Opportunities of Unconventional Resources 

Technology 

Thursday, May 10, 2012 

9:30 a.m. to 12:00 p.m. 

2318 Rayburn House Office Building 

The Honorable Charles McConnell, Assistaot Secretary for Fossil Energy, U.S. Department of Energy 

Ms. Anu Mittal, Director, Natural Resources and Environment, U.S. Government Accountability Office 

Ms. Samantha Mary Julian, Director, Office of Energy Development, State of Utah 

Mr. Jim Andersen, Chief Executive Officer and President, U.S. Seismic Systems, Inc 

Mr. Cameron Todd, Chief Executive Officer, U.S. Oil Sands, Inc 

Mr. Tony Dammer, Member, Board of Directors, National Oil Shale Association. 
3 

U.S. HOUSE OF REPRESENT A TlVES 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HEARING CHARTER 

Supporting American .lobs and the Economy Through Expanded Energy Production: 

Challenges and Opportunities of Unconventional Resources Technology 

PURPOSE 

Thursday, May 10, 2012 

9:30 a.m. -12:00 p.m. 

2318 Rayburn House Office Building 

On Thursday, May 10,2012, at 9:30 a.m. in Room 2318 of the Rayburn House Office Building, 

the Subcommittee on Energy and the Environment of the Committee on Science, Space, and 

Technology will hold a hearing titled, "Supporting American Jobs and the Economy Through 

Expanded Energy Production: Challenges and Opportunities 0/ Unconventional Resources 

Technology." The purpose of the hearing is to examine challenges and opportunities associated 

with expanding development and use of unconventional oil and gas production technologies. 

WITNESS LIST 

Panel One 

• The Honorable Charles McConnell. Assistant Secretary for Fossil Energy, U.S. 

Department of Energy 

• Ms. Anu Mittal, Director, Natural Resources and Environment, U.S. Government 

Accountability Office 

Panel Two 

• Ms. Samantha Mary Julian, Director, Office of Energy Development, State of Utah 

• Mr. Jim Andersen, Chief Executive Officer and President, U.S. Seismic Systems, Inc. 

• Mr. Cameron Todd, Chief Executive Officer, U.S. Oil Sands, Inc 

• Mr. Tony Dammer, Member, Board of Directors, National Oil Shale Association 

1 
4 

KEY ISSUES FORCOMMlTTEE CONSIDERATION 

While unconventional energy resources are increasingly developed, key issues must be 

considered. Specifically: 

• How can the environmental impacts associated with resource development be minimized, 

including water management and use? 

• What targeted and appropriate research and development activities could be supported by 

the Federal government? 

• What are policy barriers may impede unconventional oil and gas R&D? 

• How can all stakeholders involved in the process cooperate on overarching strategies to 

expand unconventional resource production? 

BACKGROUND 

The world currently consumes approximately 87 million barrels of oil per day (MMbd), which is 

projected to increase to 99 MMbd in 2035, primarily driven by growth from non-GECD 

countries.] Currently, conventional oil production is the primary source of oil supply; however, 

the International Energy Agency (TEA) projects conventional crude oil production to decline to 

68 MMbd in 2035. Tn order to meet projected demand, IEA projects production of 

unconventional oil, natural gas liquids (NGLs), biofuels, and other substitutes is anticipated to 

increase to 47 MMbd by 2035. (Figure 1) 

Figure 1: 

1 Intemational Energy Agency, "World Energy Outlook 20 II:' November 9, 20 II. Executive Summary available at: 

http:lh,y\y,r."orldcnerg\ outlook.org/mcdial\\ co\\cbsitc/20 l I/excculiyc SW1Hllary. pdf 

2 Tntemational Energy Agency, "World Energy Outlook 20 II: Key Graphs," November 2011. Accessible at: 

ll!nU!IUnv .lIQrldcncrgvo.yllook.QIg(j,11CdQl/wcowcbsitci2l)lLlJ>£v grapllUlllf 

2 
5 

In September 2011, the National Petroleum Council (NPC), a federally chartered advisory 

committee to advise the Secretary of Energy on matters relating to oil and natural gas, issued a 

report titled "Prudent Development: Realizing the Potential (?f North America '.I' Abundant 

Natural Gas and Oil Resources. ,,3 The report is a "comprehensive study to reassess the character 

and potential of North American natural gas and oil resources ... ,,4 The study identifies crude oil 

and natural gas resources and supplies and considers the prospects for North American oil 

development in light of the various challenges associated with different resource bases, including 

offshore, Arctic, onshore oil, unconventional oil, and ~ipeline infrastructure issues. (Figure 2) 

Within the various resource basis, the NPC estimates:' 

• Currently technically recoverable in the Continental U.S. at nearly 60 billion barrels of 

oil; 

• Arctic contains an estimated 100 billion barrels of recoverable oil; 

• Alberta oil sands with a recoverable oil potential of more than 300 billion barrels; 

• Onshore conventional oil estimated at 80 billion barrels, 

• "Tight oil,,6 could produce an additional 34 billion barrels; 

• Oil shale could yield resources estimated at 800 billion barrels. 

Figure 2: National Petroleum Council Resource Estimated Potential Production . 

.3 National Petroleum Council. "Prudent Development: Realizing the Potential of North !lmerica's Ahundant 

:Vatural Gas and Oil Resources." September 15, 20 II. Executive Summary accessible at: 

hllp:!;', \\ w.npc.orgjI£QQ!tsiN ARD-ExccSulllm VQ1J2'lf 

., National Petroleum Council. '"Prudent Development: RealiZing the Porential o(Norlh America's Abundant 

Vaturat Gas and Oil Resources," September 15, 2011. p. 46. Full Report accessible at: 

ht1pJ/,nnY.npc,orgiPrudcnt Dc\'c1opmcn1.hl1nl 

'NPC "Pmdent Development. p. 46. 

6 "Tight oil" is oil contained in traditional deposits. but could not flow through the tight fonnation rock, thus was 

traditionally inaccessible. 

3 
6 

Resonrce Characterization and Potential Supply 

The United States currently ranks first in the world in natural gas production and third in oil 

production7 This position as a leading global oil and gas producer can be credited in part to 

advances and breakthroughs in technology to facilitate the development of America's 

unconventional oil and gas resources. Given the variety, size, and scope of the unconventional 

deposits, advances in technology have increased recovery and output significantly increased D. S. 

resource estimates and future production potential. 

Historically, conventional deposits have provided most of the oil and natural gas produced in the 

U.S. 8 Conventional resources are generally those resources that are recovered from a reservoir in 

which oil, natural gas, and water accumulate in a layered arrangement Thus, unconventional 

resources can be defined as what they are not; they are those resources that cannot be produced, 

transported, or refined using traditional techniques. An unconventional deposit is one in which 

the distribution of oil and gas is throughout a geologic formation over a wide area, rather than 

within a discrete deposit This category encompasses heavy oil, tight oil, oil shale, and oil sands, 

as well as shale gas and methane hydrates. 

Types of Unconventional Oil and Gas Resources 

"Heavy Oil" 

Heavy oil, also referred to as bitumen, has a viscosity9 and specific gravityl0 that is much higher 

than that of light crude. This resource typically contains high concentrations of sulfur and metals 

such as nickel and vanadium. In North America, this resource is most prevalent in a Canadian 

region termed the "heavy oil belt," and is similar to the production of oil sands in the area. Oil in 

place in this region is estimated at over 35 billion barrels, and in 2009, production was at 

382,000 barrels per day (bpd)ll Estimates ofD.S. heavy oil resource in place are between 60-

100 billion barrels, 2 billion barrels of which are proven reserves and another 20 billion may 

ultimately be recoverable. Most heavy oil resources in the United States are located in California 

and Alaska. 12 

CIA World Factbook. Accessible at: !1ttps:lI\,w\,.cia.go;"/libraly/publicalions/lhe-worldfaclbooklrankordcr/2173 rank. hlml 

8 Whitney, Gene; Behrens, Carl E.; Glover. Carol. Congressional Research Service. '"Us Fossil Fuel Resonrces: 

Tenninology, Reporting, and Smmnary." November 30, 2010. Accessible at: Accessible at: 

!illJl:i/budgCI.house.gO\·!UploadcdFilcs/CRS NOVEMBER20 IO.pdf 

9 "Viscosity" is a property of fluids and slumes that indicates their resistance to flow. defined as the ratio of shear 

stress to shear weight. 

10 '"Specific Gravity" is the dimensionless ratio of the weight of a material to that of the same volume of water. 

11 National Petroleum Council, Unconventional Oil Subgroup Working "Unconventional Oil". September 

15. 20 1 L Accessible at: =""-'-'-'-:'=20lL""'-"""''''''''=''-'~'-''''=''''''"-'''='''-'--''''=''-'-

on Fuels. "Development of America's Strategic Unconventional Fuel 

Resources". Initial Report to Congress. September 2006. Accessible at: 

lti.U2i!w\nr.ul1colT,·cntiolmlfucls.or:gLQublic;:!.UQJls/rcporls/scc169h report cp.J!.cLpdf 

4 
7 

Hllght Oil" 

Tight oil, also referred to as shale oil, is produced using a combination of horizontal wells and 

fracturing to unlock hydrocarbons locked in low permeability and porosity siltstones, sandstones, 

and carbonates, or shale plays. Notable tight oil plays include the Bakken formation in North 

Dakota, Montana, and Saskatchewan; the Eagle Ford in southern Texas; the Cardium in Alberta; 

and the Miocene in California. Recent technological advancements have turned tight oil 

resources into one of the "most actively explored and produced targets in North America.,,13 

Estimates of tight oil potential are significant. The NPC estimated a range of total resources 

from 5.6-10 billion barrels, with a potential high side estimate of34 billion barrels. The Bakken 

field alone contains estimated recoverable resources ranging from 3.65 billion barrels to 4.3 

billion barrels; the US Geological Survey (USGS) identified the Bakken as the largest 

continuous oil accumulation ever assessed by the agency. 14 Additionally, the report notes that 

these estimates may be conservative, as some plays are still in the nascent stages of discovery 

and the size of the resource may not be fully known. (Figure 3) There is also significant potential 

for technology and efticiency improvements to enhance and expand the amount of recoverable 

resources. 

Figure 3: North American Shale Playsl5 

13 NPC Unconventional Oil Resources Pg 84 

I·' The group based these estimates on published litemture, reports from state and Fedeml government agencies, and 

indust!}· infonnation. References also include USGS reports, and a NETLfDOE report. 

IS Institute Research, .' 2012, 27. Accessible at 

5 
8 

"Oil Shale" 

Oil shale refers to deposits in which the petroleum component, kerogen, has not been fully 

transformed into oil or gas; kerogen must be heated to transform it into an upgraded 

hydrocarbon. The geologic state of the resource does not permit it being pumped directly from 

the ground, and must either be processed above ground or in place (ex situ or in situ). The 

potential for oil shale production in the U.S. is sizeable at 6 trillion barrels of oil in place, mostly 

concentrated in the Green River Formation in Colorado, Utah, and Wyoming. However, only a 

fraction of the oil in place will be suitable for recovery. Nearly 80% of oil shale resources, 

including the richest, most-concentrated deposits, are located on Federallands. 16 The remaining 

resources are owned by states, individuals, private companies, and tribes. Privately owned lease 

holdings are concentrated near the southern margin of the Piceance basin in Colorado, and could 

support commercial operations up to 400,000 bpd. Tn contrast, federally owned land could easily 

support a number oflarge projects with each lease supporting up to 300,000 bpd17 Oil shale has 

a limited production history in the U.S., and currently there is no commercial scale production of 

oil shale. (Figure 4) 

Figure 4: World Oil Reserves 18 

TECHNICALl Y RECOVERABLE 

US OIL SHALE RESOURCES 

WORLD 01 

WITH U 

RESERVES BY COUNTRY 

OIL SH,,'ILE RESOURCES 

16 INTEK. Inc. prepared for the US Department of Energy, Offiee ofPetrolcull1 Reserves, "Secure FIlelsfrom 

Domestic Resources: Profiles o{Companies Ei1gaged in Domestic Oil Shale and Tar Sands Resource and 

Technology Development". Fifth Editiol\ September 2011. Accessible at: 

!lllJ.l;//wW\\.ullcomcntiona![llc\s.org/publicaliolls/rcports/SccnrcfuclsRcport2011.pdf 

P Strategic Unconventional Fuels Task Force. "Task Force's Strategy and Program PJan, 2007." September 2007. 

Accessible at hUp:! IYn\ \Y ollllCOHYentimlalfucls.orgipnbHcations.html 

18 lER. Hard Facts, pp. 28. 

6 
9 

"Oil SandI'" 

Oil sands are a mixture of sand and other rock materials that contain crude bitumen, thick 

viscous crude that can be in a near solid state at reservoir temperature. These resources are 

generally composed of "approximately 80-85 percent sand, clay or other mineral matter, 5-10 

weight percent water, and anywhere from 1-18 percent weight percent crude bitumen.,,19 

Production of this bitumen, which is carbon rich, extra heavy, and contains contaminants such as 

sulfur, oxygen, nitrogen, and heavy metals, requires removing these contaminants and improving 

the value of the crude in order to meet pipeline density and viscosity requirements. Production 

technologies vary as to the location and characteristics ofvarious deposits, and include mining 

and extraction technologies as well as in situ processes such as steam assisted gravity drainage, 

cyclic steam stimulation, and solvent injection, among others. 

In North America, oil sands deposits have been identified in both Canada and the United States. 

In Canada, oil in place estimates for oil sands have been pegged at 1.8 trillion barrels, vaulting 

Canada into second place behind Saudi Arabia for total oil reserves. 

The oil sands resources located in the United States differ in geological composition, continuity, 

and deposition from Canada's resources. Canada's oil sands are generally water wet and 

consolidated, while US. oil sands are generally hydrocarbon wet and unconsolidated. Currently, 

there is no commercial scale production from US. oil sands, though there are a handful of pilot 

scale projects. Despite the current lack of commercial production, estimates of US. oil sands in 

place are approximately 54 to 62.9 billion barrels spread across ten states, and about 11 billion 

barrels may ultimately be recoverable. The largest of these deposits are found in Utah, which 

contains approximately one-third of the domestic resource, estimated at 12 to 19 billion barrels 

located mostly on public land, both state and federal 20 Large deposits also exist in Alaska, and 

the remainder of the resource is spread across Alabama, Texas, California, Kentucky, and other 

states. 

"Shale Gas" 

The Department of Energy's (DOE) 

Energy Information Administration's 

Annual Energy Outlook 2012, 

estimates that the U.S. possesses 

2,214 trillion cubic feet (tcf) of 

technically recoverable natural gas 

resources. Of this total, natural gas 

from proven and unproven shale 

resources account for 542 tcf 21 

19 NPC "Prudent Dcvelopmcnt" p. 34. 

U.S. Natural Gas Production, 1990-2035 

triIHon cubic feet 

information Administration. AE02012 

January 23, 2012. 

20 INTEK. Inc. prepared for the US Department of Energy, Office of Petroleum Reserves, "Secure Fuelsfrom 

Domestic Resources: Profiles o/Cornpanies EI1gaged in Domestic Oil ~')"hale and Tar 5'ands Resource and 

Technology Development". Fifth Edition, September 201 L Accessible at: 

hnp:!/\\ WI\". uncomcnlionalfucls.orglpublical ionslrcpol1slSecmcFuclsRcPOlt20 1 I.pdf 

" EIA Energy in Brief"What is shale gas and why is it importanf)". April II. 2012. Accessible at: 

lill.!l:ll\\ \rn' .cia.gov/~n~Ig\' in bri£fL<l~shale Q~ls.cfl1J 

7 
10 

Shale gas refers to natural gas trapped in fine grain sedimentary rock fonnations characterized by 

low penneability and porosity. These resources have become accessible over the last decade due 

to the combination of advances in horizontal drilling and hydraulic fracturing. Natural gas 

production from shale account for 23% of total U.S. production, up from less than 1 % in 2000, 

and is projected to account for 49% of total production by 2035. 

"Methane Hydrates" 

Methane hydrates are another potential source of increased natural gas production that will 

require research and technology development to produce. Methane hydrate "is a cage-like lattice 

of ice inside of which are trapped molecules of methane, the chief constituent of natural gas.,,22 

By wanning or depressurizing the resource, it can be processed to natural gas. It is estimated the 

global volume of naturally occurring methane hydrates far exceeds the current natural gas 

resource estimates. 23 (Figure 5) 

Methane hydrates deposits in the U.S. can be found in Outer Continental Shelf and under the 

Alaskan permafrost, and much of the research has focused on developing resource estimates for 

the Gulf of Mexico and Alaska's North Slope. According to estimates by the then-Minerals 

Management Service (now Bureau Ocean Energy Management, Regulation, and Enforcement) 

the Gulf could contain 11,000 to 43,000 tcf of methane in place. The USGS assessment of the 

North Slope estimated approximately 85 tcf of technically recoverable methane24 Additionally, 

the USGS estimates total in place methane hydrates resources in the U.S. are about 320,000 tceS 

Figure 5: Total Hydrate Resource26 

US Departmcnt of Energy. Officc of Fossil Energy. "M.ethane ITvdrates-The Gas Resource of the Future." 

accessible at: lllip://Yf'Y}l-.fossil.cH9m:.,,gmjpJQgrams/oilgas/hvtiratcslindcx.html 

23 US Department of Energy. National Energy Technology Laboratory, National Methane Hydrates R&D Program. 

'~411 About Hydrates-Fstimates," accessible at: 1illJ1lli~~Jl£!ill2QJSQl:lill:;Jl[!Q.l.(Ulli1iL!;ill: 

Resonrces Potential of Methane 

Uncertain ['ulUre," March 200 I. Accessible 

8 
11 

Department of Energy Unconventional Oil and Gas Programs 

The United States has long recognized the potential of unconventional oil and gas resources. For 

example, President Taft created the Office of Naval Petroleum and Oil Shale Reserves (NPOSR) 

in 1912 to serve as a strategic resource in the event of war or national emergency for the U.S. 

Navy27 The office manages an oil field technology testing center that aims to address "technical 

and environmental issues associated with the production, distribution, and use of the nation's ,,28 energy resources. 

DOE's Office of Fossil Energy (FE) manages research, development, and demonstration 

(RD&D) activities for oil and gas technologies. Specifically, FE's Office of Oil and Natural Gas 

"supports research and policy o~tions to ensure environmentally sustainable domestic and global 

supplies of oil and natural gas." 9 The National Energy Technology Laboratory (NETL) serves as 

the lead FE .RD&D facility and manages much of FE's oil and gas technology research. 

Table 1 - Department of Energy Unconventional Oil and Gas Funding Levels (In Millions) 

Program FY2011 FY 2012 Enacted FY 2013 FY 2013 House 

Current Request Energy & Water 

Appropriations 

Mark 

Naval Petroleum and $20.9 $149 $14.9 $14.9 

Oil Shale Reserves 

Unconventional FE $0 $50 $0 $25.0* 

Technologies 

Natural Gas $0 $5.0 $12.0 $10 

Technologies 

Gas Hydrates $0 $10.0 $5.0 $5.0 

*House Appropriations Committee recommends $25 million "to be used to support both 

research to improve the economics of oil production from shale oil, as well as to reduce 

the health, safety, and environmental risks associated with shale oil extraction.,,30 

Federal Unconventional Oil Research and Development Activities 

Efforts to economically produce various sources of unconventional oil and gas were underway 

through much of the last century3! For example, the U.S. Department of Interior (DOl) 

,. US Department of Energy. Office of Fossil Energy. "The Naval Petroleum and Oil Shale Reserves- 90 Years '!f 

lXnsuring JVationaI5;ecuriry,'" accessible at: http://,nvv .. -.fc.doc,goyJprograms/rcSClYCs/npr/npr-9Oycars.hlml 

"US Department of Energy, Office of Fossil Energy. U.S. Petroleum Reserves. "Naval Petroleum Reserves 

Profile:' Updated December 22,20 II. Accessible at: hltp://fossil.ellergv.gmiprogrmns/rcserycs/npr/ 

"U.S. Department of Energy. Office of Oil & Natural Gas, updated May 7. 2012. Accessible at: 

http://'',,"'' . fossil.energy. gOY /programs/oilgas/indcx.hlml 

30 House Appropriations Committee Report. "Energy and Water DeYelopment Appropriations Committee Report. 

FY 2013." P. 97. Accessible at: hup:llapproprialiolls.housc.gm-JUploadcdFiles/EW-FY!3-

FULLCOM'"llTTEEREPORTpdJ; 

31 IN1EK. Inc .. Prepared for the US Department of Energy, Office ofPetrolcum Reserves. "Oil Shale Research in 

the L'nifed Stales: PN~files o/Oi/ Shale Res'earch and Development ActilJilies in lJniversities, National Laboratories. 

9 
12 

conducted oil shale research activities during the 1940' s. The oil crisis of the 1970's renewed 

calls for unconventional oil and gas research programs and the DOl instigated an oil shale 

leasing program to provide land for RD&D activities. When the oil crisis subsided, DOE 

reduced many of its unconventional oil and gas research programs. 

Recently, significant technology advances and high crude oil prices have regenerated interest in 

unconventional fuels production. The development of horizontal drilling permitted the use of 

hydraulic fracturing to produce shale oil and gas. Shale oil production enabled the development 

of the Bakken fields in North Dakota. North Dakota is now the third largest oil producing state, 

producing over 550,000 bpd, up from 45,000 bpd in 2007. 32 

DOE currently conducts research and development activities to produce methane hydrate gas. 

On May 2, 2012, DOE, in partnership with ConocoPhillips and Japan Oil, Gas and Metals 

National Corporation, announced the completion ofa successful field test of technology in 

Alaska to extract natural gas from methane hydrates D 

Energy Policy Act of2005 

Section 369 of the Energy Policy Act of2005 (EPACT 05) contains provisions to facilitate the 

development of unconventional fuels 34 The law states: 

(1) "United States oil shale, tar sands, and other unconventional fuels are strategically 

important domestic resources that should be developed to reduce the growing dependence 

of the United States on politically and economically unstable sources of foreign oil 

imports; 

(2) The development of oil shale, tar sands, and other strategic unconventional fuels, for 

research and commercial development, should be conducted in an environmentally sound 

manner, using practices that minimize impacts; and 

(3) Development of those strategic unconventional fuels should occur, with an emphasis on 

sustainability, to benefit the United States while taking into account affected States and 

communities.,,35 

EPACT 05 directed Bureau of Land Management (BLM) to begin leasing federal lands for the 

purpose of oil shale and tar sands research and development activities. The first round of 

research, development, and demonstration leases were awarded in 2006, and another round of 

leases were offered in 2009, but are yet to be awarded. 

Strategic Unconventional Fuels Task Force 

EPACT 05 also created a Strategic Unconventional Fuels Task Force composed of the U.S. 

Secretaries of Energy, Interior and Defense, the Governors of Colorado, Kentucky, Mississippi, 

and Public Agencies, " Third Edition September 2011. Accessible at: 

http://,,,,,, .uncomcnlionalfucls.org!pnblicalions!rcports/Rescarch Project Profiles Book20 II.pdf 

.12 North Dakota Oil & Gas Industry "Facts aud Figures." Updated April 12, 2012Accessible at: 

111W1illl'w.ndoi1.orglinl~achc!Facts and Figures 2012 ~.12"llM 

.1.1 NETL Publications. Press Release, 'T.S. and Japan Complete Success/iii Field Trial a/Methane {fvdrale 

Production Technologies," May2, 2012. Accessible at: 

.15 Ibid. 

10 
13 

Utah, and Wyoming, and three representatives of local governments in affected areas. 36 The 

Task Force was charged with making recommendations "regarding promoting the development 

of the strategic unconventional fuels resources within the United States."37 

The task force submitted an initial report, as required, to the President and Congress in 2006, 

followed by a three volume strategy and program plan in 2007. Annual reports from 2008 and 

2009 followed; however, despite the legislative requirement that annual reports be provided for 

each of the five years following the initial report, there were no annual reports for 2010 or 2011. 

According to its website, "The Task Force is presently considering what its future role should 

b ,,38 e. 

Resources addressed by the task force include oil shale, coal-derived liquids, heavy oil, tar sands, 

and enhanced oil recovery. The Task Force estimated the size and potential ofthese resources, 

and identified potential uncertainties or constraints to their development. Potential impediments 

identified were resource access, environmental and permitting timeline uncertainties, risky fiscal 

regimes, lack of demonstrated production technologies, and infrastructure constraints, among 

others. This report also provided initial recommendations on how to ameliorate uncertainties 

stemming from the identified constraints. 

In the 2007 Strategy and Integrated Program Plan, these issues were examined by the Task Force 

in much more depth and detail. Major strategies were identified to accelerate the development of 

these resources and reap the public benefits associated with production while promoting 

environmental stewardship, mitigating adverse socio-economic impacts on states and localities, 

and maintaining governmental fiscal responsibility. This plan also included eight major 

recommendations, with associated steps and timelines for implementation. 

1. Access to Resources on Public Lands: Provide an effective land tenure system; 

2. Regulatory and Permitting: Provide an inclusive regulatory system and review process 

that encourages expeditious development; 

3. Economic: Create a fiscal regime that attracts necessary private development capital; 

4. Technology: Craft a fast track program to attract investment while maintaining fiscal 

responsibility; 

5. Public Infrastructure: Create an integrated local and regional infrastructure plan to 

support efficient development and reduce duplicative investments; 

6. Socio-Economic: Establish a program for development, planning, funding, and training 

that mitigates adverse local impacts and maximizes state and local employment and 

economic growth; 

7. Government Organization: Ensure that appropriate organization structures exist at state 

local and federal levels that will promote and accelerate development in a reasoned, 

efficient way; 

36 Stmtegic Unconventional Fuel Task Force, Task Force Members, Accessible at: 

38 Slmlegic Unconventional Fuels Task Force.llJ1Q;iL"w".l}IlColl\'cntionalfncls.ol'g/homc.hlml 

11 
14 

8. International Partnerships: Initiate partnerships that advance and accelerate understanding 

and development of unconventional resources and technologies. J9 

The Task Force found that, "if pursued aggressively by government and industry, domestic 

unconventional fuels could exceed 7 MMbd by 2035." 

State and International Unconventional Energy Initiatives 

The states with the highest concentration of oil shale and oil sands resources are Utah, Colorado, 

and Wyoming. In these states, a substantial amount of the resource exits on public lands, and 

thus fall within the purview of state and federal governments. 

Utah 

In Utah the federal government owns and manages approximately 60% of surface lands and even 

more of the mineral estate. In order to address this and other issues facing energy development, 

in 20 I 0 Governor Herbert created the Utah Energy Initiative, a 10 year strategic energy plan 

designed to foster energy development while preserving quality oflife4o A task force was 

appointed to develop this plan, which was completed in March 2011. Several key 

recommendations were aimed at encouraging development of the state's unconventional 

resources. Notably, the plan called for the creation of an effective strategy to encourage energy 

development on public land. Access to public lands for energy development was further 

recommended as a priority for the Governor's Public Lands Policy Coordination Office. 

Additionally, the Governor's Energy Plan advocated strengthening the state's role in energy 

technology research and development, and created a new Energy Research Triangle Initiative 

amongst the state's three research universities, coordinated by the Governor's Energy Advisor. 

Other recommendations included coordination and transparency in the regulatory and licensing 

process through establishing a single point of contact for energy developers for information on 

state and local permit requirements, creation of a coordinating council of state agencies to 

collaborate on energy development, and process improvements in agencies that regulate the 

energy industry. 

Colorado 

In Colorado, the Governor's Energy Office recommended the development of an energy policy 

for the State, with a target completion plan to coincide with the 2013 legislative session. 

Additionall y, in an effort to better coordinate and foster collaboration between state and local 

jurisdictions, Governor Hickenlooper established a task force to identify mechanisms to avoid 

duplication or conflicting regulations and help foster a climate that encourages responsible oil 

and gas development41 

.19 Strategic and Unconventional Fuels Task Force. "Strategv and Program Plan, Volume I: Preparation Strategv, 

Plan, and Recommendations," September. 2007. Page I-69. Accessible at: 

hlip.16:iw\Y.unCOllYCnt:lQl!fllfulli.org/pu"Q.licntionsircports/Volume I Intcg-GltcdPlm!.2::'.J~finar%29.pd( 

40 "Energy Initiatives & Imperatives: Utah's IO-Year SD-ategic Energv Plan," March 2,2011. Accessible at: 

hit p://rnYw .energy . lilah, gOy!goycrnmcnt/stragic plan! go-\'C~ncrgyplan. him 

" Governor John W. Hickenlooper. Office of the Governor, State of Colorado. Executive Order B 2012-002, 

"Creating the Task Force 0/1 Cooperative Strategies Regarding State and Local Regulation of Oil and Gas 

Deve!opmenl, " Febmary 29. 2012. 

12 
15 

International Unconventional Oil and Gas Development 

The United States is not alone in possessing unconventional resources or pursuing their 

development. Both Russia and Argentina possess substantial tight oil reserves, oil sands can be 

found in over 70 countries42, and oil shale resources are widely distributed as well. Though the 

United States possesses the largest deposits of oil shale, China, Russia, the Congo, Brazil, Italy, 

Morocco, Jordan, and Estonia all contain estimated in place oil shale43 Active commercial 

production is occurring in Estonia, Brazil, and China, with total global production at 20,000 bpd. 

Jordan, Morocco, and Israel are not currently producing but are projected to do so in the future44 

Shale gas can also be found in over 30 countries around the world, with significantly large 

deposits in China, Argentina, Mexico, and South Africa. Only China is estimated to have larger 

technically recoverable reserves than the United States, at an estimated 1,275 tcf45 Methane 

hydrates can be found in deposits in the Polar Regions and along the outer continental margins 

across the globe. While much has been made of the size and distribution of the resource, efforts 

are still very much in the research and demonstration phase. 

Unconventional Oil and Gas Technologies 

A wide number of stakeholders are currently conducting various unconventional RD&D 

activities. As of September 2011,34 companies46 and 29 universities, national laboratories, and 

federal and state agencies were involved in oil shale and oil sands RD&D efforts47 The RD&D 

is focused on a number of areas such as: 

• resource characterizati on; 

• extraction methods, including in-situ processing; 

• resource stimulation; 

• environmental challenges, such as water consumption, groundwater protection and 

localized air quality. 

DOE's Office of Petroleum Reserves publishes a thorough annual report profiling ongoing oil 

shale and oil sands research and technology proj ects48 

4' While found in 70 countries, the bulk of the resource lies in Camda and Venezuela. 

"NRG ExpcnEncrgy lutelligence, March 30.2012. Accessible at: hUR:!/"" w.nrgcxpcrt.com/cxpC!i·bricfmg-

.. April 2011. 

Unconventional Fuels Task Force "Profiles of Oil Shale Researcll and Development Activities Universities, 

National Laboratories, and Public Ageucies." 

"For a full listing of research projects see the Strategic Unconventional Fnels Task Force Publication site at: 

hliJ;?1!W\VTI:.:. Ul1com 'cntiQna lrue ls,org/pub 1 icaliotls. h1 mt 

13 
16 

Chairman HARRIS. The Subcommittee will come to order. 

Good morning, and welcome to this morning’s hearing entitled 

‘‘Supporting American Jobs and the Economy Through Expanded 

Energy Production: Challenges and Opportunities of Unconventional Resources Technology.’’ 

Two weeks ago, the Science, Space, and Technology Committee 

heard from expert witnesses about America’s vast untapped unconventional energy resources. The amount of energy under own soil 

is striking. With continued technological advances and the right 

policies to enable access to these resources, America could become 

the global leader in energy production for the next generation and 

beyond. 

For example, the Green River Basin located in Colorado, Utah, 

and Wyoming may contain up to three trillion barrels of oil—more 

potential oil than the rest of the world’s current oil reserves combined. If this energy, which is overwhelmingly on federal lands, is 

made available, I am confident American ingenuity will find ways 

to responsibly explore and produce this resource. 

Portions of the United States are already experiencing the significant economic benefits of unconventional energy production. 

North Dakota’s unemployment rate is now the lowest in the Nation 

due to the shale oil revolution. The State’s top economic challenge 

is not job creation, but rather finding workers to fill the thousands 

of job openings created by the energy boom—a problem most States 

would love to have. The Federal Government should afford other 

States the opportunity to replicate this success story through aggressive pursuit of leasing, permitting, and technological opportunities. 

Unfortunately, when it comes to unconventional energy, President Obama talks the talk more than he walks the walk. Beginning 

with his State of the Union speech earlier this year, the President 

has touted the historical contributions of the Department of Energy’s fossil energy research programs, while his annual budget request to Congress repeatedly calls for elimination of the very same 

program. And while the President regularly boasts of his support 

for an ‘‘all of the above’’ energy strategy, his Administration appears more focused on producing new regulations and restrictions 

than it is on producing more oil and gas. For example, the President has unleashed 10 different federal agencies in pursuit of potential regulations on hydraulic fracturing. 

Similarly, the President’s campaign Website includes an ‘‘all of 

the above’’ energy page that neglects to even acknowledge the fuel 

providing 45 percent of the United States’ electricity: coal. It is 

clear the President continues to pick his preferred energy technologies at the expense of the free market and consumer need and 

choice. 

Perhaps most incredibly, just three days after his State of the 

Union speech declaring his commitment to this all of the above energy strategy, the President’s Interior Department effectively reduced lands available for oil shale development by 75 percent, putting over 1.5 million acres off limits not only to exploration and 

production, but also to research and development. 

This morning, I am interested in examining the impact of the 

Administration’s anti-fossil fuel policies, as well as exploring what 
17 

targeted research questions DOE can and should address to facilitate the further development of America’s unconventional energy 

resources. 

I also look forward to hearing how innovative companies are enabling more efficient and environmentally sound development of 

America’s unconventional oil and gas resources. 

I thank the witnesses for appearing before the Subcommittee. 

[The prepared statement of Mr. Harris follows:] 

PREPARED STATEMENT OF SUBCOMMITTEE CHAIRMAN ANDY HARRIS

Good morning and welcome to this morning’s hearing entitled ‘‘Supporting American Jobs and the Economy Through Expanded Energy Production: Challenges and 

Opportunities of Unconventional Resources Technology.’’ 

Two weeks ago, the Science, Space, and Technology Committee heard from expert 

witnesses about America’s vast untapped unconventional energy resources. The 

amount of energy under our own soil is striking. With continued technological advances and the right policies to enable access to these resources, America could become the global leader in energy production for the next generation and beyond. 

For example, the Green River Basin, located in Colorado, Utah, and Wyoming, 

may contain up to three trillion barrels of oil—more potential oil than the rest of 

the world’s current oil reserves combined. If this energy—which is overwhelmingly 

on federal lands—is made available, I am confident American ingenuity will find 

ways to responsibly explore and produce this resource. 

Portions of the United States are already experiencing the significant economic 

benefits of unconventional energy production. North Dakota’s unemployment rate is 

the lowest in the Nation due to the shale oil revolution. The State’s top economic 

challenge is not job creation but rather finding workers to fill the thousands of job 

openings created by the energy boom—a problem most States would love to have. 

The Federal Government should afford other States the opportunity to replicate this 

success story through aggressive pursuit of leasing, permitting, and technological 

opportunities. 

Unfortunately, when it comes to unconventional energy, President Obama talks 

the talk more than he walks the walk. Beginning with his State of the Union speech 

earlier this year, the President has touted the historical contributions of the Department of Energy’s fossil energy research programs, while his annual budget request 

to Congress repeatedly calls for elimination of the very same programs. And while 

the President regularly boasts of his support for an ‘‘all of the above’’ energy strategy, his administration is focused more on producing new regulations and restrictions than it is on producing more oil and gas. For example, the President has unleashed 10 different federal agencies in pursuit of potential regulations on hydraulic 

fracturing. 

Similarly, President Obama’s campaign Website includes an ‘‘all of the above’’ energy page that neglects to even acknowledge the fuel providing 45 percent of the 

United States’ electricity: coal. It is clear the President continues to pick his preferred energy technologies at the expense of the free market and consumer choice. 

Perhaps most incredibly, just three days after his State of the Union speech declaring his commitment to an ‘‘all of the above’’ energy strategy, the President’s Interior Department effectively reduced lands available for oil shale development by 

75 percent—putting over 1.5 million acres off limits not only to exploration and production but also to research and development. 

This morning, I am interested in examining the impact of the Administration’s 

antifossil-fuel policies, as well as exploring what targeted research question DOE 

can and should address to facilitate the further development of America’s unconventional energy resources. 

I also look forward to hearing how innovative companies are enabling more efficient and environmentally sound development of America’s unconventional oil and 

gas resources. 

I thank the witnesses for appearing before the Subcommittee, and I now recognize 

Ranking Member Tonko for his opening statement. 

Chairman HARRIS. I now recognize Ranking Member—I am 

sorry. Mr. Tonko is—I guess you are the Ranking Member for 

today, the substitute Ranking Member, for his opening statement. 

Mr. TONKO. Thank you, Mr. Chair. 
18 

Today’s hearing is focused on another unconventional fossil resource that we have heard about many times in the past decades. 

Every time oil prices have spiked or that we have become concerned about a major disruption in our oil supplies, oil shale gets 

a new look. Why we continue to use public funds to pursue this energy source is truly a subject for research, I believe. The oil companies and the Federal Government have poured millions of dollars 

into research, demonstration projects, and subsidies to find an economically viable way to develop this resource. Yet it is still years, 

if not decades, away from being economically, technologically, and 

environmentally viable. 

Oil shale should not be confused with shale oil. Shale oil is being 

commercially produced along with shale gas in various places 

around our great country. Through application of conventional fracturing processes, oil is released from shale formations and then 

pumped to the surface. Oil shale, on the other hand, is essentially 

a rock that must be heated at extremely high temperatures for long 

periods of time before the hydrocarbons within it are indeed released. The magnitude and severity of the impacts on land, water, 

and other natural resources required to turn rock into oil are only 

part of the reasons that these resources have never been commercially viable. They should serve as our cue to look beyond oil. 

I have listened as many of my Republican colleagues questioned 

the wisdom and need for public investments in renewable energy 

resources, either through support of research or through tax incentives. But when it comes to offering subsidies to one of the wealthiest and most profitable industries in the world—the oil industry— 

their generosity knows no bounds. When I look at the potential for 

oil shale, I can only wonder why we should be throwing more hardearned taxpayer dollars after bad. 

Even though gas prices have recently come down a bit, our constituents still feel the pain at the pump and know that it is a just 

a matter of time before another price spike hits. The public is tired 

of seeing an increasing portion of their paycheck go to the most 

profitable companies in the world, along with outsized portion of 

their tax dollars in the form of tax breaks for the oil and gas industry. 

Subsidizing oil shale has never lowered gasoline prices or led to 

our energy independence. I do not believe it ever will. In spite of 

years of government support for research and development since 

the early 1900s, this resource has proven to be much more bust 

than boom. The high cost of delivering this energy will inevitably 

translate into high retail prices for refined products. It is time we 

took a different path and invested in alternative energy sources. 

The oil industry has the financial resources to pursue this further 

if they believe it is viable. 

As our witness from the Government Accountability Office, the 

GAO, will outline from their investigation, there are things the 

Federal Government can do to better understand the range of uncertainties regarding the impacts of oil shale development. Among 

these, understanding the impacts on water quality and quantity 

stand out as the biggest concerns. The legendary water battles in 

the West are not about protecting ecosystems, though that is a 

worthwhile cause. These battles are about economics. 
19 

There is no greater indicator of a region’s economic potential, its 

ability to sustain human life and industry, than its access to clean 

water. It is hard for those of us from relatively water-rich States 

to understand what it means for a region whose annual rainfall 

can be measured in single digits in a good year. But for most Westerners, it is a sixth sense. 

I happen to be from an area of the country that is blessed with 

abundant, high-quality water resources. Given the current and 

looming shortages of water in many areas of the West, I cannot 

imagine why we would consider trading water, a renewable, vital 

resource for which there is no substitute, for a non-renewable resource that we can only obtain with very costly, highly damaging, 

and destructive methods. Land and water are not, or should not, 

be treated as disposable goods. 

The Interior Department released a draft Programmatic Environmental Impact Statement that was not only appropriately cautious, 

but reflected the reality of the technological immaturity of the oil 

shale industry. The Department of Interior is charged with managing the Nation’s lands for the benefit of all the public in a manner that keeps faith with generations to come. These lands support 

hunting, fishing and recreation of all types. They serve as protection for watersheds that recharge groundwater supplies and feed 

streams and rivers that support agriculture, ranching, power production and countless other businesses. The people engaged in 

these economic activities in Colorado, Utah, and Wyoming also deserve consideration. 

A number of groups representing these interests have voiced 

their concerns about leasing public lands for oil shale development, 

and about its impact on water resources in particular. I am attaching several of their past communications on this subject to my testimony today. 

We should not sacrifice sustainable communities and livelihoods 

in an attempt to mimic Earth’s geologic process of converting rock 

into oil. Can we really ask the public to once again believe that we 

are going to secure our energy future this way? Perhaps our witnesses this morning can convince me otherwise, but I believe we 

can make far better investments with public funds by increasing 

energy efficiency and expanding our use of renewable energy supplies. 

I thank our witnesses for being here this morning, and I look forward to hearing their testimony. 

With that, I yield back, Mr. Chair. 

[The prepared statement of Mr. Tonko follows:] 

PREPARED STATEMENT OF ACTING RANKING MEMBER PAUL D. TONKO

Today’s hearing is focused on another unconventional fossil resource that we have 

heard about many times in past decades. Every time oil prices have spiked or that 

we have become concerned about a major disruption in oil supplies, oil shale gets 

a new look. Why we continue to use public funds to pursue this energy source is 

truly a subject for research. The oil companies and the Federal Government have 

poured millions of dollars into research, demonstration projects, and subsidies to 

find an economically viable way to develop this resource. Yet it is still years, if not 

decades, away from being economically, technologically, and environmentally viable. 

Oil shale should not be confused with shale oil. Shale oil is being commercially 

produced along with shale gas in various places around the country. Through appli-
20 

cation of conventional fracturing processes, oil is released from shale formations and 

pumped to the surface. Oil shale, on the other hand, is essentially a rock that must 

be heated at extremely high temperatures for long periods of time before the hydrocarbons within it are released. The magnitude and severity of the impacts of land, 

water, and other natural resources required to turn rock into oil are only part of 

the reasons that these resources have never been commercially viable. They should 

serve as our cue to look beyond oil. 

I have listened as many of my Republican colleagues questioned the wisdom and 

need for public investments in renewable energy resources, either through support 

of research or through tax incentives. But when it comes to offering subsidies to one 

of the wealthiest and most profitable industries in the world—the oil industry— 

their generosity knows no bounds. When I look at the potential for oil shale, I can 

only wonder why we should be throwing more hard-earned taxpayer dollars after 

bad. 

Even though gas prices have recently come down a bit, our constituents still feel 

the pain at the pump and know that it is just a matter of time before another price 

spike. The public is tired of seeing an increasing portion of their paycheck go to the 

most profitable companies in the world, along with outsized portions of their tax dollars in the form of tax breaks for the oil and gas industry. Subsidizing oil shale has 

never lowered gasoline prices or led to our energy independence. I do not believe 

it ever will. In spite of years of government support for research and development— 

since the early 1900s—this resource has proven to be much more bust than boom. 

The high cost of delivering this energy will inevitably translate into high retail 

prices for refined products. It is time we took a different path and invested in alternative energy sources. The oil industry has the financial resources to pursue this 

further if they believe it is viable. 

As our witness from the Government Accountability Office (GAO) will outline 

from their investigation, there are things the Federal Government can do to better 

understand the range of uncertainties regarding the impacts of oil shale development. Among these, understanding the impacts on water quality and quantity stand 

out as the biggest concern. The legendary water battles in the West are not about 

protecting ecosystems, though that is a worthwhile cause. These battles are about 

economics. There is no greater indicator of a region’s economic potential—its ability 

to sustain human life and industry—than its access to clean water. It is hard for 

those of us from relatively water-rich States to understand what it means for a region whose annual rainfall can be measured in single digits in a good year. But for 

most Westerners, it is a sixth sense. 

I happen to be from an area of the country that is blessed with abundant, highquality water resources. Given the current and looming shortages of water in many 

areas of the West, I cannot imagine why we would consider trading water—a renewable, vital resource for which there is no substitute—for a nonrenewable resource 

that we can only obtain with very costly, highly damaging and destructive methods. 

Land and water are not—or should not—be treated as disposable goods. 

The Interior Department released a draft Programmatic Environmental Impact 

Statement that was not only appropriately cautious, but reflected the reality of the 

technological immaturity of the oil shale industry. The Department of Interior is 

charged with managing the Nation’s lands for the benefit of all the public in a manner that keeps faith with generations to come. These lands support hunting, fishing, 

and recreation of all types. They serve as protection for watersheds that recharge 

groundwater supplies and feed streams and rivers that support agriculture, ranching, power production and countless other businesses. The people engaged in these 

economic activities in Colorado, Utah, and Wyoming also deserve consideration. A 

number of groups representing these interests have voiced their concerns about leasing public lands for oil shale development, and about its impact on water resources 

in particular. I am attaching several of their past communications on this subject 

to my testimony today. 

We should not sacrifice sustainable communities and livelihoods in an attempt to 

mimic Earth’s geologic process of converting rock into oil. Can we really ask the 

public to once again believe that we are going to secure our energy future this way? 

Perhaps our witnesses this morning can convince me otherwise, but I believe we can 

make far better investments with public funds by increasing energy efficiency and 

expanding our use of renewable energy. 

I thank our witnesses for being here this morning. I look forward to hearing your 

testimony, 

Chairman HARRIS. Thank you very much, Mr. Tonko. 

If there are Members who wish to submit additional opening 

statements, your statements will be added at this point. 
21 

At this time, I would like to introduce our witnesses for the first 

panel. The first witness is Mr. Charles McConnell, Assistant Secretary for Fossil Energy at the U.S. Department of Energy. Prior 

to joining DOE, Mr. McConnell served as the Vice President of Carbon Management at Battelle Energy Technology. He also spent 31 

years with Praxair in various positions in the United States and 

Asia, including Global Vice President. He previously held a number 

of advisory positions, including chairmanships of the Gasification 

Technologies Council and the Clean Coal Technology Foundation of 

Texas. 

The second witness on the first panel will be Ms. Anu Mittal, Director, National Resources and Environment of the U.S. Government Accountability Office. Ms. Mittal has been with the GAO 

since 1989, during which time she has led a variety of reviews of 

federal programs related to land management, water resources, 

oceans and fisheries, environmental restoration, energy, defense 

cleanup, housing, food safety—you are busy—science and technology and agriculture issues. 

Thank you for appearing before the Subcommittee today. As our 

witnesses should know, spoken testimony is limited to five minutes 

each, after which the Members of the Committee will have five 

minutes each to ask questions. 

Before I recognize Mr. McConnell, I want to again express what 

has been a recurrent theme, the displeasure with DOE’s habitually 

late communications to Congress and to this Subcommittee and 

Committee. The testimony for this morning’s hearing, I don’t know 

if you realize this, Mr. McConnell, your testimony was due Tuesday 

morning at 9:30. That is the standard operating procedure for the 

Committees. We didn’t receive it until 7 o’clock last night. At 7 

o’clock last night, we were in session debating and voting until 

midnight. Obviously, Members did not have time to review your 

testimony, as we are entitled to under our rules. This extreme tardiness is the rule rather than the exception coming out of DOE. 

Whether it is delivering testimony or responding to letters from me 

and other Committee members and questions for the record, DOE 

is almost always embarrassingly late. Mr. McConnell, I trust that 

you will communicate this frustration back to Secretary Chu and 

his team and commit to delivering all follow-up materials associated with this hearing to the Subcommittee in a timely fashion. 

With that, I now recognize Assistant Secretary McConnell to 

present his testimony. You are recognized for five minutes. 

STATEMENT OF HON. CHARLES MCCONNELL, 

ASSISTANT SECRETARY FOR FOSSIL ENERGY, 

U.S. DEPARTMENT OF ENERGY 

Mr. MCCONNELL. Chairman Harris, Ranking Member Miller and 

Members of the Subcommittee, I appreciate the opportunity to discuss the role that the Office of Fossil Energy continues to play in 

the development of the Nation’s unconventional fossil resources. 

Expanding production of American energy resources is a key part 

of President Obama’s ‘‘all-of-the-above energy’’ strategy that includes renewables, nuclear and fossil resources. Very recently, the 

President laid out a specific goal to reduce the imports of oil by a 
22 

third over the next ten years. Reducing our imports will have the 

important impacts of improving our energy security, balance of 

trade, generating new jobs and growing our economy, and we are 

in the progress of making that goal. 

Over the past few years, crude imports have dropped from 70 

percent to 50 percent, while natural gas today is at an abundant 

and unprecedented price point, driven by expanded production of 

shale gas, and an abundance currently has U.S. storage capacity at 

near capacity. 

America is sitting on one of the largest gas finds in the world as 

well as the globe that we live in today. The benefits are game 

changing. EIA estimates that in the current rate of consumption, 

the Nation has a 90-year supply of domestic economically recoverable natural gas. If anybody needs proof that domestic energy production can spark a renaissance in American manufacturing, increase exports, and create more jobs, just look at the impact of 

shale gas on the industries across the country. A recent announcement in the global companies such as Shell and Dow, perfect examples of that. The American Chemistry Council estimates $16 billion of capital investment, $132 billion in economic output, 17,000 new high-paying jobs and 395,000 nore jobs tangential to the chemical industry. 

Other industries such as the electric power industry, steel industry, 

and heavy manufacturing will all benefit from this expanded supply of domestic natural gas. 

We are poised to do some great things for our energy and economic security, but to get those benefits, we will have to do it right. 

We will have to do it right the first time, and you don’t get do-overs 

in this business. A sustainable future requires sustainability in the 

way we do our work and how the work is performed. 

DOE has played a critical role in that development for years. Be- tween 1978 and 1992, the Department invested $137 million in 

early research on innovative shale gas technologies that led to investments by independent oil producers. Today our research on unconventional resources is being conducted against the backdrop of 

industry’s rapidly evolving exploration and production practices. 

While these advances are exciting, but there are also challenges. 

Hydraulic fracturing processes have received a great deal of attention, and people in communities want the confidence that the expansion of the E&P is sustainable. These are primary technical 

challenges, and if they receive the proper focus, sensible focus, they 

can be addressed. 

So going forward, the expertise of our natural gas technologies 

program is being refocused to help launch an R&D initiative with 

the EPA and the Department of Interior to address the potential 

environmental health and safety impacts of natural gas drilling 

practices, particularly hydraulic fracturing. This effort is being 

driven by the Secretary of Energy Advisory Board recommendations focusing on shale gas safety as well as the President’s new 

interagency working group on unconventional domestic gas resources, and we have recently cemented this with an interagency 

MOU. FE’s role in this initiative will be to conduct R&D to ensure 

the development of sustainable fracturing technologies and techniques such as cementing, well bore integrity, and water usage, 
23 

and let me add that while this R&D is focused on shale gas, many 

of the technologies can be applied and will be applied to shale oil 

production, particularly in areas such as the Bakken. 

In addition to shale, U.S.-led technology advances are making it 

possible for us to explore other unconventional resources. A prominent example of this is Fossil Energy’s methane hydrate research 

process. Recently we conducted an unprecedented test of technology 

on the North Slope of Alaska that was able to extract a steady flow 

of natural gas from methane hydrates. This is a combination of cooperative work with the country of Japan, ConocoPhillips, and a 

collaborative effort with DOE and Fossil Energy to cost share. This 

isn’t a subsidy to oil and gas, but it is a critical research done in 

the early stages of a critical market where resource discovery is 

necessary. Our methane hydrates research represents the critical 

ground floor that could provide a return on investment similar to 

that of our early shale gas, and we are just getting started. 

Additionally, the Department is focused on enhanced oil recovery 

using carbon dioxide from coal-fired power plants with enhanced oil 

recovery utilizing CO2, putting the CO2 in the ground and producing oil, and safely, and long-term permanently storing that CO2

for environmental benefits so we get both the benefit economically 

as well as environmentally. 

Thank you. I look forward to taking your questions. 

[The prepared statement of Mr. McConnell follows:] 
24 

Statement of 

Charles D. McConnell 

Assistant Secretary for Fossil Energy 

U.S. Department of Energy 

Before the 

Subcommittee on Energy and the Environment 

Committee on Science, Space, and Technology 

U.S. House of Representatives 

May 10, 2012 

Chairman Ranis. Ranking Member Miller. and members of the Subcommittee. I appreciate the 

opportunity to discuss the role that the Department of Energy's Office of Fossil Energy continues 

to play in the safe and responsible development of the Nation's unconventional fossil resources. 

As you know. in March 20 II. the President laid out a specific goal for our Nation: to reduce 

imports of oil by a third over the next 10 years. This is a goal that we can and must achieve. 

Reducing our imports will reduce our vulnerability to international oil prices, and create new 

jobs. And the development of all sources of American energy including unconventional oil 

and gas - will support this goal. 

In fact. we are already making progress. Since 2008. U.S. oil and natural gas production has 

increased each year. In 2011, U.S. clUde oil production reached its highest level in eight years. 

Natural gas production grew in 2011 as well- the largest year-over-year volumetric increase in 

history. Overall. oil imports have been falling since 2005. and our dependence on imported oil 

declined from 57 percent in 2008 to 45 percent in 2011 the lowest level since 1995. 

Challenges and Opportunities 

The safe and responsible development of unconventional domestic natural gas resources 

production creates jobs and provides economic benefits to the entire domestic production supply 

chain. as well as to chemical and other manufacturers. who benefit from lower feedstock and 

energy costs. By helping to power our transportation system, greater use of natural gas can also 

reduce our dependence on oil. And with appropriate safeguards, natural gas can provide a 

cleaner source of energy than other fossil fuels. For these reasons, it is vital that we utilize our 

unconventional natural gas resources. while giving American families and communities 

confidence that natural and cultural resources, air and water quality, and public health and safety 

will not be compromised. 

Indeed, this is a period of great opportunity for the plUdent development of our Nation's oil and 

gas resources. Expanding production of Amelican energy resources is a key part of President 

Obama's all-of-the-above energy strategy that includes renewables. nuclear and fossil resources. 

But to get these benefits we're going to have to do this right. 

1 
25 

Proposed Research 

As the United States continues to expand domestic natural gas and oil production, it is critical 

that the public have full confidence that the right safety and environmental protections are in 

place guided by the best available science. 

Historically, the Department of Energy has played a critical role in the development of 

technologies that have enabled the Nation to expand development of our energy resources. In 

fact, between 1978 and 1992, public research investments managed by the Department led to the 

breakthroughs in hydraulic fracturing and extended horizontal laterals that spurred private sector 

investments and industry innovation, unlocking billions of dollars in economic activity 

associated with shale gas. As the President noted in his State of the Union address and as others 

in industry as well as academia have confirmed, the domestic shale gas boom we see today 

demonstrates that government suppOli can be critical in helping businesses get new energy ideas 

off the ground. 

Today, we apply that lesson to other nascent technologies like wind and solar, and, within my 

office, to clean coal and other sources of clean domestic energy. For example, to support the 

economics of carbon capture and storage (CCS) technology - which captures C02 from 

industrial facilities and power plants; compresses it to liquid form; transports it to an appropriate 

location; and then injects it into suitable geological formations for permanent storage 

underground we are exploring ways to use the off-take from CCS projects to be treated as an 

asset instead of waste. To this end, the Department is including enhanced oil recovery utilizing 

carbon dioxide (C02-EOR) in its portfolio of CCS projects. Geologically complex oil reservoirs 

with large volumes of residual oil will benefit the most from next generation technology. DOE's 

role here is to move forward on the goals of the carbon capture program for lowering the cost of 

capture and continue to develop the technology and methods to measure, monitor, and verify that 

the carbon is sequestered in place. The fact that these projects can be done at lower cost makes 

them more attractive to the program, and related work on saline aquifers will continue. 

Of course, just as we continue to support public research to explore new opportunities, we must 

address the technical challenges that remain with the resources being developed today. For 

instance, concerns about how to safely and prudently develop unconventional shale gas and tight 

oil resources have received a great deal of attention, and the Department, in collaboration with 

other Federal agencies, will conduct research to address those concerns and will quantify the 

risks inherent in the production of these resources. By doing so, we can help ensure that 

subsequent regulations at the State and Federal levels, as well as voluntary action by industry, 

will effectively mitigate the risks that have been scientifically quantified. 

On April 13,2012, the President signed an Executive Order creating a new Interagency Working 

Group to Support Safe and Responsible Development of Unconventional Domestic Natural Gas 

Resources. On the same day DOE, the Environmental Protection Agency, and the Department of 

the Interior's U.S. Geological Survey signed a related Memorandum of Agreement initiating a 

Multi-Agency Collaboration on Unconventional Oil and Gas Research. 

FE's Natural Gas Technologies Program will be refocused to can-y out this R&D initiative. The 

objective of this collaborative effort is to better understand and address the potential 

2 
26 

environmental, health, and safety impacts of natural gas development through hydraulic 

fracturing, Through the collaboration, a robust Federal R&D plan will be developed, taking into 

account the recommendations of the Secretary of Energy Advisory Board (SEAB) Natural Gas 

Subcommittee. DOE's role in this initiative will focus on priorities identified by the interagency 

collaboration in a research plan to be formed over the next nine months within its area of core 

research competencies, including well bore integrity, flow and control; green technologies; and 

systems engineering, imaging and materials. While this R&D is focused on addressing issues 

surrounding shale gas, many of the environmental mitigation efforts we are pursuing are also 

applicable to the growing shale oil production. 

DOE Capabilities and Expertise 

Practices employed by companies engaging in exploration and production evolve rapidly. An 

understanding of these technologies and practices is critical if the Federal Government is to 

accurately quantify the risks of these activities. DOE has research experience and capabilities in 

drilling, production, and environmentally sustainable technologies, as well as imaging, materials, 

earth science and engineering. 

DOE capabilities include experience and expertise in quantifying, evaluating and mitigating 

potential risks resulting from the production and development of fhe shale gas resources, to 

include multi-phase flow in wells and reservoirs, well control, casing, cementing, drilling fluids, 

and ahandonment operations. DOE has experience in evaluating seal-integrity and wellboreinteglity characteristics in the context of protection of groundwater. 

DOE has experience and expertise in the development of a wide range of new technologies and 

processes that reduce the environmental impact of exploration and production, such as flow back 

water treatment processes and water filtration technologies. Data from these research activities 

assists regulatory agencies in making a science-based cost-benefit analysis of requiring 

producers to adopt new technologies to mitigate environmental risks. 

DOE specializes in the development of complex engineered systems, high speed computing and 

predictive modeling, and has experience in quantifying and mitigating low-frequency, highimpact risks. This includes evaluating human factors that potentially contribute to failures. DOE 

has developed and evaluated novel imaging technologies for aerial magnetic surveys for the 

detection of unmarked abandoned wells, and for detecting and measuring fugitive methane 

emissions from exploration, production, and transportation facilities. 

DOE also has experience in understanding fundamental interactions caused during fhe drilling 

process, such as the "equation of state" research that investigates the relationship between 

pressure, temperature, and viscosity of multi-phase fluids at the high temperatures and pressures 

associated with deep drilling and hydraulic fractming. DOE's experience in engineered 

underground containment systems for CO2 storage brings capabilities that are relevant to the 

challenges of safe shale gas production, such as evaluating cement-casing integrity in COiTosive 

environments. 

3 
27 

Conclusion 

The Department of Energy is committed to developing the science and technology that will allow 

the Nation to use its abundant fossil energy resources in a way that balances the energy needs for 

sustaining a robust economy with continued environmental responsibility. As we move forward 

on a multi-agency. collaborative research program with DOl and EPA into understanding and 

minimizing the unwanted consequences of unconventional fossil resource development. the 

Office of Fossil Energy will pursue its mission with the same commitment to excellence and 

innovation. 

Mr. Chailman. this completes my prepared statement. I would be happy to answer any questions 

you or other members of the committee may have at this time. 

4 
28 

Chairman HARRIS. Thank you very much. 

I now recognize Ms. Mittal. 

STATEMENT OF MS. ANU MITTAL, DIRECTOR, 

NATURAL RESOURCES AND ENVIRONMENT, 

U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. MITTAL. Chairman Harris and Members of the Subcommittee, I am pleased to be here today to participate in your 

hearing on unconventional oil and gas resources. 

As requested, my statement will focus on oil shale and will highlight the opportunities and challenges related to the development 

of this unconventional energy resource. My statement is based on 

the findings of a report that we completed for this Committee in 

October 2010. 

As you know, U.S. interest in oil shale has waxed and waned 

since the early 1900s because, over time, average oil prices have 

generally been lower than the threshold necessary to make oil 

shale development profitable. More recently, however, higher oil 

prices have renewed interest in domestic oil shale. The Federal 

Government is in a unique position to influence this development, 

because 72 percent of U.S. oil shale lies beneath lands managed by 

the Department of the Interior. 

The Green River formation in Colorado, Utah, and Wyoming contains the world’s largest deposits of oil shale. Being able to tap this 

vast amount of oil locked within this formation will go a long way 

to help to meet our future demands for oil. The U.S. Geological 

Survey, as you noted, estimates that the formation contains about 

three trillion barrels of oil, of which half may be recoverable. As 

you can imagine, having the technology to develop this vast energy 

resource will lead to a number of important socioeconomic benefits, 

including the creation of jobs, increases in wealth, and increases in 

tax and royalty payments for Federal and State Governments. 

Along with these positive outcomes, there are a number of key 

challenges that also should be considered. First, there is the uncertainty surrounding the viability of current technologies. To date, no 

commercial-scale surface retort or in situ technology has been proven in the United States that is both economically and environmentally viable. According to some energy experts, the key to developing U.S. oil shale will be through an in situ process, because 

most of our richest oil shale is buried beneath hundreds of feet of 

rock, making mining difficult or impossible. 

Second, developing oil shale poses significant environmental 

challenges for water quantity and quality, air quality, and wildlife. 

The water quantity and quality challenges are of particular importance, because developing oil shale will require significant amounts 

of water, which could pose problems in the arid West. Estimates 

of the quantities of water needed to support oil shale development 

vary significantly depending upon the assumptions that you use. 

However, it is expected that while the water is likely to be available for the initial development of the industry, the eventual size 

of the industry may ultimately be limited by the water availability. 

In addition, in the absence of effective mitigation measures, oil 

shale development could significantly impact water quality through 
29 

increased runoff of sediments, salts, and chemicals, decreased 

downstream flows, permanent groundwater impacts to aquifers and 

wastewater discharges to streams and rivers. 

While large-scale oil shale development offers socioeconomic opportunities, it also poses certain socioeconomic challenges that also 

should not be overlooked. Oil shale development like other extractive industries can bring a sizable influx of workers who along with 

their families put additional stresses on local infrastructure. Development from expansion of extractive industries has historically followed a boom-and-bust cycle, making planning for growth difficult 

for local governments. 

As we noted in our 2010 report, industry experts believe that the 

United States is currently at least 15 to 20 years away from developing a large-scale oil shale industry, but there are certain actions 

that federal agencies can begin to take now to proactively prepare 

for such an industry. These include improving collaboration between federal agencies on research and developing more comprehensive baseline information on the current ground and surface 

water conditions in the region. Such information will help position 

federal agencies to better monitor and mitigate the impacts of oil 

shale development if a viable industry should emerge. 

In conclusion, Mr. Chairman, while there are potential opportunities for the development of oil shale, they must be balanced with 

the technological, environmental and socioeconomic challenges that 

are also present. 

This completes my prepared statement. I would be pleased to answer any questions that you might have. 

[The prepared statement of Ms. Mittal follows:] 
30 

GAO 

Not to Be Rpleasp(} 

B(,fore n::~o lUlL EDT 

Thursday, May 10,2012 

GAO-12-740T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on Energy and 

Environment, Committee on Science, 

Space, and Technology, House of 

Representatives 

UNCONVENTIONAL OIL 

AND GAS PRODUCTION 

Opportunities and 

Challenges of Oil Shale 

Development 

Statement of Anu K. Mittal, Director 

Natural Resources and Environment 

GAO 

Accountability. Integrity ... Reliability 
31 

Highlights of GAO-12-740T, a testimony 

before the Subcommittee on Energy and 

Environment, Committee on Science, Space, 

and Technology, House of Representatives 

Why GAO Did This Study 

Fossil fuels are important to both the 

global and U.S. economies, and 

"unconventional" oil and gas 

resources-resources that cannot be 

produced, transported, or refined using 

traditional techniques-are expected to 

playa larger role in helping the United 

States meet future energy needs. VVith 

rising energy prices one such resource 

that has received renewed domestic 

attention in recent years is oil shale. 

Oil shale is a sedimentary rock that 

contains solid organic material that can 

be converted into an oil-like product 

when heated. About 72 percent of this 

oil shale is located within the Green 

River Formation in Colorado, Utah, and 

Wyoming and lies beneath federal 

lands managed by the Department of 

the Interior's Bureau of Land 

Management, making the federal 

government a key player in its potential 

development. In addition, the 

Department of Energy (DOE), 

adVances energy technology, including 

for oil shale, through its various offices, 

national laboratories, and 

arrangements with universities. 

GAO's testimony is based on its 

October 2010 report on the impacts of 

oil shale development (GAO-11-35). 

This testimony summarizes the 

opportunities and challenges of oil 

shale development identified in that 

report and the status of prior GAO 

recommendations that Interior take 

actions to better prepare for the 

possible future impacts of oil shale 

development. 

View GAO-12-740T. For more information, 

contact Anu K. Mittal at (202) 512-3841 or 

mltlala@gao.gov 

UNCONVENTIONAL OIL AND GAS PRODUCTION 

Opportunities and Challenges of Oil Shale 

Development 

What GAO Found 

In its October 201 0 report, GAO noted that oil shale development presents the 

following opportunities for the United States: 

Increasing domestic oil production Tapping the vast amounts of oil locked 

within U.S. oil shale formations could go a long way toward satisfying the 

nation's future oil demands. Oil shale deposits in the Green River Formation 

are estimated to contain up to 3 trillion barrels of oil, half of which may be 

recoverable, which is about equal to the entire world's proven oil reserves. 

Socioeconomic benefits. Development of oil shale resources could lead to 

the creation of jobs, increases in wealth, and increases in tax and royalty 

payments to federal and state governments for oil produced on their lands. 

The extent of these benefits, however, is unknown at this time because the 

ultimate size of the industry is uncertain. 

In addition to these opportunities and the uncertainty of not yet having an 

economical and environmentally viable commercial scale technology, the 

following challenges should also be considered: 

Impacts on water, air, and wildlife, Developing oil shale and providing power 

for oil shale operations and other activities will require large amounts of water 

and could have significant impacts on the quality and quantity of surface and 

groundwater resources. In addition, construction and mining activities during 

development can temporarily degrade air quality in local areas. There can 

also be long-term regional increases in air pollutants from oil shale 

processing and the generation of additional electricity to power oil shale 

development operations. Oil shale operations will also require the clearing of 

large surface areas of topsoil and vegetation which can affect wildlife habitat, 

and the withdrawal of large quantities of surface water which could also 

negatively impact aquatic life, 

Socioeconomic impacts. Oil shale development can bring an influx of 

workers, who along with their families can put additional stress on local 

infrastructure such as roads, housing, municipal water systems, and schools. 

Development from expansion of extractive industries, such as oil shale or oil 

and gas, has typically followed a "boom and bust" cycle, making planning for 

growth difficult for local governments. Moreover, traditional rural uses would 

be displaced by industrial uses and areas that rely on tourism and natural 

resources would be negatively impacted. 

GAO's 201 0 report found that federal research efforts on the impacts of oil shale 

development did not provide sufficient data for future monitoring and that there 

was a greater need for collaboration among key federal stakeholders to address 

water resources and research issues. Specifically, Interior and DOE officials 

generally have not shared information on their oil shale research efforts, and 

there was a need for the federal agencies to improve their collaboration and 

develop more comprehensive baseline information related to water resources in 

the region. GAO made three recommendations to Interior, which the department 

generally concurred with and has already begun to take actions to address. 

_____________ United States Government Accountability Office 
32 

Chairman Harris, Ranking Member Miller, and Members of the 

Subcommittee: 

I am pleased to be here today to participate in your hearing on the 

challenges and opportunities related to the potential development of 

unconventional oil and natural gas resources. As you know, fossil fuels 

are important to both the global and U.S. economies, and among other 

things, we rely on oil to fuel our transportation vehicles and on natural gas 

to a significant extent to heat and power our homes, businesses, and 

industries. For many years, the United States has relied heavily on 

imported oil and, to a lesser extent, imported natural gas, with domestic 

production largely limited to conventional oil and gas resources. However, 

in recent years, improvements in technology have allowed oil and gas 

operators to extract oil and natural gas from unconventional resourcesresources that cannot be produced, transported, or refined using 

traditional techniques. Examples of unconventional resources include oil 

shale (a sedimentary rock containing solid organic material that can be 

converted into a petroleum-like oil when heated), shale oil and gas, 

natural gas hydrates (crystalline solids consisting of water, methane, and 

usually a small amount of other gases that form beneath permafrost and 

on the ocean fioor), and tar sands (a combination of clay, sand, water, 

and bitumen, a heavy black viscous oil). 

These unconventional oil and gas resources are expected to playa larger 

role in helping the United States meet its future energy needs. In 

recognition of this fact, the Departments of Energy and the Interior and 

the Environmental Protection Agency released a memorandum on April 

13,2012, announcing a collaborative interagency effort on 

unconventional oil and gas research. The memorandum states that the 

agencies will develop a multi-agency program focused on the highest 

priority challenges associated with safely and prudently developing 

unconventional resources. 

My statement today is focused on oil shale development and will highlight 

several issues related to the opportunities and challenges related to oil 

shale development that we identified in an October 2010 report 

undertaken at the request of this committee.' In addition, I will highlight 

1GAO currently has work ongoing on several topics related to other unconventional 

energy resources, namely shale oil and gas and issues related to federal and state 

agency regulation of unconventional resources 

Page 1 GAO"12·740T 
33 

Background 

the key actions that federal agencies can take to proactively prepare for 

the potential development of a future oil shale industry. Our October 2010 

report was one of a series of reports that we have completed that 

examine the nexus between energy and water resources.' This 2010 

report contains a detailed explanation of the methods used to conduct our 

work, which we perfonmed in accordance with generally accepted 

government auditing standards. 

One unconventional energy resource that has received renewed attention 

in recent years in the United States is oil shale. Historically, interest in oil 

shale development as a domestic energy source has waxed and waned 

since the early 1900s, as average crude oil prices have generally been 

lower than the threshold necessary to make oil shale development 

profitable over time. More recently, however, higher oil prices have 

renewed interest in developing oil shale. The federal government is in a 

unique position to influence the development of oil shale because nearly 

three-quarters of the oil shale within the Green River Formation lies 

beneath federal lands managed by the Department of the Interior's 

(Interior) Bureau of Land Management (BLM). The Energy Policy Act of 

2005 directed I nterior to lease its lands for oil shale research and 

development. In June 2005, BLM initiated a leasing program for research, 

development, and demonstration (RD&D) of oil shale recovery 

technologies. By early 2007, it had granted six small RD&D leases: five in 

the Piceance Basin of northwest Colorado and one in the Uintah Basin of 

northeast Utah. The leases are for a 1 O-year period, and if the 

technologies are proven commercially viable, the lessees can significantly 

expand the size of the leases for commercial production into adjacent 

areas known as preference right lease areas. The Energy Policy Act of 

2005 also directed Interior to develop a programmatic environmental 

impact statement (PElS) for a commercial oil shale leasing program. 

During the drafting of the PElS, however, BLM determined that, without 

proven commercial technologies, it could not adequately assess the 

environmental impacts of oil shale development and dropped from 

consideration the decision to offer additional specific parcels for lease. 

Instead, the PElS analyzed making lands available for potential leasing 

2 GAO, Energy-Water Nexus: A Better and Coordinated Understanding of Water 

Resources Could Help Mitigate the Impacts of Potential Oil Shale Development, 

GAO-11-35 (Washington, D.C Oct 29,2010). Also see related GAO products at the end 

of this statement 

Page 2 GAO-12-740T 
34 

Opportunities 

Presented by Future 

Oil Shale 

Development 

and allowing industry to express interest in lands to be leased. 

Environmental groups then filed lawsuits, challenging various aspects of 

the PElS and the RD&D program. Since then, BLM has initiated another 

round of oil shale RD&D leasing and the lawsuits were settled. 

Stakeholders in the future development of oil shale are numerous and 

include the federal government, state government agencies, the oil shale 

industry, academic institutions, environmental groups, and private 

citizens. Among federal agencies, BLM manages federal land and the oil 

shale beneath it and develops regulations for its development. The United 

States Geological Survey (USGS) describes the nature and extent of oil 

shale deposits and collects and disseminates information on the nation's 

water resources, which are a significant consideration for oil shale 

development in the West. The Department of Energy (DOE), advances 

energy technologies, including oil shale technology, through its various 

offices, national laboratories, and arrangements with universities. The 

Environmental Protection Agency (EPA) sets standards for pollutants that 

could be released by oil shale development and reviews environmental 

impact statements, such as the PElS. Also, Interior's Bureau of 

Reclamation (BOR) manages federally built water projects that store and 

distribute water in 17 western states and provides this water to users, 

including states where oil shale research, development, and 

demonstration, is underway. 

Our October 2010 report found that oil shale development presents 

significant opportunities for the United States. Potential opportunities 

associated with oil shale development include increasing domestic oil 

production and socioeconomic benefits. 

Increasing domestic oil production. Being able to tap the vast amounts 

of oil locked within U.S. oil shale formations could go a long way 

toward satisfying the nation's future oil demands. The Green River 

Formation-an assemblage of over 1,000 feet of sedimentary rocks 

that lie beneath parts of Colorado, Utah, and Wyoming-contains the 

world's largest deposits of oil shale. USGS estimates that the Green 

River Formation contains about 3 trillion barrels of oil, and about half 

of this may be recoverable, depending on available technology and 

economic conditions. The Rand Corporation, a nonprofit research 

organization, estimates that 30 to 60 percent of the oil shale in the 

Green River Formation can be recovered. At the midpoint of this 

estimate, almost half of the 3 trillion barrels of oil would be 

recoverable. This is an amount about equal to the entire world's 

Page 3 GAO·12·740T 
35 

proven oil reserves. The thickest and richest oil shale within the Green 

River Formation exists in the Piceance Basin of northwest Colorado 

and the Uintah Basin of northeast Utah. Figure 1 shows where these 

prospective oil shale resources are located in Colorado and Utah. 

Figure 1. Location of Oil Shale Resources in Colorado and Utah 

10 20 30 

Most geoiogically prospective oii shaie resource 

Source Adopted from BLM 

Page4 
36 

Challenges Presented 

by Future Oil Shale 

Development 

Socioeconomic benefits. Development of oil shale resources could 

also yield important socioeconomic benefits, including the creation of 

jobs, increases in wealth, and increases in tax and royalty payments 

to federal and state governments for oil produced on their lands. Our 

October 2010 report did not attempt to quantify these potential 

socioeconomic benefits because of current uncertainty surrounding 

the technologies that might be used to develop oil shale resources, 

which would influence the ultimate size of a future oil shale industry. 

Our October 2010 report also found, however, that there are a number of 

key challenges associated with potential oil shale development in the 

United States, including: (1) uncertainty about viable technologies, (2) 

environmental impacts that affect water quantity and quality, air, and land, 

and (3) socioeconomic impacts. 

Uncertainty about viable technologies. A significant challenge to the 

development of oil shale lies in the uncertainty surrounding the 

viability of current technologies to economically extract oil from oil 

shale. To extract the oil, the rock needs to be heated to very high 

temperatures-ranging from about 650 to 1,000 degrees Fahrenheitin a process known as retorting. Retorting can be accomplished 

primarily by two methods. One method involves mining the oil shale, 

bringing it to the surface, and heating it in a vessel known as a retort 

Mining oil shale and retorting it has been demonstrated in the United 

States and is currently done to a limited extent in Estonia, China, and 

Brazil. However, a commercial mining operation with surface retorts 

has never been developed in the United States because the oil it 

produces competes directly with conventional crude oil, which 

historically has been less expensive to produce. The other method, 

known as an in-situ process, involves drilling holes into the oil shale, 

inserting heaters to heat the rock, and then collecting the oil as it is 

freed from the rock. Some in-situ technologies have been 

demonstrated on very small scales, but other technologies have yet to 

be proven, and none has been shown to be economically or 

environmentally viable at a commercial scale. According to some 

energy experts, the key to developing our country's oil shale is the 

development of an in-situ process because most of the richest oil 

shale is buried beneath hundreds to thousands of feet of rock, making 

mining difficult or impossible. In addition to these uncertainties, 

transporting the oil produced from oil shale to refineries may pose 

challenges because pipelines and major highways are not prolific in 

the remote areas where the oil shale is located, and the large-scale 

Page 5 GAO~12~740T 
37 

infrastructure that would be needed to supply power to heat the oil 

shale is lacking< 

Environmental impacts on water, air, and wildlife< Developing oil shale 

resources poses significant environmental challenges, particularly for 

water quantity and quality but also for air and wildlife< 

Page 6 

Water quantity Oil shale development could have significant 

impacts on the quantity of surface and groundwater resources, but 

the magnitude of these impacts is unknown because of the 

technological uncertainties, and also because the size of a future 

oil shale industry is unknown, and knowledge of current water 

conditions and groundwater flow is limited< Developing oil shale 

and providing power for oil shale operations and other associated 

activities will require significant amounts of water, which could 

pose problems, particularly in the arid West where an expanding 

population is already placing additional demands on available 

water resources< For example, some analysts project that large 

scale oil shale development within Colorado could require more 

water than is currenUy supplied to over 1 million residents of the 

Denver metro area and that water diverted for oil shale operations 

would restrict agricultural and urban development The potential 

demand for water is further complicated by the past decade of 

drought in the West and projections of a warming climate in the 

future< Current estimates of the quantities of water needed to 

support a future oil shale industry vary significantly depending 

upon the assumptions that are made< However, as our 2010 

report noted, while water is likely to be available for the initial 

development of an oil shale industry, the eventual size of the 

industry may be limited by the availability of water and demands 

for water to meet other needs of the region< Oil shale companies 

operating in Colorado and Utah will need to have water rights to 

develop oil shale, and representatives from all of the companies 

with whom we spoke for our 2010 report were confident that they 

held at least enough water rights for their initial projects and will 

likely be able to purchase more rights in the future< Sources of 

water for oil shale will likely be surface water in the immediate 

area, such as the White River, but groundwater could also be 

used< However, as we reported in 2010, the possibility of 

competing municipal and industrial demands for future water, a 

warming climate, future needs under existing compacts, and 

additional water needs for the protection of threatened and 

endangered fishes, may eventually limit the size of a future oil 

shale industry< 

GAO~12"740T 
38 

Page 7 

Water quality. While the water quantity impacts from oil shale 

development are difficult to precisely quantify at this time, 

hydrologists and engineers have been able to more definitively 

determine the water quality impacts that are likely because other 

types of mining, construction, and oil and gas development cause 

disturbances similar to impacts expected from oil shale 

development. According to these experts, in the absence of 

effective mitigation measures, impacts from oil shale development 

to water resources could result from (1) disturbances to the 

ground surface during the construction of roads and production 

facilities, which could result in the degradation of surface water 

quality from the related runoff of sediment, salts, and possible 

chemicals to nearby rivers and streams, (2) the withdrawal of 

water from streams and aquifers for oil shale operations, which 

could decrease flows downstream and temporarily degrade 

downstream water quality by depositing sediment during 

decreased flows, (3) underground mining and extraction, which 

would permanently impact aquifers by affecting groundwater flows 

through these zones, and (4) the discharge of waste waters from 

oil shale operations, which could temporarily increase water flows 

into receiving streams, thereby altering water quality and water 

temperature. 

Air. Construction and mining activities during the development of 

oil shale resources can temporarily degrade air quality in local 

areas. There can also be long-term regional increases in air 

pollutants from oil shale processing and the generation of 

additional electricity to power oil shale development operations. 

Pollutants, such as dust, nitrogen oxides, and sulfur dioxide, can 

contribute to the formation of regional haze that can affect 

adjacent wilderness areas, national parks, and national 

monuments, which can have very strict air quality standards. 

Environmental impacts could also be compounded by the impacts 

of coal mining, construction, and extensive oil and gas 

development in the area, and air quality appears to be particularly 

susceptible to the cumulative effect of these development impacts. 

According to some environmental experts that we spoke to for our 

2010 report, air quality impacts may be the limiting factor for the 

development of a large oil shale industry in the future. 

Wildlife. Oil shale operations are likely to clear large surface areas 

of topsoil and vegetation, and as a result, some wildlife habitat will 

be lost. Important species likely to be negatively impacted from 

loss of wildlife habitat include mule deer, elk, sage grouse, and 

GAO·12·740T 
39 

Federal Agencies Can 

Proactively Take 

Actions to Prepare 

For Oil Shale 

Development 

raptors. Noise from oil shale operations, access roads, 

transmission lines, and pipelines can further disturb wildlife and 

fragment their habitat. Wildlife is also particularly susceptible to 

the cumulative effects of nearby industry development. In addition, 

the withdrawal of large quantities of surface water for oil shale 

operations could negatively impact aquatic life downstream of the 

oil shale development. 

Socioeconomic impacts. Large-scale oil shale development offers 

certain socioeconomic benefits outlined earlier, but it also poses some 

socioeconomic challenges. Oil shale development can bring a 

sizeable influx of workers, who along with their families, put additional 

stress on local infrastructure such as roads, housing, municipal water 

systems, and schools. As noted in our 2010 report, development from 

expansion of extractive industries, such as oil shale or oil and gas, 

has typically followed a "boom and bust" cycle, making planning for 

growth difficult for local governments. Furthermore, development of a 

future oil shale industry would have the potential to replace traditional 

rural uses by the industrial development of the landscape, and tourism 

that relies on natural resources, such as hunting, fishing, and wildlife 

viewing, could be negatively impacted. 

Our 2010 report noted that current federal research efforts on the impacts 

of oil shale development do not provide sufficient data for future 

monitoring and that there is a greater need for collaboration among key 

stakeholders to address water resources and research issues related to 

oil shale development. As noted earlier, the federal government is in a 

unique posibon to influence the development of oil shale because 72 

percent of the oil shale within the Green River Formation lies beneath 

federal lands managed by BLM. In addition to its leasing of these lands, 

Interior has sponsored oil shale projects related to water resources-to 

develop a common repository of water data collected from the Piceance 

Basin and to begin monitoring groundwater quality and quantity within this 

basin using existing and future wells. The common repository project was 

funded jointly with Colorado cities and counties as well as with oil shale 

companies. DOE also plays an important role in developing these 

resources and has sponsored most of the oil shale research that involves 

water-related issues. DOE also provides technological and financial 

support for oil shale development, through its research and development 

efforts. However, our October 2010 report noted that Interior and DOE 

officials generally have not shared information on oil shale research and 

that there is a need for federal agencies to improve their efforts to 

Page 8 
40 

collaborate and develop more comprehensive baseline information on the 

current condition of groundwater and surface water in these areas. Such 

information will be important for understanding the potential impacts of oil 

shale development on water resources in the region. 

To prepare for possible impacts from the potential future development of 

oil shale, which industry experts believe is at least 15-20 years away, we 

made three recommendations in our October 2010 report to the Secretary 

of the Interior. We recommended that the Secretary direct BLM and 

USGS to 

establish comprehensive baseline conditions for groundwater and 

surface water quality, including their chemistry, and quantity in the 

Piceance and Uintah Basins to aid in the future monitoring of impacts 

from oil shale development in the Green River Formation; 

model regional groundwater movement and the interaction between 

groundwater and surface water, in light of aquifer properties and the 

age of groundwater, so as to help in understanding the transport of 

possible contaminants derived from the development of oil shale; and 

coordinate with DOE and state agencies with regulatory authority over 

water resources in implementing these recommendations, and to 

provide a mechanism for water-related research collaboration and 

sharing of results. 

Interior fully supported the concepts in the report and agreed with the 

need to answer the science questions associated with commercial oil 

shale production prior to its development. In addition, Interior indicated 

that it already had begun to take some actions in response to our 

recommendations. For example, Interior told us that USGS is undertaking 

an analysis of baseline water resources conditions to improve the 

understanding of groundwater and surface water systems that could be 

affected by commercial-scale oil shale development. In addition, Interior 

stated that BLM and USGS are working to improve coordination with DOE 

and state agencies with regulatory authority over water resources and 

noted current ongoing efforts with state authorities. 

Page 9 GAO·12·740T 
41 

Contact and Staff 

Acknowledgments 

In conclusion, Mr. Chairman, while there are potential opportunities for 

commercial development of large unconventional oil and gas resources, 

such as oil shale, in the United States, these opportunities must be 

balanced with other potential technological, environmental and 

socioeconomic challenges. The recommendations in our October 2010 

report on oil shale provide what we believe to be important next steps for 

federal agencies involved in the development of oil shale, particularly as it 

relates to water resources. By proactively improving collaboration 

between departments and state agencies and developing key baseline 

information the federal government can position itself to better monitor 

water resources and other environmental impacts should a viable oil 

shale industry develop in the future. 

Chairman Harris, Ranking Member Miller, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time. 

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this testimony. For further 

information about this testimony, please contact Anu K. Mittal, Director, 

Natural Resources and Environment team, (202) 512-3841 or 

mittala@gao.gov. In addition to the individual named above, key 

contributors to this testimony were Dan Haas (Assistant Director), 

Alison O'Neill, Barbara Timmerman, and Lisa Vojta. 

Page 10 
42 

Recent Related GAO Products 

Department of Energy: Advanced Research Projects Agency-Energy 

Could Benefit from Information on Applicants' Pnor Funding 

(GAO-12-112, January 13, 2012). 

Energy Development and Water Use: Impacts of Potential Oil Shale 

Development on Water Resources (GAQ.-11-929T, August 24, 2011). 

Federal Oil and Gas: Interagency Committee Needs to Beller Coordinate 

Research on Oil Pollution Prevention and Response (GAO-11-319, 

March 25, 2011). 

Oil and Gas Leasing: Past Work Identifies Numerous Challenges with 

Interior's Oversight (GAO-11-487T, March 17,2011). 

Oil and Gas Management: Key Elements to Consider for Providing 

Assurance of Effective Independent Oversight (GAO-10-852T, 

June 17, 2010). 

Federal Oil and Gas Management: Opportunities Exist to Improve 

Oversight (GAO-09-1014T, September 16, 2009). 

Oil and Gas Management: Federal Oil and Gas Resource Management 

and Revenue Collection In Need of Stronger Oversight and 

Comprehensive Reassessment (GAO-09-556T, April 2, 2009). 

Department of the Intenor, Bureau of Land Management: Oil Shale 

Management-General (GAO-09-214R, December 2,2008). 

Advanced Energy Technologies: Budget Trends and Challenges for 

DOE's Energy R&D Program (GAO-08-556T, March 5, 2008). 

Department of Energy: Oil and Natural Gas Research and Development 

Activities (GAO-08-190R, November 6,2007). 

Department of Energy: Key Challenges Remain for Developing and 

Deploying Advanced Energy Technologies to Meet Future Needs 

(GAO-07-10B, December 20,2006). 

Page 11 GAO·12·740T 
43 

(38141S) 

Recent Related GAO Products 

Energy-Water Nexus report series 

Energy-Water Nexus: Information on the Quantity, Quality, and 

Management of Water Produced during Oil and Gas Production 

(GAO-12-156, January 9, 2012). 

Energy-Water Nexus: Amount of Energy Needed to Supply, Use, and 

Treat Water Is Location-Specific and Can Be Reduced by Certain 

Technologies and Approaches (GAO-11-225, March 23,2011). 

Energy-Water Nexus: A Better and Coordinated Understanding of Water 

Resources Could Help Mitigate the Impacts of Potential Oil Shale 

Development (GAO-11-35, October 29,2010). 

Energy-Water Nexus: Many Uncertainties Remain about National and 

Regional Effects of Increased Biofuel Production on Water Resources 

(GAO-10-116, November 30,2009). 

Energy-Water Nexus: Improvements to Federal Water Use Data Would 

Increase Understanding of Trends in Power Plant Water Use 

(GAO-1O-23, October 16, 2009). 

Page 12 GAO·12·740T 
44 

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46 

Chairman HARRIS. Thank you very, very much, and we will begin 

the questioning. The Members will be recognized for five minutes, 

and I recognize myself first. 

Mr. McConnell, as you know, the President has recently talked, 

as I said in my opening statement, about this ‘‘all of the above’’ energy strategy, so I am going to ask you just a few questions about 

what the Administration means by all of the above. First of all, is 

gas production from methane hydrate one of the components of ‘‘all 

of the above’’? 

Mr. MCCONNELL. Yes. 

Chairman HARRIS. Okay. Can you just explain why for the last 

three fiscal years, then, the Fossil Energy budget request has proposed to eliminate the program, Fiscal Year 2010, 2011 and 2012? 

Mr. MCCONNELL. I can’t speak to those previous years, but I can 

tell you, the budget request for 2013 has it in there. Last year, we 

did work on methane hydrates with funding that was provided 

through the Office of Science, recently conducted a test—— 

Chairman HARRIS. I know you mentioned that. Thank you very 

much, and I appreciate the change of heart, believe me. 

Now, is oil shale part of the ‘‘all of the above’’ strategy? 

Mr. MCCONNELL. Oil shale is certainly a part of the ‘‘all-of the 

above’’ strategy. 

Chairman HARRIS. And what is the Administration doing to actively support the development of oil shale? 

Mr. MCCONNELL. Much of the work that we are doing in the unconventional processing work that we are doing all provides a lot 

of the baselines for that industry, as well as the hydraulic fracturing that is going on in natural gas as well as tight oil that is 

going on in that area as well. 

Chairman HARRIS. But with regard specifically to oil shale, what 

is the level of investment that the Administration is proposing? 

Mr. MCCONNELL. We don’t have a specific line item in this year’s 

budget request. 

Chairman HARRIS. Do you have any idea about how much out of 

the—the DOE has a several billion dollar budget. How important 

are they looking for the future, toward the future for oil shale? Is 

it $5 million, $10 million, $15 million? 

Mr. MCCONNELL. In this year’s budget request, it was zero. 

Chairman HARRIS. Oh, zero? Oh, okay. It doesn’t sound like 

much active support. But what about oil sands? Is oil sands part 

of the ‘‘all of the above’’ approach? 

Mr. MCCONNELL. It is part of the ‘‘all of the above’’ approach, 

and it is also part of what we are constantly looking at and part 

of our overall process. 

Chairman HARRIS. Is that also line item zero in the DOE budget? 

Mr. MCCONNELL. We have a number of line items that aren’t 

specifically identified by the market segments you are identifying, 

but in terms of the key technologies and the cross-cutting research 

that goes on from technologies that apply to many of the markets 

that you are mentioning. 

Chairman HARRIS. Perhaps you can follow up with some more 

detail. We will have some follow-up questions. The DOE has, you know, requested, as you said, I think, $12 million in the budget to, I think you called it R&D initiative, but what 
47 

it sounds like is, you know, understand and minimize the potential 

environmental, health and safety impacts of shale gas. I mean, 

most people would realize this is the prelude to regulation basically. Is there any research that you are doing that might actually 

help increase production? 

Mr. MCCONNELL. There sure is. 

Chairman HARRIS. Okay. 

Mr. MCCONNELL. It would be well bore integrity. We are looking 

at processes in terms of extraction, and we don’t draw a distinction 

between sustainability and extraction techniques. We see it as one 

and the same because it has to be done right the first time with 

a sustainable impact. 

Chairman HARRIS. Right, and done right the first time, you are 

aware that, for instance, hydraulic fracturing has been done 1.2 

million times in the United States, right, with no documented evidence of contamination of drinking water ever? 

Mr. MCCONNELL. That is correct. 

Chairman HARRIS. That sounds not only done right the first 

time, it sounds like done right 1.2 million times, but anyway, we 

are going to have a difference of opinion on that, probably. 

Now, in 2007, the Department of Energy’s Strategic Unconventional Fuels Task Force published a strategy and program plan 

that included numerous recommendations on how the Federal Government could support unconventional energy, development of unconventional energy. Is the DOE implementing any of the recommendations made by that task force back in 2007? 

Mr. MCCONNELL. We are working, continue to work year over 

year with the RPSEA organization following that—following those 

sets of recommendations. 

Chairman HARRIS. What progress has been made on the specific 

recommendation to ‘‘provide an effective land tenure system’’ for 

access to resources on public lands? 

Mr. MCCONNELL. That is a question I can’t answer. I don’t know 

the answer. 

Chairman HARRIS. Perhaps you could, you know, get the answer 

and provide it in writing. 

What progress has been made on the recommendation ‘‘to provide an inclusive regulatory system and development process that 

encourages expeditious development and a predictable schedule for 

permitting and approvals’’? Is the Administration doing anything to 

encourage a predicable schedule for permit approvals? 

Mr. MCCONNELL. That is not something in Fossil Energy that I 

am aware of directly, and I will have to provide that to you as well. 

Chairman HARRIS. Thank you. And do you know if the task force 

is still actively meeting and producing work products? Is that task 

force still having meetings? 

Mr. MCCONNELL. It does meet from time to time, regularly—I 

can’t speak to how often it has met, but it has had routine meetings over the past several years. 

Chairman HARRIS. And the last one being what do you think? 

Mr. MCCONNELL. Don’t know the answer to that. 

Chairman HARRIS. Okay. Maybe you can get that answer to us 

also. Well, thank you very much. 

I now recognize Mr. Tonko for five minutes. 
48 

Mr. TONKO. Thank you, Mr. Chair. 

In this Committee, we have spent a lot of time debating the appropriate role of government in the development of energy technologies. My Republican colleagues seem steadfast in their resolve 

that anything beyond basic research, whether it is applied research, demonstration, or financing amounts to government interference in the free market, somewhat of a picking winners and losers and crowding out private investment. However, this appears to 

only apply when maligning clean energy technologies, and their 

commitment to these principles quickly disappears when it comes 

to supporting increasing taxpayer funds to develop technologies for 

the oil and gas sector. That said, I am willing to acknowledge that 

there may be areas within fossil energy research space where a little government research could be helpful. 

With that in mind, Ms. Mittal, your report includes some recommendations for research areas. Could you expand on that, 

please, and address why you think these areas are particularly well 

suited for government involvement? 

Ms. MITTAL. When we looked at gaps in research for oil shale, 

we heard from federal as well as State and academic researchers 

a consistent message that there were two areas in which there 

were gaps. One was that there was insufficient information and 

data on groundwater and surface water baseline information in the 

region that there was not enough information right now on the conditions of groundwater and surface water in the region. Therefore, 

when an oil shale industry develops, you will not know what the 

baseline conditions are, so it will be impossible to determine what 

the impacts of the industry are, so we need to do more research 

and get good information on both quantity and quality impacts, information on quantity and quality of the groundwater and surface 

water. 

The other area is that we need to develop more information on 

how groundwater and surface water interact with one another, and 

this will help develop models that will allow us to determine how 

contaminants are transported from groundwater to surface water 

and vice versa, and those are two areas that were identified for 

needing more federal research. 

Mr. TONKO. Thank you very much, and to our Assistant Secretary, the Department made a recent announcement regarding its 

work on methane hydrates. Can you please provide some detail on 

that, and in particular, discuss how it fits into what you would consider to be the right problem space for government research programs in fossil energy? 

Mr. MCCONNELL. Well, in any kind of early emerging technologies, government assistance is required to help promote and 

stimulate industry involvement. A good example of that would have 

been in the early 1970s when hydraulic fracturing for natural gas 

actually began, and again, that just wasn’t the government investing money, but it was a combination of government and industry 

partnering, and George Mitchell and the Woodlands a long, long 

time ago was very interested in moving forward but needed some 

help, and the government and Mitchell Energies moved forward 

with those initial—that work, and it has borne quite a bit of fruit 

since then. 
49 

I think methane hydrates is a good analogy to that situation. It 

was—it is a unique and emerging type of technology in industry for 

natural gas conducted on the slopes of Alaska, and it also was a 

partnership between ConocoPhillips, the Japanese government as 

well as the Department of Energy, and I think any one of these 

emerging technologies, early on, a good measure of industry interest is their willingness to cross-share and partner, and that is the 

way that kind of research can be conducted and be most beneficial. 

We had the work done in Alaska. It was very successful. We were 

highly encouraged by the results we saw, and in any type of research program, it sets the baseline for what we hope will be continued work in that area and continued involvement that we can 

bring forward, and again, in partnership with industry and others 

that are willing to partner in the effort. So like any good strategic 

process, you do some things. You find out what you learn and then 

grow from there, and we are certainly enthused about what we 

have seen. 

Mr. TONKO. And in terms of comparing that with the potential 

DOE role in developing technologies for other unconventionals such 

as oil shale, would you contrast that for us? 

Mr. MCCONNELL. Well, I don’t know that there is any contrasting. I think the most important thing we do at Fossil, I believe, is to be very close to industry’s interests and development so 

that we can stay close to their enthusiasm, and we talk a lot about 

technical recovery, and then we talk about economic recovery, and 

I think industry is a far better gauge of what emerging technologies they would like to spend time on and actually develop, and 

in the case of what you are describing, for us to find industry partners that are willing to do the cost sharing, to be involved and cooperatively develop this research, what it does is, it is a real bellwether for industry’s level of enthusiasm at the time that they are 

involved, and we will stay very close to that. 

Mr. TONKO. Thank you very much. 

I yield back, Mr. Chair. 

Chairman HARRIS. Thank you very much. 

I now recognize the gentleman from California, Mr. Rohrabacher, 

for five minutes. 

Mr. ROHRABACHER. Thank you very much. 

‘‘All of the above,’’ really, we have a problem with that and I 

have a problem with that, and I just do not believe that the President has been forthright in discussing his energy policy with the 

Congress. We have seen that in this Committee where we have 

seen what appears to be purposeful deployment of regulatory bodies to stop certain types of production, especially fracking, which 

seems to be a—which seems to be something that is actually greatly expanding the energy available to the United States. So that 

gives us some concern. That isn’t necessarily something that you 

would be involved in. 

I think that we—do you agree that we have reached a technological stage that we could become energy self-sufficient within a 

decade? 

Mr. MCCONNELL. I wouldn’t debate that with you, but I think it 

is really important that we have energy security. I think that is a 

little different than energy independence, but maybe we are just 
50 

making a fine point of a word. I don’t know. I think is important 

that we be energy secure. 

Mr. ROHRABACHER. But are we technologically capable of that 

now? 

Mr. MCCONNELL. Well, I will give you an example. We talked 

earlier about hydraulic fracturing, and I mentioned sustainability, 

and in fact, we have fracked a lot of wells for a lot of years. There 

is no question about that. I think it is also fair to say that in our 

society today, there are a lot of questions about fracturing, about 

the impacts in local communities, et cetera, and it is not just issues 

associated with groundwater, but it also has to do with seismic effects, it also has to do with wastewater disposal, wastewater treatment, all of the issues that are really important to sustainability. 

Mr. ROHRABACHER. Do you think it also has to do with a mindset 

that what is formally described as Luddite mindset that has been 

beaten into kids’ heads at our universities that a habitat for a 

squirrel is more important than energy for American homes? 

Mr. MCCONNELL. I wouldn’t subscribe to that. I don’t think that 

at all. As a matter of fact, I think it is really important that it do 

be deemed sustainable and a big part of our future, and that is 

what—— 

Mr. ROHRABACHER. You don’t think that anti-energy attitude has 

had some impact on the Administration and the production of energy in our country? 

Mr. MCCONNELL. I can’t comment to that. I can tell you it hasn’t 

had any effect on what we are doing at Fossil Energy. 

Mr. ROHRABACHER. Let me just note that we have had the ability 

in a number of areas. I have supported energy research into solar, 

for example, over the years, and it wasn’t up until about a year and 

a half ago, there were no permits issued by the Federal Government to move forward with solar energy plants in the desert— 

none. And in fact, Mr. Chairman, I had to actually introduce legislation to sort of ‘‘goose’’ the system into letting people go on these 

vast stretches of desert that we have and set up a solar plant, and 

do you know how many solar plants have been issued permits now 

in the last year and a half? 

Mr. MCCONNELL. I don’t know the answer to that, sir. 

Mr. ROHRABACHER. I think it is six, but let us just note that we 

are way behind the curve because the technology was there and 

has been there to try to build a solar plant in the desert, yet up 

until a year and a half ago there were zero solar plants in the 

desert, and you look back and I think it an overvalue being placed 

on habitat for insects and lizards rather than electric power for the 

homes of human beings. 

What about— let me get to methane hydrates. It is another one 

I supported early on over the years. Has there been any progress 

with methane hydrate other than Alaska? There are methane hydrate potentials, for example, in the ocean. 

Mr. MCCONNELL. There are indeed, and as part of the unconventional strategy going forward, we are doing some very early work 

in that to make assessments of resources and overall impact, yes. 

Mr. ROHRABACHER. Has there been any—assessment of resource 

is one thing, development of technology is another. Have there been 
51 

any technological steps forward in trying to utilize ocean-based 

methane hydrates? 

Mr. MCCONNELL. We haven’t conducted any demonstration 

projects, if that is your question. 

Mr. ROHRABACHER. One last note. For the amount of energy that 

is being produced and consumed by the American people, the 

amount of research money that is spent by the Federal Government into that particular area, wouldn’t you say that oil and gas 

actually produces a huge amount of our energy that we consume 

and that it is actually per amount of energy that we use from that 

source the amount of research actually is less than in other areas? 

Mr. MCCONNELL. Well, from our standpoint, we recognize that 

both oil and gas as well as coal is an incredibly big part of our future. I think what we want to be sure we do is not fall into the 

trap of looking at how much we are using today and having that 

be equivalent to how much we are spending on research. A lot of 

the emerging technologies that we are spending our money on at 

a federal level as well as with industry is important in that regard. 

So yes, I think it is a big part of our future and it will be a big 

part of Fossil Energy’s strategy. 

Mr. ROHRABACHER. Thank you very much, and we just hope that 

the President is serious and it is reflected in the policies that go 

through his Administration about this idea of ‘‘all of the above,’’ because America, nothing would be better for our economy than for 

us to quit sending that money overseas and spending it right here. 

Thank you very much. 

Mr. MCCONNELL. I couldn’t agree with you more. 

Chairman HARRIS. Thank you very much. 

The gentleman from New Mexico, Mr. Luja ́n, is recognized for 

five minutes. 

Mr. LUJA ́ N. Mr. Chairman, thank you very much. 

Mr. Chairman, I was really encouraged when I read the hearing 

charter, ‘‘Supporting American Jobs in the Economy through Expanded Energy Production: Challenges and Opportunities of Unconventional Resources Technology,’’ but I was a bit disappointed 

when reading through the charter and through the testimony that 

was filed with us, that I didn’t see any mention of fuel production 

from algae or that we were going to be able to talk about the energy that could be produced from battery storage. And I say that, 

Mr. Chairman, because there have been recent reports that have 

been put out that talk about the research and development that is 

taking place through the Department of Defense with unconventional energy production so that we can save soldiers’ lives when 

we fully appreciate the amount of lives that have been lost through 

the transport of fuel that is developed from petro products or the 

weight of those batteries that they have to carry in those packs to 

be able to develop any generation or communication aspects. 

But with that being said, Mr. Chairman, I still am encouraged 

at the conversation that we are having today, and I hope that we 

can take that conversation up as well because it is an important 

one as we talked about, ‘‘all of the above’’ opportunities through the 

expansion of research and development. 

Pertaining to oil shale development and water concerns in the 

West, I appreciate the sensitivities that are being brought in that 
52 

area. Coming from the high desert, although I have six beautiful 

ski areas in my district, you can imagine that the snowpack isn’t 

always what it should be, and this year as we talk about the readjudication of water from the Colorado and the way that it is 

going to impact the West, what that means to water flows, commerce, opportunities, food production in the West is something that 

I am very sensitive to. 

And so, Ms. Mittal, being from the Southwest where water is so 

scarce, I would appreciate you going into some more detail on the 

potential impact of oil shale development on water quality, on 

quantity, and how research and development might lead to other 

opportunities as we talk about the amount of water that is necessary in these areas. 

Ms. MITTAL. One of the things that our 2010 report noted was 

that right now it is very difficult to assess or measure the quantity 

impacts of oil shale development, and that is for three primary reasons. One is that we don’t have a good sense of what the baseline 

conditions of groundwater and surface water is, as I mentioned earlier. The other issue is that there is a lot of uncertainty related to 

the technology, so we don’t know how much water is actually going 

to be used by the technology. It is very, very uncertain. And the 

third issue is that there are a lot of uncertainties related to climate 

change, how much water is going to be needed in the future in that 

region from growing population, from compacts. There are water 

compacts that are going to require certain demands, that are going 

to place certain demands on the water in the Colorado River region. There are going to be other uses of water. So there are a lot 

of uncertainties right now that make it very difficult to actually 

quantify the impacts of oil shale development on water resources 

in that area. 

Mr. LUJA ́ N. I appreciate that. Although myself and my colleagues 

may not agree on what is causing some of the drought conditions 

that we are experiencing, the reality is that I have ranchers back 

in New Mexico that have sold off entire herds because there is less 

water, and I hope that we can all agree on the reality that there 

is less water out there and that we need to be mindful of that. 

Mr. McConnell, one thing that I don’t believe that we do a good 

enough job of is explaining to the American people that there is a 

difference between oil shale and shale oil. But I want to concentrate my efforts on oil shale. The way that I understand it is, 

it is a rock and that there is an element in there, if I pronounce 

it correctly, kerogen, that has to be heated up, so we have to heat 

this rock up that is down below. How would you propose that we 

heat that rock up? You know, does it take a long match? How are 

we able to reach down there to heat that rock up so we can get this 

energy coming out of that? What kind of heat do we need? 

Mr. MCCONNELL. Well, most of the technologies that are looked 

at—and again, there is a suite of technologies that can be employed, but it is really an in situ process in which you need to get 

the fuel source into that area to be able to do that heating as you 

described it. There are a number of different technologies that are 

being looked at, but again, this is a very early emerging industry 

and I wouldn’t say there is a business-as-usual case for exactly 

what you are describing. 
53 

Mr. LUJA ́ N. I appreciate that. 

Mr. Chairman, thank you very much and look forward to the 

next round of questions with the next panel. Thank you. 

Chairman HARRIS. Thank you. 

I now recognize the other gentleman from Maryland, Mr. Bartlett, for five minutes. 

Mr. BARTLETT. Thank you very much. 

I was reading the other day a report that indicated that the gas 

in the Marcellus shale was the equivalent of 3.4 billion barrels of 

oil. Is that the number that you have heard? Is that in the ballpark? 

Mr. MCCONNELL. Equivalencies sometimes can be tricky, but I 

would agree with what you are talking about, yes. 

Mr. BARTLETT. Now, underlying the Marcellus shale is a bigger 

footprint of Utica shale, which contains oil. This same report said 

that there was 4–1/2 billion barrels of oil in the Utica shale. Is that 

a number that you think is in the ballpark? 

Mr. MCCONNELL. A large number, yes, sir. 

Mr. BARTLETT. Okay. Every day the world uses 84 million barrels 

of oil. That means in 12 days, the world uses a billion barrels of 

oil. So this 4–1/2 billion barrels of oil, which you said was huge will 

last the world 52 days. That doesn’t seem to me to be a really big 

deal, just 52 days. 

Methane hydrates have been mentioned. There are potentially 

huge energy stores in methane hydrates. 

Let me mention something else where there are huge potential 

energy resources. That is the tides. The Moon lifts the whole darn 

ocean what, two, three, four feet a day? I carry two buckets of 

water, that is heavy. That is an awful lot of energy. Why aren’t we 

getting more energy out of the tides? It is for the same reason we 

aren’t getting any energy, much of any energy out of methane hydrates because it is very dispersed. It has got to be concentrated 

before you can really capitalize on it. I think it will be a long time 

before we get much energy out of methane hydrates, although the 

potential energy there, I think, exceeds most other energy sources, 

does it not? It makes a potentially huge energy reserve in methane 

hydrates. 

The oil shales, 1–1/2 trillion barrels of potentially recoverable oil. 

Shell Oil Company has tried twice there and they have given up. 

Oil at $80 barrel was not high enough that it was recoverable. 

But let us imagine that we can get a trillion and a half barrels 

of oil from the oil shales. You know, it is awfully easy when you 

are dealing with big numbers to slip a zero or two, so I want you 

to check the numbers with me. Is 1,500 billion a trillion and a half? 

Mr. MCCONNELL. I am going to take you word for it that it is. 

I am not quite sharp enough to answer your question, sir. 

Mr. BARTLETT. I think that 1,500 billion is a trillion and a half, 

and if that is true, and I now do some arithmetic, I find that if we 

are able to develop this trillion and a half barrels of oil from the 

oil shales, that it will last the world, I think, 40 or 50 years. A little over four years ago, I let a CODEL to China. Nine of us went 

to talk about energy, and the Chinese began their discussion of energy by talking about post oil. Clearly, there will be a post-oil 

world. The first prominent person I know of to recognize that was 
54 

Hyman Rickover, and if you want to read a very fascinating speech, 

it was lost for a number of years, just Google for Rickover and energy speech, and his speech given the 15th day of May 1957 in St. 

Paul, Minnesota, will come up, and he made a very interesting observation. He said in the 8,000-year recorded history of man, the 

age of oil would be but a blip. He had no idea how long the age 

of oil would last. Now we know, the age of oil is going to last about 

300 years. We are 150 years into the age of oil and we are not running out of oil, by the way. What we are running out of is our ability to produce it as fast as we would like to use it. There is way 

more oil out there to be pumped than all the oil that we have 

pumped, but the challenge is pumping it as fast as we would like 

to use it. 

Now, if we develop all of that oil and it lasts us just 50 years, 

I have got great-grandkids. What are they going to do in 50 years? 

Thank you very much, Mr. Chairman, and I yield back. 

Chairman HARRIS. Thank you very much. 

They are calling us for votes, but I think we can get a couple 

more Members’ questions in before we have to go. I now recognize 

Mr. McNerney, the gentleman from California, for five minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. McConnell, how would you compare hydro fracking technology to oil shale technology, both in terms of the economics and 

impacts on local environment? 

Mr. MCCONNELL. Well, maybe first of all, think about it in terms 

of where we are on the technical scale or the really—it is often 

called the TRL, or technical readiness. In terms of hydraulic fracturing and what is going on in the Marcellus and other areas 

across the country, that technology has been noted, as it has been 

performed for a number of years, recently come into a lot of prominence because of the high cost of natural gas just three or four 

years ago. We were all very concerned that we as a Nation were 

going to have to import natural gas, and we were able to take this 

technology, put it in play and utilize it. And from the standpoint 

of the Marcellus and many of the numbers that you quoted about 

availability of resources, etc., oftentimes the first call on that is 

considered to be technically recoverable hydrocarbon. But it is not 

really technical recovery, but it is really economically recoverable. 

And so we have got vast quantities of additional hydrocarbon resource that with the price points being what they need to be and 

with the technology evolving to where it can go, it really then 

opens up large additional volumes. 

The hydraulic fracturing activity has been performed for years 

and years, but of course, we continue to look at the impacts of it 

not just from standpoint of the fracturing itself but the wastewater 

disposal, the seismic activity, all of the other things that many of 

the people in our country are concerned about. 

Contrast that with the oil shale that you mentioned. It is much, 

much less far along on its technical scale of capabilities. A lot of 

the initial resource assessments have been performed. The volumes 

and the capabilities are vast. If you look at where we are today in 

terms of crude oil and the capacity that we have in this country 

in our domestic imports of it, I know that industry will continue 

to look at it as a next best opportunity to move forward to. But 
55 

today it doesn’t have economic recoverability, and because of that, 

there hasn’t been a draw by industry at this point to get into it in 

the same way that we have done with hydraulic fracturing for natural gas. 

Mr. MCNERNEY. Thank you. Would you comment on energy return on investment as applied to oil shale? Are you familiar with 

that term? 

Mr. MCCONNELL. Well, I can give you just a statistic from the 

National Energy Technology Laboratory. Over the past 20 years, 

we have done some analysis. For every dollar that the taxpayers 

put in, we have got about $13 of return back in terms of jobs and 

economic impact and other things that have contributed to our 

economy. The statistics that I quoted earlier, the rather modest investment that was done in hydraulic fracturing for natural gas 

today is paying enormous dividends and we are enjoying that and 

the American chemical industry, and we will likely be using more 

and more natural gas in electric power generation, etc., as we move 

forward. 

In the oil shale today, a lot of the initial work that we are doing 

again in assessments and looking at the potential for it, I don’t 

know that we are far enough along to actually put a return on investment just yet. 

Mr. MCNERNEY. Well, by energy return on investment, I mean 

energy in versus energy out. So energy out is a numerator; energy 

in is the denominator. If you have any comment on that, or Ms. 

Mittal, if you have a comment on that? 

Ms. MITTAL. We didn’t look at the actual amount of energy. What 

we were told is that it does require a lot of energy, especially the 

in situ process because you have to heat the rock for large periods 

of time to very high temperatures. It is a very high-energy-intensive process. 

Mr. MCNERNEY. So it is likely to have a small energy return on 

investment in terms of the way I just defined it? 

Ms. MITTAL. It could, but we don’t have the actual numbers. 

Mr. MCNERNEY. Thank you, Mr. Chairman. I will yield back. 

Chairman HARRIS. I thank you very much. 

I recognize the Chairman of the Committee, the gentleman from 

Texas, Mr. Hall. 

Chairman HALL. Mr. Chairman, I thank you, and I am really a 

little confused right now. I heard something that really sounded 

good to me, that one of our leaders said this country needs an ‘‘allout,’’ ‘‘all-of-the-above’’ strategy that develops every available 

source of American energy. Of course, I jumped up and down and 

clapped my hands and re-read it, listened to it, say it one more 

time. I found out it was Mr. Obama that said that in the State of 

the Union speech. And other than prayer, energy is probably the 

most important word in the dictionary to any youngster that is in 

high school or early college right now. 

And it is very difficult to square that statement with the Administration’s actions. For example, the budget proposes to eliminate 

a $50 million R&D program aimed at expanding safe production of 

oil and gas. This program, which I created in the Energy Policy Act 

of 2005, several Presidents have tried to knock it out, supports development of next-generation technologies important to ensuring 
56 

domestic production of oil and gas and it is maintained and even 

increased. It was simple. We knew the energy was there, but we 

couldn’t get it to the top of the water. We traded to universities the 

technology, traded the same very energy that they are going to get 

for us by giving us the technology to get it. It is an easy way to 

get technology without pledging or paying out money direct here 

too. It was a deal and it has worked. I don’t understand why anybody wants to knock it out, because the program was highlighted 

by the Department of Energy’s own advisory board as an effective 

program that should be enhanced and supported. I really don’t— 

Mr. McConnell, if the President really wants to identify every single way to lower gas prices and increase energy production over the 

long term, why is he trying to eliminate the R&D program? 

Mr. MCCONNELL. I don’t believe he is trying to eliminate the 

R&D program. I think—— 

Chairman HALL. What is he trying to do then? Tell me. Explain 

to me. I don’t understand that. Where do you get that? 

Mr. MCCONNELL. What we are trying to do is take the resources 

that we have got available and with the fiscal means that we have 

available, and one of the things I said when I took this job is, I 

would do the best we could to get the most impact with the resources we had available to us, and that is what we are doing. 

Chairman HALL. You have got a lot of resources up in ANWR 

and all of you say don’t drill on little ANWR. There is just 19 million acres in little ANWR. All we want to drill on is 2,000 acres. 

Maybe 40 years of energy there. How in the world can you square 

what you are testifying to here? And you know you are under oath 

right now, don’t you? 

Mr. MCCONNELL. Yes, sir, I do. 

Chairman HALL. Then go ahead and explain to me. I will just 

note for the record that in the State of the Union speech, the President said, and I quote, ‘‘It was public research dollars that helped 

develop the technologies to extract all this natural gas out of shale 

rock,’’ and it is troubling that he is suggesting the Federal Government made hydraulic fracturing possible, while at the same time 

trying to kill R&D within the same program, and he said he deserves credit for the current oil and gas boom. This is a program 

that is working, that has worked with several universities and it’s 

paying off. Why would anybody want to knock it out? And I will 

say this in deference to your President. My President tried to 

knock it out too, President Bush before he left office. We had a vote 

on the Floor. Overwhelmingly, they knew this program was working. I don’t understand why anybody would want to knock out 

something that is working when we have the greatest need in the 

world for more energy. 

Mr. MCCONNELL. I can’t comment on what you are saying in 

terms of giving you a reason for what other people may view or 

how people want to see something go down. I guess what I will say 

is that the research and the focus in the areas that we have identified in hydraulic fracturing to continue that research, to put in a 

budget request for this year. We are enthused about it, and we will 

continue to work hard at all the things that you are talking about 

using the resources that we have got available and the manner in 

which we can most effectively employ them. 
57 

Chairman HALL. Well, your views on hydraulic fracturing has 

been turned back and your spear blunted, witness after witness 

after witness. Even your own witnesses, the EPA’s witness have 

sat there and admitted that what they are saying about fracturing 

and the danger it has done to drinking water, you had to go all the 

way to Wyoming to kind of drag up something that could hit fracturing. I don’t understand that. Actually I will just say for the 

record that the State of the Union speech, the President said it was 

public research dollars that helped develop the technology to extract oil and natural gas out of the shale rock. It is very troubling 

that he is suggesting the Federal Government made hydraulic fracturing possible, while at the same time trying to kill R&D with the 

same program he said deserves credit for the current oil and gas 

boom. How do you react that he is campaigning one way and saying something and doing something else? 

Mr. MCCONNELL. Federal research dollars originally back in the 

1970s were leveraged with industry enthusiasm, George Mitchell 

and the Woodlands and the work that was done with industry, and 

in fact, hydraulic fracturing was pioneered by the Department of 

Energy’s work along with industry. 

Chairman HARRIS. Thank you. 

Chairman HALL. Yes, sir, it was a different Department of Energy than what you folks are running over there now, though. 

I yield back my time. 

Chairman HARRIS. Thank you very much, Mr. Chairman. 

The gentlelady from California, Ms. Woolsey, has been very patient. We are going to recognize her and then we are going to walk 

fast over to vote. 

Ms. WOOLSEY. You can’t answer this question, but my question 

is—well, he left. I can’t imagine why I love our Chairman so much 

after that group of questions. You can’t answer that because you 

don’t know, but we just think he is great, but not today, I don’t. 

Mr. McConnell, our colleagues, as you have heard today and over 

time, have been arguing that more taxpayer resources need to be 

transferred from work on emerging alternative energy technologies 

and into technology development for oil and gas. So regardless of 

one’s priorities in that regard, there is such a question about the 

relative impact of limited federal dollars in all of these sectors and 

whether a major increase in oil and gas research funding translates 

into real benefits for the industry or consumers. So what happens 

if we increase the oil and gas research program? Will it be a big 

or a small improvement? And is the oil and gas industry actually 

beating down your door asking for more research money? And 

where do we get the biggest bang for our buck on this? 

Mr. MCCONNELL. Well, I think that is a great question because 

really what it does is, it speaks to the pulse in the industry and 

what industry is looking at. I think the signals that come from the 

Federal Government in terms of funding, willingness to support activities and focus on research that industry is interested in, they 

get signals from budget, but they also get signals from the capabilities and competencies that exist within the Department of Energy. 

We have received a number of enthusiastic support signals from industry. Those in the natural gas industry, the leaders in those industries are incredibly driven by wanting to ensure that sustain-
58 

able processes for this, not just in the seismic—or the hydraulic 

fracturing but in the wastewater disposal, in the seismic impacts, 

in the communities. They all want this to be a sustainable, longterm industry, and the ability for us at the Department of Energy 

to work with the Department of Interior, to work with EPA from 

an interagency standpoint, to do things going forward in a sensible 

manner so that industry can have the confidence that this Administration is going to move it forward in a confident manner, to 

make it a sustainable industry. I think the President has been 

pretty clear about the fact that he wants that to happen. He has 

certainly been clear to us at the Department of Energy of what we 

are supposed to do. 

Ms. WOOLSEY. So what is the Department of Energy thinking 

about drilling and exploration for gas and oil off of, for example, 

the northern California coast, which I represent, that should be a 

sanctuary and probably will never be drilled but if it was, it would 

take all kinds of expensive research to make any of this worthwhile. But is there any way that we can prove that that isn’t worth 

the pennies we would—well, the thousands of dollars we would— 

millions invest in order to get pennies worth of energy? 

Mr. MCCONNELL. We don’t have any plans to do either at this 

point. That is not on our short-term strategic plan, and the focus 

that we have with the resources we have is not oriented in that 

area. 

Ms. WOOLSEY. Okay. Thank you. And I think because of that, I 

am going to yield back so we can go vote. Thank you so much. 

Chairman HARRIS. Thank you very much. 

I want to thank the panel for their valuable testimony, the Members for their questions. The Members of the Committee may have 

additional questions for you, and we will ask you to respond to 

those in writing. The record will remain open for two weeks for additional comments from the Members. 

I am going to dismiss the first panel. We will recess until five 

minutes after the last vote, which should be about 20 minutes from 

now, to go ahead with the second panel. Thank you very much to 

the first panel for being with us this morning. The Committee 

stands in recess. 

[Recess.] 

Chairman HARRIS. Thank you very much. I want to thank the 

second panel for your patience with us, and I will call the Committee to order. 

The first witness in our second panel is Ms. Samantha Mary Julian, Director of the Office of Energy Development for the State of 

Utah. Previously, she served as the Energy and Natural Resources 

Cluster Director for the Governor’s Office of Economic Development. Ms. Julian is responsible for the promotion of Utah’s state 

energy policy, coordinating with the Governor’s energy advisor to 

implement the Governor’s energy goals and objectives, seeking federal grants and participating in federal programs and making administrative rules. 

Our next witness is Mr. Jim Andersen, President and CEO, U.S. 

Seismic Systems. Mr. Andersen began his career as an engineering 

officer on U.S. Navy nuclear submarines and went on to hold a variety of engineering and senior management positions in engineer-
59 

ing-intensive, high-technology companies, including Westinghouse, 

White Hall Hydroscience, Litton Industries, and Northrop Grumman. 

Our third witness is Mr. Cameron Todd, CEO of U.S. Oil Sands, 

Inc. Prior to joining U.S. Oil Sands, Mr. Todd worked five years 

with Conoco Oil and Gas Limited, where he had the executive role 

of Senior Vice President, operating refining and marketing. He has 

had an extensive and successful career in the domestic and international oil and gas industry, with over 30 years of experience in 

all facets of the business. 

Our final witness on the second panel is Mr. Tony Dammer, 

Member, Board of Directors, National Oil Shale Association. Mr. 

Dammer is an independent consultant specializing in oil shale and 

other unconventional fuels development. From September 2008 to 

February 2012, he was Senior Vice President of Red Leaf Resources, a Utah-based oil shale technology and resource development company. He joined Red Leaf Resources after 28 years of federal service in the U.S. Department of Energy, Office of Naval Petroleum and Oil Shale Reserves. For the last 20 of those years, he 

served as the Director of the office, responsible for the management 

and operation of six reserves in California, Wyoming, Colorado, and 

Utah. 

As our witnesses should know, spoken testimony is limited to 

five minutes each, after which the Members of the Committee will 

have five minutes each to ask questions. 

I now recognize our first witness on the second panel, Ms. Julian, 

to present her testimony. 

STATEMENT OF MS. SAMANTHA MARY JULIAN, 

DIRECTOR, OFFICE OF ENERGY DEVELOPMENT, 

STATE OF UTAH 

Ms. JULIAN. Thank you, Chairman Harris, Ranking Member 

Tonko and Members of the Committee. 

Utah is the epicenter of unconventional fuel development for the 

United States. Our office was created in 2011 with the Utah legislature seeing that there needed to be an ‘‘all of the above’’ approach 

to energy development. We are the voice for energy development 

responsibly through economic development and policy. 

I am not here today to say that oil shale or oil sands will drop 

prices at the pump or immediately solve the country’s dependence 

on foreign oil. I am here to say that despite the lack of efforts of 

some federal agencies, the unconventional energy industry is happening in Utah today and deserves support. 

These developments are important, and the Federal Government 

needs to understand that these industries are commercially viable. 

Operators seek public land certainty and federal policy consistency. 

Special interest groups often attack these industries claiming 

massive use of water that is otherwise unavailable in our State. In 

Utah, water is available for oil shale and oil sands development 

through existing water rights and general market system. Water is 

owned by the State and in trust of its citizens. It is subject to the 

water appropriation system and managed by the State Engineer. 

The process has been in place for over 100 years. 
60 

Utah also manages its lands to promote responsible development. 

It is the main source of our funding for our educational system, 

and our pupils and educators count on it. 

As any operator will tell you, whether it is shale, sands, gas, oil, 

coal, working with the State is much more streamlined and consistently regulated. 

Our oil sands technology zone is a way for Utah to lead in innovative and research and development efforts. It is a rent-free lease 

on a pre-permitted site adjacent to a sands mine, allowing proof of 

concept to remove technology risk for capital providers. Our alternative energy development incentive encourages responsible development, again, to fund our textbooks, our classrooms, and our students. It is a post-performance incentive for oil shale, sands, utilityscale renewable energy, and nuclear. 

Governor Herbert’s 10-year energy plan is the State’s path forward for responsible energy development. It is about all approach 

diversified resources. 

So how could the Federal Government contribute to expand production through R&D? The most consequential assistance the Federal Government could provide, and I repeat, the most consequential assistance the government could provide, is to assist the BLM 

in consistent—to be consistent with the Energy Policy Act of 2005. 

Secondly, current DOE procurement favors federal R&D providers. 

That is national labs over external providers of industry and universities. If funding decisions were, instead, calculated proportionately on GDP or ranking of energy production, Utah would increase 

from $3.5 million in funding to $60 million, or almost twentyfold. 

Proactive work by the BLM and DOE would positively affect our 

energy independence, security, and decrease our dependence on foreign oil. 

We truly appreciate the support of Congress to make unconventional energy an R&D priority and help federal agencies understand that taking steps to ensure public lands certainty and federal 

policy consistency would create an energy game changer. 

Thank you for the opportunity to speak today. I look forward to 

your questions. 

[The prepared statement of Ms. Julian follows:] 
61 

Committee on Science, Space, & Technology 

Energy & Environment Subcommittee 

United States House of Representatives 

"Unconventional Energy Development in Utah" 

Testimony of Samantha Mary Julian 

Director 

Office of Energy Development 

Thursday, May 10th, 2012 

WRITTEN 

Thank you Chairman Harris, Ranking Member Miller and members of the Committee. I am 

Samantha Mary Julian, Director of the Governor's Office of Energy Development for the State of 

Utah, the epicenter of unconventional energy development in the United States. Utah is proud of 

being a major energy producer (11 th Crude Oil, 9th Natural Gas, 15th Coal). Our office was created to 

be the voice for responsible energy development within our State. 

I am not here to say that oil shale and oil sands will drop prices at the pump and immediately solve 

our Country's devastating dependence on foreign oil. I am here to say that the responsible 

development of unconventional energy is happening today in Utah. Leading technology companies 

have settled in Utah, permits have been granted and efforts begun. Hundreds of millions of private 

dollars are being invested and jobs are being created as we speak. These critical resources in Utah are 

no longer on the horizon. The unconventional industry is operational in Utah and p.)ised for 

continued growth. 

These developments are important to note, as the federal Government needs to understand that these 

industries are commercially viable and proven. The BLM's 2012 PElS (Programmatic 

Environmental Impact Statement) as well as the 2010 GAO report "Energy-Water Nexus" should 

have recognized that oil shale and oil sands technology is quite advanced, with completed pilot and 

demonstration projects. The fact is that both industries have been commercial outside of the United 

States for over 50 years, with the most obvious examples being in Estonia for oil shale and in Canada 

for oil sands. Operators and technology from both countries are now in Utah and continually seeking 

public lands certainty and federal policy consistency. 

The size of the oil shale and oil sands resources are so large it is difficult to comprehend. The United 

State Geologic Survey! estimates that within Utah's Uintah Basin alone there is the equivalent of 

over 1.32 Trillion barrels of oil. Simply put, this is more than the entire reserves of OPEC and 

enough to supply the United States with over 100 years of oil consumption. 

Special interest groups often attack these industries claiming massive use of water that is anyways 

unavailable in our State. Not only do we fervently believe and assert that water is available for oil 

shale and oil sands development, but water is owned by the State in trust for its citizens, and as such 

it is subject to the State water appropriation system managed by the Utah State Water Engineer. 

Water is available both through existing water rights and through the general market system. The 

1 Assessment of In-Place Oil Shale Resources afthe Green River FormationJ Greater River Basin in WyomingJ 

Colorado and Utah, United States Geologic Survey, June 2011 
62 

state can and will, consistent with the authority of the State Water Engineer, process applications to 

approve or transfer water rights for oil shale, oil sands or any other use. This process is well known 

and has been in place for over a hundred years. 

In addition, advances in technology should lay to rest false estimates from fGAO's Energy-Water 

Nexus2

, BLM's 2012 PElS and special interest groups. The EcoShale technology from Red Leaf 

Resources utilizes low temperatures for heating and requires no process water3

. Enefit's Enefit280 oil 

extraction process uses no water4

• Every oil sands company proposing operation in Utah recycles its 

process water. 

We were asked to speak specifically about the challenges associated with the federal government's 

involvement in unconventional energy. These challenges are critical as approximately 75% of oil 

shale and tar sands resources are under federal lands. This request is timely; as right now would be 

optimum timing for Secretary Salazar and the BLM to take steps forward in implementing policies 

and practices that sUp(X)ft Congress's mandate in the 2005 Energy Policy Act to establish a 

commercial leasing program for oil shale and tar sands. We are extremely concerned with this and 

ask the Committee to do everything in its power to encourage the current administration to embrace 

legislation passed by Congress. 

Despite the lack of efforts of some federal agencies, the unconventional energy industry is alive and 

growing in Utah. Red Leaf Resources, a Utah technology company has just entered into a $200 

million Joint Venture with the French oil company TOTAL and received mining permits for its first 

project. Mr. Cameron Todd from US Oil Sands has successfully raised significant funds and just 

testified about his efforts in our State. These two leading project~ are both on State land and this is no 

coincidence. Utah actively manages its lands to promote the responsible development of its energy 

resources as it produces the main source of funding for our schools. Simply put, Utah educators and 

students depend on responsible energy development. As any operator will tell you-coal, oil, gas, 

wind, solar, shale, sands, etc- working on State land is not only more clearly streamlined but 

consistently regulated. We are very proud of this in Utah. 

Besides making land available for responsible development, the State is leading additional efforts at 

providing pathways for res(X)Usible unconventional energy development. One of these efforts is an 

'Oil Sands Technology Zone', where technology companies and entrepreneurs are given a rent-free 

lease on a 'pre-permitted' site adjacent to an active oil sands mine. This facilitates the technological 

advancement of sometimes nascent bench-scale technology and allows for 'proof-of-concept' at a 

level sufficient enough to remove technology risk for capital providers. We hope that this will enable 

the identification and successful development of the most environmentally friendly, economical oil 

sands technology in the world. 

In addition, the State has created an Alternative Energy Development Incentive which is managed 

through our office. Unlike similar (Xllicy tools, this incentive was not created to make winners out of 

uneconomic energy resources. This incentive was created to encourage responsible energy 

development as Utah's education system relies on it for funding classrooms and textbooks. It was 

created to make Utah the epicenter of unconventional energy and we believe it is. Through this 

incentive, a significant portion of State tax liability is refunded to res(X)nsible energy developers, 

2 http://www .gaa.gav lassets/320/311896.pdf 

3 http://www .1 ese. u ta h. ed ul assetsl a reh Ive/20111 a ssetsl pdfs/red JeaC nelson _ 2011_ u cf. P df 

4 https:/ Iwww.energla.ee/e nl a II/I nter natla na lie n eflt 
63 

including oil sands and oil shale producers. This incentive is based on previous tax payments and 

thus incentivizes meaningful development of resources at a commercial scale at no risk to the State. 

Perhaps the most important effort made by the State to develop a pathway for responsible 

unconventional energy development is Governor Gary R. Herbert's 10 Year Strategic Energy Plan. 

This plan is the product of stakeholders throughout industry, government, academia, environmental 

concerns and other important viewpoints. This massive undertaking aligned all relevant parties to 

identify goals and recommendations to provide a pathway for the responsible development of Utah's 

energy resources. 

The third topic we were asked to speak on was how the federal government could contribute to 

expand production through support for research and development. I will repeat that the most 

consequential assistance that the federal government can provide is to assure that BLM is consistent 

with what Congress has already mandated. There is, however, strong opportunity for the federal 

government to provide support on the R&D side as well. The current DOE procurement processes 

favor internal government R&D providers (national labs) over external providers (industry & 

research universities). If funding decisions were instead calculated proportionally (at a minimum) to 

a States GDP or energy production ranking, the R&D resources of Utah's leading industry and 

research universities would increase from -$3.5M to over $60M. Given that Utah's industry and 

universities are a clear leader in unconventional energy R&D this would elevate the support for oil 

shale and oil sands from the federal government almost 20 fold. In the words of DOE Undersecretary 

Arun Majumdar, "the road to a secure future is to invent locally, make locally and sell globally." 

Increasing Utah's share of R&D funding to represent its size and that fact that Utah is an energy 

producing state would mean additional resources to concentrate on Utah's critical unconventional 

resources, i.e. 'inventing locally'. 

[ will conclude my comments by again requesting that Congress leverage its overwhelmingly 

bipartisan support for the Energy Policy Act of 2005. You instructed BLM in section 369 to create a 

commercial leasing program. Proactive work by BLM would positively affect our energy 

independence, national security, and decrease our dependence on foreign oil. Utah, as a robust and 

business friendly State, is successfully fostering this crucial industry. We would truly appreciate the 

su pport of Congress to make unconventional energy an R&D priority and to help federal agencies 

understand that taking steps to ensure public lands certainty and federal policy consistency would 

create an energy game changer. Thank you for your time and offering me the opportunity to speak 

today. 
64 

Chairman HARRIS. Thank you very much. 

I now recognize Mr. Andersen for five minutes to present his testimony. 

STATEMENT OF MR. JIM ANDERSEN, 

CHIEF EXECUTIVE OFFICER AND PRESIDENT, 

U.S. SEISMIC SYSTEMS, INC. 

Mr. ANDERSEN. Thank you very much, Chairman Harris, Members of the Subcommittee. 

I have a little bit different presentation, and I am going to show 

some charts and hopefully this technology will work right. 

So what I am here to talk about is, we have developed a revolutionary sensing technology that we believe will solve many of the 

environmental problems associated with unconventional oil and gas 

development, primarily for hydrofracking. The sensors are all fiber 

optic, no electronics or copper in the well, and they replace the 50- 

year-old sensor technology that has been used in the industry that 

really isn’t up to speed with these new extraction techniques, and 

I will talk a little bit about that. 

Not to go into a lot of technical mumbo jumbo, just a real simple 

‘‘how does it work.’’ You know, we have two things. We have a box 

we call an optical interrogator. All the smarts are in that box, and 

lasers, electronics and all that, and then we have a fiber optic cable 

which we drop down the well. The fiber optic cable has no electronics, no circuit boards or any power that goes down the well. 

That makes it very reliable and inexpensive. How it works, we 

send laser-like pulse down the cable. When the reflection comes 

back, the information we are looking at is in that reflected pulse. 

Very, very simple. 

So just so you don’t think that this is smoke and mirrors, in my 

prior life I used to run the division of Litton Industries and was 

responsible for fiber optics there, and we put the fiber optic sensor 

system on all the Virginia-class submarines. The contract was valued at over $450 million, had the electronics inside the submarine, 

fiber optic sensors outside the hull, and it turned out to be a very, 

very reliable system. It is now on the order of a dozen submarines, 

and reliability record is outstanding. 

A lot of the team members that used to work for me at Litton 

are now at my company, and we have commercialized it, made it 

less expensive and more reliable for commercial applications, and 

also we develop our own IP, but we have also licensed some of the 

technology from Northrop Grumman. 

So here is our premise. The existing equipment for frack monitoring is just too expensive and the performance is marginal, and 

when I say expensive, I use an example that, you know, to drill a 

well to produce shale, it costs about $5 million. To install sensors 

and the cost of sensors is another $5 million. People just don’t do 

it, and plus the performance is poor so there is really no motivation. 

We also believe that, you know, it is not just the sensing system 

but how much it costs to install, and the main driver to that is the 

cost of drilling the wells to install it. We have been working with 

the Department of Energy and they have done some studies and 
65 

shown if you have very sensitive sensors like we do, instead of 

going down and drilling down to, you know, 5,000, 6,000 feet, you 

could drill 500 or 600 feet. Great savings on installation also. We 

are trying to make this inexpensive so everybody will do it. 

You know, frack monitoring, basically what you end up with instead of blindly pumping in fluid at high pressure and, you know, 

wondering if you are fracturing, you monitor it with sensors in the 

ground as you do the stage. You can see there are different colors 

and you block off a certain section, you frack it and do the next 

one, and you see what the extent of the fractures are. So you have 

a record, and if it starts going to places where you don’t want, you 

could stop it. We believe 100 percent monitoring will solve the 

problems, and it is not just us. You know, the Secretary of Energy 

Advisory Board came out with some recommendations and they 

said you should have surveys carried out to ensure fracturing is 

limited to where you want it to occur. And they also have said we 

need additional studies to talk about shale gas leakage of water 

wells. We are also working with FTS International, a large company in the United States that does fracking and is developing systems to do 100 percent monitoring. 

Here I will just talk about well casing leaks a little bit. You 

know, it is an important issue. My feeling is, it is designed to prevent communication between layers but, you know, these things 

happen, and the next chart will show that the problem with gas 

migration, people talk about it like it is a new thing. It has been 

around for over a decade. You know, they had studies in Canada 

that 45 percent of the wells are leaking. So my thought is, is rather 

than denying or saying does this leakage happen or not, we have 

technology that is cheap insurance, and you could check for it and 

make sure that if it does happen, you could fix it. 

So summing up, there are several of the major areas of environmental concern that can be minimized via monitoring during and 

after the fracking process. This includes chemical contamination of 

the subsurface, aquifers, gas migration and even induced seismicity, and we have developed revolutionary fiber optic sensing 

technology to address the technical problems, such that you could 

do remediation before there is significant environmental damage. 

And I thank you and I welcome your questions. 

[The prepared statement of Mr. Andersen follows:] 
66 

Testimony of 

Jim Andersen 

President & CEO 

US Seismic Systems, Inc. 

House Science, Space, and Technology Subcommittee on Energy and Environment 

Hearing 

Supporting American Jobs and the Economy through Expanded Energy Production: Challenges 

and Opportunities of Unconventional Resources Technology 

May 10, 2012 

Introduction: 

Chairman Harris, Ranking Member Miller, and other members of the Subcommittee, I am Jim Andersen, 

President and CEO of US Seismic Systems, Inc. (USSI). Thank you for this opportunity to testify today. 

US Seismic Systems, Inc., (USSI) an Acorn Energy portfolio company (ACFN:NASDAQ) is a Delaware 

corporation headquartered in Chatsworth, California whose primary focus is to develop and 

manufacture sensor systems for the Oil & Gas sector based upon proprietary fiber optic technology. 

These sensors, which are powered only by light, are designed to replace the 50-year old copper wirebased sensor technology that is currently in widespread use within the oil Exploration and Production 

(E&P) industry. The existing 50 year-old sensor technology is too costly and unreliable to support the 

new oil and gas recovery techniques needed to meet the world's increasing demand. USSI's fiber optic 

sensor systems are designed to replace these legacy systems, with more reliable, more precise, less 

expensive, and inherently safe systems. 

The USSI fiber optic sensor technology is revolutionary, with three patents issued, and ten patents 

pending. USSI's all-optical sensors represent a radical departure from today's electronic-based sensing 

systems; they function with no in-situ electronics, copper conductors, or electrical power. The U5S1 

system eliminates the need for electronics, electrical connectors, batteries, and heavy copper cables in 

the field. 

Replace This ... With This 

1 

No copper wire, 

electronics, or electricity 

at the sensor 

Inherently Safe no 

sparks or heat generated 

Sensor data can be 

transmitted for miles 

without performance 

degradation 
67 

USSI's new fiber optic sensing systems provide users with a huge competitive advantage over those 

relying on electronic sensor technology. They will enable users to improve efficiency, increase output, 

and enhance safety, all at a lower cost. USSI has a world-class business and technical team, 

internationally recognized for their expertise in fiber optic sensors and related technology. 

Environmental issues/concerns with the unconventional energy production process are threatening to 

derail the current revolution in the US energy market. USSI believes that we all must recognize that 

despite following all the best practices, problems can and do still occur, i.e., fractures can occur outside 

of the intended zones, and well casings do sometimes leak. 

USSI believes it is better to install systems that can detect the occurrence of these potential problems, 

such that they can be corrected before significant damage occurs. 

Overview of USSI Fiber Optic Technology 

By way of overview, US Seismic Systems Inc. (USSI) has developed an Ultra-High Sensitivity (UHS) fiber 

optic seismic sensing system designed to replace the expensive, unreliable, bulky electronic geophones 

and equipment used in existing oilfield seismic monitoring systems with a high sensitivity, low cost, 

ultra-reliable fiber optic geophone system. The USSI system eliminates all in-situ electronics and 

electrical power cables, while providing superior signal to noise performance as compared to legacy 

systems. 

For over SO years, it has been generally accepted within the oil & gas industry that geophones represent 

the most effective and reliable approach for monitoring subsurface seismic activity. Conventional 

geophones consist of a magnet mounted inside a wire coil. Relative motion between the magnet and 

the wire coil produces an output that is proportional to the level of seismic activity. These geophones 

systems have performance that is marginal for today's new unconventional oilfield recovery methods 

and they are simply too costly. Since the USSI fiber optic geophone relies on a completely different 

technology than the magnet/coil geophone (laser light and optical fiber vs. electricity and copper wire), 

it is not subject to the same performance limitations. As a result, USSI is able to design and build fiber 

optic geophones with detection sensitivities more than 100 times higher than the conventional 

electronic geophones. As a matter of fact, the performance of the USSI fiber optic geophone is 

superior to the performance of the traditional geophones in every key category: sensitivity, noise 

floor, distortion, bandwidth, and dynamic range, and a/l at a lower cost. The major advantage fiber 

optic sensors have over conventional electronic-based sensors is the ability to separate the electronics 

(preamplifiers, filters, ADC, multiplexing electronics, etc.) from the sensor, taking the electronics out of 

the hostile sensing environment (downhole, ocean bottom, buried, etc.), allowing the electronics to 

reside in a benign controlled environment, where they are always accessible for repairs or upgrades. 

2 
68 

1,000,000 

100,000 

.. .=. 10,000 

'" ..., 

.", " ii 1,000 E 

.. 

:li 

'0 

z 100 

10 

10 100 1,000 

Frequency(Hz) 

USSI Geophone System has the Lowest Noise Floor vs. all Competing Systems 

1. Geophone and MEMS Accelerometer Comparison at Spring Coulee, Alberta, Canadian 

Society of Petroleum Geologists (CSPG), Canadian Society of Exploration Geophysicists (CSEG) 

and the Canadian Well logging Society (CWLS) Convention, Calgary, Alberta 2009 

2. Characterization of a High Resolution Acquisition System For Marine Geophysical 

Applications, Instrumentation and MeasurementTechnology Conference, Sorrento, 

Italy 24-27 April 2006 

The chart above shows how the performance of the USSI fiber optic geophone compares with other 

oilfield geophone sensor technologies and with industry requirements. As can be seen in the chart, the 

USSI system has the lowest noise floor of all microseismic systems on the market. This translates into 

the ability to detect much quieter signals. 

USSI's systems are based upon proven 

fiber optic technology originally 

developed for the US Navy's Virginia 

Class nuclear submarine LWWAA 

program. LWWAA is the largest fiber 

optic sensor system in production, 

valued at over $450M. While I am 

now USSI's CEO, I previously started 

and led Litton's (now NG) Fiber Optic 

Strategic Business Unit that designed 

and manufactured the LWWAA 

system. Key members of the LWWAA 

team are now at USSI. USSI has 

commercialized the technology for 

improved reliability and lower cost. 

3 

us LVWVAA System 
69 

How does the USSI Fiber Optic Sensor Work? 

The sensor in the USSI system is simply optical fiber. The optical fiber also serves as the transmission 

path to and from the fiber optic sensors. Engineers at USSI have developed proprietary techniques to 

package the optical fiber in ways that enhance its sensitivity to seismic signals. The system works as 

follows: Laser light from the Interrogator is launched down the optical fiber to the geophone array. 

Seismic disturbances cause the phase of the light going through the geophones to change. The phase 

change of the light returning to the optical Interrogator is detected, and represents the seismic signals. 

Downhole Fiber Optic 

Geophone Array 

Laser Light 

( )I 

The optical interrogator electronics includes a laser source with a phase modulator which imparts a high 

frequency carrier (modulation signal) onto the light launched down the fiber, as well as the receiver 

electronics for demodulating the reflected signals and translating them into a digital electronic signal. 

The fiber optic telemetry cable provides the data path to and from the individual sensors, and 

incorporates optical connection units that serve as the connection point for the individual geophones. 

The optical geophone converts the ground motion into an optical phase shift which is demodulated in 

4 
70 

the interrogator. The remotely deployed fiber sensor/telemetry cable contains no electronics. All of the 

electronics resides in the interrogator. 

Hydraulic Fracturing for Unconventional Resource Development Defined 

Hydraulic fracturing is a well stimulation process used to release oil, natural gas, geothermal energy, and 

even water from "tight" underground formations to maximize the extraction of these resources. 

Hydraulic fracturing is used by the oil and gas industry to fracture low permeability, resource-bearing 

subsurface rock to allow oil or natural gas to move more freely from the rock pores to production wells 

that bring the oil or gas to the surface. 

During hydraulic fracturing, frac fluid, consisting primarily of water with chemical additives, is pumped 

into a geologic formation at pressures up to 15,000 psi. The high pressure of the fluid, which is designed 

to exceed the rock strength, opens or enlarges fractures that can extend several hundred feet away 

from the well. After the fractures are created, proppants in the fluid are pumped into the fractures to 

keep them from closing when the pumping pressure is released. After the fracturing is completed, the 

downhole pressure of the geologic formation causes the injected fracturing fluids to rise to the surface 

where it is typically stored in tanks or pits prior to disposal or recycling. Since the flowback fluid may 

contain numerous contaminants, proper handling/disposal of the flowback fluid is required. 

Importance of USSI's Fiber Optic Systems for Unconventional Energy Production 

Currently, less than about 3 per cent of 20,000+ frac jobs performed annually in the United States are 

monitored. This monitoring process, called microseismic monitoring combines subsurface sensors with 

powerful data collection and analysis software, to record the myriad of tiny microseisms (or 

microearthquakes) that occur as fluid is pumped into a well bore, splitting or fracturing the subsurface 

rock formation holding the natural gas or oil. The individual locations of these micro seismic events are 

then mapped to create an image of the fracture locations. As the name microseismic implies, these are 

small events, thus the need for the much higher detection sensitivity of USSI's fiber optic geophones. 

Many leading producers will readily admit that increased monitoring will lead to reduced environmental 

impact and improvements in efficiency, however, based upon today's electronic sensor technology, it is 

simply unaffordable. The problem is that using today's electronic sensor technology, the cost of a 

system to provide the monitoring is approximately SSM, which is comparable to the cost of completing 

the well. This is cost prohibitive, especially at today's low gas prices. And, this cost does not include the 

drilling of instrumentation wells for the sensor arrays, or their installation. Fortunately, USSI's fiber 

optic sensor systems for microseismic monitoring are based upon proprietary fiber optic technology that 

is substantially less expensive. In full production we currently estimate, that US51's microseismic 

systems will sell for approximately 10% of the cost of today's electronic systems. USSI is in discussions 

with the companies responsible for over 75% of the frac jobs performed annually in the US. 

As is usually the case with the introduction of a new technology, a few forward looking companies 

looking to become industry leaders in the responsible and efficient development of our country's shale 

gas resources become the early adopters. Such is the case with FT5 International www.ftsi.com 

(previously Frac Tech Services), a leading independent provider of well stimulation (hydrofracking) 

services for the oil and gas industry in the United States with a focus on environmentally friendly ways 

to do business - developing vital assets and promoting energy independence, while protecting natural 

resources. FTS International, one of this country's largest multi-stage, unconventional completion 

services companies, intends to work with USSI to develop a custom fiber optic microseismic monitoring 

5 
71 

solution that will eventually enable FTSI to be the first to offer cost-effective monitoring of 100% of their 

frac jobs. 

Why Increased Monitoring will Address the Major Environmental Concerns 

Several of the major areas of environmental concern can be minimized via increased monitoring during 

and after the hydrofracking process, these include: 

Chemical contamination of subsurface fresh water aquifers 

Gas Migration 

Induced Seismicity 

Chemical contamination of subsurface aquifers can be caused by either fractures/fissures occurring 

outside of the desired fracture zone, or leakage along the well bore due to a faulty casing/cement job. 

Both of these adverse events can be detected via low cost, passive downhole fiber optic sensors. Once 

detected, remediation efforts to correct the problem can be implemented. 

Gas migration refers to gas entry into the cemented annulus (area between metal casing strings) 

creating channels with the potential to provide a gas/fluid flow in the annulus. Migrating gas can affect 

water supplies, as well as potentially accumulate inside or next to structures such as residences, 

businesses and farming operations. This could create a risk of a fire or explosion. Gas migration may 

become a threat to the health, safety and welfare of the public. Properly cementing and casing a well is 

very important to prevent gas migration. In May of 2011 researchers at Duke University released a 

study that found high levels of leaked methane in well water collected near shale-gas drilling and 

hydrofracking sites. The Duke researchers said that the presence of methane likely was due to its 

escape from faulty drill casings (gas migration). This peer-reviewed study was published in the 

Proceedings of the National Academy of Sciences. 

USSI has developed a well bore leak detection system (patent pending) designed to detect leakage along 

the well bore surface casing. The system is based upon the USSI PipeSafe'M fiber optic leak detection 

system for natural gas pipelines. 

Induced seismicity refers to earthquake activity that is the result of human activity. Numerous studies 

have indicated that induced seismicity can be caused by injecting fluid into the subsurface or by 

extracting fluids at a rate that causes subsidence and/or slippage along planes of weakness in the earth. 

Lawrence Berkeley National Laboratory is currently conducting extensive research into induced 

seismicity brought on by hydrofracking operations for both oil and gas extraction and enhanced 

geothermal activity, and believes that monitoring during the hydrofracking process will allow more 

precise control thereby minimizing induced seismic events. 

Conclusion: 

In conclusion, as I have described in my testimony today, USSI has developed revolutionary fiber optic 

sensing technology that can have a large potential impact on unconventional energy production. USSI 

acknowledges that even when following the best industry practices, unexpected problems may occur. 

Fractures can occur outside the desired zone, and documented cases of gas migration have been 

reported for years, even prior to the revolution in shale gas. Fortunately, the technology now exists to 

detect these problems such that remediation can be performed prior to the onset of significant 

environmental damage. 

6 
72 

Again, thank you for the opportunity to testify today, and Ilook forward to answering any questions that 

you might have. 

* * * * * * * 

About the Author 

Jim Andersen is President and CEO US Seismic Systems, a leading producer of fiber optic sensor systems 

for the Energy and Security markets. Jim started and headed Litton's Strategic Business Unit for Fiber 

Optic Acoustic Systems, which was recognized as the company's fastest growing business unit from 1995 

to 2002. At Litton, he landed the first fiber optic sonar production contract on the new Virginia class 

submarines, valued at over $400M. Jim began his career as an Engineering Officer on US Navy Nuclear 

Submarines and went on to hold a variety of engineering and senior management positions in 

engineering-intensive high-technology companies, including Westinghouse, Whitehall/Hydroscience, 

Litton Industries and Northrop Grumman. Prior to that, Mr. Andersen held technical and executive 

positions in companies that developed systems for oil exploration and ocean applications. Mr. Andersen 

is a member of the Technical Committee of the Marcellus Shale Coalition and a past member of the 

Board of Directors of the Electro-Optics Alliance, a collaborative group of over 300 US Electro-Optics 

companies formed to maintain US leadership in Electro-Optics. He has written recent articles for 

numerous Oil & Gas publications including the The Oil & Gas Journal, Hart's Exploration and 

Production, Offshore Magazine, Oil and Gas Reporter, and First Break Magazine. He holds a Bachelor of 

Science in mechanical engineering from the United States Naval Academy and six US patents in sensing 

systems and optics. 

About US Seismic Systems, Inc. 

US Seismic Systems, Inc. designs, integrates, manufactures and sells fiber-optic sensing systems and 

solutions for the energy and defense markets. USSI utilizes all-optical fiber sensing technology for its 

state-of-the-art sensors. USSI's proprietary optical fiber and electronics combine to form the sensor 

system. It is designed to replace the legacy electronic-based sensor systems at a lower cost and with 

improved performance and reliability. For more information visit the USSI website at: 

www.ussensorsystems.com. 

7 
73 

Chairman HARRIS. Thank you very much, Mr. Andersen. That is 

some fascinating technology. 

I now recognize our third witness, Mr. Todd, to present his testimony. 

STATEMENT OF CAMERON TODD, 

CHIEF EXECUTIVE OFFICER, 

U.S. OIL SANDS, INC. 

Mr. TODD. Mr. Chairman and Members of the Committee, I 

thank you for the opportunity to address you today on vital matters 

of energy, environment, and the economy. My name is Cameron 

Toddm and I am the Chief Executive Officer of U.S. Oil Sands, a 

public company with a unique proven technology for the development of the U.S. extensive oil sand resources. 

I am here today to explain that development of these valuable resources is not only economically viable and technologically proven, 

but also can be done in an environmentally responsible manner 

with significant economic benefit for the Nation. 

U.S. Oil Sands has a proprietary technology using a renewable 

biosolvent to extract heavy oil from oil sand without the need for 

tailings ponds. This breakthrough is expected to revolutionize the 

development of oil sands, particularly in the United States where, 

in spite of extensive resources, there have been no commercial extraction projects to date. 

The solvent we use is nontoxic and biodegradable, made from citrus peels. Over the last 10 years, our company has exhaustively 

tested and piloted our process. It greatly simplifies current approaches to development and allows them to be built on a smaller 

scale using modular phases. 

Our company has been active in Utah for more than seven years and has invested more than $20 million developing the technology, 

acquiring lands, doing environmental reviews, in design, and initiating construction. Beginning later next year, expect to complete 

construction and initiate production on the first commercial oil 

sands extraction project in the United States. By that time we will 

have invested more than $50 million and employed hundreds of 

people. 

Our process demonstrates the best environmental performance of 

any oil sand development to date. We recover 96 percent of the bitumen processed, the highest of any project. Since we produce clean 

sand without tailings ponds, we reclaim the mined area as we go. 

The process recycles 95 percent of the water used, and we use half 

the water of other projects. We use less than a third of the amount 

of energy and we have a lower greenhouse gas footprint than any 

project to date. 

Our first project is modest, producing 2,000 barrels a day. Over 

the next 10 years, assuming fair access to lands, our company has 

expansion plans for 50,000 barrels per day. Over the project life, 

we expect to generate over 60,000 person years of direct employment, high-quality, permanent jobs. And they come at a time when 

the American economy has been hit with the worst recession in 75 

years. We expect to pay more than $9 billion in taxes and royalties 
74 

and contribute more than $20 billion to the economy. And we will 

be saving the import of over $50 billion worth of foreign oil. 

And while we may be first, U.S. Oil Sands is not alone. Other 

companies are pursuing exciting technologies, and new and environmentally responsible and economically attractive projects are 

coming. 

So what is standing in the way? In short, federal policy. Even 

though most resources are on federal lands, it is no accident that 

100 percent of our company, U.S. Oil Sands, leases are on State 

lands. The State is strongly supportive while the BLM essentially 

has a de facto moratorium on leasing and approval, this in spite 

of the instructions of Congress in the Energy Policy Act of 2005. 

The BLM is further proposing to reduce the lands available for development by nearly 80 percent because of their belief that commercial technologies do not exist, that only massive large-scale development would occur. It is not that these lands are conservation 

areas where development is prohibited. Quite the contrary, as conventional oil and gas, forestry, grazing, and mining are allowed, 

subject to normal approvals. It is only oil sand and oil shale leasing 

that is restricted. 

Developers are not asking for unfettered access. Every project 

would still be subject to extensive scrutiny and approval, just as 

are conventional projects. We have already shown that small-scale 

phased development is possible, and that world-class environmentally responsible technologies are proven. 

In conclusion, the oil sand resources of the western States are 

large and accessible. U.S. Oil Sands has developed a process to 

unlock these valuable resources in an environmentally superior 

manner. We expect our project on State lands to be in production 

next year. The process uses far less water, energy, surface area, 

and generates less greenhouse gas than any project to date. It generates clean tailings and requires no tailings ponds. Our company 

expects to generate tens of thousands of man-years of employment, 

billions of dollars of tax revenue, and contribute tens of billions of 

dollars to the economy. In exchange, we ask for no special treatment, no fuel subsidies and no grants. We simply suggest that Congress permit these developments on federal lands as mandated in 

the Energy Policy Act. 

We at U.S. Oil Sands intend to implement our game-changing 

approach with or without access to federal lands. We have identified large resources on State lands and will develop them in concert 

with the State. We will apply our approach to resources in Canada 

and other parts of the world where large deposits exist. It would 

be a shame if the people of the United States were not able to 

enjoy the benefits of development of their own extensive resources, 

but such a great technology and such a win-win-win result with respect to energy, the economy and the environment, is too good to 

not to be applied to solve the energy challenges of the world. 

Thank you. 

[The prepared statement of Mr. Todd follows:] 
75 

Committee on Science, Space, and Technology 

Subcommittee on Energy and Environment 

United States House of Representatives 

"Challenges and Opportunities of Unconventional Resources Technology" 

Testimony of Cameron M. Todd 

Chief Executive Officer 

US Oil Sands Inc. 

May 10, 2012 

Mr. Chairman and members of the Committee, I thank you for the opportunity to address the 

committee today on vital matters of energy, environment and the economy. My name is 

Cameron Todd and I am the Chief Executive Officer of US Oil Sands. I am an engineer by training 

with more than 30 years' experience in the oil and gas industry, and have worked extensively in 

Canada, the United States and internationally. US Oil Sands is a public company with a unique 

proven technology for the development of Utah's extensive oil sand resources. I am here today 

to explain that development of these valuable resources is not only economically viable and 

technologically proven, but also can be done in in an environmentally responsible manner with 

significant economic benefit for Utah and the nation. 

US Oil Sands has a proprietary technology using a renewable bio-solvent to can extract heavy 

oil from oil sand without the need for tailings ponds. This breakthrough is expected to 

revolutionize the development of bitumen resources, particularly in the US, where in spite of 

extensive resources, there have been no continuous commercial oil sand extraction projects to 

date. 

The solvent we use is non-toxic and biodegradable, made from citrus peels. It has been widely 

used for decades in environmentally-friendly household and industrial cleaning products; 

however nobody had ever thought to use it in oil sand extraction. Over the last 10 years our 

company has perfected a proprietary method which has been exhaustively tested and piloted in 

the field. This process greatly simplifies the current approaches to development, and allows 

them to be built on a smaller scale with modular phases. This also allows for continued 

improvement of both technology and operating practice while minimizing environmental 

impact. 

Our company has been active in Utah for more than 7 years and has invested more than 20 

million dollars developing and proving our technology, acquiring and exploring lands, on 

environmental reviews, in design, and initiating construction. Beginning later next year we 

expect to complete construction and initiate production on what we believe will be the first 
76 

continuous commercial oil sands extraction project in the United States. By that time we will 

have invested more than $50 million dollars and employed hundreds of people. 

These years of development and sizeable private capital investment have allowed our company 

to perfect a process which demonstrates the best environmental performance of any 

commercial oil sand development to date. Our process recovers 96% of the bitumen processed, 

the highest of any existing project. Since we produce clean sand without tailings ponds, we 

reclaim the mined area as we go instead of waiting until the end of the project as other 

processes do. This allows for a greatly reduced surface impact. Our first project is expected to 

operate an open mine site of only 30 acres, less than 1/20 of a square mile. By the time we 

need to access additional mine area, the original mine site is being filled back in. US Oil Sands 

process recycles 95% of the water used, the highest of any project to date. We use less than 

half the water of other mining processes and less than 1/3 the amount of energy of other 

bitumen producers (approximately 1/3 mcf of natural gas for each barrel of bitumen produced). 

Fuel used to produce a barrel equates to approximately 1/18 of the amount of energy 

contained in that same barrel. This also means that we have a lower greenhouse gas footprint 

than all other current oil sand projects, in fact less than many conventional oil projects. The oil 

we produce in Utah is sweet, meaning that it contains 90% less sulfur than is found in the 

Canadian oil sands. This makes it much easier to refine and therefore it generates much lower 

amounts of greenhouse gases at the refinery. In almost every regard, the environmental 

aspects of this process are best-in-class. 

Our first project will be relatively modest, producing 2000 barrels per day of bitumen, as heavy 

oil processed in local refineries. Over the next 10 years, assuming fair access to resource lands, 

our company has expansion plans for the development of 50,000 barrels per day. Over the life 

of our development, we expect to generate over 60,000 person years of direct employment. 

These are high quality, full time, permanent jobs. And they come at a time when the American 

economy has been hit with the worst recession it has seen in the last 75 years. Over this same 

10 year development period we expect to pay more than 9 billion dollars in taxes and royalties 

and contribute more than $20 billion dollars into the economy. And we will be saving the 

import of over $50 billion worth of foreign oil, a notable impact on both the balance of trade 

and the security of energy supply. 

This only accounts for the economic impact expected directly from our own company and its 

employees and contractors. The indirect "spin-off' economic benefits and employment are 

several multiples more than these levels. 

While we may be first, US Oil Sands is not alone in this endeavor. Other companies are pursuing 

new and exciting technologies which will bring additional environmentally-responsible and 

economically-attractive projects. 
77 

So what is standing in the way of such an important development in American energy supply? 

The largest impediment to the responsible development of these valuable resources is federal 

government policy. Even though 80-90% of the lands in this region are federal lands, it is no 

accident that 100% of US Oil Sands oil sand leases are on State lands. The BLM essentially has a 

de facto moratorium on leasing oil sands or oil shale and as on the approval of commercial 

projects. This, in spite of the instructions of Congress in the Energy Policy act of 2005, whereby 

the administration was directed to open these very lands to oil sand and oil shale development. 

The current administration is proposing to reduce the lands available for oil sand development 

by nearly 80% (from 431,000 acres originally proposed down to 91,000 acres). Purportedly this 

reduction is because of the belief that commercial technologies for development do not exist, 

that only massive large scale development would occur, and that the lands should be 

conserved. 

It is not that these lands are conservation areas where development is prohibited. Quite the 

contrary, other development such as conventional oil and gas exploration, forestry activities, 

cattle grazing, and mining developments are allowed (subject to normal permitting and 

approval requirements). It is only oil sand and oil shale leasing that is restricted. 

We are not asking for unfettered access. Every project would still be subject to extensive 

scrutiny and approval just as are conventional projects. We have already shown that small scale 

modular development is possible, and that world-class environmentally-responsible 

technologies are proven and already in development. Why would the federal government 

restrict enterprise from developing such a valuable resource, especially one that can be 

developed with such strong economic benefit and such sound environmental performance. 

In conclusion, the oil sand resources ofthe western states are large and accessible. US Oil Sands 

has developed a process which unlocks these valuable resources in an environmentally-superior 

manner. We have a project on Utah state lands which we expect to be in production later next 

year. The process uses far less water, energy, surface area, and generates less greenhouse gas 

than any project to date. It generates clean tailings and requires no tailings ponds. Our 

company expects to generate tens ofthousands of man-years of employment, billions of dollars 

oftax revenue, and contribute tens of billions of dollars to the US economy. In exchange we ask 

for no special treatment, no fuel subsidies and no grants. We simply suggest that Congress 

permit these developments on federal lands as mandated in the Energy Policy Act of 2005. 

We at US Oil Sands intend to implement our game-changing approach with or without access to 

federal lands. We have identified a large amount of resources on State lands and will develop 

them in concert with the State. We also expect to be able to apply our approach to oil sand 

resources in Canada and in other parts of the world where large deposits exist. Of course it 

would be a shame if the people of the US were not able to enjoy the benefits of development 
78 

of their own extensive resources, but such a great technology and such a win-win-win result 

with respect to energy, the economy and the environment, is too good not to be applied to 

solve the energy challenges ofthe world. 
79 

Chairman HARRIS. Thank you very much. 

Our final witness, Mr. Dammer, is now recognized for five minutes to present his testimony. 

STATEMENT OF MR. TONY DAMMER, 

MEMBER, BOARD OF DIRECTORS, 

NATIONAL OIL SHALE ASSOCIATION 

Mr. DAMMER. Thank you, Mr. Chairman and Members of the 

Committee. I thank you for the opportunity to appear today. I have 

worked on and off in the oil shale business for several decades. 

They kicked me out of Colorado in 1982 when Colony folded, so I 

have seen the ups and downs of the industry. 

As been pointed out, oil shale development has had a long and 

tortured history which would take hours to relate, so I won’t go 

over that in any detail here. But in 1982, Exxon abruptly closed 

its doors to the Colony project and, without warning, left the scene. 

That was referred to as Black Sunday. So the industry has been 

characterized by boom and bust, but not until almost 25 years later 

the passage of EPAct 2005, the Energy Policy Act of 2005, the government demonstrated any appreciable interest in the oil shale resource. High price of crude oil, coupled with concerns regarding energy geopolitics and increased dependence on imported oil from unfriendly, unstable sources, focused attention back on oil shale. 

Today, there are several companies engaged in oil shale research 

and development in the United States in varying degrees of development. Some are small, their work limited to the laboratory. Others such as Shell, Exxon, AMSO, Red Leaf, Total, Shale Tech International, just to name a few, are actively testing their technologies 

in various stages of development in the field. 

The secure fuels and domestic report, resources report published 

by the U.S. Department of Energy summarizes those technologies, 

those 32 separate companies working in oil shale and tar sand development in the United States. Most or all oil shale development 

companies and their profit and their profiles are summarized in 

www.Unconventionalfuels.com. 

I have by no means covered the technical landscape regarding oil 

shale development, and I regret that time does not allow a comprehensive review of all the technologies. Advances that have taken 

place in the last five years are very large. Suffice to say that clean, 

safe and sustainable technologies are being advanced to develop oil 

shale resources. The passage of the Energy Policy Act of 2005 provided impetus for this program. 

We talked a little bit about some of the key technical challenges 

that presents us. We talked a little bit about water. I have not read 

anything from any oil shale company that believes that they will 

exceed one barrel of water per three barrels of oil shale produced. 

A lot of the industries are water producers. I think there is a lot 

more known about water utilization than is generally understood 

by the public. 

One of the greatest concerns has been the requirement of water 

development in the scarce area. I think that has been overstated. 

A far greater concern than the technical challenges faced by oil 

shale, the oil shale industry, are policy and regulatory inconsist-
80 

ency and uncertainty. Since the passage of the Energy Policy Act 

of 2005, the Department of Interior has reversed itself on the initial Programmatic Environmental Impact Statement and changed 

the associated resource development plans. As we all know, oil 

shale regulations were overturned in 2008. 

The Energy Policy Act, however, was a comprehensive piece of 

legislation designed not only to prepare for R&D and leasing regulations but also to plan for the orderly development of oil shale and 

tar sands in what is essentially the Green River formation of Colorado, Utah, and Wyoming. That planning responsibility was assigned to the U.S. Department of Energy under section 369(h) and 

(i). Section 369(h) of that Act directed the Secretary of Energy in 

cooperation with the Secretary of the Interior and the Secretary of 

Defense along with governors of affected States to establish a task 

force to develop a plan to accelerate the commercial development 

of strategic unconventional fuels and initiate a partnership with Alberta and nations with oil shale resources. The task force report 

with recommendations was completed and forwarded to the President and Congress in 2007. Section (i) of the Act directed the Office 

of Petroleum Reserves to coordinate and create and implement the 

implementation of a commercial strategic fuels program. If these 

sections of the Act were implemented and the unconventional fuels 

development program was initiated within DOE, uncertainty and 

inconsistency in policy would not exist today. 

Unfortunately, there is little evidence that the recommendations 

of the task force or the establishment of an unconventional fuels 

program has occurred. My strong recommendation would be to implement the law as it was stated in the Energy Policy Act of 2005. 

Mr. Chairman and Members of the Committee, thank you once 

again. I would be pleased to answer any questions. 

[The prepared statement of Mr. Dammer follows:] 
81 

Written Testimony 

Anton (Tony) R. Dammer 

Independent Energy Consultant on Unconventional Fuels 

Senior Vice President - Red leaf Resources, Inc. (Retired) 

Director Naval Petroleum and Oil Shale Reserves, U.S. DOE (Retired) 

U.S. House of Representatives 

Science, Space, and Technology Committee 

Energy and Environment Subcommittee 
82 

Introduction 

Mr. Chairman and members ofthe Committee, I am Tony Dammer. I am an independent 

consultant currently working for Genie Energy Ltd. on an oil shale project in Mongolia. I 

recently retired from Red Leaf Resources, Inc., a small and successful oil shale technology and 

resource development company located in Utah. Previously I served as the Director of the 

Naval Petroleum and Oil Shale Reserves within the Department of Energy, retiring with 28 years 

of service in 2008. The office was responsible for the implementation and management of 

Sections 369 (h) and (i) ofthe Energy Policy Act of 2005 and produced all ofthe studies and 

analysis found at www.unconventionalfuels.com. Most notably, the office directed the 

activities ofthe Task Force on Strategic Unconventional Fuels which published the report 

America's Strategic Unconventional Fuels for the President and Congress, as directed by EPACT 

05. I also represent the National Oil Shale Association as a member of the Board of Directors. 

(www.oilshaleassociation,org) 

I thank you for the opportunity to appear today. I have worked on and off in the oil shale arena 

for several decades and it gives me great satisfaction to discuss some of the progress that has 

been made over the past several years and the opportunities that oil shale provides our country 

from both an energy and economic security standpoint. We should be cognizant that along with 

these substantial benefits, there are risks that all developing technologies face. It is my opinion 

that the industry as a whole has addressed those risks admirably and that the efforts of a large 
83 

number of companies, both here and abroad are performing the requisite research and 

development to create a safe and sustainable industry. 

I have been asked to address four topics: (1) the status of oil shale exploration and production 

activities; (2) the development of key technologies, partnerships, and pilot activities; (3) key 

policy and technology challenges; and (4) recommendations on how the Federal Government 

could best help and enable. 

Before beginning it is important to understand a few points regarding the oil shale resource. By 

definition, oil shale is a petroleum precursor, which is organic matter in the rock called kerogen. 

It is essentially an algae or marine based material that has not sustained the time and 

temperature to turn it into oil. Only applied heat will convert oil shale to crude oil and gas. 

What mother earth failed to accomplish with time, the application of man-made heat resolves. 

All oil shale extraction technologies, whether insitu (below ground) or exsitu (above ground), 

involve the application of heat to transform the kerogen to oil and gas. Kerogen oil begins to 

release from the rock matrix at an applied heat of about 650 degrees Fahrenheit. The intensity 

and duration ofthe application of heat to the rock has a large impact on the quality of the 

produced hydrocarbons. 

Oil shale development has a long and tortured history, which would take hours to relate. Its 

development has run hot and cold over decades, in large part dependent on the availability and 

economics of conventional crude oil. In the United States, the Arab Oil embargo of the early 

1970's initiated a resurgence of interest in oil shale, resulting in the Prototype Oil Shale Leasing 

Program in 1974. Four oil shale leases were awarded by the government, two in Colorado and 
84 

two in Utah, attracting $641 million in bonus payments. The Synthetic Fuels Corporation was 

established and Exxon and Unocal began massive oil shale development projects in Colorado. 

And as soon as the oil shale boom began to get traction it ended with the collapse of world oil 

prices brought on by massive production from Saudi Arabia. In 1982 Exxon abruptly closed its 

Colony project without warning in an event referred to as "Black Sunday". 

Not until almost twenty-five years later and the passage of EPACT 05 did the U.S, Government 

demonstrate any appreciable interest in the oil shale resource. The high price of crude oil 

coupled with concerns regarding energy geopolitics and increased dependence on imported oil 

from unfriendly or unstable sources has focused attention back to the oil shale resource. 

Today a variety of countries are actively interested in developing their oil shale resources. Oil 

shale is one ofthe most prolific hydrocarbon resources on earth. Massive deposits are found in 

a number of countries around the globe, including Australia, Brazil, China, Estonia, Israel, 

Jordan, and the United States, among others. Today, only China and Estonia produce oil shale 

commercially and only in relatively small quantities. The high price of oil, decline in world 

conventional oil reserves, and increasing competition for oil resources worldwide have drawn 

the interest of many countries and companies to this significant source of oil as the next 

generation of petroleum supply. Technologies developed in the United States hold the clear 

advantage in developing oil shale both domestically and internationally. 

There are several dozen companies engaged in oil shale research and development in the 

United States, in varying stages of development. Some are small: their work limited to the 

laboratory. Others, such as Shell, Exxon, AMSO, Red Leaf, and Shale Tech International, to 
85 

name a few, are actively testing their technologies at various stages of development in the field. 

The Secure Fuels from Domestic Resources report published by the U.S. DOE summarizes the 

technologies of 32 separate companies working in oil shale and tar sands development in U.S. 

Most are oil shale research and development companies and their profiles are summarized in 

the aforementioned report found at (www.unconventionalfuels.com). 

Shell, Exxon, and AMSO have BLM oil shale RD&D leases in the Piceance Basin of Colorado. To 

this date, Shell and Exxon have conducted most of their research on their own fee lands but are 

recently moving onto their leases. All three of these technologies are insitu (below ground 

heating). 

AMSO, which is owned jointly by TOTAL and Genie Energy, has completed their heater and 

production well testing and is moving forward with a pilot test of their process. 

Shell, perhaps the most advanced of the oil shale companies, has successfully recovered oil, 

proving their heater and production technology, verifying the viability of their insitu conversion 

process (ICP), and their freeze wall technology to isolate groundwater. 

Exxon plans to move its Electrofrac insitu process to its BLM R&D lease. Successful tests 

conducted at their Colony mine indicate that the technology is ready for the next phase of R&D. 

On the surface (exsitu) Shale Tech International has tested the Paraho II surface retort process 

in Rifle, Colorado and is completing a demonstration plant for Queensland Energy Resources 

Ltd in Australia. On its own, Shale Tech continues to operate its own R&D center and fully 

equipped pilot plant in Colorado to further develop the Paraho technology. 
86 

Red Leaf Resources, Inc. has developed and piloted an in-capsule technology that involved 

surface mining of shale deposits with a stripping ratio of no more than 1 to 1. Rubblized shale is 

placed in a fully sealed and oxygen-free capsule. Convective heat is circulated through the 

capsule by heating pipes and the kerogen oil is released from the shale at temperature and 

collected in an oil and gas recovery system. Following the success of their pilot plant, Red Leaf is 

in the engineering design stages for a commercial demonstration facility. They are in a joint 

venture with TOTAL. 

There are a variety of other promising companies developing oil shale technologies that are not 

currently on the ground. Enefit American Oil, a subsidiary of the Estonian company Eesti 

Energia purchased 100% of the Oil Shale Exploration Company (OSEe) and controls the largest 

tract of private oil shale property in Utah. Their technology is based on a redesign oftheir 

Galator surface retort that is operational in Estonia. Enefit is very active internationally and has 

acquired concessions in Jordan. EnShale Energy, another Utah-based oil shale company, has 

acquired leases in Utah and has built a pilot plant to demonstrate the feasibility of this surface 

process. 

I have by no means covered the technical landscape regarding oil shale development and I 

regret that time does not allow a comprehensive review of all the technological advances that 

have taken place in the last five-or-so years. Suffice to say that clean, safe, and sustainable 

technologies are being advanced to develop the oil shale resource. The passage of the Energy 

Policy Act of 2005 provided impetuous for this progress. 
87 

What are the key policy and technological challenges? The technological challenges are fairly 

straight forward and are being addressed by the participant industries. One of the greatest 

concerns has been the requirement for water in a development area with scarce water 

resources. The industry has developed processes that minimize water use. Water uses by 

different technologies are in the range of 1 to 3 barrels of water per barrel of oil produced. A 

number oftechnologies are net water producers. Similarly the impact of the industry on green 

house gas (GHG) emissions has been an issue. Produced GHG can be captured and used for 

beneficial uses or sequestration, as with any industry. Further, many of the technologies 

produce sufficient gas to supply the energy requirements of the process. There is a great deal of 

natural gas developed in this region both from conventional wells as well as the oil shale 

processes themselves. This greatly mitigates the need for coal generated power. There is also 

significant opportunity to utilize solar and wind power in this region of the United States. 

(www.oilshaleassociation.org) 

Of far greater concern than the technical challenges faced by the oil shale industry are policy 

and regulatory inconsistency and uncertainty. Since the passage of the Energy Policy Act of 

2005, the Department ofthe Interior has reversed itself on its initial Programmatic 

Environmental Impact Statement and changes to associated Resource Development Plans 

(RDP). In 2008 DOl issued commercial leasing regulations only to cancel them when suits were 

brought challenging the PElS and the regulations. Another PElS was scheduled and is currently 

under review and new regulations are scheduled for late 2012. For companies that plan to 

invest hundreds of millions of dollars, if not billions, this continued uncertainly is extremely 

limiting. 
88 

The Energy Policy Act of 2005 was a comprehensive piece of legislation designed not only 

prepare for RD&D and commercial leasing regulations but also to plan for the orderly 

development of oil shale and tar sands in what is essentially the Green River Formation of 

Colorado, Utah, and Wyoming. That planning responsibility was assigned to the U.S. 

Department of Energy under Sections 369 (h) and (i). Section 369 (h) of the Act directed the 

Secretary of Energy, in cooperation with the Secretary of the Interior and Secretary of Defense 

along with the Governors of effected States "to establish a Task Force to develop a plan to 

accelerate the commercial development of strategic unconventional fuels and initiate 

partnerships with Alberta and nations with oil shale resources". The task force report, with 

recommendations, was completed and forwarded to the President and the Congress in 

February 2007. Section (i) of the Act directed the Office of Petroleum Reserves to "coordinate 

the creation and implementation of a commercial strategic fuels program." If those sections 

ofthe Act were implemented and the unconventional fuels development program was initiated 

within the DOE, uncertainty and inconsistency in policy would not exist today. Unfortunately, 

there is little evidence that the recommendations of the Task Force or the establishment of an 

unconventional fuels program has occurred. My strong recommendation would be to 

implement the law. 

Mr. Chairman and members of the Committee -thank you once again. I would be pleased to 

answer any questions. 
89 

I have submitted for the record: a White Paper Economic Impact of the failure to Implement 

Legislative Mandates of Section 369, Energy Policy Act of 2005, by Anton Dammer and Dr. 

James Bunger 
90 

Chairman HARRIS. Thank you very much for your testimony, and 

we will now begin the first round of questioning. I will recognize 

myself for five minutes. 

Mr. Andersen, let me just ask you, your technology, was there 

any government involvement in the development of the technology? 

Mr. ANDERSEN. Well, I talked about initially there was some government involvement in technology that was put on a submarine, 

but we took that and developed our own intellectual property, our 

own funding. We built some systems for the government, but the 

R&D for those was all internal. 

Chairman HARRIS. Okay. And did you ever request any help from 

the Department of Energy or, you know, sought some of the funds 

from some of the programs we have been talking about today? 

Mr. ANDERSEN. No, we haven’t. 

Chairman HARRIS. Okay. Now, Mr. Dammer, your testimony—I 

want to thank you for your testimony. You know, it was a little disturbing to me that, you know, the Department of Energy, you 

know, Mr. McConnell kind of admits that oil shale and oil sands 

are part of all of the above but they are not spending any money 

on it. They are not really doing anything. The task force that you 

mentioned that produced that report in 2007 did outline some impediments that are occurring or constraints that exist on development of oil shale. In your opinion, is the DOE or BLM really doing 

enough or doing anything to implement the recommendations of 

that task force or basically has it almost ground to a halt? 

Mr. DAMMER. I can’t really speak to what the Department of Interior is doing. Let me correct that. I know exactly what they are 

doing, and they really are on the regulatory side of this, and we 

have sort of jumped the gun on regulations, because as you have 

heard today, you have people questioning water usage, you have 

the carrying capacity of the western energy quarter, socioeconomic 

concerns. Those are the concerns that need to be addressed and addressed in a plan, and that was the purpose of section 369(h) and 

(i) was intended to do. They weren’t intended to promulgate new 

regulations. That is the responsibility of the DOI. It was to put together a plan to reasonably develop these resources, and these resources stretch from Wyoming down through Colorado, and they do 

broach the Green River and the Colorado River. So there is all 

kinds of hydrologic issues, incidentally, some of which have been 

answered far better than the testimony by GAO. 

Chairman HARRIS. Let me ask you, so—because my understanding that that—the oil shale, is it true that if you look at oil 

shale resources, that the United States really has more than the 

entire world’s reserves, if we could unlock oil shale? 

Mr. DAMMER. Many times over. 

Chairman HARRIS. That is what I thought. So, you know, it is an 

interesting all-of-the-above strategy. That is all I can tell you. 

I want you to directly comment on the use of water, because my 

understanding, the GAO report suggests that it takes five barrels 

of water to produce one barrel of oil. You say that more likely that 

it is one barrel of water for three barrels of oil. Is that because of 

advances in technology or the feeling that we can make those advances and that is a goal? 
91 

Mr. DAMMER. Well, I think the genesis of that statement is, is 

that companies like Shell, Exxon, Total, Red Leaf have been out on 

the ground for some period of time. A number of those projects 

have pilot projects. In the case of Red Leaf, we ran a pilot project 

so we know exactly how much water we were using, and we were 

using actually less than one barrel of water per barrel of oil shale 

produced. And most of that water was for domestic consumption 

and dust control. So there is a gap between what is going on in the 

industry and what is being talked about by these various reports 

and whatnot. 

Chairman HARRIS. Thank you very much. As you said, the purpose of the Energy Policy Act was to try to answer some of those 

questions. 

Mr. Todd, you know, thank you all the work the company has 

done. Just out of curiosity, were there—because you say you don’t 

really want any loans or programs or grants or whatever, and that 

is kind of too bad because I think the money in your company 

would be much better than Solyndra, for instance, probably much 

better spent. What is the price per barrel that it is going to cost 

you ultimately when you begin this production? Can you give us an 

idea about what the price per barrel of producing is from the oil 

sands using your technology? 

Mr. TODD. We estimate our operating costs at under $30 a bar- rel, and we estimate the economic limit to be about $50 a barrel 

priced to go ahead. 

Chairman HARRIS. So even at today’s relatively—I hate to say 

relatively depressed price of Midwest oil compared to the world 

but, you know, roughly $97, $96 a barrel, whatever it was in the 

last few days, it is economically—again, the Department of Energy 

testified it has to be economically viable, and clearly, that is economically viable in today’s oil market. 

Mr. TODD. Absolutely. Of course, one of the problems we have in 

oil sands side in the federal level is to lump oil sand and oil shale 

together. They are different resources. They are both very large. 

They both occur in the western States. That is about where the—— 

Chairman HARRIS. And they both start with ‘‘oil.’’ 

Mr. TODD. But the fact is that the technologies for developing oil 

sand have been well at play. Our company is a unique one, but in 

Canada, we are—we have got two million barrels a day. It is hardly unconventional anymore. 

Chairman HARRIS. Yes. Thank you very much, and we will probably have a second round but I want to recognize Mr. Tonko for 

five minutes. 

Mr. TONKO. Thank you, Mr. Chair. 

Mr. Dammer, since oil shale companies have secured thousands 

of acres of oil shale resources in Utah and have apparently secured 

funding to move forward with a commercial oil shale development 

program on these lands, why do you think it necessary for the Federal Government to make millions of acres of federal lands available for commercial development since, (A) large amounts of federal 

lands have already been available for oil shale development; (B) 

millions of acres of oil shale resources in the West are already in 

the hands of private industry, none of which to date have been 

commercially developed; and (C) it seems that ample oil shale re-
92 

sources have been acquired to move forward with the commercial 

program? 

Mr. DAMMER. I think the short answer to that is the economics. 

The richest oil shale on earth is located in the Piceance Basin of 

Colorado. It is a relatively small area, but it is the area where the 

RD&D leases are located. That is where Shell, AMSO, Exxon, and 

Chevron want to deploy their in situ technologies, and the reason 

for that is, is that in that particular region, the pay zone in the 

middle of the Piceance Basin is 1,000 feet thick, all right, so there 

is about 1,000 foot of over burden and then there is about 1,000 

foot of pay, a very, very high quality, consistent oil shale. So what 

they want to do is they want to put those electric heaters down into 

that very thick pay. Keep in mind, we would be heating that whole 

column of thousand foot, and the payoff for that is tremendous. 

Shell incidentally believes that they will produce a million to 1.2 

million barrels per acre. There is no conventional oil play on Earth 

that is that productive and that concentrated. So that is the story 

with the Piceance Basin. 

Mr. TONKO. And with the State and private lands that exists 

along with the proposed research leases in PEIS, are those not 

enough in terms of area or land space? 

Mr. DAMMER. Well, they reduced the land space from two million 

to somewhere below 500,000 acres. The thought is no, that is not 

enough land. 

Mr. TONKO. Even for research and commercial pilots? 

Mr. DAMMER. For commercialization. The two million acres that 

were the preferred alternative in the original regulations were two 

million acres, so what has happened is that amount of land has 

been carved back to somewhere below 500,000 acres, and yes, the 

answer to your question is, that is not enough open land. 

Mr. TONKO. Okay. In support of this discussion, I would ask that 

the Wilderness Society document outlining the private and state 

land leasing for oil shale be included, if we might, Mr. Chair, in 

the record? 

Chairman HARRIS. Without objection. 

[The information may be found in Appendix 2. 

Mr. TONKO. Thank you. 

And the oil shale industry has a very long history of grand failures, which have come at enormous cost to investors and to taxpayers and certainly the environment, yet today we are talking 

about it as this resource of the future, as if it is some new idea that 

has not seen a century of attempts with no return on investment. 

GAO just testified that their project to assess the water impacts of 

oil shale was complicated by the fact that the technologies were not 

mature enough to inform a precise assessment, yet here we are 

hearing that it is a proven commercial ready technology and all you 

need is the federal land to make it happen. 

Mr. Dammer and Ms. Julian, what has changed to perhaps have 

us think differently here? 

Mr. DAMMER. Well, I don’t want to correct you, but I don’t think 

we said that these were ready for commercial, to be commercialized. There is no commercial oil shale development project. But 

what I would say is that there has been a lot of private R&D that 

has gone into these technologies. Shell has spent hundreds and 
93 

hundreds of millions of private capital out on their site in Colorado. 

They have a very good idea of what their water usage is and their 

energy return on investment, as does Red Leaf Resources Incorporated, who has run a pilot. So—— 

Mr. TONKO. Has that research provided for any different approach or would it be the same—is it the same effort with the same 

potential impacts on water and the environment? 

Mr. DAMMER. Well, I think the in situ technology and the Red 

Leaf technology, which is a modified in situ, is unlike any other 

kind of technology that you might hearken back to, to the 1980s 

where the surface retort was king and rumen pillar mining and 

surface mining were being considered. That is not to say that surface retorts haven’t improved their technology remarkably, but this 

is not your grandfather’s oil shale industry anymore. Just as with 

shale gas technology, 10 years ago—I have been in the oil and gas 

business for a long time. Ten years ago, people were saying you 

would never be able to deviate a well into a shallow conventional 

shale reservoir that is 10,000 feet deep and put out a long-reach 

horizontal well another 10,000 feet. People would have laughed at 

you. So, I mean, it is a technological play that is evolving, and it 

is evolving very fast. 

Mr. TONKO. Thank you, Mr. Chair. I yield back. 

Chairman HARRIS. Thank you very much. And again, we will 

have a second round here. 

Ms. Julian, in your written testimony you state that ‘‘As any operator will tell you, coal, oil, gas, wind, solar, shale, sands, et 

cetera, working on state land is not only more clearly streamlined 

but consistently regulated.’’ Could you please expand upon some of 

those lessons from Utah with regard to the permitting process or 

energy regulation with regards to state versus federal? 

Ms. JULIAN. Sure. In the State of Utah, our regulatory policy is 

laid out pretty simply. We completely have everything out on the 

table and really want to be an expeditious, business-friendly process. It is not subject to interpretation as much federal regulation 

is, which creates a delay and turns it into a judiciary system. The 

process to improve everything from air and water permits to mining permits in the last three years, the timeline has decreased significantly where some permits can be done in 90 to 120 days. And 

some of the things that we do in the State of Utah is, we put all 

the regulators in the room together for an entire project, and we 

have them work it out together with the company all at the same 

time and say what are the timelines, what are the obstacles, what 

do we need to go through for this, and just getting them in the 

same room and having these predesigned meetings has cut down 

on all kinds of things that regulatory agencies go through on a federal level that turn into a judiciary-type situation where you have 

lawsuits delaying projects and perhaps losing private investment 

such that happens to the federal entities. 

Chairman HARRIS. Thank you. 

I would like to ask unanimous consent to enter into the record 

the following three documents from the State of Utah: the Utah’s 

economic development plan, Utah’s 10-year strategy energy plan 

that is called ‘‘Energy Initiatives and Imperatives,’’ and Utah’s response to the BLM’s draft Programmatic Environmental Impact 
94 

Statement for Oil Shale and Tar Sands. So without objection, so ordered. 

[The information may be found in Appendix 2.] 

Chairman HARRIS. Thank you very much. 

Specifically, you know, you discuss Governor Herbert’s 10-year 

strategic energy plan. Are there any particular examples from the 

plan you would like to highlight with regard to regulations, streamlined development, coordination, long-term planning, anything that 

you would suggest to the Federal Government adopt some kind of 

similar strategies? 

Ms. JULIAN. Sure. There were eight recommendations that came 

out of the plan from the task force. One of them was to increase 

transparency, to really look at the regulatory system, the licensing 

system, put it online, have people see exactly where it is at, and 

adjust the regulatory framework to technology, modernize it. Some 

of the things that we look at and the way that we look at regulatory processes are decades old. We haven’t changed it. Technology 

has changed. Some of these processes were put in place before 

there were cell phones, before there was other messages—excuse 

me—methods of technology, and we haven’t sped up the regulatory 

process to keep up with technology. 

Chairman HARRIS. Thank you. 

Now, Mr. Andersen, with regards to your technology, I understand that one of its usefulnesses actually can be to direct how the 

horizontal drilling occurs. Is that right? By detecting the—by 

doing—well, by seismic detections as you are drilling? 

Mr. ANDERSEN. Oh, you could do that also. That is not one of the, 

I guess, parts that we are pushing here. But basically, you put a 

bunch of sensors in the ground and they triangulate on some event 

that is occurring and knowing exactly in three dimensions where 

it is, be it a fracture occurring or a drill progressing down, you 

know, as you drill a well. 

Chairman HARRIS. And what you are suggesting is that the technology actually would enable to be more efficient with regards to 

the fracturing. Is that right? Because you would know exactly 

where it is occurring and when it is occurring and the extent of it 

and whether you are near where you shouldn’t be? 

Mr. ANDERSEN. Absolutely. One of the things I primarily talked 

about here was the environmental effects, but in reality, there is 

a big efficiency improvement. I was in a frack job down in Fayetteville shale about a year ago, and I was talking to the geophysicist 

during the frack monitoring, and, you know, I asked her, what is 

your interest in this, why are you monitoring and a lot of the other 

guys aren’t? She says well, you know, we have a certain amount 

of acreage, we want to maximize how much we get out of that field. 

If we don’t monitor, we have to guess how far we space the wells, 

because we are not sure where the fractures are occurring. So if 

you put it too close, you will have thief zones and the frack fluid 

would leak into a previous fracked area. So the point was, their 

thought was if they could get this done inexpensively, they would 

do this on all their frack jobs and it will allow them to get maybe 

30 percent, 35 percent more out of the fields rather than leaving 

areas just untouched. 
95 

Chairman HARRIS. So in essence, that also relatively reduces the 

amount of—the environmental impact per, you know, million BTU 

of gas extracted from a gas well, for instance, right? Because you 

are extracting more from the same bore hole? 

Mr. ANDERSEN. Exactly, and one other point is that, you know, 

I was talking—we had investor day at my plant yesterday and I 

was talking to one of our clients who, you know, does a lot of 

fracks, and he says, you know, typically you might do stages like 

six, eight stages, half of them may not produce, but you don’t know 

because you are not monitoring it so you are not, you know, seeing 

the effects. So there would be a lot of efficiency improvements if 

you monitored 100 percent. 

Chairman HARRIS. And the bottom line is, two years ago, that 

technology just didn’t exist? 

Mr. ANDERSEN. It did not exist. That is correct. 

Chairman HARRIS. So, you know, as we look—and the whole purpose of the hearing is to look at research and development of unconventional oil and gas. I personally believe—and I am going to 

ask you whether you agree, but I suspect you do—that it is through 

technological improvement that we will actually improve and increase the amount of available unconventional oil and gas, and I 

think your product is a perfect example of how you do it through 

technology. 

Mr. ANDERSEN. I agree 100 percent. If I may just real quickly, 

you know, they were talking in the 1970s that peak oil was 

reached, energy production was going down but then, you know, 

technology came along, hydro fracking, you know, and starting 

around 2008, it is going up. You know, technology has done that 

and what I am worried about is that whole revolution could get 

slowed down by people having concerns about the safety of it, and 

we can monitor that, and the technology exists to do that, and if 

some events start happening, they could be corrected before there 

is any significant environmental damage. 

Chairman HARRIS. No, this is great. I am a firm believer in technology. I wish we had invited ATK, a company that has some presence in my district that you may or may not be familiar with, is 

doing the propellant fracturing. It eliminates the use of water, and, 

you know, they claim they can roughly double the yield of wells, 

of their test wells done with that technology. Now, you combine 

that with your—and all of a sudden, you know, we have got potentials that we knew nothing about two, three years ago, which is always exciting. 

Yes, Mr. Todd, briefly, and then I am going to go to Mr. Tonko. 

Mr. TODD. If you don’t mind, I might build on the same point relative to water. The last company that I worked for, an in situ oil 

sand developer in Canada, we were the first company to use a new 

water recycling technology that had developed and acquired by GE. 

It was—it allowed us to get the highest water recycle that had ever 

been achieved in the oil sands to date. It was a technology that did 

not exist five years prior. It is now standard practice, and it 

couldn’t have existed if we had to have the answer before we were 

allowed to get access to the resource. As you start on the projects 

and you start small, you identify the problems and the opportuni-
96 

ties and technology works along with you. But if you have to solve 

it all before you get started, you can never get there. 

Chairman HARRIS. Thank you very much. 

Mr. Tonko. 

Mr. TONKO. Thank you, Mr. Chair. 

Ms. Julian and Mr. Dammer, there seems to be an apparent difference in public acceptance in Utah versus Colorado. Can you 

speak to that, please? 

Ms. JULIAN. There is public opinion difference, definitely in Colorado versus Utah, and much of that is that some of the folks that 

are interested in oil shale development actually don’t live in those 

regions or areas, and so they are worried about those particular 

concerns because they are not in the area, they are not aware of 

the jobs, the economic benefits to that community and the fact that 

it isn’t just about water availability, it is how you use the water, 

and so Colorado and Utah do have somewhat of a difference. Even 

though Colorado has got a great resource, the State of Utah is open 

for business, and many oil shale and oil sands companies are coming over the border to do business with us. 

Mr. TONKO. Mr. Dammer? 

Mr. DAMMER. Well, I think that Utah has an entirely different 

attitude toward commerce and development than Colorado has. 

Colorado is very much more diverse. I got a letter, I guess it was 

last night, that said that a number of mayors had objected to the 

expansion of oil shale lands to two million and they were backing 

the 400,000-acre thing, and one of the objectors was from 

Carbondale. Well, Carbondale is southeast and halfway to Aspen. 

So there is a lot of recreational, there is a lot of retirement type 

of activity out in and around Rifle and the Piceance Basin, and I 

think one of the challenges for oil shale development is going to be, 

how are you going to responsibly and sustainably build that industry in that area. It is going to be different. 

The other side of the coin is, is that three county commissioners, 

Mesa County, Garfield County, and Rio Blanco County, wrote the 

opposite letter saying that we represent the people of these counties and we support the two-million-acre thing. But what you see 

in Colorado that I don’t think you see in Utah is, you see retirement communities that are not interested in mineral development. 

So you go into these towns and talk to people that have to ship 

their kids down to Aspen to serve Starbucks coffee to keep them 

in the area. They are interested in high-paying jobs. So it is a push 

and pull. I worked in Utah, and it is open for business. It is an entirely different environment. 

Ms. JULIAN. I would—— 

Mr. TONKO. I am sorry. 

Ms. JULIAN. I am sorry. I would also add to it that I think people 

don’t realize that you can have both. You can have environmental 

sustainability and energy development. It is not mutually exclusive. These things can happen together. You can have prosperity 

and economic development and jobs, ripple effects into the school 

systems, and you can still have tourism, you can still have your endangered species and all of the species that go along with it, our 

plant life survive and thrive and you can still have other industries 
97 

such as agriculture and hunting. It can be done together. It is, 

again, not mutually exclusive. 

Mr. TONKO. My understanding is that the processes used in Estonia have reaped massive environmental damage there. Would we 

use that same process here? 

Mr. DAMMER. No, sir. I worked in Estonia for several years. You 

are exactly right. The old, antiquated surface retorts that they use 

there are pretty nasty business. They produce a lot of semicoke. 

You know, they call them the Estonian Alps. To the credit of 

Enefit, which is their—they have a U.S. subsidiary now called 

Enefit American Oil and they own land in Utah. They refined that 

retort. I can’t tell you exactly all the technical details of it, but it 

is much improved. But you would never want the retorts that are 

operating in Estonia to come to the United States, as with the Chinese retorts, the Fushun retorts. Those are horrible, nasty things. 

Mr. TONKO. Many of you have made reference to the technologies 

that produce water. What is the quality of this water compared to 

that which already exists on the surface? 

Mr. TODD. In our case, the water is a fresh water that we 

produce. We don’t actually discharge water. The water that we lose 

is essentially water that evaporates and is coating the sand grains 

and so it is like putting wet beach sand on the ground. It has got 

water entrained in it, and that is all the water that is used in our 

process. 

Mr. TONKO. I believe I am out of time, so I yield back, Mr. Chair. 

Chairman HARRIS. If you have an additional question, you can 

take a little extra time if you want to ask another question. 

Mr. TONKO. If I could just ask Mr. Todd about the—in terms of 

commercial readiness, what is the difference between oil sands and 

oil shale? 

Mr. TODD. There are many, many differences, and we can go 

back to the chemistry of it all, but oil sands have oil in them. It 

is oil that is ready to go into a refinery. And so when we produce 

our oil, it will go direct to refining. It does not require to be upgraded. It is not a kerogen. It is oil. It is heavier and it requires 

some technical dealing with viscosity. Those are chemical problems 

to be dealt with. The kerogen that—they both started off in the 

shale. All the oil and gas in the world started off in shale. The stuff 

that migrated out of the shale after it became mature became oil 

and gas, and the oil, if it came close to the surface as it has in 

Utah, and the surface was eroded away and that oil came into contact with the atmosphere, the light ends of the oil would run off 

and what would be left is very heavy, and that is why it is hard 

to get out of the ground. On the other hand, what is left in the 

shale is still needed to be cooked, but unfortunately, it wasn’t left 

buried long enough and so now it needs to be cooked man-made to 

get it out. 

So there are two completely different problems. One is the oldest 

oil in the world and one is the youngest oil in the world. 

Mr. TONKO. Mr. Chair, in support of the discussion we have been 

having, I ask that the nine-page report by the Checks and Balances 

Project titled ‘‘A Century of Failure’’ be included in the record. 

Chairman HARRIS. Without objection, so ordered. 

[The information may be found in Appendix 2.] 
98 

Mr. TONKO. Thank you. And also a compilation of expert quotes 

titled ‘‘Not Ready for Prime Time’’ expressing opinions about the 

commercial readiness of oil shale, also prepared by the Checks and 

Balances Project, be included in the record. 

Chairman HARRIS. Without objection, so ordered. 

[The information may be found in Appendix 2.] 

Mr. TONKO. Thank you, sir. 

Chairman HARRIS. Thank you. I am going to ask unanimous consent to enter into the record three resolutions passed by the Board 

of County Commissioners for Garfield, Mesa, and Rio Blanco counties, Colorado, opposing the U.S. Bureau of Land Management’s 

2012 oil shale and tar sands Programmatic Environmental Impact 

Statement for lands administered by the BLM in Colorado, Utah, 

and Wyoming. 

[The information may be found in Appendix 2.] 

Chairman HARRIS. Additionally, I would ask unanimous consent 

to enter into the record two additional documents, a white paper 

co-authored by Mr. Dammer entitled ‘‘Economic Impact of Failure 

to Implement Legislative Mandates of Section 369, Energy Policy 

Act of 2005,’’ and a letter from Dr. Dag Nummedal and Dr. Jeremy 

Boak with the Colorado School of Mines regarding unconventional 

oil and gas development. Without objection, so ordered. 

[The information may be found in Appendix 2.] 

Chairman HARRIS. I want to thank the witnesses for their valuable testimony, and their Members for their questions. The Members of the Committee may have additional questions for you, and 

we ask you to respond to those in writing. The record will remain 

open for two weeks for additional comments from Members. 

The witnesses are excused. Thank you all very much for coming. 

The hearing is now adjourned. 

[Whereupon, at 11:54 a.m., the Subcommittee was adjourned.] 
99 

ANSWERS TO POST-HEARING QUESTIONS
100 

ANSWERS TO POST-HEARING QUESTIONS
101 

Department of Energy 

Washington, DC 20585 

The Honorable Andy Ilarris 

Chainnan 

July 20. 2012 

Subcommittee on Energy and the Environment 

Committee on Science. Spaec. and Technology 

U. S. House of Representatives 

Washington, DC 20515 

Dear Mr. Chainnan: 

On May 10,2012, Charles iv!cConnell. Assistant Secretary. Office of Fossi) 

Energy, testified regarding exmnining the challenges and opportunities associated with 

expanding development and use ofuncon\'entionai oil and gas production technologies, 

Enclosed arc the answers 10 seven questions that you submilled for the hearing 

record. 

[fwe can be or further assistance, please have your starf eontacl our 

Congressional Hearing Coordinator. Lillian Owen. al (202) 586-2031. 

Enclosures 

Sincerely, 

Ii 1- y (}7j. {/4tl;{i;r-ti'l (rY(~( ChristophJ Davis 

Deputy Assistant Secretary 

Jor Congressional Affairs 

Congressional and Intergovernmental 

Affairs 
102 

QUESTION FROM CHAIRMAN ANDY HARRIS 

QI. Please provide an update on the status of the recommendations contained in the 

Strategic Unconventional Fuel Task Force's "Strategy and Program Plan." 

What has the Department of Energy specifically done to address each of the 

challenges and recommendations contained in the plan? 

A 1. To address the challenges and recommendations of the Strategic Unconventional 

Fuel Task Force, the Department led an effort in 2007 and 200B that resulted in 

the development, publication, and distribution of a Strategic Plan for 

Unconventional Fuels Development in the Western Energy Corridor. The 

Strategic Plan was developed jointly by an ad hoc group of representatives from 

the Department of Energy (including national laboratories), Department of 

Defense, Department of the Interior, affected state and local government entities, 

universities, and industry representatives from the U.S. and Canada. The 

Department has also been developing, publishing and distributing multiple reports 

that track research, development, and demonstration (RD&D) efforts in the 

private and public sectors in the U.S.; and participating in national and 

international oil shale conferences. 
103 

Department of Energy 

Washington, DC 20585 

The Honorable Andy Ilarris 

Chainnan 

July 20. 2012 

Subcommittee on Energy and the Environment 

Committee on Science. Spaec. and Technology 

U. S. House of Representatives 

Washington, DC 20515 

Dear Mr. Chainnan: 

On May 10,2012, Charles iv!cConnell. Assistant Secretary. Office of Fossi) 

Energy, testified regarding exmnining the challenges and opportunities associated with 

expanding development and use ofuncon\'entionai oil and gas production technologies, 

Enclosed arc the answers 10 seven questions that you submilled for the hearing 

record. 

[fwe can be or further assistance, please have your starf eontacl our 

Congressional Hearing Coordinator. Lillian Owen. al (202) 586-2031. 

Enclosures 

Sincerely, 

Ii 1- y (}7j. {/4tl;{i;r-ti'l (rY(~( ChristophJ Davis 

Deputy Assistant Secretary 

Jor Congressional Affairs 

Congressional and Intergovernmental 

Affairs 
104 

QUESTION FROM CHAIRMAN ANDY HARRIS 

QI. Please provide an update on the status of the recommendations contained in the 

Strategic Unconventional Fuel Task Force's "Strategy and Program Plan." 

What has the Department of Energy specifically done to address each of the 

challenges and recommendations contained in the plan? 

A 1. To address the challenges and recommendations of the Strategic Unconventional 

Fuel Task Force, the Department led an effort in 2007 and 200B that resulted in 

the development, publication, and distribution of a Strategic Plan for 

Unconventional Fuels Development in the Western Energy Corridor. The 

Strategic Plan was developed jointly by an ad hoc group of representatives from 

the Department of Energy (including national laboratories), Department of 

Defense, Department of the Interior, affected state and local government entities, 

universities, and industry representatives from the U.S. and Canada. The 

Department has also been developing, publishing and distributing multiple reports 

that track research, development, and demonstration (RD&D) efforts in the 

private and public sectors in the U.S.; and participating in national and 

international oil shale conferences. 
105 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q2a. Please provide an update on the activities of the Strategic and Unconventional 

Fuel Task Force. For example, how often does the Task Force meet and when 

was the most recent Task Force meeting? Is the Task Force producing reports as 

required by Section 369 of the Energy Policy Act of2005? 

Specifically, what is the Department of Energy's current role in the Task Force? 

A2a. The Task Force met prior to January 2008 and approximately 10 times between 

January 2008 and the last meeting in April 2010. The Task Force completed II 

report, entitled Initial Findings and Recommendations of the Strategic 

Unconventional Fuels Task Force in September 2006. With assistance from the 

Department, the Task Force also completed a Strategy and Program Plan report, 

entitled America's Strategic Unconventional Fllels, in September 2007. These 

two reports fulfilled the Task Force's reporting responsibilities under section 

369(h) of the Energy Policy Act of2005 (EPAct 2005). 

Additionally, pursuant to section 369(h)(5)(b) of EPAct 2005, the Department 

was required to "provide an annual report describing the progress in developing 

the strategic unconventional fuels resources within the United States for each of 

the five years following submission of the" Task Force's Initial Report. The 

Department accordingly submitted an annual report for 2008 on January 16, 2009 

for the three-year period covering 2006 through 2008; and another annual report 

for 2009 was submitted on June 18,2010. 

2 
106 

The Department's current focus is primarily on safe and environmentally 

sustainable development unconventional natural gas, including shale gas, and 

methane hydrates. The Department does not have a current role with regard to the 

Task Force because all of the Task Force's reporting requirements pursuant to 

EPAct 2005 Section 369(h) have been met and the Task Force is not currently 

producing any additional studies; accordingly, the Department is not planning to 

submit additional annual reports. 

3 
107 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q2b. Please provide an update on the activities of the Strategic and Unconventional 

Fuel Task Force. For example, how often does the Task Force meet and when 

was the most recent Task Force meeting? Is the Task Force producing reports as 

required by Section 369 of the Energy Policy Act of 2005? 

Why has the Task Force not issued an annual report, as required by law, since 

2oo9? Is DOE committed to the Task Force completing the required reports? 

A2b. The Task Force produced an Initial Report in September 2006. EPAct 2005 did 

not call upon the Task Force to produce additional reports. However, with 

assistance from the Department, the Task Force also completed a Strategy and 

Program Plan report in September 2007. Additionally, the Department submitted 

an annual report on January 16,2009 for the three-year period covering 2006 

through 2008; and another annual report for 2009 was submitted on June 18, 

2010. The Task Force has not produced any additional studies since its last 

meeting in April 20 I 0; and the Department is not planning to submit additional 

annual reports. 

4 
108 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q2c. Please provide an update on the activities of the Strategic and Unconventional 

Fuel Task Force. For example, how often does the Task Force meet and when 

was the most recent Task Force meeting? Is the Task Force producing reports as 

required by Section 369 of the Energy Policy Act of2005? 

Please provide a timeline to the Subcommittee for the Task Force to issue an 

updated Annual Report. 

A2c. The Task Force's reporting requirements pursuant to EPAct2005 Section 369(h) 

have been met; the Task Force has not produced any additional studies since its 

last meeting in April 20 I 0; and the Department is not planning to update previous 

annual reports. 

5 
109 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q2d. Please provide an update on the activities of the Strategic and Unconventional 

Fuel Task Force. For example, how often does the Task Force meet and when 

was the most recent Task Force meeting? Is the Task Force producing reports as 

required by Section 369 of the Energy Policy Act of 2005? 

Does DOE have plans to implement the recommended unconventional fuels 

strategy, proposed by the Ad Hoc Unconventional Fuels Working Group? 

A2d. Our current focus is primarily on safe and environmentally sustainable 

development of unconventional natural gas, including shale gas, and methane 

hydrates. 

6 
110 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q3. How is the Department of Energy actively fulfilling its program responsibilities 

called for in Section 369 of the Energy Policy Act of2005? 

What plans does the Office of Fossil Energy have for further supporting oil shale 

development as part of the Energy Policy Act 2005? 

A3. Our current focus is primarily on safe and environmentally sustainable 

development of unconventional natural gas, including shale gas, and methane 

hydrates. The Department's oil shale activities going forward include efforts to 

track RD&D in the public and private sectors; and to participate in oil shale 

conferences. 

7 
111 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q4. During the hearing, you stated that both oil shale and oil sands are part of 

President Obama's "all-of-the-above" energy strategy. If this is truly the case, 

why does the budget request for the Department of Energy's Office of Fossil 

Energy contain no funding for oil shale and oil sands research? 

A4. America's abundant unconventional oil (including oil shale) and natural gas 

resources are critical components of our nation'S energy portfolio. Their 

development enhances America's energy security and economy. 

However, there are significant technical and environmental challenges to the 

development of U.S. oil shale. The more difficult issues related to the 

commercialization of domestic oil shale appear to be related to high capital costs, 

uncertainties regarding oil shale development regulations, and most importantly, 

environmental considerations, rather than process-related technical challenges. 

Our current research focus is primarily on safe and environmentally sustainable 

development of low-carbon unconventional natural gas. This includes shale gas, 

and methane hydrates. 

8 
112 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q5. Please describe all activities specifically relating to oil shale development within 

Department of Energy's Office of Fossil Energy. 

What is the Department of Energy specifically doing to address water-use issues 

associated with unconventional energy production? 

A5. DOE's Office of Oil and Gas supports research and development (R&D) efforts 

addressing the water use, water re-use/recycling, wastewater treatment, and water 

resource management issues associated with the development of unconventional 

resources, including oil shale. Examples of such DOE sponsored projects specific 

to oil shale include: (a) the development and creation of an up-to-date Geographic 

Information System (GIS) database that will provide baseline water information 

needed to understand potential impacts of future oil shale development, which is 

being conducted by a team led by the Utah Geological Survey; and (b) 

development of a web-based water resource geospatial data gathering and analysis 

system to facilitate decision making for potential oil shale development, which is 

being conducted by the Colorado School of Mines. 

9 
113 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q6. In the Department of Energy's response to the Government Accountability Office 

report "Energy-Water Nexus: A Beuer and Coordinated Understanding of Water 

Resources Could Help Mitigate the Impacts of Potential Oil Shale Development," 

DOE states, "the biggest obstacles to investment in the development of a viable 

oil shale industry in the US have not been the state of the technology, but rather 

the regulatory uncertainty, and lack of access to resources on Federal lands in the 

western US." Does DOE stand by this assessment? Ifso, what is DOE doing to 

help overcome these obstacles? 

A6. The Department of Energy (DOE) believes the issues of regulatory certainty and 

access to resources will be resolved by ongoing Bureau of Land Management 

initiatives. In the meantime, DOE's main focus will be on safe and 

environmentally sustainable development of unconventional natural gas, 

including shale gas, and methane hydrates. 

10 
114 

QUESTION FROM CHAIRMAN ANDY HARRIS 

Q7. The House Appropriations Committee provides $25 million to the Department of 

Energy's Office of FossiI Energy for unconventional fossil energy research to 

support research to improve the economics of oil production from oil shale, as 

well as to reduce the health, safety, and environmental risks associated with oil 

shale extraction. Does DOE support this funding? Ifnot, why not? 

If Congress appropriates this funding, what targeted research areas would be the 

most impactful for the development of the United States' unconventional energy 

resources? 

A7. The Department supports the President's Budget as submitted. which will focus 

primarily on safe and environmentally sustainable development of unconventional 

natural gas, including shale gas, and methane hydrates. 

II 
115 

United States Government Accountability Office 

Washington, DC 20548 

June 7, 2012 

The Honorable Andy Harris M.D. 

Chairman 

Subcommittee on Energy and Environment 

Committee on Science, Space, and Technology 

House of Representatives 

Subject: GAO Response to Questions for the Record 

We appreciate having had the opportunity to appear before the House 

Subcommittee on Energy and Environment on May 10, 2012, to speak about GAO's 

work on issues associated with oil shale development. 

Enclosed are GAO's responses to the questions you submitted for the hearing 

record related to our testimony, Unconventional Oil and Gas Production: 

Opportunities and Challenges or Oil Shale Development, GAO-12-740T. If you or 

your staff have any further questions, please contact me at 202-512-3841 or 

mittala@gao.gov. 

Sincerely yours, 

Anu K. Mittal 

Director, Natural Resources 

and Environment 

cc: The Honorable Brad Miller 

Ranking Member 

Subcommittee on Energy and Environment 

Enclosure 
116 

U.S. HOUSE OF REPRESENTATIVES 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

Subcommittee on Energy & Environment 

Hearing Questions for the Record 

The Honorable Andy Harris 

Supporting American Jobs and the Economy Through Expanded Energy 

Production: 

Challenges and Opportunities of Unconventional Resources Technology 

Ms. Anu Mittal 

1. A number of organizations, including the Department of Energy, have 

argued the water use assumptions contained in the Government 

Accountability Office report "Energy-Water Nexus.: A Better and 

Coordinated Understanding of Water Resources Could Help Mitigate the 

Impacts of Potential Oil Shale Development" were overstated. Given the 

development of new unconventional oil and gas production technologies, 

does GAO still support its previous water use estimates? Has GAO taken 

into account new industry estimates, or taken measures to revise the 

report? 

As we stated in our report, the water use estimates that we presented characterized 

what was known about the amount of water that may be needed for commercial oil 

shale development and reflected the most current data and information publicly 

available at the time of our review. We reported the entire range of reputable studies 

that were publicly available at the time without bias to illustrate the wide range of 

uncertainty in water needed to commercially develop oil shale. We discussed the 

completeness and accuracy of these studies in interviews with federal agency 

officials, state agency personnel involved in regulating water quality and quantity, oil 

shale industry representatives, and representatives of environmental groups. As a 

result, we continue to believe the water use estimates presented in our October 

2010 report reflect what was known about the amount of water that may be needed 

for commercial oil shale development at the time. Since that .time, we have not 

conducted additional analyses to reflect any possible changes or new estimates that 

may have been developed since this work was completed. 

2. The Department of Energy criticized GAO's characterization of the state of 

oil shale technology development,' stating "the Report gives the 

impression that all oil shale technologies are speculative, and that proving 

them to be commercially viable will be difficult, requiring a very long period 

of time, with uncertain outcomes. This is not an accurate representation of 

the state of the technologies, or of the expected timing of first commercial 

Page 2 
117 

production. The Report should be revised to address these issues." Can 

you explain why GAO's assessment of the state of oil shale technology is 

at odds with DOE's? 

a. What is GAO's position with respect to DOE's comments and 

recommendation to revise the report? 

As we stated in our response to DOE's comments to our report, we disagreed with 

this characterization of our report. Our report clearly stated that there was 

uncertainty regarding the commercial viability of in-situ technologies. Based on our 

discussions with companies and review of available studies at the time we 

conducted our review, Shell was the only active oil shale company to have 

successfully produced shale oil from a true in-situ process. On the other hand, we 

noted that mining oil shale and retorting it at the surface was a relatively mature 

process. Nonetheless, competition from conventional crude oil has inhibited 

commercial oil shale development in the United States for almost 100 years. As 

noted in the report, we did not dismiss any companies' efforts to overcome longstanding challenges in this industry nor did we tout their progress. As a result of 

DOE comments, we added language to better explain the scope of our work and our 

characterization of the state of oil shale technology development. 

3. The House Appropriations Committee provides $25 million to the 

Department of Energy's Office of Fossil Energy for unconventional fossil 

energy research to support research to improve the economics of oil 

production from oil shale, as well as to reduce the health, safety, and 

environmental risks associated with oil shale extraction. If Congress 

appropriates this funding, what targeted research areas at DOE would be 

the most impactful for the development of the United States' 

unconventional energy resources? 

a. What specific recommendations do you have for how DOE can 

best fund research and development and otherwise leverage 

resources for unconventional energy production? 

Our October 2010 report examined federal research efforts to address impacts on 

water resources from commercial oil shale development. Therefore, the report did 

not provide specific recommendations for targeted research, nor did it offer 

recommendations on how DOE can best fund research and development for 

unconventional energy production. The report did, however, note that Interior and 

DOE officials generally have not shared information on water related oil shale 

research and that there is a need for federal agencies to improve their efforts to 

collaborate and develop more comprehensive baseline information on the current 

condition of groundwater and surface water in these western areas. Such 

information will be important for understanding the potential impacts of oil shale 

development on water resources in the region. As a result, we made three 

recommendations to the Secretary of the Interior to address these concerns. 

4. Ms. Mittal, your testimony notes "the eventual size of the industry may be 

limited by the availability of water and demands for water to meet other 

needs of the region." Is there a balance determined by water availability, as 

Page 3 
118 

managed by state authorities that could enable the significant production 

of unconventional energy? 

As you are aware, states playa large role in managing water resources, including in 

the West where the greatest potential for oil shale development is located. State 

officials will, therefore, need to consider the trade-ofts between oil shale production 

and water quantity and quality while weighing competing demands for water 

resources, such as agricultural, municipal, and commercial use, particularly in light 

of the already constrained water supplies in the region. As noted in our report, water 

is likely to be available for the initial development of an oil shale industry. In this 

regard, we provided several illustrative examples depicting an oil shale industry of 

various sizes and the estimated water needs-for both surface and in-situ 

technologies-based on the studies we examined. 

Page 4 
119 

GARY R. HERBERT 

Governor 

GREG BELL 

Lieutenant Governor 

Office of the Governor 

CODY B. STEW ART 

Energy Advisor 

SAMANTHA MARY JULIAN 

Director, Office of Energy Development 

June 13,2012 

The Honorable Andy Harris M.D. 

Chainnan 

Subcommittee on Energy & Environment 

United States House of Representatives 

Dear Chainnan Harris, 

Thank you for the opportunity to represent Utah and participate in the May 10,2012 hearing 

entitled: Supporting American Jobs and the Economy Through Expanded Energy 

Production: Challenges and Opportunities of Unconventional Resources Technology. Energy 

is one of Governor Gary R. Herbert's four cornerstones and as such, it was an honor to speak 

to your Subcommittee on the importance of Unconventional Energy to Utah. 

I write today to address the questions submitted for the record by Members of the 

Committee. Below please find my responses. 

1. The Government Accountability Office testimony mentioned the lack of 

knowledge of hydrologic conditions as a potential impediment or area that needs 

further research prior to commercial oil shale development. Does the State of 

Utah consider its specific knowledge of the hydrologic conditions and formations 

as uncertain or lacking? 

a. Please briefly describe how the State of Utah assesses ground and surface 

water resources and determine water rights and appropriations. 

The State of Utah does not consider its knowledge of hydrologic conditions as 

uncertain or lacking. Hydrologic conditions are a vital part of the permitting process 

and are thoroughly examined by the Utah Division of Oil, Gas and Mining and the 

Department of Water Quality before pennits are issued. 

Water is owned by the State in trust for its citizens and is subject to the State water 

appropriation system managed by the Utah State Water Engineer. Water rights 

appropriations are for specific diversion or use proposals. The State believes and 

asserts that water is available for oil shale and oil sands development through existing 

water rights and through the general market system. The State's allocation system 

examines issues related to availability, prioritization, interference with other rights, 

and related factors. The State makes decisions regarding the availability of water for 

60 East SoUlh Temple. 3" Aoor • Salt Lake City. Utah 84111 

Mailing Address: PO Box 144845' Salt UtkeCity. Utah 841144845 

Telephone: (801) 53&.8732 ' Fax 855-2714373 'T.D D. (801) 536-4414 

wwv.'.energy,utah.gov 

Ponted on recycled paper 
120 

energy development or any other use in all cases. The State will, consistent with the 

authority for the State Water Engineer, process applications to approve, transfer or 

reject water rights for oil shale, oil sands or any other use. 

2. Your testimony notes Utah's creation of an "Alternative Energy Development 

Incentive" to "encourage responsible energy development as Utah's education 

system relies on it for funding classrooms and textbooks." Please describe what 

increased energy production means for the State's budget, particularly how this 

initiative impacts the State's education programs. 

A Headwaters Economy Study, Energy Revenue in the lntennountain West, identified 

that over $368 Million dollars flow to Utah's State budget from Energy Development 

through production value, production taxes, property taxes and royalties. A 

significant portion of this is through the State of Utah School and Institutional Trust 

Lands Administration, which for the fiscal year of 2011 received over $12lMillion in 

revenues that were almost entirely derived from energy development. 

As this is a critical part of the State's educational funding, increasing energy 

production would mean increasing the State's ability to educate its pupils through 

infrastructure investment, hiring additional teachers and upgrading our schools. 

This simple fact is why the Alternative Energy Development Incentive (AEDI) was 

created, because incentivizing energy development through the AEDI will lead to 

increased activity and larger overall State Revenues for education. Temporarily 

trading a portion of State Tax liability for long-term investment in alternative energy 

development will augment Utah's current position as a leader in traditional fossil fuel 

production by cementing Alternative Energy companies in Utah. This will assure 

long-term tax base and increased long-term educational funding. 

3. How is the State of Utah assisting localities and counties to plan for the possible 

development of the State's unconventional resources? Is the State developing 

long-term plans to address infrastructure and service challenges? 

First: the State of Utah works closely with local Government in every instance 

possible. The Counties have been very active, vocal, and invaluable partners 

throughout the process of developing the State's unconventional resources. Most 

notably, in 2012 the State Legislature passed a bill to create an "Energy Zone" 

roughly aligning with the Uintah Basin. This was a coordinated effort of both the 

Legislature and Counties and cements State and local priorities as they relate to 

unconventional (and other) energy development efforts. The bill can be found at: 

http://le.utah.gov/-2012Ibills/staticlSB0083.html 

In addition to the State working closely with the Counties to develop legislation, the 

State coordinates development efforts and stays in close-and-constant communication 

with other County and other local leaders to harmonize efforts and assure that State 

efforts and policy align with local policies and efforts to every extent possible. The 

Office of Energy Development has made particular inroads to work with every 
121 

applicable State Agency and coordinate their communication and efforts to related 

field and State level offices. This model, and the overall synchronization of efforts, is 

what the State of Utah would like to achieve with Federal agencies. 

Secondly, The State is certainly developing long-term plans to address infrastructure 

and service challenges. Most notably, Governor Gary R. Herbert's 10 year Strategic 

Energy Plans lays out several goals and recommendations to accomplish just that. 

The Plan can be found here: 

http://www.utah.gov/governor/docs/IOyear-stragegic-energy.pdf 

Within the plan, Governor Herbert's 5th overarching goal is to "Modernize the 

regulatory environment to support sustainable power generation, energy transmission 

and energy conservation". 

Additionally, recommendation 7 clearly targets this effort by recommending: 

"Utah should ... Analyze current and future pipeline capacity for oil and gas" 

This is expanded on page 34, suggesting that the State will consider alternatives to 

current regulation and funding sources to encourage transmission line and pipeline 

construction in areas that promote economic development. 

To that end, in the 2012 Legislative Session the Office of Energy Development 

pushed a bill that included the creation of a Utah Energy Infrastructure Authority, the 

role of which is to promote the development of any "energy delivery project" that 

helps to facilitate responsible energy development in the State of Utah. The 

Authority has tax free bonding authority through which it can provide below-market 

financing for qualifying projects, and it may also partner with developers to advance 

projects of special importance to the state. While such authorities do exist in a 

handful of other states, Utah is increasingly seen as an energy crossroads for the 

West, as well as a great power producer, and the Authority is expected to playa key 

role in future years. 

Aside from working to in cent and promote energy infrastructure, there is also 

significant work to be undertaken to help streamline the siting and permitting of 

linear projects, and to that end increased coordination among State agencies, and 

between those agencies and the Federal government, will be essential. The current 

national dialogue on these issues, which can largely be credited to the advent of the 

Rapid Response Team for Transmission, is heartening, and Utah has been party to 

that dialogue from its outset. 

The Utah Office of Energy Development's aim is to coordinate all such activities in 

the state, as well as to coordinate regionally and nationally. Analysis, streamlining 

and potential future investment in Utah's energy infrastructure is ongoing and will be 

coordinated with other Western States through the Western Governor's Association 

which Governor Gary R. Herbert currently chairs. 
122 

4. How has the State of Utah worked with US Oil Sands to advance the oil sands 

project? Do you think such a model would be beneficial to replicate at the 

Federal level? 

As with any other energy development company, the State of Utah has worked with 

US Oil Sands on several fronts. Most recently and notably, this has been through the 

Office of Energy Development. These efforts have included the identification and 

dissemination of fact-based information, arranging site-visits, participation in energy 

events and general coordination and communication. 

The State certainly believes that the Federal Government would benefit from 

increased communication and coordinating efforts with industry, something that has 

recently been a significant difficulty as outlined in the State of Utah's written 

comments on The Department of Interior's 2012 Oil Shale and Tar Sands PElS (and 

previously submitted for the record) where the Federal Government showed little 

effort at working or communicating with industry at any level. 

5. As a part of Utah's commitment to develop its unconventional energy, it has 

created what you can an "Oil Sands Technology Zone." Please describe this 

effort and how it might be used as a model for responsible development and in 

improving safe, economical technologies. 

This is a recent effort led by the Office of Energy Development to create a rent-free, 

pre-permitted site for oil sands technology companies to be able to showcase their 

innovations. The current site is a brownfield on State land immediately adjacent to an 

operating mine which has agreed to provide ore to allow tenants to mimic actual 

commercial operations. 

This effort was begun because companies and individuals with proprietary technology 

have been unable to gain access to landlleases for oil sands resources; largely because 

the Federal Government has closed off their leasing. As a result, the State wishes to 

enable these technologies to progress to the next level at a small, demonstration scale 

in order to identify the most environmentally responsible and economic technology. It 

is hoped that this effort will provide a bridge to commerciality and facilitate the 

funding of companies nurtured in this zone. 

The State applauds the consideration that this be used as a model for responsible 

development at the Federal level. We believe that an opportunity exists not only for 

oil sands but oil shale as well. While several companies are in the commercial 

development phase already (RedLeaf Resources, Enefit American Oil, American 

Shale Oil, etc) several innovations have been left by the wayside due to lack of a 

proper opportunity to truly demonstrate their technology. It would be a travesty if the 

responsible development of domestic energy resources were hindered due to the 

inability of innovators to innovate. 

It is worth noting that the recent RD&D efforts led by BLM to provide leases to these 

companies are an example of "what not-to-do". This program involved a significant 

multi-year application process which was extremely burdensome and anecdotally cost 
123 

companies over $1,000,000 to obtain. The State would suggest that the Federal 

Government identify a pre-permitted, rent-free site for small scale demonstration of 

oil sands and oil shale processing, including in-situ and surface technologies. Siting 

this zone on a previously disturbed area would minimize the environmental impact. 

The State of Utah would strongly aru>reciate the opportunity to work with the Federal 

Government to identify such a site and share in efforts leading to its creation. 

In addition to exploring the creation of a Federal-level innovation zone concept, the 

State of Utah would like to highlight additional efforts which might benefit 

unconventional energy development. The first is to reverse the recent trend at the 

Derfartment of Energy as discussed by Mr. McConnell during his testimony on May 

10 where he highlighted that $0 have been devoted to oil sands and oil shale in 

recent budgets. Historically the Federal Government has supported these domestic 

sources of energy, most recently/notably through the Unconventional Fuels Task 

Force which published valuable studies examining these industries and their likely 

development. The State of Utah believes that Mr. McConnell's testimony stating that 

the Task Force has recently been active is factually incorrect. The State of Utah is 

unaware of any material efforts made by the DOE and/or Unconventional Fuels Task 

Force since 2009. Its re-establishment and re-funding would be a beneficial effort 

warranting discussion at future hearings. 

Thank you, I look forward to the opportunity to address any additional questions and 

represent Utah at future hearings if you feel it is appropriate. 

Best Regards, 

Samantha Mary Julian 

Director, Utah Office of Energy Development 
124 

US SEISMIC SYSTEMS INC 

Congressman Andy Harris M.D. 

Chairman Subcommittee on Energy & Environment 

2321 Rayburn House Office Building 

Washington, D.C, 20616-6301 

Honorable Congressman Harris, 

June 8, 2012 

It was an honor to pa11icipate in the May 10, 2012 hearing entitled Supporling American Jobs and Iile 

Ecol/omy Througil E'panded Energy Prodllction: Challenges and Opportunities a/Uncol/ventional 

Resources Technology. I thank you very much for the oppOl1unity to testify before your sub-committee 

and am very pleased to answer the question below submitted for the record by Members of the 

Committee. 

1. As you are aware, Ihere is currently all intense debare regarding allegalions./i'om Ihe Environmental 

Protection Agel1cy and elll'ironlllenialisfs fhat hydraulic ./i'acturing may cOlllaminale ground waleI'. 

HOll'lIIight US Seismic's technology evel1tually assist ill cOl/firmillg or denying allegaJions o/water 

contaminalion? 

Our technology uses ultrasensitive fiber optic sellsors to detect the microseismic fractures occurring in 

the gas-bearing rock (shale) during the hydraulic fracturing process. This monitoring of the 

microseismic activity allows operators to lllap the locations of the fractures as they are occurring, which 

provides them with the ability to terminate the fracturing process should they discover fractures 

occurring outside the desired zone (which can lead to water contamination). Unfm1ullately, only a very 

small percentage of the tens of thousands of hydraulic fi'acturingjobs being perfonned alUlIlally in the 

US are being monitored. We believe this is due to the very high cost of current, commercially available 

monitoring equipment and the marginal performance of this 50 year old legacy electronic monitoring 

teclmology. We believe that our new fiber optic technology, which field testing indicates will provide 

substantially better perfornlance at a fraction of the cost of the legacy monitoring systems, will 

encourage operators to monitor 100% of their frac jobs, leading to significant reductions in 

environmental impact. Specifically, by continuously monitoring microseismic activity during the 

hydraulic fracturing process, time sequence data could enable a company to confiml or deny allegations 

of ground water contamination. 

9601 V.riel Ave., Clmtsworth, CA 91311 Phone (818) 428-1457 Fax: (888) 892-7507 

).VWW u,,~sL('om 
125 

US SEISMIC SYSTEMS INC 

We hope this response fully and completely answers your question and look forward to being part of the 

solutions provided by innovative companies to ensure responsible fracturing in America. 

Thank you again for the opportunity to appear before your Subcommittee. 

Si~~ 

1'A".= ~O & President 

US Seismic Systems, Inc. 

9601 VaTiel Avenue 

Chatsworth, CA 91311 

9601 V.riel Ave., Chatsworth, CA 91311 Phone (818) 428-1457 Fax; (888) 892-7507 

\YWW,u-:;-sl.com 
126 

Hearing Questions Ior tbe Record 

The Honorable Andy Harris 

Supporting American Jobs and the Economy Through Expanded Energy Production: 

Challenges and Opportunities of Unconventional Resources Technology 

Mr. Cameron Todd 

1. How did your experience in Canada inform US Oil Sands' project in the United States? 

What lessons can be learned from Canada's successful development of oil sands? 

a. What are the largest technological challenges to prodticing oil sands in the United 

States compared to Canada, and how can the Federal government best assist in 

overcoming them? 

The principal leaders of US Oil Sands have a long history of involvement in the development of oil and 

gas resources in both Canada and the United States, as well as in Canada's oil sands. We have come to 

understand the key technical challenges faced by the oil sands industry, as well as the long evolution of 

the technologies that have been key to Canada's success. We have also benefited from the ability to 

evaluate the current state of the industry and identify challenges that were not originally recognized. An 

example is the problem oftailings ponds. Originally tailings ponds were seen as the normal way for any 

mining and extraction project to handle its "un-finished" oil sand separation challenge. It is only 

relatively recently that the amalgamation of many large projects along with public concern has shown 

the need to reduce or eliminate tailings ponds. Understanding this problem in advance of initiating our 

first development in the Utah, US Oil Sands has re'engineered the extraction process and come up with 

a breakthrough approach that now eliminates the need for tailings ponds by starting with a much more 

efficient extraction process. 

Canada has a long history of development of its oil sands resources, and there are many lessons to learn. 

Key among these is the recognition that it does not happen all at once. Commercial development of 

Canada's oil sands first started more than 45 years ago and at a time that oil prices did not support the 

economics. It did not become large scale for decades, and there has been plenty of opportunity for 

government, the public and industry to influence the outcomes along the way. Canada's oil sand 

resources are 50 times larger than those of the United states and it is highly unlikely that the US will 

ever reach the mega-production levels anywhere near the scale as Canada has. The oil sand resources of 

the US are large enough to be of great value and economic impact to the nation, (indeed the in-place 

estimates of oil sand resources are more than double the level of the nation's entire current 

conventional oil reserves) but not so large as to necessarily cause broader regional social dislocations or 

environmental impacts. Large scale development (if it is to happen in the US) will evolve over a long 
127 

period, and no one approach, technology or answer will solve all of the challenges and obstacles that 

arise. Partly because oil sands deposits differ and therefore different approaches will be necessary, and 

partly because technical innovation will evolve. Furthermore it is impossible to anticipate all of the 

technical, environmental or social issues or problems that may arise associated with oil sand 

development, let alone solve them before getting started. If this had been a requirement in Canada, 

there would be no oil sand production today. And it this tendency to need all the answers before 

starting is one of the main reasons the US is so late at getting started on developing its own extensive 

resources. 

Policies, support and regulatory frameworks should recognize the various stages of development of a 

new and broad resource. In the early stages development is extremely fragile. Technologies are new and 

untested. With no cash flow to support on-going research and development, access to start-up capital is 

critical. Government supported seed capital for technology development can be helpful, but perhaps of 

even higher value would be government's demonstration of commitment. Private capital is Widely 

available, but it is highly suspect of government's commitment to successful implementation of 

commercial technologies. Early efforts will need to focus on the immediate technical challenges of 

recovery of the resources. As successful technologies emerge, the broader challenges of infrastructure, 

regional impacts, social issues will be appropriately dealt with along the way, particularly given that 

policy makers and industry leaders now recognize the importance of these issues. As well, the more 

modest size of the resource will make for more modest growth allowing for any such impacts and issues 

to keep up with any growth in needs. Therefore while keeping the regional issues in mind, it is not 

necessary to figure out all of the potential answers in advance. 

The federal government can best assist by providing a clear, consistent and coordinated message (from 

all federal departments) that it supports sustainable development of oil sands and oil shale. It should 

not be supporting research on technology from the DOE on the one hand, and then creating obstacle 

after obstacle by denying access to land from the Department of Interior or raising insurmountable 

barriers from the EPA on the other. As far as research goes, support of new technologies in oil recovery 

and in particular in water treatment and recycling would be of greatest assistance. 

2. In your testimony, you stated, "it is no accident that 100% of US Oil Sands leases are on 

State lands" due to a "de facto moratorium" on leasing oil sands or oil shale and approval . 

of commercial projects by the BLM. Can you describe in a bit more detail the Federal 

positioJl and approach to oil sands leasing? 

a. 'What specifically could be done to improve public-private cooperation in this 

area? Would you characterize this Administration's approach to oil sands as "allof-the-above"? 
128 

In the Energy Policy Act of 2005, Congress specified that the BLM was to make oil shale and tar sand 

leases available to be developed. In keeping with this directive, on November 17, 2008, the U.S. Bureau 

of Land Management issued an Approved Resource Management Plan Amendments / Record of 

Decision for Oil Shale and Tar Sands Resources to Address Land Use Allocations in Colorado, Utah, and 

Wyoming and Final Programmatic Environmental Impact Statement ("2008 05TS ROD"). 

However, this decision was challenged by a number of environmental groups, and on February 15, 2011 

the BLM reached a settlement agreement with these parties which included a provision that the BLM 

would not offer lands for competitive tar sands leasing, or accept expressions of interest in tracts for 

competitive tar sands leasing until publication of a new decision or decisions regarding amendments for 

each of the planning decisions made by the 2008 OSTS ROD, or January 15, 2013, whichever occurs first. 

(A copy of that settlement agreement is appended to this document.) 

This settlement agreement was unprecedented and completely at odds with the directive from 

Congress. No effort was made to promote or allow any leasing or opening of federal lands. In essence 

the settlement agreement thwarted the intentions of Congress and at minimum ensured a lengthy delay 

(in essence a "moratorium" on leasing and development). The BLM then set about to undertake an 

extremely lengthy and expensive public consultation process, which merely served to further delay the 

action intended by Congress. Finally in January 2012 the BLM issued a draft Programmatic 

Environmental Impact Statement ("PElS") which seeks to exclude approximately 75% of the original 2.3 

million acres of Federal Lands under consideration for commercial leasing of oil sand and oil shale rights. 

The Secretary of the Interior made clear his intentions in this regard when he addressed a meeting of 

energy producers at the Uintah County Energy Forum held in Vernal, Utah in September 2011, as he 

stated that a better use of these lands would be conserving them for hunters and sportsmen. Clearly the 

BLM is not pursuing a balanced approach in regard to an "all-of-the-above" energy strategy, but rather 

acceding to various environmental radical groups' desire for a "no-development-here" approach. 

In order to be consistent with an "all-of-the-above" approach to energy development in the United 

States of America, our position is that each potential commercial lease should be evaluated on its own 

specific merits. To categorically exclude lands based on a programmatic document does not further the 

goal of development of unconventional resources. Further, other commercial activities such as livestock 

grazing, logging, and conventional oil and gas production take place on these lands and to exclude oil 

sands and oil shale development from these areas is not equitable, nor conservationist. 

A major unintended consequence of the chaotic and disjointed federal approach to the leasing of 

federal lands has been to cause a flight of access to investment capital for R&D and technology 

development. While seed money from the DOE might be helpful, entrepreneurs and investors know that 

without access to the land and resources, there is no point in developing technologies which cannot be 

used. Thus the only way to secure funding for any project or company working the oil shale or oil sands 

regions has been to target state and private lands, even though most of the resources reside on federal 

lands. 
129 

3. How has the Stat\l of Utah worked with US Oil Sands to advance the oil sands project? 

Do you think such a model would be beneficial to replicate at the Federal level? 

The State of Utah has worked very hard to advance oil sands development in general. One of the key 

elements in this assistance has been Utah's approach to coordinating the roles of various state agencies 

that are involved in approving a project. In this way all the departments get involved together and it 

tends to streamline the approach for a project. You don't have to answer the same questions twice. In 

addition the State sees the benefit of getting a project moving and therefore does not just act as a 

"gatekeeper" turning back deficient projects, but more like a guide helping companies navigate the 

bureaucracy and showing what needs to be done to meet the requirements. In this way the public is 

protected, by ensuring projects meet the requirements, but at the same time the approval is 

streamlined by showing companies how to meet the requirements. It's a win-win approach. 

For the federal government, it could also work, but it would require the resolve to try and encourage 

projects and to coordinate between large departments. While this is not the norm at the federal level, it 

could be accomplished. Perhaps there could be a project coordinator assigned to each project to work 

across department lines. 

4. How does the enviro=ental footprint of U.S. Oil Sands' technology compare to that 

being used in Canada? 

US Oil Sands' technology is a major advancement over existing processes currently in use for oil sands 

extraction in Canada. Through the use of US Oil Sands' proprietary technology, we have been able to 

greatly increase bitumen recovery, while reducing residual waste streams. This has allowed us to 

generate clean sand tailings, which in turn allows us to develop a project without the need for a waste 

tailings pond. Instead we can now place damp dry tailings back into empty mine pit and reclaim the 

mined area as we go. Effectively this reduces the time the mine is open by more than 20 years over 

current technologies in use, and greatly reduces the surface area required. 

Furthermore, because our water is separated in the process immediately (and not put into tailings) we 

are able to recycle much higher levels of water. Our water recycle rates are 95%, higher than the other 

extraction projects, and our water use is lower. As well our energy use is much lower, as we recycle hot 

water and don't lose thermal energy to the air in the tailings pond. Process temperatures are also lower. 

With lower energy use and much lower fugitive emissions our greenhouse gas footprint is also lower, 

and our air quality much improved. Utah bitumen is sweet, meaning it contains 90% less sulfur than 

Canadian heavy crudes. This reduces sulfur emissions both at the project and at the refineries that 

process the crude. This also reduces the energy use and greenhouse gas output at the refinery. 
130 

Our process uses non-toxic bio-solvent and therefore does not release harmful chemicals to either air or 

water. Our process is modular, thereby allowing much smaller projects to be developed sequentially. 

This allows a much smaller surface footprint and lowers impacts on both the natural environment and 

on local social and public infrastructure. 

Incidentally, the existing processes used in Canada are not effective at economically extracting Utah 

bitumen, primarily due to differences in the oil/sand chemistry. However US Oil Sands' process works on 

both Canadian and Utah oil sands, and on other deposits found around the world. Thus we expect that 

once our process has been pioneered in Utah, it will not only expand to more development in the US, 

but can also be exported to Canada and other bitumen deposits around the world, thereby greatly 

improving the environmental benefits to many other areas. 

5. The House Appropriations Committee provides $25 million to the Department of 

Energy's Office of Fossil Energy for unconventional fossil energy research to support 

research to improve the economics of oil production from oil shale, as well as to reduce 

the health, safety, and environmental risks associated with oil shale extraction. If 

Congress appropriates this funding, what targeted research areas at DOE would be the 

most impactful for the development of the United States' unconventional energy 

resources? 

a What specific reco=endations do you have for how DOE can best fund research 

and development and otherwise leverage resources for unconventional energy 

production? 

Some of the best approaches are joint efforts between various industry groups as well as educational 

and state agencies. It may be possible to leverage funds further by obtaining joint federal, state and 

industry funding. In addition funding should not be targeted only to national research bodies as it may 

be better placed closer to the resource and the projects. A joint advisory board could steer projects 

through the process, and the use of coordinators to help navigate the federal bureaucracy would be 

useful. 

Some of the key obstacles which may require improved technology to overcome will deal with 

environmental mitigation and improvements. These technologies may involve joint study into water 

treating and recycle. Much additional work will also be required into oil sand extraction techniques. 

Research into the use of non-toxic and biodegradable chemicals used in extraction would be valuable. 

Concentration on approaches for oil-wet reservoirs would be valuable as well. 

lastly we would suggest that the US consider partnering with Canadian and Albertan research programs. 

Many of the technological challenges to be overcome are already being worked on in Canada and there 

would be much synergy in applying joint approaches. 
131 

U.S House of Representatives 

Committee on Science, Space, and Technology 

Subcommittee on Energy & Environment 

Dammer Answers to the Hearing Questions 

1. The GAO Report "Energy-Water Nexus" is essentially a fine report and accurate in many respects. It is 

unnecessarily confusing and often contradictory, however, when it discusses ranges of potential water 

use in the development of oil shale. Most prominently is the contention that 12 barrels of water per 

barrel of oil is conceivable by some "hypothetical" oil shale extraction process that uses a water-cooled, 

coal fired power plant to generate power. No one would or could do that. If you are an opponent to oil 

shale development .... what number do you cherry-pick to support your opposition? Plucking a number 

out of a quick-study RAND report isn't bad in and of itself, but it represents a development scenario that 

has never been considered nor suggested by the industry. There are no commercial oil shale projects in 

the United States but a great deal of analytical work and pilot plant experience has been accomplished 

over the years. The literature is quite prolific and the companies involved in oil shale development have 

been forthcoming regarding the ranges of water use their technologies will require. That is a range 

between one barrel of water per barrel of oil and three barrels of water per barrel of oil. It should be 

added that it is to the absolute economic advantage of every oil shale technology to reduce process 

water consumption and many companies are examining the recycling of produced water from both their 

processes and neighboring natural gas development. 

One point that the GAO Report made that is extremely important is to "coordinate on water related 

research". There are a bunch of analyses out there that are at times contradictory, often 

unrepresentative of the realities of the past and developing industries, and totally uncoordinated. The 

problem is that there are multiple competing federal offices working on the same issue but with slightly 

different objectives and inconsistent data. I think the GAO Report is subtly suggesting that someone 

should be in charge. 

2. Funding legitimizes government programs. The mandates of EPACT 05, Sections 369 (h) and (i) were 

never fully implemented because a specific appropriation was not directed to that purpose. Ironically, 

there were existing funds to accomplish work in this area, but the lack of appropriated funding provided 

the excuse to suspend work on an area that was not a goal of the administration. The Task Force on 

Strategic Unconventional Fuels report America's Strategic Unconventional Fuels made many 

recommendations regarding everything from regulatory and permitting streamlining; to infrastructure 

planning; to fiscal and tax reform; to market analysis; to water resource stewardship. All ofthis would 

require a program plan and a specific office to coordinate and eventually implement the plan. Further, 

the issues associated with development of oil shale in the Green River formation encompasses several 

States and a variety of other oil, gas, and mining industries. Multiple State and local interests must be 

accommodated, all in an area where 80% of the land is owned by the Federal Government. And that 

80% is why it is essential that the Federal Government take a proactive role in planning for the 

sustainable development of this region. 

During the time the Task Force was functioning, the Office of Petroleum Reserves, Office of the Naval 

Petroleum and Oil Shale Reserves, who had the responsibility to manage the Task Force [Section 369 (h)] 

and develop an unconventional fuels program [Section 369 (i)], formed an Ad Hoc Unconventional Fuels 

Working Group and through multiple planning meeting published; Strategic Plan: Unconventional Fuels 

Development Within the Western Energy Corridor (attached). The working group included 
132 

representative from every major oil shale development company, regional universities, Nationai labs, 

DOE, 001, DOD, and representatives of Alberta (Oil Sands). 

My specific recommendation would be to establish an Unconventional Fuels Center to implement the 

aforementioned "Strategic Plan", reestablish the Ad Hoc Working Group to assure continued input into 

the process and provide a one year timeframe to recommend a plan for the development of the 

"Western Energy Corridor Initiative". I would allocate $2 million to that purpose. I would make the 

remaining $23 million contingent on establishing effective work plans and implementation strategies. 

The problem is to assure that there is proper motivation to get the job done. In EPACT 05, that 

responsibility resides with the Office of Petroleum Reserves, but little to nothing has been accomplished 

in the last several years. 

3. The Department of Energy has not fulfilled the statutory requirement of EPACT 05, Sections 369 (h) 

and (i). They have done little to advance unconventional energy resources since 2008. By all indications, 

they are not interested in the problem. There is no indication that DOE or Fossil Energy, within DOE, has 

the interest or resident expertise to accomplish this work. 

From the beginning of the 369 program, Idaho National Laboratory (INL) provided the greatest interest 

and the most consistent and valuable service to the unconventional fuels program. They continue to 

actively support and promote the Western Energy Corridor concept. If possible, I would recommend the 

establishment of an Unconventional Fuels Center to manage the work described above and place it 

under an interagency group managed at INl and supported by that lab. They would be directly 

responsible for reinitiating the Ad Hoc Unconventional Fuels Working Group and completing the 

Western Energy Corridor Initiative Plan. 
(133) 

Appendix 2 

ADDITIONAL MATERIAL FOR THE RECORD
134 

LETTER FROM MEMBERS OF WYOMING HOUSE OF REPRESENTATIVES TO BUREAU OF

LAND MANAGEMENT
135 

Bernadine Craft 

Wyoming House of Representatives 

District 17 

Rock Springs, Wyoming 

Floyd Esquibel 

Wyoming Senate 

District 8 

Cheyenne, Wyoming 

Joyce Corcoran 

Rock Springs City Council 

Rock Springs, WY 

Erik Molvar 

Laramie City Council 

Laramie, WY 

Dr. Klaus Hanson 

Laramie City Council 

Laramie, WY 

Representative Brian King 

Minority Assistant Whip 

Utah House of Representatives 

District 28 

Salt Lake City, UT 

David Litvack 

Minority Leader 

Utah House of Representatives 

District 26 

Salt Lake City, UT 

Rebecca Chavez-Houck 

Utah House of Representatives 

District 24 

Salt Lake City, UT 

Sally Elliott 

Summit County Council 

Summit County, UT 

Audrey Graham 

Grand County Council 

Moab, UT 

Christopher F. Robinson 

Summit County Council 

Park City, UT 

Dave Sakrison 

Mayor, City of Moab 

Moab, UT 

Jim Bradley 

Salt Lake County Council 

Former Director of Utah Energy Office 

Salt Lake City, UT 

Roger Wilson 

Colorado State Representative 

House District 61 

Millie Hammer 

Colorado State Representative 

House District 56 

Dan Gibbs 

Summit County Commissioner 

Summit County, CO 

Thomas Davidson 

Summit County Commissioner 

Summit County, CO 

Karn Stiegelmeier 

Summit County Commissioner 

Summit County, CO 

Forrest Whitman 

Gilpin County Commissioner 

Gilpin County, CO 

Tim Mauck 

Clear Creek County Commissioner 

Clear Creek County, CO 

Stephen Bersheyni 

Glenwood Springs City Council 

Glenwood Springs, CO 

Rachel E. Richards, 

Pitkin County Commissioner 

Pitkin County, CO 
136 

Lynn Padgett 

Ouray County Commissioner 

Ouray, CO 

Leo McKinney 

Glenwood Springs City Council 

Mayor Pro-Tern 

G Ie nwood Springs, CO 

Bruce Christensen 

Former Mayor 

Glenwood Springs, CO 

Frosty Merriott 

Carbondale Town Council 

Carbondale, CO 

John Hoffmann 

Carbondale Town Council 

Carbondale, CO 

Allyn Harvey 

Carbondale Town Council 

Carbondale, CO 

Gerry Horak 

Fort Collins City Council 

Fort Collins, CO 
137 

‘‘WATER ON THE ROCKS’’: A PRESENTATION BY WESTERN RESOURCE ADVOCATES
138 

Dan Luecke contributed the sections on the Upper 

Colorado River !;ndangered I=ishes Recovery Program 

and the Colorado River Compact Robert Harris reAbout Western Resource Advocates 

2260 Baseline ~oacl, Suite 200 

Boulder, CO 80302 

Tel: (103) 444 /lBB 

Fax: (303) 786-8054 

www.westernresoun:eadvoc;qte,org 

'© Copyrigh.t 2009 
139 

THE 

~oreword: Why This Water and Oil Shale Analysis MaHer 

Executive Summary 

Introduction 

Water for Oil Shale Development 

Water Rights for Oil Shale 

A. Conditional Water Rights 

B. Agricultural Water Rights 

in 

iii 

xiii 

A Closer Look at Water Rights for Oil Shale 16 

A. Colorado River Basin 16 

1. Chevron Texaco 16 

2. Colorado River Water Conservation District 19 

3. f:xxon Nobil Corporation 19 

4. The Oil Shale Corporation 21 

5. OXY USA 21 

6. Shell Texaco 22 

7. Union Oil Company of California 23 

B. White River Basin 26 

1. Colorado River Water Conservation District 26 

2. ~xxon Mobil Corporation 27 

3. Shell Frontier 30 

4. The Oil Shale Corporation 30 

5. Yellow Jacket Water Conservancy District 32 

Key Implications of and limitations on Water Development for Oil Shale 33 

A, Oil Shale and f:xisting Water Uses 33 

B. Oil Shale and the Colorado River Compact 35 

C. Oil Shale and the Upper Colorado River Recovery Program 36 

1. Colorado River 37 

2. White River 38 

Conclusion 39 

Appendix A: Chronological Development of Conditional 

Water ~ights for Oil Shale Development 40 

A. Deve!opment in the Colorado River Basin 40 

13. Development in the White ~iver Basin 43 

Appendix B: Conditional Water ~ights for Oil Shale Development 46 

Appendix C: Irrigation Ditches Purchased by Energy Companies 55 

Appendix D: Colorado ~iver -- Absolute Wells and Springs 62 

Appendix E: Comparing Selected Oil Shale and Non-Oil Shale 

Conditional Rights in the Colorado Basin 65 

Glossary of Water Terms 71 

f:nd Notes 75 
140 

WI-lY SHALl:;: ANALYSIS MATT!;!!!; 

witn('.~~, QS 

industrial dndopment in III(' Siull""; hi"tol"y - with etlOnlWHS 

for aU of \orthw('~j Colorado and for the Slalf' 

most ,;jgllitlcalli a"p('('!s of ,.;(wl! ('l18Jlgp 

wafer. 

Oil "llal(, dcyt'lopnwnt wflllld haH' IrenlPlldol1'-; impacts on current awl fttfUH' llse" of wal<'r--- Colorado\: most natural 

f('SOI1H'(,. Wah'r is the lifeblood of the \\{'sl. 

o! w('stern ('('onomies and connnl1nilics, thl' bu . ..;i;-; of political 

diyj,.;ions. and 01'[(-lllhf' canse of conflict. Battlf's O\{'\" wa!er often 

pit Front 

\\'<',.;\ 

eould llll('f.' Hgaill fall tlie J1altl('" thaI jut'! such lnll!lhl. 
141 

2 a iBiI 1MDJ1l 22 

that oil shalt' d,'v('lopnwnf will slress limited waIN ]'('"ourc,'s. Til,' qUh,tion Cor 

!I'aders dl'(' how. \'Ihen. Wh(,H', and to what ('xtent. In a 

"Chipli" 

AND KEY ~1!'lI)INGS 

In a 200g ('mironmenlal 

This fill.,; ill allot!!,'!' critical pi('('(' of tli,' pw:zlt" It id,'ntifi('s wah'f 

and wal('l' provider'> tllD! ('ould :'llP}lort oil shale development. 

• Pro,iecb watel' requiwllJ('nts aSSOf'idled with oil slwi<: dl'H'lopu1<'lIi. 

hYPlwrgy 

report: 

• IdeTltifies all ('ompanies Ih,ll (,01i1d!w u",,,j for 

righl;1 fhat could iw eX(,l'ci:-ed ill the 

hm, ttl(' Loo",' (:010< "doHi""'I':",hm~,,,,<,d 

additional cO!1"'umptiyc wws of wall'r in 

:'lIlt! 
142 

ImlmElElElCCdElElElElEIlmElElElElElElEl22E1E1E1E1E1E1E1E1ZCJkC2alEIEIEIEIImC.1 LdElElElElElElElEIIm 

Trw rq)()rt's kl'y findiHp:,,; indw]" tIl(' following: 

I. El1(,l"g~ 

:;;ociat .. d 

rado Hivt'l' Clnd ""hitt' Hivef 

L The CpPl'r Colorado HiH'] 

Compad limil tlw ill!lOlml 

('dg('s clost'r to th,':<t, limitation.;, lurg('-sca!e oil "hale 

lW(,OlllC ttHltllally {'X('lllsive. 

pmj('('ts 

would af{t'd t'xistinp.:l.t"''''; estahlished undN mow junior 

wal!'1' a\ ailahility. B('CdllHt' 

1922 

Front Hanp:e cities. 

CONCLUSIONS ~ROM !l~PORT AND OTl.j~~ AN,lI.LYS~S 

["."-lie -11)(' nature and l'Xl<-nl ohHlkr rights thai {'(lilld 

dt'sign. hmH'\"Cl" Iht' report g('llNally do~':< not ('xamine 

\\<11('1". and tIll' POl'>lllial 10('a! ('('0!10Illil-s, 

tlie eJl\"irolHm'Ht. and olliel '~a!('j' H:<t']'S. :\01' does it <lddre,,>; 

Lind the potent!.,l impacts on waler dyaiblbilily. 

Conclusion #1: Commercial oil shale development would transform western Colorado communities. 
143 

!W 12I§J = £&2iiillii'= 

areiu 

Oll ('xis!iug agti(,ll!tmc, ~1il!1) of II)('s(' wal('r right'S. wbieh \la!<' hack!o Ill<' lal(' 11100." 

and parly 1 ()OOs, an' owHt,d by oil an' now being 1e'-l:,-"d buck 10 faHdH'S. So. for 

BOW, most ofth(' \\:1t('r ,.;till n>mains in 

as 1Iw BL:vtnotes throngh jl,.; ('llyimllI1H'nldl anillysh, ~ 

I ak(' off. oil companies would transfer \vat<'l' ('Htwntly 

Thonsands of 8(,1'('''; hisloriclllly wou!d \)(' 

112,675 

244,535 

whose rights aw jUllior Thi" report pro-

'ides ,.;om(' key eX£Hnpks of deveJoPllwnl s('enario,.; Ihal show Ihe exfent of ';ll('h disp!.:tct'!l1('nl,.;. 

initial waIN right>; for oil sha!". OW';) 

vi 
144 

Conclusion #2: Oil shale development in western Colorado would affed Colorado's Front 

~ange communities and must be thoroughly evaluated and understood. 

D('llWr \\'lltcr and otl1('1" Front Bange water prm-idc1"s divert 

c;('\cral hundrpd lhou"and acn'~f~'d of water ,Hlllll<llh Ollt of the 

Colorado Hiwf Basin. :Vluch of Ihis water i:-; ,;cnior t~ conditionol 

waiN plOviddS han> elWolmtNl'd difficilltip:-; ill ;jiwfting water ite{'JlIse 

Efforts <.m' llnd('nvu~ to "finn" 
145 

aa \11111 ill = = To ;;01l1e Olilside ofttle W't'sf. 111('S(' ('onflids may minor in H,lation 10 ttw JI('pd 10 ill('n'HSP 

-[h thOOil' of UOi in this fl'gion. how stich cO!lflict:-; <lte ]"(';;oh "d bNll',c.: 

prosperity. future growth. uml <'tlVironlll<'tllll! pro!<'e!ion. 

Conclusion #3: Oil shale will accelerate climate change and will further stress water avail, 

ability_ 

Id 
146 

.<:1. Str!?arnRows will change. 

ThrollgllOU11!W ;ZO'h ('entmy. much of II\(' Lni/pd Slate" 

and wilh 

Tlw 

Conclu!oion #4: Water needs must be quantified and supply sources identified before committing to commercial oil shale leasing. 

abililY is troubling. 
147 

1II&&1iiIII1iiIII1iiIII1iiIII1iiIII1iiIII1iiIII1iiIII1iiIII1IIIII iliEL ZliiIIllilUlill1t in. = Bnwl' who has ('valuated wat(']' lll't'(}" u;<socia!ed with oil ,~hal{' dt'vt'lop!tl{'nt. 

of unc(>llaillty. H" points (JUt that tht" BLM's analysis 

analysis: 

• Does not ieJ(kqllatf,jy ('ralnak sil('-sjlu'ific wat('1' suppl.i{'S in rivN has ins wht'r(> oil d('w'[opBWnlltlilYO('('llL 

• Fails to aSSf'S;i 

water rights and 

fprs. pernWlll'n! 

imp"lCISlda1ed 

Conclusion "5: £nergy demands must be quantified and sources identified before committing to commercial oil shale leasing. 
148 

arc hJ"ed on the BL~rs assumption,; Ihat oil 

,;hal~' opelations. In addition to (1)(' vast 

dallli1,!!TS rllUl1<lll 

llS(' dwindling watN f:llppli,,''; and impact (and, 

in SOtlH' cases. curtail) junior waiN llSN,; throllghout the state. 

d,,\dopll1eul. 

WRA's final conclusion: Develop the information necessary to make informed decisions. 

Oil 

• :--eq!wllclng of d(·Vt'iOPlll('tlt proj('c\:; 

• Ratp of ("onslllllplioll 

w·eds 

water rights on junior lIscrs 

thC1W\llS 

Bl.'·I a('knowl~ 
149 

This H'POI'! nmb,s l,jl'ar that lhe link !w!we\.'tl oil 

shak and water is cmnpkx.. \X'!Id!wr cilan,gr's 

fo.Ct'!1 willlw increnwlltal or 

to plt'dic1. :\en"rthcless, 

WRA opposes development of oil shale resources in the West unless and until industry 

and government demonstrate that proven technologies can develop oil shale without 

unacceptable environmental, climate. economic, or social costs. The industry has barely 

begun to address that challenge. 

As the Ohama Administration tah's its spat ill W~l"hington. D,C, it lilllP for elected officLlls 

and admilli"lratiO!l offieials at tfw federal, state. and hWdllevcl rc\·ic\\ tht' 

[)luI ('enter mils! Jw a hard ;It the wal\'r reqllireposed by largp-:"cdk (·omHK'l'cialle3sing. 
150 

Thi~ re}lOli lJelps frame these <Inti other is''ll(,~ cpntr"llo the many technic<l! and policy ({lWStion:" posc,! hl oil :-;hale devc1opnwnt. The report: 

• Projecls wal('r l'C'qllir('tncllts 8:-;sociat"d with oil sh81e rk1;('lop!llt'tlL 

• Id('lltifi('s <.Ill mcljor 
151 

hiE 1£J2 • MEl mEllE 

would enabl" Ih" dit't'c! diwfsion of 

<J." \IIdl dS ownership ill l:l. di!dl('s in 

structures in ttl(' Colorado HiH'!' BdBin, 1\)5('0 

ill ! 11 ditc!w," in tll{' \Yhile River Ha"iJl. The <:o!ol'<1do 

locations in the two bar<in:< that coolt! sel'v(, oil "hah> dt'y('lopmenL 

111 uddition raises a lIlHntlf'l' or important i:o.slles that cOlild 

3. Restrictions under the 1922 Colorado River Compact: An 

in Wt'skrn Colorado is the leg;:tl 

histori~ 

WOOs and 

ColonJdo and a$social,'d law,; and reqnir('nwHh, 

(]l·\'t·lopnlclll COllld \w COllstfain{'cl ilH'rei.\s<.>d COllS!ll1l[ltion would also incrhlSt' tht' Busin slat0s :olguinst tlw 

l:PlwrBusin . 

.4.lmpacb on endangered fish; The ultimate t.'xtt'ni of new waIN d~'\('lopnJ\'nf also sl1hjc('t 

to ('onslraints associated with the Fifih H('('o\{'j': Pro· 

\, 

mn 11('W 

WUIN dpve]opmt·nt shalt> or oth('l'wi,~t' "-- mllsl sarisry suh"tlUltia\ pr:lgrum 

IHjl11rpmellL<; in!('nded 10 pro!('ct and j"N'O\'('j' tlwll1. 

2 && 
152 

LETTER FROM DENVER BOARD OF WATER COMMISSIONERS TO SUBCOMMITTEE ON

INTERIOR, ENVIRONMENT, AND RELATED AGENCIES, COMMITTEE ON APPROPRIATIONS
153 

Honorable Norman D. Dicks, Chairman 

Honorable Todd Tiahrt, Ranking Member 

May 14, 2008 

Page 2 ot 2 

(especially, water, power, processing facilities, and pipelines), and options for protecting 

and water quality. Without this data informed decisions cannot be made. 

Accordingly, committing to leasing regulations prior to a full and complete evaluation of 

the results from these research leases puts the cart before the horse. We ask that 

order be restored to the process and that the moratorium be maintained until such time 

that all involved can assess the impacts of oil shale development. 

~~ Manager - on behalf of the Denver Board of Water Commissioners 

cc: Governor Bill Ritter 

Senator Wayne Allard 

Senator Ken Salazar 

Representative Diana DeGette 

Representative Mark Udall 

Representative John Salazar 

Representative Marilyn Musgrave 

Honorable Doug Lamborn 

Honorable Tom Tancredo 

Honorable Ed Perlmutter 
154 

LETTER FROM ROCKY MOUNTAIN FARMERS UNION TO SUBCOMMITTEE ON INTERIOR, 

ENVIRONMENT, AND RELATED AGENCIES, COMMITTEE ON APPROPRIATIONS
155 

OIL SHALE FACT SHEET FROM THE WILDERNESS SOCIETY

• THE 

WIWERNESS 

SOCIETY 

Oil Shale Fact Sheet 

Private Shale Resources Are Undeveloped 

• Though proponents of oil shale development claim the need for an expedited federal 

oil shale leasing program, the Department of Energy's Office of Naval Petroleum and 

Oil Shale Reserves has estimated that more than three million acres of oil shale 

lands in Colorado. Utah. and Wvoming are alreadv in private hands and have been 

for decades.' 

• Several large companies alone control over 200,000 acres of oil shale lands, but 

none to date has engaged in commercial-scale development. For instance, the 

following companies already control extensive oil shale resources but have not yet 

established technologies to develop them: 

- ExxonMobii owns 50,000 acres of oil shale lands in Colorado's Rio Blanco and Garfield 

counties alone2

; 

- Red Leaf Resources controls oil shale leases of about 16,500 acres on Utah state 

lands3

; 

- Great Western Energy, LLC owns or controls oil shale leases on 16,500 acres of state 

lands in Uintah County, Utah4

; 

- Millennium Synfuels, LLC controls approximately 34,000 acres of oil shale leases in 

Utah5. 

- Shell 'owns 36,000 acres of oil shale lands in Rio Blanco and Garfield counties Colorad06

; 

- The Oil Shale Exploration Company controls over 45,000 acres of oil shale lands in 

Colorado? 

• Several of these companies are also engaged in research and development on 

federal land controlled by the Bureau of Land Management. BLM leased six 160-acre 

tracts of federal lands for the expressed purpose of facilitating technologies to overcome 

the significant obstacles to efficient and sustainable oil shale development. Shell holds 3 of 

these leases (480 acres total), all in Colorado. EGL Resources and Chevron each also 

hold a lease in Colorado. OSEC holds the only federal research lease in Utah. 

\ National Strategic Unconventional Resource ModeJ, U.S. Department of Energy Office of Naval Petroleum and Oil Shale Reserves, April 

2006. p. 6. 

2 Secure Fuels from Domestic Resources: The Continuing Evolution of America's Oil Shale and Tar Sands Industries. U.S. Department of 

Energy. 2007. p. 33 

"3 Ibid., p. 61 

~ Ibid., p. 70 

~ Ibid., p. 47 

{I Mahogany Research Project- Doing Oil Shale the Right Way, Royal Outen Shell, (company brochure), www.sheILcom/usimahogany/ 

1 OSEe's Privately Held Land, The Oil Sl'1ale Exploration Company (company brochure), hltpllwww o.l!ihffl@l!plorahoncpmp:!nvcom/defaul!rum 

For more information: Dave Alberswerth, lWS, 202-429-2695 Chase Huntley, lWS, 202-429-7431 
156 

When coupled with the federal research and development Jeases currently held by 

private companies, industry has ample resources already at their disposal to begin 

developing a commercial-scale industry without the need for large scale commercial 

leasing of the public lands. 

09080B~3 

Department of Energy Overview of U.S. Oil Shale Resource (2006) 

Minimum 

thlckn ••• Yield Average Acreage Re80urces 

Slala Ownanrhlp (feet} (galltOn) Yield (tl'Iouaanda} (billion bbl_) 

F <10 5 570 

F 15 15-25 20 300 600 

CO F 10 >25 30 600 390 

NF <10 5 165 

NF 15 15-25 20 ao 130 

NF 10 >25 30 170 ao Subtotal 1,865 1.200 

<10 5 2,130 

F 15 15·25 20 1,070 150 

ur F 10 >25 30 600 70 

NF <10 5 6'0 

NF 15 15-25 20 320 40 

NF 10 >25 30 170 20 

Subtotal 4,930 ,ao 

F <10 1,500 

F 15 15-25 20 700 150 

W'I F 10 >25 30 400 20 

NF <10 5 ago 

NF 15 15-25 20 440 80 

NF 10 >25 30 200 10 

Subtotal 4,190 ,60 

F 7,870 1,480 

Totale NF 3135 360 

11!006 1,840 

F=f6deml Nf"'I'Orl-fadOfBi 

Eatlmllted Prlvatelv-Held 011 Shale Re.ourc •• 

Source' Adapted from data found in National Strategic Unconventional Resource ModaJ, U.S. 

Department of Energy Office of Naval Petroleum and Oil Shale Reserves, April 2006, page 6, 
157 

UTAH’S ECONOMIC DEVELOPMENT PLAN FROM GOVERNOR GARY R. HERBERT
158 
159 

TABLE OF CONTENTS 

GOVErnor's lntmduct!on 

Vision. 

Mission 

What Others are Saying . 

R~ults Are In 

Not by Chance or Coincidence 

Not Resting on Our Laurels 

ObjectivE!s 

Strengthen and Grow Existing Utah Businessesl 

.2 

. ... 3 

..... 3 

.4 

.. 6 

both Urban and Rural. . ........ " > ............. 11 

Increase Innovation, Entrepreneurship, and Investment. . .......... 13 

Increase National and International Business .. < , 15 

Prioritize EdUcation to Oevelop the Workforce of the Future .. , 17 

The Bottom Line . 18 
160 

UTAH'S ECONOMIC DEVELOPMENT PLAN 

by GOllernDr Gur.1d R. Herbert 

As a life+long Utahn, it is no surprise that I believe our State is the best place to live, work and 

raise a family. As a former executive for a small business and the husband of a small business owner. I 

recognize OUT unique opportunities and challenges. 

Throughout my business career, as a County Commissioner. Lieutenant Governor and now as 

Governor, I have trav+ 

eled extensively 

around the State. During those travels. I 

have been repeatedly 

reminded of the many 

reasons each of us 

chooses to live in Utah, 

and I am also reminded 

of the reasons why 

Utah is praised by 

those outside of our 

State. This praise is because we work to our 

unique strengths, we 

are humble enough to 

recognize and over¥ 

room.£' mn r.h.~.Uen.v,p.:s: .. w£' ~r£' innovabY.e an.d !~e ~xudf.' 

activities that will lead to accomplishing our goals. 

Some of the action items are a continuation and 

improvement of what we have done well and other 

action items are new and necessary adjustments 

designed to keep Ut.ah a leader in job creation and 

economic prosperity. 

Realizing this r:ision and accomplishing t.his 

mission will take the collective efforts of an Utahns 

or. as I like to say, "Team Utah." What I commit to 

you. as Governor of our great State, is to never forget that I work for you and I will do so tirelessly to 

strengthen Utah companies. bring more business 

to the State, support our unequaled quality of life 

and ensure the world knows that Utah is a great 

place to do business. What I ask of you is your commitment to continued hard work, entrepreneurial 

spirit, and innovation. Economic development is 

everyone's job - public and private, business and 

government. rural and urban, small business and 

large. I also Jleed your input. This plan huilds on 

what we have accomplished over the past five years 

and, more specifically, upon the framework that I 

introduced just over a year ago when I became Gov~ 

ernOT (Appendix A). Over the past five years I have 
161 

MY VISION FOR 

OUR STATE: 

Utah will lead the notion as 

the best performing emmmy 

and be recognized 05 a 

premier global business 

destination. 

OUR MISSION STATEMENT 

FOR MAKING THIS VISION 

AREAUTY: 

Utah will excel in jab creation, 

innovation entrepreneurship, 

global business, and quality 

wor*force and have a stable and 

sustainable business friendly 

envimnment, 
162 

WHAT OTHERS ARE SAVING ABOUT UTAH .. , 

As Utahns we recognize an that our State has to offer and "singing our own praises" comes naturally. Of 

course. it's always great when someone else is dojng the singing for you. Our State has received many 

accolades. Take a look at the list below and I think you'll find one that resonates for you. 

Utah #1 SlC #5 

Utah #1 

Utah #8 

Utah #1 

Utah #2 Utah #8 

Utah #1 

Utah #2 

Utah #9 

Provo #2 

Utah #1 

Utah 1110 

Utah #3 

Utah #1 

Utah #3 

University of Utah #1 
163 

THE RESULTS ARE IN ... 

Through the good times and the tough times, Utah has been l"ecognized year after year 

as having one afthe strongest economies in the country. Despite the current. economic challenges: 

we are facing both globally and at home, the fundamentals of the Utah economy remain solid and provide 

the foundation for our recovery. Some of t.hese fundament.als include: 

&> Utah';, world exports have increased 45% over 

dnd Utah was 

• Utah', uu"nuJIO',m'2nt 

.. The Zions Bank Small Business average of 9.6%. 

Index, which rneasures conditIons from a 100 point bJseline 

for small btblnes,ses around the 

State, was '106.9 2010 

'" Utah'~ 
164 

NOT BY CHANCE OR COINCIIJENCE ... 

I am thrilled, but. not. surprised, t.hat Utah has been recognized by the world as a premier 

business destination. As Utahns, we have 10n(;:, undel'stood what. makes our hOIlle a wondelful 

place, and now the world is beginning to understand as well. We have not. found ourselves on top 

oft-his mountain by accident.- it took hard work and innovation. The path was charted in 2004, 

when Jon Huntsman and I joined forces to run for Govel'l10r and Lt. Governor of Utah. The 

Huntsman - Herbert campaign was based on a vision to make Utah's economy the best in the 

nation. With the help of key business leaders around the State, we detailed a lO-point plan 

(Appendix B) for economic revitalization in Utah. 

The objective of the original 10 point. plan was to implement policies and initiatives that 

would make Ut.ah an at.tractive place to invest and do business. This plan has served as a 

roadmap for success, and with ,Your help we have made progress on each of the 1.0 points. For 

example, we have recru.ited some of the most recognized businesses in the world. Companies 

like Adobe, Procter and Gamble, Sephora, eBay, Oracle, Disney, and 
165 

ment and Commerce Committee for the National Governors Association, I am 

humbled by this opportunity tA) share with the rest of the country Utah's best 

practices for economic success and survival. 

One of the most important "ingredients" of our success is col1ahoration and leveraging of 

public and private sector resources. This collaboration is evident in the "unprecedented partnerships" hetween state and local elected officials, community and husiness leaders, as weU as 

organizations such as Chambers of Commerce, the Ut.ah Science Technology and Research 

(USTAR), World Trade Center of Utah, Utah Technology Council, Economic Development Corpomtion of Utah, Utah Fund of Funds, Utah Sports Commission, Ut.ah Alliance, and countless 

other entities that work together for the advancement of our St.ate. 

NOT RESTING ON OUR LAURELS, .. 

The economic development plan that we developed is wOl'king. Our vision for Utah is corning 

int.o focus, but there is still more to be done. We must be willing t.o Jearn, we must adapt to a 

changing environment., and we must work harder than evel' to accomplish our shared goals. The 

following objectives and action items will take us to the next level as we emerge fl'om t.his historic 

economic downturn faster, stronger, and bett.el'-positioned to succeed. I will make sure that. each 

member of my administ.ration does their part to accomplish t.hese objectives and act.ion items. I 

have tasked the Governor's Office of Economic Development (GOED) to work with each memher 

afmy cahinet to fully implement. this plan across all areas ofStat.e Government. 
166 
167 
168 
169 

Strengthen and Grow Existing 

Utah Businesses, Both Urban and Rural 

1&'11 Strengthen relationships and identjfy areas of opportunities for economic development with municipalities, industry associations, and other economic development, tourism, and film partners. 

i!!I Convene quarterly meetings to coordinate goa1s and activities with economic development stakeholders 

including representatives from GOED, World Trade Center Utah, Utah Science Technology and Research initiative (USTAR), Economic Development Corporation of Utah (EDCUtah), Chambers of 

Commerce, and other trade associations. etc. 

III Sustain growth in economic clusters to provide high paying jobs in strategic industries that demonstrate the best opportunity for future expansion. 

Visit 100 premier Utah companies to identify opportunities for expansion. 

Conduct targeted industry summits and roundtables with stakeholders and partners to discuss industry sector needs and opportunities. 

III Support small businesses through programs such as the Procurement and Technical Assistance Center 

(PTAC), Business Resource Centers (BRCs). Rural Fast. Track, Small Business Development. Centers 

(SEDCs), and Business Expansion and Ret.ention (BEAR). 

1m Increase business opportunities in rural Utah by identifying unserved and 

undel'served high-speed Internet service areas and by developing a plan to 

extend broadband sen:ice statewide. 

Iii Maintain Utah's status as the "Crossroads of the West" by continuing to 

fund vital transportation infrastructure projects including highway construction, the extension of Front.Runner Commuter Rail, and expansion at the 

Salt Lake City International Airport. 

m Maintain access to high-quality health insurance at competitive costs through the Utah Health Ex-
170 
171 

Increase Innovation, Entrepreneurship 8. investment 

~ SuppOtt early stage companies by working with the Utah State Legislature to ensure that the current: 

tax and regulatory environment cont:inues to encourage investment, 

I!!!lI Support and strengthen entrepreneurship and company gTowth through programs and partners such as 

Business Resource Centers, intem.ational export training, and rural outreach and meDtaring. 

mil Expand Utah's capacity for technology-based economic development. by opening a nationally recognized 

interdisciplinary bio+focused research development and commerciali7.ation 

center at Utah State University in 2010. 

tm Continue to foster high-powered research and commercialization collahorations hy expanding the number of world-class innovators recruited to the 

University of Utah and Utah State University through Utah Science Technology and Research (USTAR) Initiative (www.innovationutah.com). 

1m Drive start-up business growth and foster more interaction between local 

companies, entrepreneurs, and regional higher education institut.ions by providing business services 

and project. management through USTAR t.o Technology Commercialization Grant awardees. 

IiI!i Train Utah's future entrepreneurs and innovators by connecting private industry wit.h institutions of 

public and higher education through programs such as the Utah Cluster Acceleration Part.nership <UCAP), 

Workforce Innovations in Regional Economic Development. (WIRED), and the Utah College of Applied 

Technology CUCAT). 

III Attract capital to the State and help introduce start-up companies to potential investors through the 

Utah Fund of Funds (an economic development program aimed at providing access of alternative and 

non-tradihonal capital to Utah entrepreneursl. 
172 
173 

Increase National and International Business 

AliI Doub1e exports in the next five years and increase international business and tou-rism by mentoring and 

training Utah companies to compete globally, facilitating trade missions and trade shows, and strengthening international and diplomatic relationships. 

I!I Promote Utah's image through targeted business, tourism, and film marketing and public relations 

efforts. 

Build critical mass within each of the State's strategic industrial clusters by promoting the vibrancy 

and strength of Utah's business enVlronment and recruiting targeted businesses. 

Develop a Utah ambassador program made up of business organizations 

and individuals located inside find outside of the State in order to receive 

input and to improve the recmitment of targeted businesses and business leaders to Utah. 

Establish a business-marketing and public relations committee to improve 

the St.ate's effort in promoting Ut.ah's many business friendly attributes 

and incentive programs. 

Grow Utah's tourism industry and increase statewide visitation by continuing to promote Utah as a 

premier tourist destination (www.ut.ah.t.ravel). 

Market Utah as the premier leisure and business travel destination by creating a cust.omer service 

program through which all Utahns and tourism-related companies ·will promote the "Utah Life EIevatedY" brand. 

Attract major motion pictures and television series to the State by usjng-the Motion Picture Incentive 

Fund and continuing to promot.e Utah as a premier film location (www.film.utah.gov). 

II Increase joh creation and capital invest.ment in the Stat.e hy ensuring that Utah's incentive programs 

are competitive, sust.ainahle, and used seleciively. 

o Increase the velocity of capital flow by further supporting and developing an environment that encourages private capital investment in t.he State from local, national and inwrnational sources. 

1'1 Increase the number ofdirBct. int.ernational flights into and out of Utah py working with t"e.~.llt<i,'~. 

City , , 
174 
175 

Prioritize Education to Develop 

the Workforce of the future 

!!':!II Excite our students. and champion our teachers 

to ensure that we prepare our students for the 

jobs of the future by coordinating economic de~ 

velopment plans with the Excellence in Education 

Commission and providing input on the 

Commission's recommendations. 

(www.governor.utah.gov) 

I!!Il Ensure that the curriculum taught in public edu~ 

cation (K·12) is rigorous and aligned with 

workforce needs in order to prepare students for 

higher education and future Utah jobs. 

iii Connect higher education, industry and government to identify industry workforce needs and 

ensure pJans are in place that will deliver a 

trained and ready workforce for the future. For 

example continuing the partnership between 

workforce development, economic development. 

and higher education to conduct Utah Cluster Ac~ 

celeration Partnership (UeAP) projects. 

D Support and promote jointly-funded technology 

incubat.ors and encourage the creation of addit.iona] hands-on educational programs for K-12 

and higher educat.ion st.udents. such as 

BioInnovation Gateway iBiG) and the Workforce 

Innovations in Regional Economic Development. 

(WIRED) initiatives. 

!II Ensure Utah remains a national leader in preparing st.udents for the global economy by 

continuing SUPPOl't for the K-12 "dual immersion" 

language programs (currently over 7,000 students are enrolled in 40 different dual immersion 

programs), 
176 

THE 

We have every reason to be optimistic about the future. Our 

St.ate has faced challenges before and we have always come out 

stronger. V.rhile current challenges are unique, they also pro~ 

vide unique opportunities. Taking advantage of these 

opportunities wil1l'equire maximizing our unprecedented partnerships throughout the State. I look forward to partnering'With 

you to accomplish our goals and realize our vision: 

Utah wilt lead the nation as the 

nor'mrmlrlf'l economy and 

business destination. 
177 
178 
179 
180 
181 
182 
183 
184 
185 

ENERGY INITIATIVES AND IMPERATIVES: UTAH’S 10-YEAR STRATEGIC ENERGY PLAN
186 
187 

!fABlE CONTENTS 

Executive Summary. . ... 2 

1. Introduction 10 

II. Current and Future Enprgy Demand 10 

III. Background Information on Utah's Energy Resources 11 

IV. Economic Development and Energy Jobs 18 

V. Energy Development and Gur Naturall,csources . . .. 21 

VI. Energy Efficiency, Conservation, and Demand-Response .. 27 

VII. Transmission, Infrastructure, and Transportation ........... 31 

VIII. Developing and Applying Technology and Science .... 35 

Task Force & Sub-Committee Members, . . .. 41 
188 

t'nvinmment. Under the GllVl'l"l1l1r'S \e,llier::-hip, 

the statl' hilS received several avvards and dcc()ladl's. Most reCl'ntly, 
189 

2. de,·dopmentinUtdh will carefully omsider 

on vdldlifc habitat. An effort to avoid, 

or mitigatl..' thcs(' impacts will b(' made 

regardless of cm'r~w r('~ouro,'. 

4. 

s. 

This uocuml'nt describes <) 1()-Y,-'ilT Strdh:'gic Energy 

Plan that secks to stTl'ngtlwt1 Ut,)h'~ ('Conntny by sdting the following gOd1s: 

and ,IHcrn,ltiw's ,md rCllC\\'ilblc n's{)urccs in il tlurket-driven, c\)~t l'ffcctiVt'r ,1I1d cTwironml'ntdlly 

n .. ~p\)Jlsibl(' W<ly. 

2. Ensure Utah's continupd economic dl'vc1opmpnt 

through access to our own cie.1n and low-cost C11-

,?rgyrCS(lUrcl's. 

J. 

4. 

5. 

6. 

7. 

B. 

Y. 

lMtur<,1l resources with an devah.-'d l'nvironm('ntal 

consciousness, and d('ploy them in Utah, the nation, 

and the vvorld. 

markets. 

and (lpporlunitics.~ 

10. Collaborate with othl'T y\'l'stl'Tn rcgiol1dJ shlt('S to 
190 

cost:;, ~Uld eO,\TIom1c impcKt on 

PI~" model from RegiOIMI Ecotwmic Models, Inc (the 

REMl mrtt.1el) is nl1l' tool identified that will be tlsi..'li to 

1\)rt'Gbt economic impacts of r(,source development in 

mcnddtions, lwxt steps dnd additional investigMlons 

Plan and opportunities for SL:lk('holders to colldbotdte 

in building it stwnger, more secure energy futurc. 

Utah':; CtlITPnt energy t'('souro.' nmstlmpti()U includes 

trddHinndl f()ssil fuc1s~ll1d n'nc\vclbk' n.'sonrcl'S, as summari;wd in Figure 1. In 2009, n'sidcnts, businessl's, dna 

lHHJrs (C\'Vh) 

ndluol ga!', 

"Pf,,<>xitm,tdy 27,4 tl 
191 
192 

eC01l0m.ic models, and overs('l~ thellcti<111 items identified by the Covcn1nr. 

Crmte II <1n energy office by consolidating l'Xbting pnNh'Y functions currently fr.lgm('nted 

throughout stdh' gOVi.'mment 

Provide continuous 

dnd constraints on dl'vl'loplTIl.:nt 

Implement this Energy Plan dnd L1ssun' swtc 

gov('rnment agencks drc ·working s('am\essly 

to accomplish g(),lls as uutliJwd 

\vildemcss nrl'<1t>, impnrti111t \V(l tef n'SOllrcl'S tha t arc 

l'sst.'ntidl to 10e<11 communities, wildlHc habitat ,md 

arc.,w(>'(>SfCa'dnd 
193 

Acl to h'l'p Utah':;; Public Lmd:;; open for n'spons1bh> energy development 

Utiliz(' the Cov('rnor's Balanced Resource 

Council tn facilitau.' agn'enwnt on ('nergy "nd 

environmental n!!lCNn~ 

Assure that stelle ,\>;"t'ncies ,,,re taking k'ad roles 

t" 

ardwolngy) 

Strengthen Utah's rok in n's('Hn-h and dt'velopment 

[n((t'ase collaboration betw~~en the Rc'scMch 

G!l1timK' toattraCl world class rt'sL,<uchHS tnconneet higher education to deployable l<-'C'hnologic'S 

A551'55 hOlv tax inccntivt's may further foster 

energy prtx:1uctitm and the ll1ilnufacturing K'(-

tor conm-x:ted to the t'nt'T,!-,'Y industry 

Usc' "«"''''l1lC o,<".lding (REMI) to lwstdt't('fmim~ the economi(' 

d\~vdopm(-'nt 

of fulurp 
194 

Dl'Ve10P d Utah long~range transmission ptm 

thl' Stc,\h"S role in authorizing <l!1li 

tra nsmi SSiOll! in f ra::; truc ture 

ZI ((lst dfectl"w.' resource, Dl'mdnd-sid(' maoag('mt'nt (oSM) str<\ocgies reduce consumption during 

p{>ak dt'mdnd, fl'sulting- in hnser costs bec,-)Usc of 

dvoided or debyed invt'stnwnt in 11l'\\' dl'ctrical generation and new natural gdS supplies. 

Maximize Utilh' 5 cmmnitment to energy (>ffidel1cy 

<lnd dl'l1ldnd sid!;' m~magemC'nt. 

Support ('ducation and communication proutilities dnd regulators to expand 

energy and demand rt"spnnse programs through stat(' policy 

An<\lyze financial incl'ntin'S to enable invclc:tnwnt in elll'rgy effid('nt c()n~truction <md 

rl'trnfitting 

tm"p,'rt,'I:iOtl fuels 

tinn from uut of sta{(> snurccs-may ,n>';l[(~ d future fuel 

crisis. It b critical to 

quality nf life that Utdh 

modE'l. 

f(lr its 

for ttdl1sportatinn 

our 

this dependence has on economic development 

Support augml'ntaOOll pf Utah's fuel supply 

v,,'ilh nontraditional hll'lS 

Triangk) 

future pipeline CdPildty 
195 

As~un.' that the St,lte of Utah is engaged in 

transportation that promotes oonmotorized 

infrastructure 

mass transit 

Examinefutun.' c(Kl] supp]ks, the impcll'ts(lf additional feguldtillH on coaJ fired 

And the potenti,)l of d('(tn CO<11 

SUMMARY: 

SIV(' st:<'IhhoJder driv,'n proC('SS to hdp shape 

future, TIl(' plan takes into consid(>ration our 

natural f(>sourn'Sr economic dcvdopmimt 

ohkctiv('s And tlw of cnvironnwnlAI 

,u,tdil1,ability.lt b to be a working do(unwnt 

",o,jifi'l'atious 'will he made 

'will striV(' to 1(',)(1 om n~Hion in the d~'vdopnwnt 

of tr<ld1ti~')lML alternative' ,md n'm'\vabk t'nergy fCS011TC('$. 
196 

Plan 

-..., .....- :>'£(0.5%) 0.7 (o.l'lb) 

as summarized in Figure 1. sC'ctors'vl/ill increase fnml. 170miHkHl Dth in 2011 to 20{1 

10 

In 200Y, residents, businesses, and industries con-

,)PlJTOxilT,atclv 27,411 (GWh) nf 

coal). 

n'serves Me at h'<-lst sufficient to la:-;t this cnming 

deceld('; and in gent>Tdl, t'xisting coal plcmts vvilllikdy 

continue to produc(> ckctridty through the dt'Gltk. Tll(' 

cpal use m3Y remain about tht' 5<1111<.:', bllt this energy is 

~lccounted for in the t'lcctrleit:r< 

Iltab'sPfojected Fossil Fuel Energy Growtl'o;"'Next Il) Years. 

Source: Rocky Mountain Power, Questar. Ill .. h Geological Survey 

Electricity LQad (RMP) (MW) 

2illl 2Q2Q 

4700 

170 

45 

5600 

200 
197 

pally from public municipals. 

1 ""vill bp low. FUTthl'T, Ut,lh is not sl'lf-sufficknt in p,~­

troleum and imports about 72'ft (If its pctTlJleum 

To m('('t future demand, Utah should contin'lll' t~) usc 

ship and Energy 

Utah's depl>ndence on ilnportcd trallsDortlltion 

ds is a concern over the next ten Yl'dTS. currently 

import::, abput 72\1,· of its petroi<'um hI mect transportation n(:'~'(j". This I;; similar to US. imports of its pdrolt'unl 

~vhkh is considcTl'd t(! be a fl.1t-hmal crisis. As discussed 

ebevvlwre in this report, Utah 1MS vast mservC's pf oil 

shalt-and oil sands in thp Gre,pn River formMion in l>ast~ 

em Utah. 

energyefflDivcrsifying Utdh's enngy base not only 

jobs and revenues, but also critic,ll resources 

and energy to fuel Utah's broader business and industrial sectors. 

Coal: In 2008, Ut,'Ih produCl'd its one-billionth ton of 

('Odl. In 2009, Utah Tdnk ... 't:l 

about 47(X of Utah'." total pwdun .. 'tl ('IlNgy t('S(JUrt.'('S. 

11 
198 

50,000 

40,000 

< 

~ JO,OQO 

!! 

& 20,000: 

10,000 

1960 

IICO<li BPetroieum ON<lturil!Gas OHydmelectrk OthN" 

'Other ;oclud"" geothNmal, wind, Idn<ffili ~a" IlwniCipal "oIrd wclste, Jnd atlwr ga$e~ 

el)al abo accounts for 41?( of til(' C'nergy 

Utahns.'~ There are l'stimdlt'd to be OH'r 3,722 j\)bs 

Utah's coal production industry, including direct and 

related (this figure docs not include indiundN lease at detive mines, while stLlte-wide rccovcrobJe coal resources tt)tal about 15 billion tons (this 

numlwr does not tak(' into account economic or land 

us~> clH1straints). j,) Another estimate from the BUTl'<tu of 

12 

approximately 5Wk coal, 17'7< natural 

renC\vabll's {including hydroelectric},I! 

customers arc s('rvcd by two 

groups, and U!\,rPA, and by an association of 

rural t'lcctric COOpt'ratives. Th(·y have a simiLn- fucl mix 

as Rocky Mountain Power, but \"\rith a larger percentage 

from hydwelectric p0\,·;er, 

Ut<lh's proven coal n'5crves, 

min('s, have been steadily 

429 million tons in 200n to 2()25 

l1lCn~ i')r(' thn.-'c existing ,,·.lays of estimating (oa I reserves. 

Business-sector investmt~nts in coal-fin'd gl'neration, including carhon capture and 5('qupstrdtion, appear 

unlikely until then~ is certainty federal car-
199 

gen('ration. Furthermorl" as some Western stdh.'s eV<11uat .. ' thl' generation .1l1d imp{Jrtation nf from 

electricity p()rtf~llio5 may change. The techo(llogy and 

C(lst of integrating intcnnittcnt, nlllHtispatch,)ble renewable Te50UfC('S, as 1vell <lS the need to ensure reserve 

gl'm>ratil)n to back-up intermittent generation, <lrl' f,letors in the divcrsifil"ation of electricity resources in Ut"h 

and across the vVesh.>m Interconnect. 

Crude Oil <Petroleum Products}: In 200H, Utah 

e5SdTY capital hl C'ontinu<ll1y modernize and mak ... , their 

operations mOf-(: effici{'nt. 

Natural Gas! In 2007, Utah T<H1kcd as 

sectors consumed approximately IJ-7 billion cubic feet 
200 

Future <""»U,ecd'''''''' should 

rt'nc\Ydbk's, partinllarly wind and 

not compIetdy replace fossil fuds in thl' mix! but 

U5U.ll1y rply (In natural gas "s il bdCkup and Pl>ilk-d<1Y 

contingl'l1cy Additional natural gas will also be needed 

should \-vind gt'nl'ration lx' dcvdopcd in 

Utah. unpredictable ndlur(' nwam; grid (lperamust construrt d shadtHY grid, 

erator for times when tvind resou('('cs arc not 

dt>livcring their potentidl Glpadty. An increased reli,mcC' 

on natural gas for clectrkity g{'ncration .llso means that 

there is i1 need for additional pip<:1inc capacity. 

Unconventional Fuels: Utah posscsses unprc(-

('lkntcd oil shale and oil sands rC$OlUCl'S. 'D1Crl' hdW' 

been wide-ranging estimates of the volume of resources 

in the Uinta Basin. 'Inc Utah GeologicHI 2009 

('valuation estimates that a continuous 

v,'(lrld an: in th<.' Cr('en River Formation, 

portions of Colorado, Ut<lh, and Wynming. Potenti,,111y 

recoverable oil shale n'sources include 500 billion barT('is to 1.1 trillion barrd~ of oil. For pulky planning purlion ttl 32 Rand Corporcltion 

R('port (1I1 oil sands notes that "U.s. r('sources of bitumen have not been h"Clvily exploited Hnd ~He not 

characterized as thoroughly as resources in Canada 

(USeS, 200fi). Major deposits of bitumen (Le., larger 

than'lOO million barrc!s) in tlll' United States can be found 

to:< loCi:1t<.'ti of 

Blanding, Utah. Uranium mined in Utah, in <lddition to 

Uranium mined in the A ..rizona Strip, is being transported to White Mesa for processing. There is the 

pot('I1lial nuc1edrpo\verplant projcftin Utah that\\'ould 

depend (1I1 this on:!additiomlly a market exists cUTn'ntly 

and mdY gro-w as additional plants are brought lm lim' 

<1Ttlund tlw (Xllmtry. 

There arc more than 150 fob:<; in Utah's urdnium jn~ 

dustry, induding direct dnd Te1.Jteti suppnrl jobs in 

and milling (this figuR' dOC5 not in~ 

Future job in Utdh is 

the 

is dependant {111 the aT('a known a~ 

Strip remaining~)p('n for uranium 111ining. Curn'ntlytlw 

Dureau of Land ManagemC'nt is propo::ling t(l withdra\v 

OVPI' 1 million acres from devl'lopmC'nt. 

Hydroelectric: In 2008, hydnwlectrk 

of Utah's total produced 

tric abo accounts for O.79( 

of 

ek'Ctricity pmducl'i.11h:rcarc pstimated to be 1,1+2 jubs 

in Utah's hydrodectric industry, induding direct and 

related support jobs (this figure does nut include imlirectjobs).c9 

Geothermal, Solary Wind and Biomass: In200H, gl'Otlwrmal 
201 

energy resources. Biomass dlso accounts for (;;( of the energy consumpd hy 

Utahns. In 200H, Utah rankc'd 45th in the nation in Pl'fccnt of total nd electricity fmm ren('wab1c 

in Utah not cost l'ffcctive compared to 

source options. N('v('rtlwkss, r(~nt'·wable energy 

represents a small, but portion of Utah's ena statewide installed 

Utdh's renewablt' energy resource potential 

t('chnology and location. 

The numlwrs found in tlw Utah RenC'·wabl(' Energy 

Zone Ti.1sk Force Repprt (UREZ) n'present the upper 

boundary of ,vhat is tht'orctically possiblc, but dot's not 

identify wh.at is rt.'asonably prohable dnd economic. 

Ongoing ('[forts by memlwrs of the Commith'l' support 

the premise that commercially viablt' renewable elH'rgy 

proj('cts exist and should be deve'loped in Utah as they 

<lre demonstrated to 1);;' cost effective. Utah's policymaking authorities, public dClndnd, cost, the utility 

reguldtpry dnd planning arendS, ~md continued coordination among stakdiOldcrs should (ollaborat{' to 

pat}n-vdYS to dddress <.'xisting: challeng('s to reenergy devdopment. Given grmving energy 

demand Jnd constr,lints on corrent enerS")! supply, rene"vi\ble enprgy could play an imporhmtrole in Utah's 

next 10 years. 

it should be noted 

ergy resources thdt to 

(RtvlP) has foond potential energy prl)jects 

in Utah hJ be l(>ss cost-l>ffectivc' than projects in surrounding statl'S. Current rl'gulatory policy in tlw State applies 

a le3sh.'(lsl risk ildjusted standard to RMr in pnwiding 

electric service to its Utah customers. Under this standard, RMr has dit('ckd lhp 

to '<\-'ind fddlHit's in Wyoming. Undt'r the curn.'nt least-

(,Pst stcmdard, RMP .vill inv('st in n'!1c'\vablc eIlC'rgy 

facilities located in Utah (such dS the Blundell geolhc'rpoint. 

dOIn and unpredictabk'. Solar facility prodlKtion is 

impacted bydoud C(lvL'rand shading from nt'arbystructun's, while production from wind fadlitil's can drop 

15 
202 

l)ff in d mattt'r of minut('s ,,)S th(' wind ceases to bknv. 

Also, pnlLiucti~m from fenevvablc em'rgy facilitil's may 

or may not occur at the time it 15 most m~c(h'\.i - wh('n 

demand on the electricdl systl'lTI peaks. Because dectJic 

by production n'5tltlrces 

a short period of timt'; ,md 2) dt the tinw energy is 

nccd('d. Pn'sf'nlly, RMP backs up its wind rc:::ources 

primarily with natural gas-fin'd gClwmtion .md pnwt'T 

purchilses from the markct, both pf which add cost to 

tiK' provision of elcctric servic('. The dcvdopml>nt of 

Compressed Air Energy Storage (CAES) as a Renewable Energy Resource. The 2010 Legisldturef 

through 58 104, designated ",ir that is compn'ssed and 

stored using rcnewdbk, energy to be classified as a f('-

ne\vable energy resourCt' undN cl'rtain conditions. 

While there arc no CAES facilities in Utah, 

air storage in proximity to potential renewable energy 

16 

are currently approximately 75 direct jobs in Utdh's biofuds industry at 9 

The projl..'cts includ(' both start-up and 

lus, and the job!;J are R&D, manufacturing, 

enginL'ering and 

Biomass Utilization. Utah's biomass energy potential is only p.'Ttly TC31iZ('d ,It this time. Curn:ntly, landfill 

gas, municip.l1 solid waste combustion, and soml' cxperimental alga.e and anal'robic dig<'stion procl's5es 

constitute biomass energy utilization. The numerous 

dUel' an pxcess of vvood, ~vilste, and forest 

undcrgn)\yth \,,'a~te. The w('b-based Coordinated Rc-

~(lurn' Ofh"ring rrotocol {CROP) provid<'s potential 

vvood users 'with inf~mmltion on \-ww·d fiber <lvailable 

,,,-ithin economical haul distances from f('defat and nonthan regular crops, and can co-produce electricity.'t 

Nuclear Power Generation. This resource deserves 

addHi(lnalevJluation, but ,"vill likdy not bt.' availabh' 

this 
203 

New Generation Cost (1012$) 

March 1010, UMPA Conference 

(D. Gruenemeyer, SoVINe! & Assoc.) 

150 

'00 

250 

200 

$!MWh 150 

100 

50 

0 

.Y oq,(, .c ~~fl,Jt:.'"re; 

~~ 

tl.'xt for cncpuraging nuclear ('lwrgy in 

Utah. Furthermore, if environmental concerns or poli~ 

cies curtail lhe development of (utun> coal and/or 

their net generating costs, 

providl' an additional incentive tn considl'f 

nuclear as a of the Stdte's basl.'-lo<'ld l'lC'c~ 

trieal genl'ration. the p(ltcntial to beconlL' 

a Tl'-t'ffil'rgtmt industry ~vithin thl' United Statt's.. Ub.lh 

should assess and to sc'rve and 

manui.lCbLlri.," cdpability <md uranium ore reserve::;. Thefe are proposals to develop nuclear POWl'T 

in Utah, but there is not a proposal that has moved 

through the permitting process. 

lOa 

ptHVC'T will he a vital faC'tor in maintaining Ut<1h'5 

ing: rcg-ul.-1tion, impacb of supply and demand, the· 

cconomic dim<ltc in the U.s. ,md other costs. CowrnlUcntt'.xpenditun.'s through incl'ntivt'S, hldns, tax cn'dits 

and grants, s(\VC'wl of \yhich arC' mC:'ntioned in this reimpact em'rgy cost. As larger fractions 

el1('rgy are product.'d from alternative and renewahle 

('os~ \,vill Tisf'. 
204 

ranked 13th in the nation in the production of coal at 

21.4 million tons. UtJh eUTre·nlly has about 202 mimon 

tons of coal rcserVl~s under lease' Jt <lctivC' minc:-, while 

",tote-wide recoverable co,}l resnurccs total ilbout 15 bit· 

lion tons (this number docs not take into account 

economic or land use constraints).v Anotht"r ('stimatC' 

fwm the Bureau uf I ,and Price Field Ofreserves ilt 

CUTrent production rates. 

Table 2 summarizes UtHh's pn)Vl'n fl'S('fVl'5 and current consumption rates for pf'trok'um, natural gas, and 

coal. It a1sl\ 5ho\-"\"s re1l1<1ining Yl'ars of proven reserves 

at currelltconsumpti~H1 rates. Sl'veral f.lCtors affect these 

nahIral gas projcctC'd to 

rCSl'rve disl'()veries, etc. Utah 

imports a significant part of its consumed pctn)ieu1l1. 

Conventional ('lwrgy and tnineral rcs()urce~ han' 

historically :,;C'rvl'd dS thc backbone of Utah's 

37% was c'xported olltof stah'.'" That i~not t() say, hmvlR 

tt) generdl(' c'h'("tricity. About 25(,t of the Slate's elf'clrkitv gencrdiion comes from renel-vable resourc(':,;, 

"' , 26'1( of which is from geothermal, 65';1,; 

'""'"",,b,"c;r Jf;; from bio1l1ass, and 6{!i from 

wind, with d small frdction from solar.k' Nt'w studies 

indicate rneaningful rC11l',vable n\sourCt' capacity in the 

State.'l1 

Fostering iobs ... manufacturing stn.'ngths, ~md inmlvMive l'l1treprencurial entNprises ('man~lting from 

Utah's sector is critical to SUCCl'S5 in future {'1l1-

and natural resource industriPsY 

TIll' l'm'rgy s~'ctl)r contributes substantially to statl~ 

tax revenues, thereby enhancing and stimulating Yi.uiOllS employment sectors of thl> St,)te beyond l'nergy. 

Als~l, a significant am(lUnt of energy devc]()pnwnt takes 

plac(,on State School and In~titution<ll Tn15t Lands gl'nerating direct rt.'v('nu('s thdt support K-12 public 
205 

Developing: Utah's energy resources (r('ates a demdnd for jobs. Energy deveJopmentin Ut<'lh enables the 

State to attractl1ewiobs and manufacturing-and impwvl' 

its economic devclopment and l>mploymcnt landscap~, 

The to attract jobs is di.rectly related to 

ilnd natural gas. This competitive advantage over other 

states is one Uti'lh is able to recruit BevV and l:'Xr.and existing particularly high-tech 

to haw slrat('gies in place to 

lhdr relidTlCe on eIlPrgy as an employment driver. Utah Cdn do much to .attract future 

em'q::;y-n'j.-lt(>d jobs ,)nd manufacturing by taking specific dctions to elimin,'tc barriers and provide 

or expanding in 

ate vital and 

As Utah's l'nergy portfolio is diversified, the demand 

for ncw energy-sector t.-'mploy(>es vvill incR'dse. Ut.ah's 

19 
206 

s('ctnr. 

Owr 42')(· of tJ1(' technician level workforce in sub~std~ 

tion ml'tering, and line t~'chnology will 

retin' the next five years. The State should C'n~ 

sure that industry is engaged in devcloping.,. pwm(lting, 

and dssisting with contemporary ~kill training w(lrkshops and programs in conjunction "vHh regional 

education centers in order to pnwidc qualifit'd "workrC'ady" cmployl'cs to fill the retirement gklp. 

In 2007, Utah ranked 34th in tlw nation for the l1UlTlthe Stat<..' DepartlTlent of Workforce St:>rCommunity Colh.'ge and the Applied 

Colleges to cst.-)blish curriculum, certifkdprograms to prepare Utah's workforcL' 

The Utah Cluster Accl'\l'ration Partncrdize renc').vabJe energy tit'vl'iopmentinaH dr,)rt to grmv 

Utah's rene",'abl(' sector. The committee nt'cds 

('rs, i.e, thl' goV('nloT. 

the state \vants to ('nt'OuTage renewabll' 

opmcnt without rnzmdates or incentives, 

IJtahbased 

should be devel(lp('d \vhich enables utilitk5 to offer r('-

ne"vahle tariffs to their CllstO!lWrs who wilnt a 

{\Ugh, tariffs for 

customers who want them. CUTTl'nlly, under its Blue Sky 

program, ROCky Mnuntain rmver t'ncoumgcs custom20 

electric po"v('r producpd from rene.vahle energy 

projects. 

Bccausc of Utah's world-class cnnventional ,md uninnovdtion through 

relocdtion dnd start-up compank's. While th(, 

State io:. making great strides through its Utah Science, 

dnd Research (USTAR) (>fforts in basic rc-
207 

Tlw State .should continuC' {(l attract significdnt donwstk anJ international inve"tment funding. Such 

H'S()l1rcc 

training. 

in rC50nrce and ('nvironn1('ntdl manPl*:ntial to dttract high-skHled, 

('xtrdcti,ln, ct('\'dopm~'nl, production, trdn:-,mi~:donJ distribution and industries, as ·well as 

professional support services. help to 

Utah's position of being 00(' of statf'S in 

Stilte::i thilt is a lwt ~>xportl>r of energy. If nlaland hvdrociectric rpsourc\.'s declinc, 

('xpandl'd ind~stry and j{)bs "dll he lwedcd in 

these rural communities. Stah' goV('rnrn(>nt should promote continued stat<' dnd federal land access for 

cxploration, extraction and production of crude oil dnd 

nJ.tural gilS, invC'stment in unconventional fueb techand dcvdopnwnt and tlw recruitment of 

nents. 

tlw future energy economy 

sit fuel developm('nt with devdl)pnwnt of rene\ ... ·abk 

and altcrnativ(' energy. 

protect its qUdlity of 11f(> and environment. 

public I,m.ds pristine "ir slwds; national parks 

and wikkrncss af('a~; important watpr r('sources th<)t 

arc c5senlial to local ("ommunities and \yildlifc habitat 

and and 

zdtions, ilnd statt' and local leaders ov(>r how and 

development should occur on Utilh's public 

for their 

21 
208 

Sfate Institutional Trust Lands Administration (SlTLA) 

the new stilte to provide 

financial support for public schools. These school tnlst 

lands arc managed by tl'w School nnd Institutional Tmst 

Lands Administrntion (SITLA). SITLA manages approxirnatcly 3.4 million ~urfacc acre's. In addition, SITLA 

manages ;mother 1 

Revenuc' from schoo! trust 

Permdncnt School Fund, a perpetu81 

distrihutes income ,mnually to each K-l2 public school 

in Utah. 

Energy development is the lC1rg('st component of 

SlTLA's contribution to edncation funding. The SIT! A's 

with initial dewlopnwnt of commercial beginning. SITLA Also 

has an expanding r('ncw~)bk (,l1ergy Over 

ma5sin' quantiti('5 of nahlral gas in (>ngincc>rcd und(lrground salt caverns, providing energy flexibility tu 

industrial and power generation customers thwughout 

th(' West. The W('stem Energy Hub project also contl'mplatr's devdoping und('rground compTl'ssed air \.~nprgy 

storage, an in!1(lvative technl)\(lgy that can largely S()j\'C 

problems of intermittency with other rene'wable ('nergy 

further devclopnwnt of wind 

in areas th,)t are restrictively managed by the federal 

government, ilnd to \\'hich access is highly limited. In 

22 

ll1(' ('vpnl thdl Congn':,;- and curnml and futun' administT<llions cho\l~e to continue managing federal public 

lrlnds for vI:ilderness, tlwre l1('l>t.iS to be an effiwilderness for cor"olida"~i 

that Gill tlwn be managed by SfTLA f~)r 

energy and economic d\.'vdopml'nt. 

Much of Utah l'njoys clean air for mdny days of the 

y(~ar. Hm.vever,duc to topography, wcatherpauerns, and 

d highly urhanized populiltion, Utah also suffers some 

nf the worst air quality days in the Nation. It will be 

critical for human health ,md the environment and economic !,.'k'vc1{lpmf..'nt to implenlcntenergy developm('nl 

jn a way that takes this unique ~ituation into dccount. 

Additiondlly, the Environmental PnJtcction Agency 

(EPA), in implementing the Oean Air Act, is continuing 

to strengthen the NHtion's air qll<)lHy standards for most 

pollutants. 111is \vill result in higl1l'r costs for mal and 

natural gas plants" 

The natural bypnlductsofhnrningcoal and, to a lesser 

~'xh::nt naturdl gas, indu(:k air pollut<mts permitted and 

reguJdh.xi by the Clean Ajr Act: partiC111atl' matter, ~ulfur 

dioxidt't and oxides Thl' ('missions arc pt'Tmitted and regulated Air Act. 

controb on 

imp1c'ml'ntati(m of the n'gional haze plans ,vill r('sultin 

additional improvements ;)s emis:-.ions from dt'ctrical 

gl'neration ~m' n'ouced. 

Oil and natural gas drilling and production may impact air pollution. The Uinta Basin has I\'«'ntly T('COf(it'd 

ek'vatpd levl'ls of winu'rtinw tlZonc. If these levels (011-
209 

on~wZld mobile sector kars, tn1('ks 

dnd PM2.5 are responsible for i'lcute spikes in air pollution and unhe<llthy air dJys in Ut<1h <lS confirmed by 

the Utah Division of Air Quality's (UDAQ) monitoring 

network aipng tlw Wasatch Fwnt. Both {lZOlW and PM25 

emis<;ions are reiakd to on-road mobil(' sourCl'S. Ozone 

and PM25 an' n'spiralory irritants that can trigger asthmatic epis()d~>s and ('<lust: acute R'spir<ltory symploms 

in sensitiw individuals dt concentrations thdt approach 

and exceed th{' NationalAmbient Air Quality Standards. 

Doth pollutants ,1fe mnfim1l'ti risk factors 

for a numbn of cilrdiovascular conditions. Since acutl' spikes in concentratilms of air 

contaminants are predictable based on 

abk weather f()n~rdsts, it is pmticularly 

eliminate dll nonessential driving to protL'tt peTsoni'll and 

public health when thl~ UOAQanmmnces j~ yellow dnd 

rcd 

Implementation of thc'sl' strategies should 8150 include meaningful 

mdrics for success, such as r('dueing particulat(' matlN 

(PM2.5) and ozone k'v('ls in tIll' air. 

slwuld consider ,\-'lays to inceutivizl.' alternative-fuel 

vehicles and to make n'fueling infrastructure more accl''>sible. 

AltelTl<ltiv('-fud v('hides proven t,) Tl'duc(' V<.'hick 

H(lWl'VCf, reducing ctnbsions 

non-attainment days "vill depend ~m 

adoption of TIt.'V'" {<'GUR''''"'''o, 

fuIHul'I-C]1Ck ('lfRd,,[lCY 

through more traffic 

and technology to effcctiv('1y 

fir and maximizing the df,,'ctliYl'TI"'" 

transportation systems. This includes continued implementation ()f pnlven ideas such as }'lOV IHOT lanes, 

vehiclc signal pre-l'mption dnd signal 

especii'llly during pl'd.k hours. 

Stnltegic ideas such ilS dyndmic speed control, peakhour usc' uf s}wuldcrs, and increasing P'lrk-dnd-Ride lots 

(both privatc and public) sh()uld be rcvil'\ved. All traffic-operation pi(lns should include a 

23 
210 

Changing behavior is difficult but communication 

strategics ,md tactics that providl' dWJrt'ness and ('dncation, supporh'd by incl'ntivcs, mark('ting i'lnd 

promotions can su(cc{'d in reducing unn('n'SSiU)i trdVCl, 

particularly the numlx'r and dUratiutl of snll>-driver 

trips. Existing programs like TravelWisf\ Ridesharc and 

fdk'-fn'l\along \Nith ('Vents lih' the Clt"'3.r- thc-Air-Chall('ngt~, Bike Month and Frt'l'-FnrE' to 

ulb(lrhood Access Program (SNAP), dnd Walking Scl1()ol 

Bus, all of which ('ncomagc walking or pooling t{\ 

schools, m'('d mon' resources to increase av\rarcn('ss. ft 

is critiC'ill to ('duci'lh' and pmO'\ote the bcnpfits of more 

l'ncrev-dficient transom-Winn with such tools as the 

len'lnf stdte government and private business as exState should assist communities in choosing 

I,mel-use options that reduce pl.~r-capita 

sumption, impmvL' <1ir 'luallty, and make it for 

people to get from one plact' to <l110tlWT. Utah's population is projected tlJ double lweT the next JO ycaTs, ·with 

vehicular travel increasing at tv,"ice that rah'. As the 

population and (10 momy grow, Utdh has an opp1.lrtunity ilnd fl'SlJnnsibilitv 

th<lt support ('nercv-dfident 
211 

should LX' madt, ffllm thes(' ncighborlwods to rn.)S5/ 

public transit. 

2SVr of totall'nergy demand 

ilnd 81 1;;, of Utah's petroh:um consumption, 

tIll' available CIWrgy sources will b(' part 

In the proces..~ of illlocating public funds for transportation, tlw priority should be proj('ct~ that d('monstratl~ 

Mas5tranreliable and afford~)bk travel options 

and infrastructure that supports hiking and \valking,"yill 

reduct' the amount of timt' in their cars, 

well connected bike"vays, and whide milt's traveled 

(VM'f) reduction strategksf throughout the region to 

support this system, 

waler in 

undoubt('dly decline over 

the next Water curn.'nlly US(>ci at other fadlities or by otl1('r b\' purcha5cd for 

use in energy d('vdopnwnt in Thb is how 

water r\:'sourccs 'Nert' dl'n'1oped for thl' Huntington, 

Hunt~~r, and !['P plants. T('(:hnology and (>fficI(:I1CY ddv,,"nces the energy industry In,'y provide 

additjon,~l '\-vater 6Jr existing p~}wer plimts or reduce 

the demtwd for water at new P(HVeT plants in thc future. 

pmjech_'d ('co·· 

the possibility of 

and i~ not the CtllTcnt baseline technoh)gy. 

TIll' dcV<.~lopmcntof primary fuel ~ourct's such as oil, 

oil shall', tar :>ands, natural gas, and bioful'l:: also coove}op bioful'1s can vary tn'nwndolls1y. There <lH' 

currently a dozen m more diffcrt'nt k'chnologks under 

consideration for thest.' fuel resources. It is unlikely that 

updated in 

Additionally, the ErA has launched a Hydraulic' Fracturing Study in order t\) clssess potvntial impacts (If this 

ml'thod of recovering: natural gas on drinking water and 

human health. Study results should be rcleas('d in 2012. 

25 
212 

milling, hnv-levcls <lJ1d \Vdstes, can impair 

surface and groundv"ilter resources if ledk from 

lmpoundmC'nts and di~posal sites. 

leak-dete<:tion syslC'ms, kak-colkction systems, 

and pump-bacK !'iYSh'DlS. Thest' issue::; m'pd to he reviewed regularly hy DEQ, \-vith rl'l1ledial actions 

rcc()mmended if pn!blems (ICcur. 

EnC'rgy extraction and transportation generally require construction and ground disturbance, which can 

be darn.aging to historic and archaeological resources, 

Fedl'ral and stltt' statutes require the responsible <:1);endes limd OVVIll'rs Llnd permitting agencies) to 

the effects of their actions tH1 cultural rc·· 

sources, and to a11O\'\ the State Historic rrcserv<ltion 

Cell dnd historic n'sources, and consultation 

interested parties, \dth on~th('~ground survey, 

m()st nf the can bt, avoidl'd. Recent 

successes 

impact migratilm 

corridors. 1'11(' most acuJ:(' problem occur5- ',','hen an el1-

26 

padS indud(' tall-structuTC avoidcll1C(" habitat loss and 

fragmentdtion, pnx:lation, human di5turbanc(~, nud nd-

\vorks, increased noise, reduced nesting success, 

effectivt'nt'SS of 'loc,llizations, lek Mtendi.1OCe hy milk,s 

science-b<lscd processes <It the proj('ct-sit(' kvd. Once 

impacts are avoided ilnd minimized, remaining impacts 

must be mHig<lted dnd vvildlife monitoring 

implcml.'nled 

As Ow dcbatt' (In climate change continues, Utah 

must participat(' in this discussion to represent Utah's 

policy nn carbon emissions, clnd it 501.'ms h'ss 

pccur in thl' imml'Ciiatt' c(lIning y('cus. Uncertainties in 

at the state 
213 

methane, nitrous oxide, 

hy,jwfluoro'cal'bons, perfluorocarbons, ilnd sulfur 

hexafluoride) - collective known CHGs. EPA's phasedin appnl<lCh through the Tdiloring Ruit' limits rt'gulntion 

initially to iacilities already permitted and emitting dt 

k,1St 75,000 tons pl'r year. The effect of this regul<1tion 

will h.' inc[(:ao5('(:\ cost to energy production dnd ultj~ 

mately to the consumer - though cost estimates VMy 

depending on source. Ag<lin, any such regulations 

should lw accountt'd fGr when d('h:rmining cO!'lt/bcnefit of iutme energy :>Pl.lfCes. 

dal awart'tlc!'lS and understanding about {'nergy, 

ciency Strategies (UBEES) partnership, Utah's Wcathcrization dnd HEAT programs, ,md nonprofito5 such ,lo5 

Utah Clean 

program, 

Powl'rFonv,ud programs, that works "vith {'xisting utility efforts to raise ilwarcnl'SS and 

und('rstnntiing about co~h.ff('ctiveness and risk l1Mnagetncnt opportunities of 

contractors, and trddcs; and providing funding 

dnd other inccntivt's to local building departments 
214 

to train staff in the .scienn:: of building ~'nergy demands, controls and ('fficiency dnd in code 

implementation dnd cnfnrcctncnt 

Increasing the minimum hiring stand,uds for 

building~plan revic"\vet'S and insp(>ctors to include 

energy-management degree'S, certifici1h .. 'S, IECe 

tr,)ining or equivalent 

V'iS.9 MW of load c(mtrol resources. 

For clos" to a decade! Rocky Mountain Power hdS 

'worked 'with its customers to reduce ek'ctricHy use 

through demand-response (load contmD programs .. By 

activrly conlrolling sp('cific equipment such as rcsictt'ntial and small commercial air-conditioning and irrigati(H1 

pumps, th~" utility is able to reduce the long-h.>nn lll'pd 

for rww eleC'lricity generation. In 2010 Rocky Mountain 

POI-vel" had <'IpproxiuMtely ]00,000 cu~tomers (roughly 

25 - 28 percent of qualif~vjng homes and businesses), rq:r 

rcsentingov('>r 112 megawatts, und,'r direct load contwL 

The company als(l had ab(llJt 43 nwg,nvdtts of irrigdbon pumps under direct load control. Customers 

participating in th('se prog-rams <ll1(y\",', under tenus and 

conditiuns approved by the Public Servin! Commission 

of Utah, Ri,lCky MOlmtain Po;,v('r to the C'xistcllstoml'rs' 

innovative dcmdnd~n)spon5C programs removing barriers that limit 

participation in these programs 

Designing d('mand-rcsponse programs that have 

heen shown to increase p!lrtidpation Significantly 
215 

nm"ticinalion in (,{1St ('fh'('~ 

Utah industries currently lx-'nL'fit from energy prices 

among tlll' hnn'st in the nati(lll. Whih, these prices h,)\'(' 

helped n1<-1kt.' the industries l\)5t cntnpctitivl', they .lIso 

cTeah' a bzmit'f for imr('stment in !;'n('rgy ('fficil'ncy, i.e'., 

multi-slate industries (('cdV(' a highn return forinv(>stgenC'rnte pm'll'(. Tlwse opportunities 

('vdllldtcd for C<lpturing ('t1crgy othcnvise unused 

in industrial processes. 

Encouragf' utilities dno their rcguldtnTs to (011-

rinD\.' PT begin offering COSh.'ffcdiv(' pn)grams to 

sl1pp()rtindu,o,tril's' CIWrgy dficicncyinvl':stnwnts. 

In lni'my situiltions, inCl'ntiV('s are sufficient to ('11-

courage industric's, bU5jn(,5S(~~, and residential 

tractor delivering a packagl' l'l1l'rgy analysis, 

home improvement, and financing program to the ho~ 

m(,OWlwr. Salt Lake County's EIWrgy Smart program is 

an inh'n'st rate subsidized loan program s('r\iccd by 

Conununity lkve10pnwnt Corpofcltion of Utah, a 

rofits. 

Pnwide tax credits, tax deductions ,-md /1.lT rebates 

to industril's, busitwssC's ~md h(llTIe owners, landlords dnd condominium associations for 

inv('stm~'nts mad;.' in ('n('rgy pfficient eqnipnwnt, 

proc('SSCS, rdrofib;, dC'. 

('J1('rg,,·efficiency and conservation retax incentives for new 

Considl'r <1 job-creation tdX incmtlv(' for hiringres,lllrcl..' ('fficiency lellPrg), managPTs at industrial 

fadliti{>s 

Requirp a home energy rating for an homes listLxi 

forsal('orrf'nt 
216 

state-building constn1('tion.ln 2010, DFCM also installed 

$4 million in rf'ne.,,"abJe energy projects solar) 

\dth Americdn Recovery and Reinvestment 

nomic stimulus funding; est~1blished 

pilrtnerships \ovith ~>lwrgy ;.;crviCl' companies 

and 

to achieve such savings has not b('('l1 detennined and 

should be analyzed. 

Building ('l1Ngy codes dktate minimum standards 

for the design and con:-.tntction of a1l11C"W and T('novdh:'ll 

buildings. The codes impact use for the life of 

thc building. Utah's statewide 

tlw 

Energy codes are n\lt dfective if tlwsc codes an'n't 

propl'rly implementL'll by tlw d~'sign and o.mstruction 

industry or enforced by il)cal building departments. "Ib 

eff~'('tiwly do l1wir jobs! ev('ryom' involved in building 

design, cOl1stmctiol1! plan-review ,md on-site onforcement must be aware of the latest bUlilding-scienc-c' 

that support ('lwrgy cod~'s are 

through the US, Oc'partnwnt of Energy':;. Building Energy Codes Program. The Utah Stat\' Energy Program, 

snppnrteD by RllCky M{lUnt,1in P(lw('r <lnu QuC'·starGas, 

pmvkks ener~y code training. Hmvever, qualitdtiv{' 

observations in 2()10revml Utah's compliance ratccould 

beimpnwl'd. 

30 

The Ta~k Forct' m<lkes the folhrwing n'comnwndaproducts 

ImpnlVl'and ddrify thciKiministrativl' feedback loop 

for {'ode enforcenwnt professionals betw{'en k)cal 

jurisdictions and thl' Uniform BUilding Codt' Council, and .J. resoluthm proc('ss for 

Encourage and fund pwgrdms that provide wholl'-

hOllse and building systems analysis and 

hol,e-b,uilcling retrofits 

EncourCtge gOH'rnn1('nt and non-government 0rganiz.ations to utilize energy service companies a:;, a 

financing mechanism ftlr energy-dficientretnlfits, recpmmissioning, and ongoing commissioning 

cusing its efhHis l)O reducing: ovcrdll energy 

consumption, m.maging peak loads through best practkes, and supporting energy-dficiency and 

demand-response programs, consumer education, Ctnd 

utility rate d{'sign tu promote l'nergy dflciC'Hcy and conscrvdtion. It is dlso important to ensure that utilities arc 

not disadvantaged haTnwti a~ a r('<;uIt 

of stah' energy and ('COll(1mic decisions. Utdh's 

regulc1l{.lry \<vith Utah stdtutcs 

gov('Tning its opcrMions, h.;)s provided 

c<'IV(~ry of wsts directly incurr<.'d by 

should: 
217 

and appropriatdy con:::;id('H>d <1S "vel I 

"11(''''''-dfici'.'ncv and demand5-idp response pnlgrams 

rursue additional<lnaly;:;i;:; and f'\Tulu<llion of utility and rdlepaYN impads of hjgh~ cfficiemy 

scenarios 

Considerrate recovery mechanisms thdt balance lhe 

first-year costs of cnergy'~('fficiency programs while' 

bendits are (KmK'li acmss many years. Altemativ(' 

r<lt('rV((Weryml'flMnisms may be l1ccc%ary togivt' 

energy-efficiency resources cc)mparabJetreatmcnt to 

;.;upply~~id(' gp1l(Talion tt.'SOUT(V;'; thatdrt> dU1()rlizpd 

over multipk' year;.;. Tmp<lcts this <lpproach Oldy have 

on ,,1 utility':: finimcidl condition should be considered as p.lTt of this (>fforL 

Historically, energy producers have focused on pro~ 

viding costs while balancing other fdctors 

and risks. other requirements and puhlic 

1M\'(' lwcomc nwn' prcdominant in 

the new t'conomy and climate 

Ek'ctrk and natural gas transmission t., d key pdrtof 

C0111pOnent of energy deliv('ry system to 

construct Long planning- tlmdinl's, 

footprint, complex pprmitting frum 

tions and h11g\..' capital costs make l'llt'rgy transmissi\m 

31 
218 

1h(' mnst comph,x and higlwst risk ('ntNpri~t' <1n t'k'1..~tric 

utility (.10 undertake, Rl.'gardless 

selected, 

ndwork in 

vli'ere made some 20-30 yeaTs dgO. While some companil's have begun major transmission additions or 

proposed major projects, t1ll' hug(' capital cost of transmission is a barrier to new invl'stnwnt. Bl.'GHISe Sttlte 

polici('s ~tm fi.'CJuire that most transmission construction 

costs be borne by the l'etail customers of the load serving entity that construct tlwm, few investor- or 

consumer-mvned utilities have committed the large 

pressing oeed. private investors have 

rl'luctant to propose projects IIf their o\\'n or commit 

funding to projects proposed by others. 

During the summel' of 2009 Rocky Mountain PO\\'c-r 

load serving entities. There art' eight n1i1jor electrical 

transmission paths that intNconm'ct thp St,)tc of Ut<)h 

to bordering states. All of thl.'s(' existing paths arc currently fully subscribed for transmission usage and have 

constraints and limits regarding their ability to ser\'\.' the 

St,)te long term. 

FOUNDATIONAL PROJECTS BY 2020 

Finai-Ver. 7.0,Ju!y22, 20la 

32 
219 

FigllTe 4 is d. map of planned electrical transmission 

projects (Foundatiunal Projeds) nlTr'-'lltly in tlw Regional 

planning review process within the Wl'stcrn Electricity 

Coordinating Coundl (WECC)"'O and projl'ch:d to b\.' 

dl'>vdopl'd over the next 10 yl'a~. These projects arc 

being proposed by a number of t-ponsors, including-electric utilities and indcppnd(;'nt producers and 

priv(lte inVl'stors. Utah's pInn should be 

dpvdoped in coordination vv"ith suh-n'gional and WECC 

transmission plans, and Utah should work with other 

st<ltl's/provinces in the W('stern lntcrnmn".'ction to capit':llizl' on dmong transmission development 

Natural gas tr,:\11smission is dcromplislwd by undergrollnd pipes, which h<'lve seen drdmdtic 

in thp last 30 year';., Ncltural 

Ow Rocki('s has incH'ascd 

to S.l MMd/day in 2010. With the addition of the 

Ruby Pipdine dnd thl' Kern River 

aT(' ~ch('dukd to Lw complC'tl'd in 

port rapacity in the Rocklf'S will be 

Pipeline transmission inside Utah hdS dmmatically incf('<1s(.'d as ,vith nel.-V transmission 

from Qu('star Pipdine and Kern Rivpr Pipl'-

is dbo capital 

marh,t forces. 

33 
220 

need t() be built. To build a dean energy economy, gain 

mort' ('nergy im'kpt'nd('nce and 

dnd jobs, Utah will need 

from rem(lt{' location~. Utah's n'gulatory frameW(lrk is 

not currt'ntly set up to make this ptlssib!e. 

Potential barricr~ to transmission infrastructure d(>-

v<.'lopnll'nt inc1udl' financing, integrated ptlnning 

.)Cross aJJ levels of government <md permitting proCl'-

dures. Funding methods, sourn.'s, and options Ilc'('d to 

be t'xplored and implC'mented, \,,,,hile building on previous stdte-hased efforts. A 

study of a 

stakeholder input 

,md privat<.' svctor participation, 

combined the utiHz,,)tion of natural and cultural 

rt..'souro .. ' data ('arty in planning and budgeting can hdp 

s{'cure as nynch public 5upp)rl as possibk'.111is, in tum, 

would reduce the probabilitks of suits against any futun' projl'('ts th<1t may lx, built ,1.5" result of tlw pldn, 

fadlitdtt, p('rmitting, and produce' m(\rct'fficicnt siting 

and mitigilti\\l1. practices, therpby saving lime ~H1d resources< 

199() 2010 

34 

and 2030 to maintain the physical condition of the high-

\va)! sy~tem at its current level. 

Th('fc may be opportunitk\~ to both improve the energy transmission nehvork and the transportation 

system that offers both overall ('fficieocil's ,md rednct>d 

impacts through bettt'r c\Jordin;~tion dnd planning. 

Consid{'r altcmativt's to current reguldlkm and funding SOurCl'5 to encourage transmiss1(m Hne and pipdine 

constntction in dreas that economic devdopment or rL'nC'INabk' and energy resource 

development. Stdle economic regulation reqUires that 

invt'stments bt> prudently made·, competitive cost (risk 

adjusted) ,md used ,md useful for existing ,md future 

customers. Federal and stat\' 

]035 
221 

H'quircments. 

agencie:s. 

Public intl're:stmultjpll' infrastructurl' corridor:s can~ 

not be sl'cured \vithout funding dnd 

acqui:sition. InfrastTucture provider:s do not 

have mechM1bms to acquire fUhm~ rieills-'l,i-lvav 

mod statl' law and providp a return on that 

invesln1('nL Dl'velop funding method!:) """"i"" h,,,"_ 

term multiple infrastructure corridors. 

statutory framl'"\.vork to id('ntify options to provid(' funding to acquire Utah inh'rt.'sl in jt1int corridors. 

lnfrastnlClure should be built in a way to mininlizp 

environmental and social impacts. Federal, statp and 

owners often prefer impacts to he located 

Work with the Covernor's office to crente a 

forum h) balance infr,btructur(> and the envimnment in 

thl;' mamgement of public dnd private> hmds. Cn'ah' a 

team to dewlop specific language and Tl">('omm('ndanons 

that tlw State can take to fcdcral1and manager:::. 

Encourage strong ('nergy <,ffidcncy, demand-side 

managt'D1ent mt-'dSUrl'~ and distributed gem'ration to 

minimizp the need t~) build addithmal transmission. 

Fixed cost rE'cowry b a problem and stab'holders d15-

agre(' on th~' appropriate 1t'vl'1 of spending on dpm"nd 

skit' managpn1ent measures. Create d mulu-dimensional 

stakeholder t(\ further discllss tlw isS1WS. Utilities \-vork to develop policies th<lt 

encoufuge dl'mand reduction and ent'qw efficiency partkipation dt ~lptimal lewis. Consider policy changes 

recomm'.'l1dcd by the sl<1h'holder group_ 

Utah's heavy reliancl' on fossil fuels, coupled \-vith 

rapid gnrwth in til(> d('nMnd for el1f'rgy and m"v\' ('}1\'i-
222 

ncgdtively imp<Kt tht' State's compditive position for 

job crcation, as well as business i1ttraction ~md r('tenHon."'! Whik~ the electricity in Utah is primarily generated 

fn)Jn f056il fuels, aCc{lunting ft)T 96 pcrtTnt{)fUtah'5 t()t,ll 

cnc'rgy production in 2009, a significant portion of this 

generation is exported to other states. Electric power 

pnn.rid('rs &"fVC thc Stnt~, vvith a p~)ftfolio ~lf fcspurces 

(coal, nahlral gilS, hydroelectric, \vind, geothermal, purchased etc.) that MP induded in custonwrs' 

Align the Stah"s main n'~(,il.rch UniVl'fsitics 

University of Utah (U of U), Utah State (LISu) 

and Brigham Young University (BYU) - into a 

po\.-V(>rful energy resed[ch and development trianglt' 

Connect this "R('scarch Tri.:H1gk>" with glOh.l1 industry, nali,)l1al ldbordtorh's and rl'giolhl1 

universiti('s to C'ffcctivdy comm<'fcialize I1('W ('nNgy tcchtwjogiC's and Utah's 

l'onvi.'ntionat, dltenKltiv(' <wd 

Tesour('t'S 

energy 

EmpO"\-VCT Utah's education system to C'xpand its 

ability to train, <)ttract dnd rC'tain tlw skilled tal~ 

c'nt Iwc('~sary to grow Utah's C'lwrgy economy 

d('\'dopmont.Thdr 

efforts 

tion. '111C research universHk's investnwnt in developing 

and deploying ('nergy includes r('search 

faculty and prngrams; [('search related infrastructuH'; cpmmt.'rcialization offices: and coordination 

\vith industry, ndtional1abs, Tt'gional univeTsitics, and 

Stah.' commercialization and ~~conomk dO\.'t'\o,om.cnt 

versity, Utah Valley University and Sl)Uthern Utah 
223 

C'lwrgy re-

~i..'arch institutions .. th(' Energy & Geoscience Institute 

(EGl) and the Institute for Clc,m dnd St'cure Energy 

(leSE). EGl is a \cader in f055il fuel, g('otht'n11al and 

carbon research. EGl rescdrch projects 

cover the ;md 70 of tht' ",:odd's 

l'omp,mics support its resc<Hch. Eel is to 

expand both its applic0 n'search in hydrocarbons, <15 

well as gC'othl'rmal and carbon managcnwnt applications for both and industry. leSE is <1 

computer modeling research. leSE utHizes its impressive 

off-campus pilot-sCJlc ros('arch 

with industry to comml'rdalizc new tecJ,nc.lo",i<'s 

h~lS l'merging energy research programs in :.-uch areas 

Utah State Unin.'rsity (USU) is Utah's iand-gTant 

institution Jnd htlmp to ':>everal world-class r('search, 

dl""'i<,pnrrent, demonstration and deploym('nt plat-
224 

managenwnt and mWgdtion, agricultmal d~'wlop~ 

in the arcit of space sensing and imclging, with 50-

yeilr history of d('signing, engincering, constructing, 

C'alibr<lting and deploying satellites and st'nsing l'quipment for NASA, JPL, and US D<.'parhnent of Defense. 

Much of this work is now bl'ing brought to b(>ar on 

tern.'stria! ('ffort::> related tn ~'\-'cather, ('nviwnmcnt and 

energy both in the dcademic and commercial <H'l'as. The 

USU Tcchno!()gy Commercialization Office is tasked 

with commercializing USU l'lwrgy technologies. USU 

38 

equipped to tpst and dl'piny cnprgy tl'chrural Utah through its rural partnerships 

C'xtension prog-rilm. US-U has just opened 

Bingh<ml Etwrgy Reseatch C('nlN in the Din tab Bd~in; 

the ccnt~'r scrvt'S as a research centH dnd to ('du(ah' 

the \vorkforce in energy-related careers. 

Brigham Young University is d private univ('r~ity engaged in ~mbstantidl res(',uch and 

ctllnmerdalizdti(lll activities T('garding cnviromm'ntally 

sound energy [('source:.. RcS('<m~h is both applied and 

academic vdth considerable strength in combustion, biomass, gnsification, clean ('oal, and carbon management. 

Centrdl to BYU's capability is thl' Advanc('t.i Combustion Engineering RvseZirch G'nter (ACERO ,md tlw 

Technology Transf('r Office (TTO). The ACERC has a 

age. 
225 

Utah's research universities sl'('k closer research collaboration with all of the Nation's laboratorit's. In 

the Idallll National Lalxmltory (INL) is co1-

\\lilh the State's uniVl'rsities on num('WllS 

fla, {'slablbfl'l'd a formal rcldtionship v\.:ith 

The R('scarch Triangk' com benefit greatly by expanding this relathmship with INt, as w('ll as pursuing 

(Ol1aborati(ll) ~vith additional Depdrtm(:nt of Ent'rgy 

lMtional dsspts in tlw region and energy 

t~)S Alamos, National RI?He\<\'ablc Energy 

National Labl)ratory, National Enl'rgy 

soultne'astern Idaho, j':l 

ties for the Nation in 

engHge5 in research regarding d",'"Ic,mTwnt 

renewable, and energy systems. rn partictllar, TNL is applied resl'arch dnd 

ttl reduce the risks ,15sociated 

techn,)logy. 

to collaborating with regional rcsearch institutions, govl'Tnment, and industry in 

addressing current and anticipah'd 

A.s part of this effort, INL ha!' b{'en kl'Y 

tionships in tlw WC'stC'm Energy Corridor, a transnational 

containing \vorld-dass ('n('rgy re80tlTl,{'S sirak'-

to North American and 

economic development. 

hosts many of tlwse resourC'('5. 

Pry, drilling completions pC'rh)rmance, core-log 

inQ>gration and rock nlt't.'hdnics. Ceramatec is d national 

leader in developing 11('\'" materials for the 

energy industry. Its focus is and em>ironmpnt"l 

dean coke demonstration plant converts re~ional carhonacc'()us materi<lls such as coal, coke fines, and ch<.1r5 int() 

is bll'ssed "vith regional universities and ('01-

kgC's th,)t grant bachelor degrees in science, technology, 

engineering, math, and commercial subjl"cts that support merg-y producers, users, and research \-vith a skilled 

\'\.'ork force. These institutions provide-' for a full spc'C'-

tmm of training from high srh()~)l thwugh post-doctoral 

{'ctuGltion. 

The U of U, USU, and BYU should ml1aboratc and 

~)ptimize [(,5e,lrch Cdpabilitks and efforts. Recognizthe accomplishments and addressing the 

of this ('ulldboration will be the focus of 

Capitol. 

IN L ."hould h," invi led 

bpr to participate in Utdh Resparch Triangle 

semi-dnnual meetings. Otlwr national bbnrcltorics 

m"lY be invit('d in the future. 

ilnd implement findings appropriah' to optimizing 

thc< wl'lfart: of thc< St:.:lte of Utah and H'giondl pdrtnt'rs. TIll' Utah Clu!c>tC'f Accderation Parllwrship hilS 

'worktxl 

39 
226 

40 

UniV('Tsitic':> tm-vards {'omml..'rcialization and imph'~ 

m('ntation of h'chnohlgy to ml'd Utah's ('nergy 

chZlllenges. 

tory and the Utah Clu~tpr A((('lprathm Partnership 

to energy can.'er tr<linings dnd 5killed 

implement this recommendation, on 

an annual ba::;is, the n's('arch univprsitip!-, will alkrnately host <l Utah Energy Symposium to preSt'nt 

developments, ne\\' 

otlwT emerging topics. 

region, and Nation. Triangle should 

expand its interaction with Departm~>nt of Energy 

natiol1al1aboriltories ,and specific funding should bl' 

id(~ntHkd to promotl' opportunitie;.; for appropriate 

collaboration in th(' State and Nation's int('Tcst. 

Utah is positioned with l1<ltural [('sources, n'slYl.rch 

institution!), cclpabk' industry, dnd n'gionalsupporl to 

conduct meaningful demonstration scale pro-jt'ds that 

can l~'dd tocostpfkctiv('comml'rcial and el1VirOnmelltaUy~ound cn('rgy d('velopml'nt. Dl'monstration-s('ak~ 

fl'$l\lrch pn*-'t'ts supJXlrted by theStatel.lfUtah sh(lUld 

hi." conductLu by unprl'C('l..knh .. u parmer."hips between 

the Research Triangle, nationallaboratorit's, industry, 

,md the public ;;ector to capitdlizc on the region's rich 

resources to mc\.'t the region'::; energy nel'<.is in an environmentally 5pnsitiv(' manner. 

Implementation of these re.:ommmdation::; -will significantly improve Utah's energy [(-'search, devciopment 

and dcploymentperitmnance<lnd f():?terunpn.'ccdL'ntcu 

collaboration iwtWl'l'n academia, governmt'nt, laboratori\~s, and industry. 
227 

TASKFORCE 

Ted Wilson, C{wcrnor's Office, Chair 

Dianne R. Nid<;on, Govt'rnor',; Energy Advlsor, Stc)ff 

SUBCOMMITTEES 

{,(Iura Nelson, Red Leaf Resourccs 

Dave Olive, Lotusworks 

Lee [>Cc'lCOCK, Utah Petroleum Association 

Tefl RHmphm, Utah Association of Municipal T\lW('r 

Richard;" Intermountain Wind ilnd Solar 

Clart'ncl' Rock\vell, Navdj(1 Ut"h Commissi()l1 

Brendan Ryan, Rill Tinto 

Selma Sierra, Utah State Uniwrsity Enerh)' Dynamics L1.b 

Anundd Smith, Utah Department of Environmenh:IJ 

Ronald W. Daniel", Governor's Ene·rgy Advi<;or'<; 

Office/Staff 

Advisor's 

Michele Beck/Chefyl Murray, Office of Cmsumer 

Servic('<; 

Chris Tc111.'lckson, St,1ti.' 

Curtis Do.vdlc, 5.:1lt Lake 

Andre'."; GruLX'r IKip Billings, W,,<:ak'h Front Rq:_,'ion"l 

Cmmdl 

Heying/Bryce Bird, Utah Oivl<;ion of Air 

Brucc:jont's/Ed Buchandn, Utdh Tramit Al1thority 
228 

S,)m Let." Ut,lh Stdte Fk'et 

Alan l'v'lathef,(m, Envi~i()n Utilh 

Brian Moench, Utnh Phy<:.icidn~ for a Healthy 

Em,if\mment 

Jdf Ed\"\',1l'ds, Economic' Dcvdopment Gxporation of 

Utah 

Cl1mmCfC(, 

Robert Simn1()ns, USTAR 

Ttldd StcV('ns, ReTIl.'\,I/ablc T('ch Ventures/Utah 

Su<;an J)"vis, Quesbr Gas 

Bill Fenimore, Utah Audubon Council 

Darrell Gerrard, 

Fon><,l 

BUH.'c1.U of Land Managemt'nt Utah 

Mike Peterson, Utah RnrdJ Electric A<;sociatizln 

Yashoda Khandkar, Governor's Office (If Ecnnomic 

Abn J. Walker, Utah Science Technology & Research 

initiativC' (USTAR) and 

Ashlt·c Buchholz, Ct)v('rnor's Ofricc, Staff 
229 

Ut,lh G(>ok>f,iml Sun'('Y, 2009, lltuh"<; Em'rgy Land~ilpc, Public Informfltion S!.·rh:~93, http://g<.'ology.l1tilh,goY/(.nlindpiipi"9S.pdf 

Qu(,,,t.1r201OIRl' 

Ctah Ceolt)glcal Sun'ey Elwrgy Srab4ic~ http://geologyutah.goy !cmp/ent'rp'data/inc1£>'".hbn 

,1, 1\1\01.1.11 bwrgy Out\(\ok" 2010, En('fgy Inf(lHlI,ttiOl1 Admil1i<..tration, U.s. D('p'lftm(.·nt ('t Enef!;Y, jNashingt()j) llC (i\pri121l10) 

tnternation(li Syrnp'lSlUm on Oil Shale, t ;olden, CO .. ()d. 2(}I\l 

6 lbid 

7 Utdh (;el,log-ic\ll SurVl':,>j 2009, Utah'<; Elwrgy Lan&:l.:ape, [,ublic InfnmMtinn Scrll'~ 93. http://genbgy.ut.lh.gnv Jontine/pi/pi-95.pdf 

S Utah (;colugic,ll Survey, http://geolll};y.ut'lh.go\'!elnp/cnergydnta(~t'ltiSlico-!o'/('f\·il'w1,{l/T1.14'·~20&'·~20Fl.7.),.ls 

1) Department of W,xkiorce Services Quarterly Energy & Natural Resourc('S }ol: R~"p.)ft, Ikcemlwr 2010, 

10 

11 Utah (;e'.llogicd.l SUT\'{,~~ 20()l), Utah's Energy Lll\d~cape, Public !n/nrmatl<)H Sene" 93. http: /,I:;Cojllgy.utdh.go\'/ol\line/pi/pPJ5.pdf 

D Ibid 

I-llbld 

15 Ut,lh (~t.'ologjml SurVl'y, http://gN\lllgy.utJh.pw/cmp!encrgydata/C:{),1Idata.htm 

16 Utah (,e,~logl(,ill Surliey, 2009, tJtah's Energy Llndt>c,lpe, Public Infurmation Series Q3, http://g('oiogy,l1t<lh,[';ov/nnline/pilpj·9.3.pdf 

171bkl 

18 [)cpartnwl1t pf Workforct' Serdces QU<1rterly Encrr;y & Natural R(,~llurcl'<; Job R"'p,)rt, [)0cembcr 2010, 

19 lit-all (;l'()1o~iQ11 Survey Energy Stilbo-tks bttp:/ !gl"j]ogy.l1tah,go\' /('mp/l'ner~;ydata/ll\de\.htrn 

20 Ibid 

"fl1is t()!'ec<lsl C('nSLllnption figures d<) D('t rdlect nah~ra! .1::,\$ u$age ot tlv: UAMPS N('b,) ['ow~'r St,ltiOl\ .. )f other tMtuml gil" Jin'd plants 

lomted in Utah 

Rocky lvl<)untain !'(',wr lO.-ycar forecast 

Ptah ecologic,\l Surn'y, 2009, Utah's Energy Landscapc, Public Information Serif.'s 95. http://geology.utah.go\"/online;/pJ/pj-95.pdf 

24 ibid 

25 Rand Lllrpordtll)l\ Hep·ort. Oil <;h.l1e lil'n:!opmcllt in tlw United States: proSjX'cts and policy is,<;ue<; / James T. Bartl", 2005< 

Rand Corpofati(ln R('port. Uncoln-enthmal f(ls~jJ.l)ased fuds: ('('<-,twmk and l'nVlwnmental tr,lde~offs ! ]\·1khad T('man ., let i1Ll" 20n8, 

27 [)('p,lflment of 1;\brkIl'rce Sef\'lCeS Ql1ll1"t0fly Enexgy & Natu!\11 R~>S('lln.'-'o- J,)b Rqx>rt, Dl'cember 2010 

28 

29 Dl'partment of1Nllrkfllrcc Service$ Quarterly Energy & Naturdl Rl'SUltra'~ Jub Rcp<.\l"t, Deccmber 2010, 

10 Utah C('d<,'p~',,15urvey, 2009, Utah'.; Elll'rgy Landscapl', ]'ublic Infl,rmatwll SefK'~ 93. http://gcolPgy.utah.gov/\'11lim'/plipi-95.pdf 

11 [bid 

National Ivlanufactming In<;titutl', Nillional A"~odatjon l'fM;H1ufadnrer~(Man, Exll'n~ion Partncrship data for Utah. 

UtJh (;('(>lug-imi Stlf\'ey, http://,Q;r>.Jh'f,y.utah.g-llv/C'mp/ ('nerg~'ddta/ r~'lw\vl'll('rgyd()ta.h!m 

:1R VI<lh (;colll.e;ica] Slln'ey, Tablt' 5.1(h http://gt.'<.llogy.tltah'R(w/vmp/elll'rgyd,'ta/ekclridtydata.htm#g(,l1Qfdthm 

39 Ibid 

40 Utah Ceoh\gJc,)15uf\'ey~ http:,! /gl,,~bgrl1tah.r;(i\·;v1Up/('Jlergyd,'ta!ind('x.htm 
230 

,U 2010 ECc'l1otnic Report t<J the (;,'\u'llc)r, http://www.governoLutn!;.gov /de,1/ERC;/2010ER(;.pdf 

JS U.s. Energy fnformiltion Admlmstriltlon, 200.'> data, http://l,vwl','.dil.gov /(,W"11/st<lte";/'K'p 5umihtml/pdf/riUlk 11~e,pdf 

·1<1 http:;'/w'ww.trave!\\1sc.utah.g\l\' 

30 http:/(ww,\\·si<;I<.>ndl,\W.,'qJ;! 

51 http://WWW.DIW1S]('l)ut,'h.prg/histnryenvisonutahv:'ip1.pdf 

32 W""<ltch Choke')', 2lHO" i\ rour entlaty L,llld·U'ic (\nd Tnlllspnrt,lJ\<m ViSlOll, http://www.wfrc.t}'g/cms/publicatimls/ 

,\"<\~atchchoic('<?04()rL'p(lrt.pdf 

t)tah (,l',)k'f;ic"l Surwy Energy Stati<;tk" http: '/g'-'t'logY.ut,'h.g()\'/emp/energ:-d"t<l/ind~'x.htm 

f.1 Rocky .Iv!ountdin P()w('r'" 2tl07 ",\-;<;e"'itn1:nt of L')l\i">Term, System \\'Kk Potenti.l! for Dc'n1and-~id(' and other Supplt'!1Wllt"l l{""wLlJ'ces" 

62 

63 Rocky tl-k'untain !'mv('r Stat(> lkvenu,-' RepoTtJOS, 2009, 

6-1 2009 Qlte".tar CdS Fmanci,11 Report 

63 TIll' Bureau of Economic <md Bu<;ines" R('s<..'arch 

67 Rocky rvj,'untain 1'<\"wer 

(,fi 'Westem EJ('ctriot~· (\".1rdinating Council (\.VECC), J\U}!;ll~t 11, 201O,Sf'C CO(lrdin"t\ol1 Croup (SeC) Foul)cl1tional Tr,m<;mi%ion Pmjl'ct Lbt. 

69 2008 El("ctrk POW,;T l\("se,lrch !n'ltitul<.' 

70 
231 
232 
233 

DRAFT PROGRAMMATIC ENVIRONMENTAL IMPACT STATEMENT: POSSIBLE LAND USE

PLAN AMENDMENTS FOR OIL SHALE AND TAR SANDS (MAY 4, 2012) (UTAH) 
234 

plans and policies of stale and locaJ goverrunents. The state will vigorously oppose these 

proposed changes to the cun-ent oil shale and tar sands program. 

The state participated fully in BLM's 2008 NEPA analysis regarding the availability of 

lands tor the leasing of oil shale and tar sands and thc structure of a potential leasing program, as 

required by the Energy Policy Act of2005. This process concluded with a Record of Decision in 

2008 allocating eeltain lands through the ELM's Resuurce Management Plans as available fix 

leasing The BLM also established the basic framework for It leasing program through adoption 

of leasing regulations. now ltmnd at 43 C.F.R Part 3900. (See 73 FR 69414, November J8, 2008) 

The state concluded its review of this earlier effort with the conclusion that the proposed RMP 

amendments were consistent with state law, policy and programs. as required under provisions of 

the Federal Land Policy and 1\1anagement Act. and expressed full support for the establishment 

of a commercial leasing program. 

Despite the adequacy and sufficiency of the previous Record of Decision and supporting 

documentation prepared under the provisions of the National Environmental Policy Act, the 

BLM has reversed the sotmd decisions it made in lhe2008 ROD. The decision to significantly 

reduce lands available for leasing appears to be predicated on thc terms of a Settlement 

Agreement ("Agreemenl")drafted in response to litigation° brought by parties antagonistic to the 

development of adequate and sufficient domestic sources of energy. The BLM declares that this 

revisit of its previous decision is based on the need to take a "fresh look" at the land allocations 

made in the 2008 NEPA analysis in light of ' 'new information which has cmerged since the 2008 

OSTS PElS was prepared.'''' The Settlement Agreement states that BLM must publish a Notice of 

Intent to consider amending each of the land use planning decisions made by the 2008 OSTS 

ROD, including alternatives that met the plaintiffs goals. These goals, in general, require that 

BLM have the option to reject a commercial lease based upon "environmental or other resource 

considerations," and have the option to decline to offer a commercial lease unless it can be 

shown that "operations can occur without unacceptable environmental risk."; 

Nowhere in the terms of the Settlement Agreement is there a requirement thllt the BLM 

select an alternative that furthers the goals of the plaintiffs. The BLM has misconstrued the intellt 

of the Agreement and abrogated its decision- making responsibilities in favor of an ahernative 

that it was only required to consider, not select. 

In furtherance of the Settlement Agreement, the BLM proposes to eliminate the current 

provisions of the commereialleasing program in favor of a Research and Development pro/,'Tam, 

reduce the amount of acreage available for leasing, and, shortly after the current period to 

comment on the DPEIS is closed, offer another rulcmaking whicll 'I\'ill propose to "remove thc 

royalty rate for oil shale production."6 The cleven day period between the closing o[(he 

comment period for the DPEIS and the potential publication of royalty rate provisions affecting 

oil shale and tar sands docs not allow cooperating agencies the chance to include royalty rate and 

J Colorado El1vil'Ol1men/al Coali/ioll, ct. al. 1'. Solo:ar, Civil Action No. 09-cv-00091·JLK, Colorado. 

, See Executive Summary page J. I, 1-4 

, Ddcndanls' and PlaintiffS' Joint Motion to Administmtively Close the Case, Colo EI1",. Coalilion 1'. SalaJar, page 

3. 

, Id. 

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235 

cummcrcialleasing aspects into their comments, thereby impermissibly segmenting the propo~cd 

ruJemaking as envisioned by Congress. For this rcason, the state requested an extension of the 

comment period. and advises the BLM that it expects the comments upon any propo~ed royalty 

rate adjustment be incorporated into the analysis of the issues within the DPEIS. 

SummaI')' ofthe DPEIS Review 

Thc state has reviewed the Draft Programmatic Environmentallmpact Statement 

accompallying BLM's CllTfent proposal. The statelinds that the information contained within the 

DPEIS is procedurally deficient and cannot support the proposed Resource Plan Amendments 

Specijically, lhe state finds thaI thc BLM has not hcen diligent in locating and considering 

information generated since tbe 2008 Record of Decision. This is unacceptable, particularly 

given the case with which this infOlTIlation may be obtaincd. The State of Utah finds that the 

DPEIS is incomplete, biased and does not meet the required "hard look" purpose of the National 

Environmental Policy Act. Any final EIS based upon the provi~ions contained in this Draft 

cannot support a decision by the BLM which would alter the prOl'isions in the 2008 ROD 

concerning the availability of lands for oil shale and tar sands leasing. Decisions based on 

analyses in the DPEIS will be arbitrary and eapriciolls as a matter of law. and will nol be 

consistent with state law, policy or procedures if the Preferred Alternative, as identified in the 

DPEIS, is chosen as the final decision. 

As a general point of discussion, documcnts currently prepared under the provisions of 

the National Environmental Policy Act have evolved in reccnt years into a format which is 

staggering in its ability to obfuscate inforn1ation. These documents are so convoluted that the 

reader is unable to discern the validity and adequacy of the NEPA analysis on which the agency 

bases its conclusions, especially in tile short time frame provided. Nonetheless, the state has 

been able to discern the following salient facts and identify a singular bias by BLM against 

illfonnation supporting the viability of the oil shale and tar sands industries, and local and state 

economies, instead favoring a particularly antagonistic position towards oil shale and tar sands 

development. 

Focus of the Current Proposal 

The Executive Summary for the DPEIS states BLM has decided to take a "fresh look" at 

the land allocations made in the 2008 review based upon the Settlcment Agreement and upon 

"new illfolmation which has emerged since the 2008 OSTS PETS was prepared." (ES-l) BLM 

furthcr refines this fresh look to include a reconsideration of the 2008 allocations and detemline 

whether it is "nppropriate for approximately 2,000,000 acres to remain available for potential 

development of oil shale," with an equivalent decision for tar sands.7 The BLM statcs that the 

reason for this reconsideration is specifically 1) tbe need to review new inventories for lands 

having wilderness characteristics, 2) the March 2010 decision of the Fish and Wildlife Service 

concerning sagc grouse, and 3) the completion of studies related to Areas of Critical 

Envirollmental Concern (ACEes). 

, E~cclltivc Summary, p. ES-l, 

~ 

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236 

In a related action required under the Settlement Agreement. the BLM will propose 

amendments to the oil shale final rule to remove the royalty rate codified in BLM regulation (43 

CFR 3903.52) and perhaps propose alternative adjustments to the royalty rate. TIlesc proposed 

royalty rate adjustments are not scheduled to be made public until mid-May 20 I 2. after the 

comment period for the DPEIS has concluded. 

As discussed furthcr below. the state finds that there is no new infornlation concerning 

lands with wilderness charactcristics in Utah beynnd that considered for the 2008 Oil Shale EIS 

or the 2008 Resource Management Plans. Management for Sage grouse and its hahitat is bcing 

addressed through a massive effort by thc affected states, the BLM, the Forest Service. and the 

U.S. Fish and Wildlife Service, with these efforts detcrminingthe needs of the species and the 

means to balance specics protections with provisions for human needs. Any proposed discussion 

of sagc grouse needs in the current DPEIS is not ripe for analysis, and any proposed restrictions 

due to sage grouse are premature. Any decision to amend currently operative RMPs. based on an 

issue currently undergoing such a massivc review. would constitute an arbitrary and capricious 

decision. 

The slate finds that the BLM has not only based its decision on new information where 

none exists, but also has, to compound this egregious error, inexplicably ignored new 

infonnation which supported the conclusions of the 2008 decision, and failed to analyze 

significant new information that would satisfy NEP A 's required hard look. 

Congressional Mandate 

The Energy Policy Act of2005 (EPACT 2005), Section 369, is the driving force behind 

the BLM 's original Oil Shale and Tar Sands (OSTS) Programmatic Environmental Impact 

Statement and the resource allocation decisions it supported. Section 369 of EPACT 2005 

specifically states "notla\er than 18 months aftcr the date of enactment of this Act ... the 

Secretary (of Interior) shall complete a programmatic environmental impact statement for a 

commercial leasing program for oil shale and tar sands resources on public lands, with emphasis 

on the most geologically prospective lands within cach orthe States of Colorado, Utah, and 

Wyoming." 

BLM advanced the purposes of E1' ACT 2005 through its conclusions in the 2008 OSTS 

Record of Decision and the accompanying decisions within 2008 Records of Decision for the 

Vernal, Price and Richfield Field Offices, along with adoption of the oil shale leasing regulations 

codified at 43 CFR Part 3900. These decisions successfully laid out the availability ofland 

containing the rcsources and the framework of the regulatory structure for acquiring leases on 

BLM land for the development of thcse resources. TIle state believes that BLM did an adequate 

and thorough job in reaching the decision contained in the 2008 ROD. The state also applauds 

the agency's efforts in 2008 to conform with state and local laws as well as engage in significant 

cooperative exchanges with countless agencies and stakeholders. 

The current proposal. and the supporting documentation found in tbe J)PE[S, takes a 

huge step in the wrong direction. Congress did not ask BLM (0 determine if commercial leasing 

was appropriiltt: or not, or to wait on a commercial leasing process in Javor of some other 

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237 

pmposal. As noted on page 1-3. EPACT 2005 requires the BLM to complete a programmatic 

EIS, establish a leasing program, consult with the Governors, conduct lease sales and consider 

land exchanges. The cun-ent proposal docs not meet those requirements and directly ignores 

both the mandate and timetinc given to it by Congress under Section 369 ofEPACT 2005. 

In addition, thc Preferred Alternative will push commercial leasing farther into the future 

by requiring more unnecessary planning and research and development before commercial 

leasing can be established. Therefore. tbe I'l'efelTcd Alternative is at direct odds with and 

contravenes the directions given by Congress in the EPACT 2005 to establish an oil shale and tar 

sands commereiallcasing program. 

J'rcccdcntial Value oCthe Settlement Agreement 

BLM has clearly stated that this entire effort is the result of the settlement of litigation 

brought by various enviromnental groups. Litigation, by its very nature, excludes many 

stakeholders interested in the issue litigated. Because full public involvement is required by 

NEPA and other laws, the Settlement Agreement requires only that the BLM propose various 

adjustments to the existing regulatory and planning provisions. The provisions ofNEI' A require 

that other altematives be considered as welL including the option of doing nothing, which in this 

case would keep the 2008 land allocation decision intact. 

The Settlement Ab,TJ'eement itself is not determinative of the final decisions madc in 

response to the current DPEIS. This means that the No Action Alternative is as viable as thc 

alternatives identified in the Agreement. Yet the Agreement, which was made without the 

involvement of many of the relevant stakeholders, including the state, is apparently being used to 

drive a hasty decision. The BLM informed the state and other stakeholders that the calendar is 

tight, and there is no room for additional analysis and review. This rush to complete the DPEIS 

by an artificial deadline is arbitrary in light of the va~t amount of information the BLM must 

analyze to adequately meet the requirements ofNEPA. 

Request (iftlle Stale 

As shown below, this rush to complete has produced numerous major and minor en-Drs 

whicb combine to produce a flawed product. The state urgently requests the BLM: 

• slow down the analysis; 

• carefully analyze the infornlation offered below concerning the maturity of the oil shale 

and oil sands industry in Utah; 

• recognize the clcar delineation of jurisdiction between the states and the BLM; 

• review the impacts to tlle social and ceonomic structure of the state and local 

goycrnmcnts; 

• examine 1he needs of the industry within larger venture capital markets; and 

produce a complete analysis ofimpaets. 

If necessary, the state requests the BLM and its attorneys petition thc couti for additional 

time, based upon the reality of completing the tasks and further analysis outlined below. 

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238 

Consultation with the Governors 

The provisions ofEPACT 2005 require that the BLM consult with the Governors of the 

states involved in the creation of commercial leasing program. Specifically, Section 369 requires 

thcBLM to 

Consult with the Governors of States with significant oil shalc and tar sands resources on 

public lands, representatives oflocal governments in such states ... to determine the level 

of support and intcrest in the Statcs in the development of tar sands and oil shale 

resources. 

During the preparation of the 2008 Record of Decision, the BLM met on several 

occasi()ns "'rith the representatives ()f the Governors of the three states involved, and as a result 

were advised of the necessary "level of interest." Utah advised the BLM that the level of intercst 

in Utah was high, and that if necessary , the BLM sh()uld pmeeed with a eommercialleasing 

pmgram in Utah even if the other states were not interested. In stark contrast, no such meetings 

have taken plaee with the G()vernor ()CUtah or his representatives during the Clmcnt PElS efT()rt. 

Request oftlte Stale: 

The State of Utah urgently requests meetings with the 8LM which meet the letter and the 

spirit ofthe requirement ()fEI'ACT 2005 to consult with the G()vern()rs, and local govcrnment, 

t() determine the level of support for a commercial pm gram for the leasing of oil shale and tar 

sands. Only then will the BLM be able I() fully analyze the s()cial and economic impacts t() the 

state as well as work with the state on decisions affecting a critical cnmp()nent of the state's 

ec()nomy. These meetings must include thorough discussi()n of all information and issues 

pertaining to a c()mmercialleasing program, including royalty rates, the structure ()f the leasing 

program, and the availability oflands for leasing. 

State Authority 

The DPEIS reflects a lack of respect f()r state authority and capabilities. The BLM 

repeatedly asserts that it wishes to hold off ()n implementing a c()mmercialleasing program 

until m()re infom1ation is available on the impacts of ()il shale and tar sands ()perations.". ELM 

explicitly asserts on many occasions in the DrEIS that oil shale extraction processes are 

unknown and that it must delay all()cations oflands for leasing pending further study In 

contrast, the state asserts that oil shale processes are fundamentally composed of discrete 

extractive ()perations that have existed for decades, all of which are covered by state auth()rity 

and regulatnry programs. F()r example, the BLM states that it requires more informati()n on the 

impacts on watcr quantity and qua !iti from ()il shale and tar sands ()pcrati()ns. Yet inf()nnation 

c()ncerning a permitted c()mmercial operation pertaining to water quantity and quality are readily 

available on the Division ()fOil, Gas and Mining's website. The BLM, in co()peration with its 

statc and Jocall'cgulatory partners, can readily engage in the discussion of impacts to the natural, 

sucial and eC()llmnic environments frnm these well-understo()d prncesses. 

'ES.7, found on ES-9. 

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239 

The extraction of kerogen from oil shale. as proposed in Utah, i, nothing more than a 

mining operation followed by a retort operation. Mining operations have existed in Utah for 

over a hundred years and the state has implemented the necessary regulatory controls to mille in 

an environmentally sensitive manncr, using the latest in technology and management practices. 

Rctorts have been used since ancient days to reduce orc and produce useful products. Oil shale 

and tar sand operations in\'olve well-defined, basic extraction, processing, and upgrading 

techniques that have been in use in Australia, Brazil, Canada, China. Estonia. Ireland 

(commercially in Canada and Estonia), and tested for over 50 years in the U.S. Oil shale and tar 

sand dcvelopment activities havc cxisted on Utah State lands [or many years with adequate 

protection of thc environment under state regulatory programs sanctioned by the Office of 

Surface Mining and the Environmental Protection Agency. 

Water is owned by the slale in trust for its citizcns and is subject to the state water 

appropriation system managed by the Utah State Water Engineer. The federal government must 

particifate in the state's allocation system should it desire to quantify any water rights it may 

claim. Water rights appropriations arc for specific diversion or use proposals. A general water 

right for general use by the public lands is not allowable under state law. As discussed fUlther 

below, the state believes and asserts that water is available for oil shale and oil sands 

development, both through existing water rights and through the gcneral market system. The 

state's allocation system examines issues related to availability, prioritization, intclferencc with 

other rights, and related factors. BLM's decision to defer analysis until it obtains further ~ 

information on water availability imposes BLM vague desires onto the decision-making process 

of the state. The state will make decisions regarding the availability of water. not the BLM. The 

state will, consistent with the authority of the state water engineer, process applications to 

approve or transfer water rights for oil shale or any other use. 

The same is true for air quality and water quality. The state has primacy for enforcement 

ofthe Clean Air and Clean Water Acts within the state and works closely with the EPA to insure 

the protection of these resourccs. The Utah Department of Environmental Quality, along with 

federal, state, and industry partners is currently studying issues related to air quality in areas 

containing the most geologically prospective oil shale resources, and will work 10 jointly find 

solutions to air quality issues in these regions .. All inventory of emission sources is underway in 

conjunction with studies of the factors surrounding the formation of ozone during the winter 

months in the Uinlah Basin. Protection of water quality from underground or surface mining 

operations is well within the regulatory authority and expertise of the stale. Although issues 

related to the particular soil chemistry and topof,lTapily must he addressed, the state is perfectly 

capable of the project specific analysis and decision making necessary to address any 

environmental concerns. See the Addendum below for further infonnation concerning the 

permitting process. 

Reqllest of tile State for Further Analysis; 

Surface and underground mining as well as relorting generates no major unknowns for 

ELM beyond lbose presented by other mining and relining operations. The Statc ofUtab 

strongly rcquests that the BLM make use ofthc information readily available to it from its 

I) 43 U .S.C .Section 666, 

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240 

regulatory partners and conduct the required environmental analysis of the impacts ofwcllknown processes rather than continue io insist that the production of a refinable liquid product 

from oil shale is shrouded in mystery. The BLM must defer to the expertise and authority orthe 

state in these mailers, use available inrorn1ation about standard mining and retort processes for 

its environmental analyses, and stop insisting that it cannot make resource allocations at this lime 

based on upon vague, ill-defined assertions that more information is necessary. 

Lands with Wilderness Characteristics 

BLM conducted inventories of lands for the prescnce of wilderness characteristics prior 

to the Record of Decisions made for the 2008 oil shale allocation decisions and all other 

management issues covered in the final 2008 RMPs. No inventories for wilderness 

chamcteristics have been conducted since that time. As part of the 2008 RMP decision process, 

the state commented on management prescriptions for the lands identified, in whatever manner, 

as possessing the characteristics of wilderness. At the time, the state informed BLM as follows: 

The State of Utah has reviewed BLM's inventory of and proposed management for lands 

identified as possessing wilderness characteristics. The state does not believe that BLM has the 

authority to create a category of management based solely on the characteristics of wilderness. 

The characteristics of wilderness, or1heir constituent elements, were first recognized by the 

Wilderness Act of 1964 and passed to the BLM within the provisions of Section 603 of the 

Federal Land Policy and Management Act of 1976. The authority within Section 603 has now 

expired by its own terms. The state recognizes that recent court decisions have affirmed BLM's 

authority to inventory for wilderness characteristics, and have required the BLM to consider new 

information about these characteristics in its documents prepared under the National 

Environmental Policy Act. These decisions do not, however, consider or affect the BLM's 

statutory authority for management policies on the BLM lands. The slate cautions BLM against 

an overly broad reading of these decisions. Management authority must be derived solely from 

the specific provisions of the Federal Land Policy and Management Act, (e.g. Areas o[Criticai 

Environmental Concern) or other specific federal legislation, and it is incumbent upon the BLM 

to carefully define its detailed legal rationale and rcasoning for its proposed management 

policies, provisions and categories. 

The DPEIS does not contain any such analysis of its authority to manage for wildemess 

characteristics. In addition, the DPEIS does not contain any new information on inventories for 

lands contained within inventories for wilderness characteristics. All inventories in the areas of 

eoncern in the DPEIS were completed prior to 2008. Because the HI,j\1 presents no new 

infonnation regarding new inventories that would indicate the reasons for an increase, decrcasc 

or adjustment. related lo the management oflands with wilderness characteristics, the BLM must 

carry forward the decisions made in the 2008 oil shale EIS and the 2008 RMPs for lands 

managed for wildemess characteristics. A decision containing new management prescriptions 

for lands with wilderness characteristics would be contrary to the decisions in the 2008 Records 

of Decision and would therefore be arbitrary and capricious, as it would not be supported by any 

signitic,IDt new information. 

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241 

Since 2008. the State of Utah has passed several laws which have bearing on this decision 

regarding the protection oflands with wildemess characteristics. First, Utah Code Section 63.1-

8-103(4) provides that the public lands should not be "segregated into separate geographical 

areas for management that resembles the management of wilde mess, wilderness study areas, 

wildlands" and the like. Instead. state law indicates the need for BLM to simply adhere to the 

normal standard of preventing llI1necessary and undue degradation to the land. 

In addition, Senate BillS3, passed in the 20]2 General Session of the Utah Legislature, 

provides that certain areas of Uintah, Duchesne and Daggett Counties arc designated as an 

Energy Zonc. and managed for the primary purpose of the production of energy. Senate Bill 83 

provides in part, as follows: 

The lands comprising Ihe Uinlah Basin Energy Zonf conlain abundant, world-class 

deposits (!f energy and mineral resources, including oil, natural gas, oil shale, oil sands, 

gilsol7ife, coal. pho,lphatc. gold, uranium, and copper, as 'well as areas wilh high wind 

and solar energy potential; and the highest management priority/or aU lands within the 

Uintah Basin Energy Zone is re,\])OIt,;ble management and development o/existing 

energy {md mineral resources in ordel' to l'/"Ol'ide long-term domestic energy and 

supplies/or Utah and the Uniled States. 

The stale supports a cooperative management approach among/ederal agencies, state, 

and local governments to achieve broadly supporred management plans,!(Jr the jill! 

development a/all energy and mineral resources within the Uintah Basin Energy Zone. 

The ,11ale calls upon the/edem! agencies who admini.l'terlands within the Uintah 

Basin Energy Zone to fidly cooperate and coordinate with (he slate and with Daggett, 

Uintah. and Duchesne Counties to develop, amend. and implement land and resource 

management plans and to implement management decisions that are consistenf with the 

purposes, goals, and palicies described in this section to the maximum extent allowed 

underfederallatr, ... Jand t07 r~frail1/rom any planning decisions and management 

actions that will undermine restricl. or diminish the goals. purposes, and policies/o,. the 

Uintah Basin Energy Zone ... and refrain/rom implementhlg a polic)' that is conlrary to 

the goals (flld purposes (a/the Energy Zone). 

BLM mllst give the provisions of this law full consideration ba.~ed upon respect for the 

authority of the state to provide for the general welfare of the citizens of the state and must 

review and analyze the purpose and effect of the law in the DPEIS, Additionally the law is an 

expression of state planning for lhe resources of the area, and is entitled to consideration as part 

of tile consistency review discussed below. 

Because the BLM does not possess any new information about lands with wilderness 

characteristics from that available in 2008, a change in any type of management for the lauds, 

fi'om that finalized in the 2()08 RMPs and the 2008 Oil Shale EIS, as is proposed by various 

alternatives within the DPEIS, would constitute an improper use of Secretarial Order 3310, 

issued December 23,2010, Secretarial Order 33 J 0 was defunded by Congressional action, 

which required that no funds may be used to implement or cnforcc the Order. In this case, the 

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242 

BLM is proposing to restrict the availability of these lands for the commercial leasing of oil shale 

and tar sands based solely upon lhe existing, older inventory for the presence of wilderness 

characteristics. This clear expression of intent to manage for wilderness is the functional 

equivalent of the creation of wild lands as proposed within the Secretarial Order. Because the 

Congressional action dearly stated that the BLM may not implement or enforce Secretarial 

Order 3310. the DPEIS mllst be rewritten to reflect this fact. 

Request oftlte State far Further Analysis: 

The State of Utah requests the BLM revisit its analysis of the proposed management 

prescriptiolls conccming the existing inventories oflands with wilderness characteristics, and 

• Recognize that no ncw information is available since the 2008 Records of Decision: 

• Recognize the soundnes~ of the decisions made in thc 2008 for thc Resource 

Management Plans Records of Decision and the Oil Shale Record of Decision; 

• Adopt the intent of state law and policy upon the subject of wilderness and wildernesslike management; 

• Adopt the intent of state law and policy conceming the Energy Zone; and 

• Adhere to the Congressional moratorium requiring BLM not enforce in any manner 

Secretarial Order 3310. 

The state specifically requests that the BLM adhere to the decisions made in the 2008 

Records of Decision concerning lands with wilderness characteristics. and support BLM's 

previous sound decisions by adopting the currently proposed No-action altcl11ative. 

Sage Grouse 

Eleven of the westem states, including Utah, are cngagcd in a cooperative effort to 

review the status of the Greater Sage grouse within its existing range, and to determine the 

elements of plans, conditions or stipulations, along with other mechanisms, to preserve the sage 

/,'Touse while allowing economic developmcnt and growth to occur. The state of Utah has been 

sponsoring programs to protect the sage grouse for years, but the latest coordinated effort is 

occasioned by the March 20 I 0 decision of the U.S. Fish and Wildlife Service concerning the 

potential listing of the sage grouse under the provisions of lhe Endangered Species Act. 111e 

Fish and Wildlife Service determined that a listing was warranted but precluded by higher 

priorities. TIlis decision is now set for review by the end nf2015. 

As a result of the listing decision, BLM and the Forest Service have initiated, through a 

Notice oflntent to Prepare an Environmental Impact Statement, a massive effort to detern1ine if 

amendments to variolls Resource Management Plans (RLM) and Land Use Plans (forest 

Service) are required in order to address the issues raised in the rws decision. This effort is 

scheduled to be completed in 2014. 

The State of Utah provided comments to the BLM planning process, and stated as 

follows: 

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243 

The Nolice (If Intent Slilies very !.pecifical~y Ihul the reusonfor the enlire I?;/forl is 10 

respond 10 Ihe decision by the U.S Fish and Wildlife Service Ihalthe listing oflhe 

Greater Sage Grouse is "warrante£l, bUi precluded" hy higher listing priorities, and Ihal 

the FH'S asserts thai ELM and Forest Service lands are lhe key to sage K"ollse survival. 

To the contrar)', fhe state firmly he/ieFes that sage-grouse populations in Utah are in 

good condition, are receiving significanlmanagemenl attention and, therefore, do nol 

warrant listing under the Endangered Species Act, The state will challenge a proposed 

listing whenever and wherever necessary, The siate requests that the BLM and Forest 

Service receive. review andfilily analyze all evidence offered by the stale and others in 

supporl 11f its position that a listing is not warranted as pari (!f'the anafcvsis o/lhe impacts 

oflhe EIS provisions Imd alternatives, The stare specifically requests that the BLM/ully 

anal,vze and explainlhe ahiliry o/the BLM and Foresl Service 10 protecr the ~7JCcies 

without the cooperation (!/other landowners, as discussed/urlher helm,!', 

In/act, the state strongly asserts Ihm a decision /0 list sage-grouse range-wide, but 

e,\jieciaZZv in Utah, would be a major setback 10 current conservation management 

aclivities, Sage Krouse in Utah, while challenf{ed, are biologically staiJle. Utah 

conservation efforts are being conducted at a scale that wililikel,l' he hard to match 

anywhere else across the species' range. Filially, organizational alldfimding 

mechanisms unique to Ulah have filstered cooperatio/1 and /ocusjo,. continued and longterm conservation in/O (he/ulure, Thl' slate is concerned thai unnecessary restrictions 

imposed by the ELM and Forest Service will upset the successful e,Uc)r/s underway in 

Utah, to the detriment of the species. 

To further the slate's commi/mentto conservation (?f the sage grouse and economic 

health of the sfate, the Governor recently convened a Sage Grouse Working Group, This 

If'orking Group is comprised of representatives of the Governar's OffiCE, ELl,,!, Forest 

Service, Fish and Wildltfe Service, Narional Resource Conservation Service, Utah '.I' 

Qflice of Energy Development, School and Institutional Trust Lands Administration, 

Deparlmenlof Agriculture and Food, Division ojH'ildl!fi,! Resources, and representatives 

of the oil and gas industry, transmission line industry. oil shale induslry, ranching 

community, county commissioners. The Nature Conservancy, and Utah State University, 

The Governor '.I' charge directed the group to provide recommendationsjor the protection 

I!fsage K"ollse, while continuing to provMeJor a healthy economy and protecting private 

property rights, The Workinf{ Group was recently briefed on issues related to the lifi: 

cycle {if/he sage l(1'ome and previous and ongoing efforts to proteer the species, and 

expects to provide recommendations within aftw months. These recommendations are 

expected [0 lead to a state sage gmuse plan soonthereq(ier, The siaie 'will expect the 

ELM and Forest Service to adhere to the provisions l?fthis pran, both as a mailer Ilf 

respect for state authority. and in compliance with ELM's }nstmctionar Memorandum 

2012-039, which requires the BLM to make use o,fstate data related to wildlifi:, 

The Statc of Utah, in response to thesc faclors, is currently, through the Working Group, 

cngaged in an effort to review habitat needs of the sage !,'Touse and make determinations about 

the relative importance of the habitat against the prcscnce of other human and wildlife needs, 

The state is doing this in addition to weighing other options concerning the need to list the 

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species. This process is expected to result in the designation of areas of greater and lesser 

importance. A similar process in the slate of Wyoming resulted in the designation of areas as 

"core" and "non-core," which is a possible outcome of the Utah process as well. The state 

asswnes the Wyoming results, approved by the FWS, are the origin of the term core within the 

DPEIS. The BLM also recently issued an Instructional Memorandulll concerning management 

of the sage grouse, covering the interim period until the massive planning effort concludes. In it, 

the term priority habitat is employed. along with general habitat which is presumably the source 

ofthose terms within the DPEIS. 

The state is very disappointed. therefore, to sec "core" or "priority"discussed within tbe 

DPEIS for tbe State of Utah, and maps prepared with "core" or "priority" habitat displayed. The 

state, which is the entity with management authority over the sage grouse, has not yct reached a 

conclusion about any habitat designations, and does not expect 10 do so until the Working Group 

process is completed. The legend for Figure 2.3.3-2, lO entitled "Lands Excluded ii'om 

Application for on Shale Leasing Under Altcmative 2 in Utah," clearly shows lands dcfined as 

Core or Priority. The state has not yet made any such determination, and strongly objects to 

BLM making such a determination. The information contained in the DPEIS about corc or 

priority sage grouse habitat in Utah, as evidenced by this map, and any analysis based upon the 

information, is wholly inaccurate, and must be altered to reflect the true situation. 

Request lif the State for Further Analysis: 

Because the data concerning sage grouse habitat is inaccurate, BLM must remove all 

reference to it in the DPElS, and replace it with the habitat types which result Ii'om the efforts of 

the state's decision after the Working Group's work is completed. The BLM and the FWS are 

both represented on the Working Group. and will have every opportunity to influence the final 

product. Proceeding with the current data does not advance a completely and correctly informed 

analysis, but only perpetuates the continued use of erroneous data and misinformed opinion. 

NEP A Requirements - Social and Economic Studies 

BLM has not presented a serious study of the social and economic impacts or the 

proposal as required by the provisions of the National Environmental Policy Act. The DPEIS 

contains discussion about the generic social effects of a boom and bust economic cycle, bUl does 

not contain a countervailing discussion of the social effects oflimited and reasonable economic 

growth. The DPEIS discusses the history of oil shale development twcnty years ago, but 

includes no discllssion conceming cun'ent energy needs, the current pricing structure for oil and 

gas, and the corresponding ability oC oil shale and tar sand operations to continue to contribute a 

larger share of a healthy economy in the eastern part of Utah, and for the state a~ a whole. The 

discussions in the DPEIS generically concerning boom and bust economic cycles, withoUl any 

discussion of reasonable economic gro\\1h altematives demonstrates the agency's bias against 

development of oil shale and tar sands. 

The DPEIS mustlo include a discussion of the entire market process for creation of a 

viable oil shale and tar sands industry, including its role in the regulatory cel1ainty needed to 

If! Sec page >38, DPE1S. 

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245 

attract venture capital. The State of Utah expects tbc BLM to be an active partner in the 

marketing of opportunities to diversify the domestic production of the nation's energy needs, not 

hang its institutional head claiming ignorance of real world market realities. 

BLM needs to revisit the analysis of socioeconomic impacts in the DPEIS and present 

additional analysis of the opportunities to encourage a viable oil shale and tar sands market. 

BLM has the resources and the expertise to evaluate the reasonable effects of simple mining and 

retort operations. ELM should immediately communicate with industry to determine the needs 

for eC!1ainty and about reasonable development opportunities. The state knows that iJ'BLM 

delineates reasonable requirements for resource developmcnt industry will participate. There is 

clear evidence that industry is engaging in oil shale and tar sands development in Utah. Based 

on past experience with oil shale and tar sands development 011 statc and plivate lands in Utah, 

growth will be measured and moderate, which is a viable altemative to the boom and bust 

scenarios presented in thc DPEIS. 

The State of Utah understands the value of a balanced economy, and values the 

contributions of tourism to thc state's economy. However, BLM must not assume that tourism is 

the only possible contributor to a stable economy in the Uintah Basin and elsewhere in Utah. 

BLM must recognize and analyze studies which demonstrate the value of oil and gas to the 

Uintah Basin. and examine the bencfits the oil shale and tar sands industry could bring to 

providing a stable and robust economy in thc area. BLM must examine the contributions of 

tourism, oil and gas, government and other existing industries in the area, then analyze the value 

that a moderate growth oil shale and tar sands industry might add to that by bringing additional 

diversity to the area's economy. 

BLM must also not falsely aSSume that a viable tourism industry is put at risk by oil 

shale production in the llintah Basin. This is not to say that BLM should not discuss tourism 

and outdoor recreation as part of a significant economic evaluation - it should. But BLM must 

also evaluate wages from the tourism industry against those of the energy industry and evaluate 

the prospects for employment, revenue and commlulity stability based on those figures. 

Otlrer Economic Studies - Examples: 

The state contracted with Utah State University and the University ofUlah to complete a 

llumber of economic and social-attitude studies regarding the use of and values attributed to 

public land resources by Utah residents. These studies as~ess: general attitudes of the citizens 

toward the public lands, ot1~lllghway vehicle use on public lands, grazing on public lands, and 

ec.onomic impacts of oil and gas exploration and production. Below are short summaries of a 

number of these studies, which are available on thc state's website. 

A statewide survey of the residents of Utah, the Utah Public Lands Study, was conducted 

in the summer of2007 hy Utah State Univcrsity. One focus or the survey involved assessing 

various ways in which residents engage in economic activities that are linked to public lands and 

resources. Othcr major purposes involved assessing attiludes toward public lands as part of111e 

residents' quality oflife and sense of community, and assessing attitudes and preferences 

regarding public land management. 

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246 

Preliminary results from the Utah Recreational qff-llighway Vehicle Use Study 

conducted by Utah State Univcrsity snow OHV use becoming increasingly popular, but the 

number of trips taken per year declining. Recreational activities that OHV users participate in 

are diverse, including both passive (sightseeing and photography) and active (camping and 

hiking). Rider motivation includes stress relief and nature appreciation, along with achievement, 

stimulation, indepcndence and socialization with others. The study also shows economic 

impacts broken out by direct and total impact to Duchesne, Uintah and Daggett counties as well 

as by regional gross output. employment, household income, and value-addcd income. A 

"Random Utility Modcl" will be used to measure change in the allocation of trips across 

counties, measure cnange in tbe total number of trips taken by Utah OHV users, measure change 

in economic value accruing to OHV users and generate trip-distribution information for use in 

economic impact modeling. Full rcsults ",ill be made availablc upon completion of the study. 

The Utah State University study. Trend Information/or the Vernal RMP: Liveslock 

Industry Issues indicates that the trend in livestock grazing preference and authorized use in the 

Vernal Field Office Planning Area is downward. The permitted AUM level proposed in the 

Draft RMP Prcferred Alternative is a reduction of 8,323 AUMs. a 5.7 percent reduction in 

preference ITom tnc current level. This reflects a reduction of 15,376 AUMs, (10 percent) from 

the level 16 years ago. 

The Bureau of Economic and Business Research at the University of Utah has completed 

an economic impact study of the oil and gas exploration and production industry in the Uinta 

Basin titled The Structure and Economic Impact o.fUtah's Oil and Gas Exploration and 

Production Industry: Phase I- Ihe Uinta Basin. The Phase I study shows that rapidly rising 

energy prices and the corresponding rise in oil and gas activity are causing an economic boom in 

the Uinta Basin. During 2006, the oil and gas exploration and production industry was directly 

responsible for 19.9 percent of employment and 34.8 percent oftotal wages in the Uinta Basin, 

while those figures rose to 49.1 percent of the employment and 60 percent of the wages in the 

Basin when the indirect (multiplier) effects were considered. The industry also has a sizeable 

fiscal impact on local governments in thc Uinta Basin. Property taxes paid on producing oil and 

gas wclls were $ I 8.2 million in 2006 and accounted for 38.7 percent of all property taxes paid in 

the two counties. 

Required Fllrtiler Analysis Requested by ti,e State: 

These studies, and othcr similar work, should be discussed as part of the examination of 

the social and economic structure ofthc area influenced by the upcoming oil shale and tar sands 

mining activities. Only after such consideration can the BLM make reasoned analysis of the 

economic impacts of the required leasing program. BLM must not make decisions which may 

influence the structure and robust nature of local and state economies without an examination or 

the ability and desire of the local economy to face the challenges raised by the proposal. The 

DPEIS focuses almost entirely on the perceived perils of a boom and bust cycle. This is 

pejorative and misleading, and does not rcflect a serious attempt to analyze the potential 

contributions, both positive and negative, from the proposed leasing program. BLM must step 

hack, and redo the social and economic analysis with these factors in mind. Failure to do so 

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247 

violates the provisions ofNEPA requiring analysis of the social and economic impacts of a 

proposal to the same degree as the environmental analysis. 

Support for the Mission of SITLA 

Utall'S School and Institutional Trust Lands Administration (STTLA) is an independent 

~1ate agency responsible by law for management of lands granted to the State of Utah pursuant to 

tnc Utah Enabling Act, (Act of July J 7, 1894, 28 Stat. 109), for the financial support of Utah's 

public schools and other state institutions. TIle United States Suprcme Court has referred to this 

Enabling Act land grant as u "solemn compact" between the United States ,ll1d the State oflJtah 

that obligates the United States 10 take into consideration the purposes of the grant when 

managing federal lands. 

The State of Utah is obligated by both the Utah Enabling Act and the Utah Constitution 

to act as a trustee in managing school trust lands. Among the liduciary duties imposed by this 

trust on SITLA is the duty to manage trust lands in the most prudent and profttable manner 

possible. and not for any purpose inconsistent with the best interest of the trust beneficiaries. 

Revenues from school trust lands ure depositcd in the Permanent School Fund, a permanent 

endowment for public education. Interest and dividends from thc PClmanent School Fund arc 

distributed to individual public schools statewidc annually to supplement critical academic 

needs. 

SITLA manages lands within the boundaries of the BLM Field OfJices under discussion 

in the DPEIS. Most of these state trust lands are comprised of numbered sections 2, 16, 32 and 

36 in each township, representing the fo>Tant of in-place school sections made by the Utah 

Enabling Act; however it also includes lands acquired from the federal government in a land 

exchanges. The significance of the checkerboard pattern ofland ownership is that because most 

trust lands are surrounded by BLM lands, planning decisions made by BLM with respect to 

rights-of-way, withdrawals from mineral leasing, special desibrnations (e.g. ACECs, managcment 

for wilderness characteristics, etc.) and other detem1inations inherently impact the state trust 

lands, making them an island within the sLllTolmding BLM lands. BLM's decisions on how to 

manage its lands directly affect the ability of the State of Utah to manage state trust lands ior the 

purposes for which they were granted by Congress, which was to provide revenue for public 

sehools and other beneficiary institutions. BLM manag~ment is an issue of significant impact {() 

Utah's school trust. For example, lands within the Vernal Field Officc makc tip approximately 

13 percent of Utah's total surface trust land portfolio. 

Conversely, management by SITLA of state tmst lands within BLM areas of special 

designations can directly affect the ability of BLM to achieve management objectives. SITLA is 

not obligated by Jaw, for example, to manage its lands within BLM areas managed for 

wilderness characteristics or ACECs for environmental protection. SlTLA development of 

inholdings consistent with SlTLA's governing mandate may substantially defeat the purpose of 

the special desiglliltion. 

Reqllest of tlIe State fi" Further Study 

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248 

BLM bas an obligation to include in its planning an effective and timely means of 

addressing the impact of federal land actions on in-held state trust lands. BLM must engage in a 

serious study of its need to support the purposes of the grant of'lands to the state for the support 

of the common schools. Specifically, the BLM needs to rework the DPEIS to include effects of 

the lack of a leasing program upon the ahility of the state, througb SITLA, to expect a robust 

leasing program for oil shale and tar sands and thc relatcd expectation of revenue. 

In addition, the DPEIS addresses the requirements of Section 369(n) of the Energy Policy 

Act of2005(EPACT), Puhlic Law 109-58, only in a cursory manner. Section 369(n) provides in 

relevant part: 

(n) LAND EXCHANGES. 

(1) IN GENERAL. To facilitate the recovery of oil shale and tar sands, especially in areas 

where Federal, State, and private lands are intenningled, the Secretary shall consider the 

use ofland exchanges where appropriate and feasible to consolidatc land ownership and 

mineral interests into manageable areas. 

(2) IDENTIFICATION AND PRIORITY OF PUBLIC LANDS. The Secretary shall 

identify public lands containing deposits of oil shale or tar sands within the 

... Uintah ... basin ... , and shall give priority to implementing land exchanges within those 

basins .... . 

At page 1-6, lines 31-34, the PElS states that the decision in the 2008 ROD that "the 

specific decision that the BLM will consider and give priority to the use of land exchanges to 

facilitate commercial oil shale development pursuant [0 Section 369(n) of the Energy Policy Act 

of 2005" will be carried forward through this planning process. This statement should be 

clarified to confinn that, pursuant to the EPACT 369(n) directive, BLM lands that are not made 

available for commercial leasing will nonetheless be available for state exchange, subject to 

other applicable laws applicable to federal-state land exchanges. 

Consistency with State Law, Plans and Policies 

The State of Utah is extremely supportive of the consistency review rcquirement, as 

provided in federal law (43 U.S.C. § 17 I 2(c)(9)) and regulation (43 C.F.R. § 1610.3-2). 

Pursuant to this regulation, RMPs shall be 

consistent wilh officially approved or ado pled resource-related plans, and the policies 

and procedures contained therein. of ... Stale and local gOl'ernmenrs, ... so long as the ... 

[RMPsJ ure eliso consistent with rhe pwposes, policies and programs of Federal laws 

and regulations applicable /0 public land~. 

BLM correctly notes this requirement, but then qualifies the requirement to be that of 

consistency with state and local plans, where possible. 11 The DPEIS also discusses the plans of 

the City of Rille for economic development, and mentions that thc final Record of Dccision 

should consider consistency with [he City's plans. 12 The state certainly believes that BLM 

" Section 1.4.5, Page 1-21. 

" Id. 

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249 

should consider the views of the City of Rifle. but more accurately consider consistency with 

state and local plans. policies and programs as demonstrated to BLM through the Governor's 

consistency review. 

As an explanation for the idea that BLM need only be consistent with state and local 

laws, plans, policies and rrograms, the BLM previously provided an interpretation of the 

consistency requirement. 3 BLM stated that the "RMP .. , l must] be .,. consistent ... to thc 

maximum extent possible by law and [that] inconsistencies between Federal and non-Fedcral 

Government plans bc resolved to thc cxtent practical.,,14 The BLM thereafter defined an 

inconsistcncy as anything that "cannot be resolvcd or reconciled where state and local plans 

conflict with federal law." The state strongl) asserts that this interpretation does not fully 

recognizc nuances orthe consistcncy requirement, cspecially involving discretionary planning 

dccisions or the BLM. 

The state recognizes that federal law requires certain decisions and establishes parameters 

within which those decisions can be made, However. the BLM retains considerable discretion 

v.ithin thesc lcgal sidcboards. Stale and local governments cannot demand that BLM act outside 

these sideboards, but when state and local governments' policies pertain to areas within BLM's 

lawful discretionary decision space, BLM is obligated to make its plans consistent with state und 

local policies to the maximum extent possible, Thus. it is inappropriate to dismiss state 

recommcndations that fall within BLM's legally prescribed discretion simply because BLM 

disagrees with thc balance struck bylhc state. To assume that BLM's discretionary choices 

constitute federal law has the immediate effect of detemlining that state plans, programs and 

policies which strike a different balance yet accomplish the same purpose as the BLM's choice 

are, a priori, in conflict with federal Jaw, Instead, the state asserts tbat if its recommendations 

strike a slightly different balance between competing resource demands and this balance is 

within BLM's lawful discretionary decision space, thc BLM must endeavor 10 make its final 

decision consistent with state and local government policies. 

Request oftlre State: 

The State of Utah provided a consistency review just prior to the 2008 oil shale and tar 

sands Record of Decision. The state indicated the decision was generally consistent with state 

law. policy, plans and proccdw'cs, Within the decision space laid out by the alternatives within 

the DPEIS, the no-action alternative, i.e. the status quo, would remain consistent with state and 

local plans. Other alternatives may not be. Fundamentally, the decision space allowed BLM in 

this matter is limited, EP ACT 2005 requires thc creation of a commcreiallea~ing program for 

oil shale and tar sands within 18 months of enactmcnt. The Statc of Utah supports this, and 

found the effOlts of BLM in 2008 to be consistent with its laws, plans, policics and procpdures, 

The state is not asking thc BLM to stcp outside thc law in retaining the status quo, and BLM has 

not demonstrated any information which would require a decision diri'erent from that made by 

BLM in 2008, Therefore, the BLM can easily accommodate the state's request that the Record 

" See generally the 2008 RM P eiforts, 

14 Vernal RMP EIS. p. 5-17 

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250 

of Decision in the current analysis renect consistency with the state's position. BLM should 

simply adopt the no action allcmative at this time. 

The BLM Relies on Outdated Information on Oil Shale and Tar Sands Resources in Utah 

Although the BLM cites the U.S. Geological Survey reassessment of oil shale resources 

in Colorado, Utah, and Wyoming as one important reason for reevaluating the allocation 

decisions in the 200S PElS, the BLM did not LIse this new information in its analysis of the most 

geologically prospective reSOllrccs. The DPEIS simply carries forward the data used for the 2008 

PElS. The 2012 PElS would greatly benefit from the incorporation of new USGS resource 

assessments !md new oil shale data resource data published by the Utah Geological Survey in 

200S. 

This omission of new data is extremely troubling and calls into question both the validity 

of BLM's allocation decisions and whether the BLM took the requisite hard look for purposes of 

NEPA. Despite its insistence that updated geological assessments were important for improved 

allocation decisions in the 2012 PElS, the BLM instead demonstrates an almost tOlal disregard 

for this new information. For exanlple, the BLM relied on digital data provided by the BLM 

Utah State Office rather than data from USGS or UGS. 1l Oil shale data for the 2S foot thick, 25 

gallon per Ion resource standard used in the 2008 PElS came primarily from older reports 

focusing 011 the southeastern part ofthc Uinta Basin. Newer USGS and UGS studics include 

complete dala sets spanning the entire Uinta Basin. lo 

The DPEIS states thai "(t)he BLM considered this new (USGS) information and has 

determined that while the new data should infonn and update the 2012 PElS effort, particularly 

with respect to information pertaining to the 200S study area, the boundaries defining the inplace assessment do not represent the most geologically prospective areas of the Green River 

Fonnation located in the ... Uinta ... Basin ... (T)he PElS will not employ the USGS boundary to 

define the study area." J7 11lc BLM discusses at somc length why it did not consider the increases 

found for estimated total in-place oil in the Piccance B!L<;in USGS Oil Shale assessmcllt,18 but 

fails to justify why similar assessments for the Uinta and Green River Basins were not 

incorpordted. 

The BLM does not include reference citations in the text, map, or lable identifying the 

geologically most prospcctive arcas in Utah for oil shaJc;19 however, UGS is certain the data 

described comes from preliminary information provided by the agency tor the 200S PElS and 

does not reflect updated information developed by either UGS or the USGS. The DPEIS 

references Tabet (2007) as the source of oil shale and tar sand resource data for oil shale lands in 

" Omft PElS, Chapter I, 1.2, pg. I-10, footnote 4. 

"Vanden Berg, 1008; LlGS Special Study 128; USGS 2010b, Oil Shale Re.<OlIrce., of the Uinta Basin. Utah and 

Colorado, National Oil and Gas Assessment Project, Digital Data Series DDS-69-S·B. 

J7 Draft PElS. Chapler 2. 2.5.1, pg. 2-77. . -

"The flLM quoted the assessment as saying. "much of this previously unassessed resource is of 101\' b'l"adc Dnd 

unlikely to be deveJuped." 1£1. 

J" Ilmfi PElS, Chapter 2.2.3. Pl'. 2-13 to 2·16. 

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251 

Utah.2°These references to iniomlation provided by a UGS senior geologist in 2007 confirms 

that the resource data IIsed for the 2012 DPEIS came from iniomlation provided by the agency 

for the 2008 PElS. This information. as even tbe ELM acknowledges. is out-of-date and been 

replaced by infonnation from more reecnt UGS and USGS resource assessments. 

It is disturbing that the fiLM employed lew people with geological and mini1lg 

engineering backgrounds in the analysis oftbe most geologically prospective areas for the 2012 

DPEIS21 It appears that the BLM chosc to update the resource picture without the assistance of 

suitably trained personneL The only gcologist employed in the current effort evaluated 

paleontological resources, not OS1'S resources. This demonstrates a biased reevaluation by 

BLM of the issues and impacts from OSTS lcasing. It also violates the NEP A requirement that 

insures "environmental inronnalion is available to public officials and citizens before decisions 

are madc and before actions are taken. The infonnation must be of high quality. Accurale 

scientific analysis, expert agency commcnts, and public scrutiny are essential to implementing 

NEPA," (emphasis added) ~2 

The Draft I}EJS Fails to Adequately Analyze Oil Shale Technologies 

Thc DPEIS relies heavily on outdated infom1ation regarding oil shale and tar sands 

development technologies and in doing so, fails to provide the kind of comprehensive 

information required by NEP A for proper decision making. 

CEQ regulations are quite clear about thc standards required under NEP A for EISs. 

According to Sec.1500.1 (b) 

" ... infonnation must be ofhigb quality. Accurate scientific analysis, expert agency 

comments, and public scrutiny are essential to implementing NEPA.'· 

Because an EIS is used to plan actions and make decisions and must be supported by 

evidence that the agcncy has made the necessary environmental analyses,2J it must contain the 

most accurate, up-to-date infomlution available. Based on our extensive discussions with oil 

shale and tar sands industries, the DPEIS is clearly deficient and shows little to no coordination 

with industry. This may be a product of the backgrounds ofthe DPEIS contributors, where there 

is lIO evidence of industry or development background. 

The BLM admits that "some oCthe infonnation on the environmental consequences of oil 

shale development .. .is based on past oil shale developments. For purpose oflhis analysis, in the 

absence of more specific infonnatioll of the oil shale tcchnologies to be implemented in the 

future and the environmcntal consequences of implementing those technologies, information 

derived from other types of devclopment ... was used.,,24 (emphasis added). 

20 /d., 2.3.1, pg. 2-20, footnote 4: Appondix A references. 21 Draft PElS, Chapler g. 

"40 CFR 1500.1. 

2) 40 em § 1502.1. 

" Draft PCIS, Chaplel 4, I'g. 4·1. 

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252 

Consultation and coordination with industry by the BLM is critical to the effective and 

unbiased analysis of the environmental consequences as well the economic benefits of oil shale 

and tar sands development. Based upon the previous decisions orthe BLM, companies have 

invested hundreds of millions of private capital in technology, pennitting, construction, and 

processing of oil shale and tar sands. The willingness of the state and privatc landowners to 

encourage this development in Utah has produced a highly sophisticated, successful, privately 

funded and well-capitalized oil shale and tar-sands industry in the state. 

The BLM qualifies its analysis of oil shale and tar sands technologies by stating that the 

infonnation on these technologies is presented for the purposes of general understanding and 

doesn't define the range of possible teclmologies that might emergc in the coming ycarsY This 

reflects a lack of due diligence on the part of the BLM. There is infonnation available on newer, 

cutting-edge technologies that have moved from the RD&D phase into commercial scale 

development. BLM's reliance on outdated or general descriptions of the technology and its 

environmental impacts when there is ample infonnatiol1 available on the newest developments in 

(he industry contravenes NEPA's implementation requiremcnts for EISs.26 Appendix A 

references six oil shale projects in Utah from the late I 960s-the mid 19805 and cites these 

projects as a "wealth of resource, engineering, and baseline environmental data that will be 

useful in future efforts to develop oil shale resources.n27 While past experience may be useful for 

the analysis of the impacts of oil shale technologies, it is also important to include analysis of 

the innovative technologies currcntly in use that seek to resolve some of the environmental 

concerns raised by these earlier projects. Relying on technological examples in any industry (e.g. 

computing for example) from years back simply does not meet the requirement ofNEP A to 

consider the best infonnation available .. This is true especially in the oil shale and tar sands 

industries present in Utah. 

An examination of Chapters 4 and 5 of the PElS, along with the accompanying 

references, shows that the BLM did little research on newer technologies and did not make 

personal contact or mention any coordination v.>itha single representative from industry. This is 

troubling to the state, since the Preferred Alternative relies on proven success through RD&D 

projects before allocating additiollallease lands. A willingness to communicate and work 

effectively with industry will be critical under any of the alternatives, but especially wlder an 

RD&D driven alternative. 

For example, BLM's analysis of the EcoShaleTM In-Capsule Technology developed by 

Red Leaf Resources was based solely on infonnation derived from Red Leafs website? 

Employing a tean1 of researchers devoted to addressing reasons to exclude lands from 

commercial development while limiting technology and industry research to an effective 'google 

search' demonstrates BLM's fundamental incapability to work with industry. 

" Ibid. 

;U, 40 CFR § 150:2.2 (g) ;'£m1 jronmel1fallmpoct ,r.,'tatements "hal/serve as the n1f!(Ins of a.\'S!~SSil1g the environmental 

impact qfproposed agency actions. rather liIal1jIlst!fyinR decision.\ already made, " 

27 DPEIS Append;', A, pg. A.2J. 

" Ibid., A.5.3.7, pg. A-S7. 

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253 

A second example is the information regarding the development of Ene fit's RD&D lease 

at the White River Mine. lbis DPEIS relies heavily on lindings from a 2007 EA for OSEe's 

proposed developmcnt activities at the same site. The only update BLM provides for the purpose 

ofits analysis is that Enefit will employ its own version of the proposed underb'Tound mining and 

aboveground retort technologies based on its Enefit280 plant under construction in Estonia2 '1 

BLM provided no comparative analysis between the Enefit280 process and the ATP retort 

process the agency evaluated for the purposes of the 2007 EA. It also fails to mention that the 

Enefit280 plant is possible only duc to the commercial success of Ene fit's parent company 

producing energy from oil shale since before] 950. Frmnillg Enefit's successes and tcchnology 

as "Enefit280 plant under conslruetion" further shows BLM's bias and active effOlts to portray 

the industry as nascent while in fact it has been functioning successfully and economically 

outside ofthc country. This demonstrates that the leading reason that oil shale and tar sands have 

not been proven commercially is due to the eITorts and bias ofBLM; not thc lack oftechnoiogy 

as BLM asserts. 

The Utah Division of Oil, Gas and Mining (DOOM) recently granted Red Leaf a permit 

to begin commercial scale oil shale production in the Uintah Basin. Following a successful pilot 

test of its EcoShale technology, the company will commcnce oil shale operations on 1,500 acres 

in the Uintah Basin on state owned school trust lands. Encfit American Oil. a subsidiary of an 

Estonian energy eompany with 50 years of c},:pcriencc commercially producing energy from oil 

shale, acquired the Utah-hased Oil Shale Exploration Company (OSEC) in March of2011. Eesti 

Energia, the parent company of Ene fit, recently announced it will conduct a commcrcial study of 

the application of its Encfit retort process to operations at the White River Mine. 

These companies report that their new technology uses less water and result in fewer 

environmental impacts than the process technologies of Ule 1980s. For example, the EcoShale 

technology utilizes low temperatures for heating and docs not require process water. The 

Encfitl40 retort process, currently in usc in its Estonian facilities and the predecessor to the 

Encfit280, uses no water, rUlls on organic waste, and emits significantly lower C02 emissions?O 

While the BLM acknowledgcs that these two companies are planning commercial production in 

the Uintah Basin in the near future, BLM fails to examine these technologies in any detail or 

evaluate their assertions of reduced environmental impacts. The agency instead relies on 

assumptions based on old data.)] 

This omission is serious. According to regulations for the implementation ofNEPA: 

"{{a drC/ft statement is so inadequQle as to preclude meanil1gfiti analysis, the agency 

shall prepare and circulale a revised drqft (!fthe appropriale por/ion. ,,32 

BLM's failure to include any kind ofrne:mingl'ul consideration ofcurrcnt oil shale and tar 

sand teclmologies and their environmcntal impacts is a serious breach of its responsibility to 

provide thorough, unbiased analyses in its EISs. CEQ regulations arc vcry clear that E1Ss shall 

l'lbid, A,S.3.34. pg. A,75. 

JI' https:llwww.cnergia.ec!enloilloilandgas/enefitI40 

31 thld, Chapter 4, 4.1, pg. 4-2. 

" 40 Cl'R 15U2.9(a). 

- 21 -
254 

serve as the means for assessing the environmental impact of proposed agency actions, rather 

thanjustitying decisions already made. 

The state strongly supports the development of oil shale and tar sands resources and 

recognizes the significant contribution this development will provide Utah's economy. Utah 

contailL~ some of the richest oil shale reserves in the world. Unconventional fuels such a~ oil 

shale and tar sands arc an important component of Governor Gary Herbert's 1 O-year Strategic 

Energy Plan for the state.33 Energy development attracts new jobs. capital invest.ment, and 

economic development opportunities for the state. 

Information gathered by the Utah Office of Energy Development (OED) bears Ihis out. 

Enefit has invested over $100 million dollars to bring its commercially proven teclmology 10 

Ulah,4 and has indicated it will invest. more if given t.he opportunity t.o develop resources on 

public lands. Questerre Energy Corporation recently signed a letter of intent to invest $40 mitlion 

in Red Leafand their EcoShale In-Capsule technology, citing the success ofthe Utah pilot 

project.'; As recent as April 2012, the major French Oil Company Total entered into a $200 

million Joint Venture with RedLcafto further commercial scale operations.J6 1n March of2012, 

the Uintah Transportation Special Service District awarded a $9 million asphalt paving contract 

to surface the first 17 milcs of a road to the Uintah-Grand COWlty linc with Plant Mixed Oil Sand 

Asphalt (PMOSA), II heated blend ofUintah county aggregate and tar sands. Additional paving 

contracts using PMOSA demonstrate a growing commercial demand for tar sands. 

OED also performed an informal survey of companies who had either previously invested 

in oil shale and tar sands development or had indicated a strong interest in doing so in the future. 

Survey results showed that 99.7% ofille investment dollars represented in the survey believed 

that the primary impediment to developing oil shale and tar sands was uncertainty surrounding 

aeccss to BLM lands, ranking overwhelmingly higher than lack of technology, capital, or access 

to state or private lands. With over $190 million of recent « 5 year) in vestment and over 

$930,000,000 of planned (5< year) investment represented in the survey, OED calculates that 

implementing the Preferred Alternative, with its RD&D emphasis and limited acreage available 

for leasing, would prevent approximately $3.26 billion dollars in investment in the state for oil 

shale and tar sands development. 

Availability of Water 

Supposition n. Fact 

The characterization of water resource use in the DPEIS study area lacks the clarity 

ncccssary to satisfy the requirements ofNEPA, which stipulates that "statements shall be 

concise, clcar, and to the point."n Broad statements and the confusing application of water use 

"Energy Initiatives and Imperatives: Utah ,. lO-Year Strut!!,;c Energy Pian. pg. 14. 

,., htlps::Jw\\,w.ellcrei".ec/-ldoc fIOI87mdriconorrn'1111erim rep0l1 201 J Q3 ~ 

""Red Leaf Resources Get Green Light for Oil Shale Project in Utah". April 5, 2012, 

!Hlp;// w'-"\'\\ .ccnterwt.:sl.or~:'rub I icat iOIl.l,ioi J S.h~lJ!!'/7 nt.' \V .'?rF~ 450 

.>6 h!.m;! fwww.mm.:het\\·(Heh.com 'stor)'!rt"'d~ lett f·resolIrcc'" ~inc~t 01a I .. en-USIl-O i !-slml ('-llc~flnnntmce-"Dw!n ,"1 -ventUri.'· for: 

oil-shalc'l'rodllctlon-projcct-201]-(14. J 8. Red Leaf Resources. Inc & Tolal E&P USA Oil Shule. LLC announce n 

joint ventureji,)' oil shale p)'oduclion proje,'/. Markctwatch website aocessed 51lJ20 I 2. 

" 40 CFR § 150~.1. 

- 22-
255 

tenns cloud and complicate the analysis. The state asserts ELM's data lacks the necessary 

confidence to properly evaluute the impact of oil shale and tar sands on water allocations under 

the Upper Colorado River Basin Compact, given the lack of clarity contained ill the agency's 

descriptions of water availability and usage. 

The BLM describes water use in the Colorado River Basin as "highly developed, 

allocated, and regulated.,,38 This scntence is misleading. Although the statement is true for the 

lower-basin states, it misrepresel1ls conditions along the main stem of the Grecn and Colorado 

Rivers in Utah. None ofthe Upper Basin States have developed all oftheir Colorado River 

Compact water, with the possible exception ofNe\\' Mexico. Utah has yet to deplete or consume 

roughly 300,000 acre-fect of its approximately 1.37 million acre-feet of water under the 

Colorado River Compact as cvidenced by 8LM's own table included in the DPEIS:19 

The BLM should make it clesr in its discllssion of water ullocation under the Compact 

that the 6 million acre feet of water available both pbysically and under the provisions of the 

Compact is the quantity of water thc Upper Basin States may deplete or consume. 411 

While the BLM defines the terms '"diversion" and "consumptive use" in the DPEIS, it 

does not define the term "demand," It nppears the BLM uses the tem] synonymously with 

diversion, which is not correct. Since the BLM does not provide a definition of "demand," thc 

usc projections on two of the tables are mislcading41 and conclusions regarding supply and 

demand are faulty.42 

The Utah Water Demand Table (3.4.1-3) shows the projected 2020 and 2050 demand will 

be greater than the 23% allocation of 6 million acre-feet available for the Upper Colorado River 

Basin under the compact.43 Without a definition of supply or demand, this comparison is 

meaningless. The 6 million acre feet of water available for the upper basin states is not a 

limitation on diversion or demand, but rather a limitation on the allowable depletion or 

consumption. Statements regarding water use 44 make it appear that there is no water available to 

develop in the Upper Basin states. Utah has nol fully used its allocation of the Colorado River 

Compact and, as the ELM indicates in its 2030 projections, even if consumptive uses are on the 

high end, Utah will still have a 268,425 acre-foot surplus for consumptive use.45 

The BLM Uses Outdated Assumptions Regarding Water Usage for Oil Shale lind Tar 

Sands Development 

"Draft PEtS Chap1cr 3,3.4, pg. 3·61. 

3') Ibid, Tnble 3.4.1·3, pg. 3.67. 

40 Ibid 3,4, l.l , pg. 3-61. 

"Ibid" TabJes 3.4·J-2 and 3.4.1-3, pp. 3-67-3,72. 

"Ibid. PI'. 3·73, 3-74, 3·75 . 

. " Fuotnote j: Ibid., pg. 3·70. 

"Ibid. pg, 3·73 . 

• 1.' (bid .. Tab!c 3.4.1·2, pg. 3-(,7. 

- 23 
256 

The BLM states that 'although a certain amount ofwaler is calculated to be available 

in ... Utah ... , this does not imply that the water is readily or physically availablc for 

development.',4(, Supporting statements include: 

• Oil shale basins and STSAs are situated in areas much smaller than the Uppl!r Colorado 

• Hydrologic hasin on which water availability was calculated 

• Storage and capture infrastructure may not be available in oil shale basins and STSAs 

• Developers would have to acquire water rights either through transfer or purchase, 

since most of the watcr has been claimed 

• Water use would be regulated under a number of state and federal regulations, as well 

as instream flow requirements to protect endangered fish47 

These broad statements would apply to most water use in the Upper Colorado Basin and 

should not be used as justification for wholesale dismissal of water availability for oil shale and 

tar sands development. 

In its discussion of water use for oil shale development, the BLM bases its assumptions 

on outdated infOlmation. 4R Its assessment assumes 2.6 to 4.0 bbl of water per barrel of oil for 

surface mining with a surface retort and undl!rgrmmd mines with surface retorts and 1 to 3 bbJ of 

water for in situ projects. Current technology utilizes I to 1.5 barrels of water per barrel of oil. 

New teclmologies do not use water for the actual extraction of the oil from the shale but 

primarily for dust control. 

Recently permitted oil shaJe operations in Utah use considerably Jess water than the BLM 

assumes 10r purposes of the PETS. According to Red Leafs permit "most water will be 

consumed for constntction of the process capsules and for dust control. The EcoShale InCapsuJc 

process itsel f i s a net producer of water. ,,4~ Red Lear s petroleum removal process extracts water 

from the oil shale. Rl!moved as water vapor, condensed, recovered and then put to use in mining 

operations, this process water will supply approximately one Ulird of the total project water 

demand. All water captured, recovered, or withdrawn for use on the project is to be used on 

site.;{) The DPEIS assumption of 1-3bbl waterlbbl oil produced for a 30,OOO-50,OOObbl/day in 

situ plant does not take into account the different water requirements for Red Leafs mining 

technology.51 

Enefifs retorting process itself does not require water, although water is needed for 

cooling, upgrading, power production, and dust control. 521n considering the impacts to water 

resources fTom Enefit's White River Mine, the BLM references its 2007 EA for OSEC's 

proposed mining operations at the mine sitc.53 Water requircmcnts for the OSEC operations, 

'" Ibid.,pp. 3-74 and 3-7-'. 

" ibid., pg. 3-75 

" Draft PElS, Chapter 4, 4.5.1.2, pg. 4·33. 

4'! Utah Division of Oil, Gas, and Mining. Red Leaf Large Mining Operation Application, Appendix K. Approved 

March 14,2012. ~, Ihid. 

'! Droft DrEIS, Chapter 4, Table 4.5.2-1, pg. 4-43. 

" https:llwww.enefit.comlen/oillproiectslusa 

q Draft PElS, Appendix A, A.5.3A.3, pg. /\-79. 

- 24-
257 

based on the use of an A 1'1' retort arc likely not comparable to thosc proposed by Eneiit and 

again show~ that BLM has failed to cooperatc and discuss thesc vital issues with industry. The 

state strongly suggests that BLM cooperates with industry and again asseTls that tbe DPElS is 

deficient without tbese efforts. 

Tbe anticipated decline in available Colorado River water is based in part on the 

development of water for oil shale and tar sands development.;· This dccline appears to be based 

on tbe water requirements of older technologies and should be revised accordingly. 

The BLM appears to belicve that water is only available through retiring agriculturc 

water rigbts.~o In Utah currcntly, tbere are approved water rigbt applications totuling well in 

excess of 10,000 acre-fect of water for tbe express purpose of developing oil shale and tar sands. 

The assumptions regarding likely water sources for tar sands development on Asphal1 

Ridge are flawed. 56 Water in the Green River. whicb flows past the southern tip of Asphalt 

Ridge, is available for use. Until recently, there was an approved applicatiol1to divert water from 

the Green River for tars sands development at Asphalt Ridge. The application is held by the 

Uintah Water Conservancy District, which plans tar sands development as a future usc for the 

application. 

The DI'EIS Does Not Fulfill the Requirements of a Commercial Leasing Program as 

Required by the Energy Policy Act of2005 

Section 369 of the Energy Policy Act 0[2005 (EPACT) states "not later than 18 months 

after the date of enactment ofthis Act ... tbe Secretary (of Interim') shall complete a 

programmatic environmental impact statement for a commercial leasing progranl for oil shale 

and tar sands resources on public lands. with emphasis 011 the most geologically prospective 

lands within each of the States of Colorado, Utah, and Wyoming."S7 Like the 2008 PElS before 

it, tbe 2012 Oil Shale Tar Sands PElS seeks to simply idcntify lands "available for application 

for leasing" ratber than completing an analysis tbat would make lands available [or commercial 

leasing. The DPEIS. contrary to the intent of Congress in EP ACT, docs not actually designate 

lands available for commercial leasing or establish the necessary guidelines or regulations for a 

commercial oil shale and tar sands leasing program by the BLM. Tbe Preferred Alternative, in 

fact, takes a step backwards, constraining commercial leasing by: 

• excluding large swaths of geologically prospective lands frolll application for leasing; 

• demanding unneceSS81)" burdensome NEPA analyses that go beyond tbose required for 

conventional oil and gas and surface mining leasing programs; and 

• predicating commen.;iaJ leasing on the sllcccssful application of oil shale technology 

through an RD&D leasing program. 

" Draft PElS, Chapter 4, 4.5.2.2, pg. 4-48. 

"Draft PElS, Chapter 4, pg 4-34-4.35; Chapter 5, 5.5.1.2, pg 5-27 .. 

5(, Draft PEtS, Chapter 5,5.5.2.2.1, pg 5-37. 

5' Public Law 109-58, "Oil Shale, Tar Sands, and Other Slrategic and Unconventional Fuels Act of2005," Section 

369 (eI) 

25 -
258 

Geologically Prospective Lands Excluded From Application For Leasing 

The Preferred Alternative removes geologically prospective lands due to perceived 

conflicts with sage grouse core or priority habitat and lands with wilderness characteristics 

(LWCs). While the Settlement Agreement ("Agreement") 5R between the BLM and 

cnvironmental plaintiffs that resulted in the revision of the 2008 PElS ROD required the BLM to 

analyze the environmental effects of an alternative that excluded these lands from oil shale and 

tar sands leasing, the Agreement did NOT require the BLM to select this alternative. As 

discussed above, BLM's analysis ofthese two factors is replete with errors in fact and policy. In 

fact in light of the requirements of EPACT, the Preferred Alternative nullifies the intent of 

Congress to establish a commercial leasing program. 

Unnecessary, Burdensome NEPA Analyses That Go Beyond Those Required For 

Conventional Oil And Gas And Surface Mining Leasing Programs 

The BLM treats oil shale and tar sands leasing differently than oil and gas leasing and 

coal leasing by requiring additionalleve1s of analysis before commencing commercial leasing. 

The agency states "it anticipates, to thc best of its knowledge, that the surface disturbing 

activities involved with other types of mineral development are comparable to those that may 

result from oil shale and tar sands deveJopment."s9\t also says that it anticipates that oil shale 

development will proceed in a three-step decision-making process similar to that used for federal 

on shore oil and gas. 60 Then it turns around and says that due to the experimental nature of oil 

shale and tar sands technologies, the BLM believes the stages ofNEP A compliance will be 

different from oil and gas. It goes on to explain that H(i)f and when applications to lease are 

received and accepted, the BLM will conduct additional required analyses, including 

consideration of direct, indirect, and cumulativc effects, reasonable alternatives, and possible 

mitigation measures, as well as assessment of level of deVelopment that may be anticipated. 

(Based on this analysis of future \ease applications), the BLM will establish general lease 

stipulations and best management practices" for oil shale and tar sands leasing and 

dcvelopment. 61 

These extra levels of environmental analyses are unnecessary and place an undue burden 

on companies wishing to develop oil shale and tar sands resources. The proposed process is so 

cumhersome and fraught with uncertainty that few companies could afford to secure investment 

and dedicate capital resources to development efforts, especially given the added possibility of 

additional delays due to protests or legal challenges. This lengthy process defeats the intent of 

EPACT to construct a commercial leasing program, a program originally scheduled to be in 

place hy 201 L 

There are adequate federal and state regulations to deal witb the impacts of oil shale and 

tar sands operation that protect water quality, air quality, and other resource values. Oil shale and 

tar sand developments involve well-defined, hasic extraction, processing, and lIpgrading 

lB Civil Action No. 09-cv-00085-JLK, Febmary 15,20 I L 

,. Draft PElS, Chapter 4, pg. 4- L 

MJ. Draft PElS, Executive Summary, pg. ES-5. 

'" Id. 

- 26-
259 

techniques that have been in use in Australia, Brazil, Canada, China. Estonia, and Ireland. Oil 

shale and tar sands enjoy commercial success in Canada and Estonia and havc been produced 

there successfully lar many years. Similar extraction and production technologies have 

undergone RD&D testing in the United States since the 19605. The impacts from developing 

these rCSOl\Tces should not require furiher ELM analysis or research to understand the 

environmental impacts of oil shale and tar sands before leasing can take place. 

Oil shale and tar sand leasing and associated development activities have occurred on 

Utah state lands for many years. Thcse operations have proceeded in a manner that provides 

adequate protection or the envirOlunent under state regulatory programs sanctioned by the Office 

of Surface Mining (OSM) and the Environmental Protection Agency (EPA). The BLM gives no 

reason why similar activities, safeglmrded by the same level of environmental protection. could 

not be carried out on federal lands absent fUlther NEPA or BLM llualysis. The BLM correctly 

states that it would have llmple opporiunities to assess the impacts of OSTS development plans 

with further "NEPA analysis and other approgriate review" "before approval of a lease and 

subsequent plan of development on a lea~e." 2 More RD&D and NEPA analysis is not needed 

now or belare ELM proceeds to a commercial OSTS leasing program. 

Commercial Leasing Predicated On the Successful Application Of Oil Shale Technology 

Through An RD&D Leasing Program 

The BLM declares in the PrefelTed Alternative that the agency "would like to maintain 

focus on RD&D projects.'">J This is not the mandate ofEPACT, which was to proceed to 

commercial leasing. Congress did not ask the BLM to determine whether it wished to have 

commercial leasing or not. As was stated before, a number of companies have initiated pilot 

projects on state and private lllnds in Utah for years. One company, Red Leaf, is confident that its 

technology will lead to oil shale production on a commercial scale. It requested and received a 

permit from the Utah Division of Oil, Gas, and Mining (UDOGM) to proceed with commercial 

operations. The justification for seeking more RD& D data is not valid in the case of oil shale 

companies who might seek federal leases in Utah. 

BLM's RD&D Leasing Program 

The ELM declares in the Preferred Alternative that the agency "would like to maintain 

focus on RD&D projects.',64 The state finds this unacceptahle, as the previous RD&D Leasing 

Progranl was not only excessively burdensome, but not economically attractive and, as a result, 

etlectively killed interest in development of oil shale and oil sands on BLM land. As an example, 

the first round of RD&D leases offered more than 5,000 ncres for commercial development if a 

technology was deemed 'worthy' by BLM. The second rmUld decreased the amollnt 'awarded' to 

RD&D lease applicants to less than 700 acres, as well as increased the administrative oversight 

and bureaucratic burden. Quite simply, 700 acres is not enough area for a successful commercial 

"Draft PElS, Chapter 1 , pg. 1-1. 

(" Draft PElS, Executive Summary, pg. ES-9. 

M Draft PElS, Execmive Summary. pg. ES-9. 

- 27-
260 

project, as evidenced by the examples throughout these comment In addition, BLM placed 

approximately 50% of Enefit's preferential lease area as 'off~limils' to development despite 

having identified this as an area which should be awarded to the RO&D lease holder. 

This is a clear exrunple of the disregard for the realities faced by industry and shows that 

BLM is not truly interested in understanding thc requirements of a successful oil shale industry. 

A simple coordination with industry during the DPEIS process would have borne this out, but 

ELM showed no cffort in this regard. The result is massive regulatory uncertainty that shadows 

the industry and prevents sllccessful economic development. It is further evidence that the rea'ion 

that there is less commercial success in the United Staks is not due to lack of technology, as 

asserted in the DPEIS; instead it is due to the regulatory uncertainty created by efforts like this 

DPEIS. 

BLM's Deal With Plaintiffs In The Settlement Agreement Is At Variance With The 

Requirements Of EP ACT 

The BLM in many ways abrogated its responsibilities under EPACT when it sif,rned the 

Settlement Agreement. The Agreement prohibited the BLM from issuing a call for expression of 

leasing interest for oil shale or offer lands for competitive tar sands leasing or expressions of 

interest in tar sands leasing prior to January 15,2013,65 wen after the December 2012 deadline 

for issuance of an ROD. This defeated the stated purpose behind the original 2008 PElS for 

establishing a commercial leasing program. The Agreement effectively precluded consideration 

of areas of interest to industry lor the purposes of the 2012 PElS while at the same time giving 

disproportionate weight to "nominations" of areas precluded from oil shale and tar sands leasing 

by environmental interests. This turns the intent of EPACT on its head. 

The labyrinthine process created in this DPEIS makes it nearly impossible for companies 

to develop oil shale resources on public lands. How can interested parties make applications for 

commercial leasing of oil shale in the absence ofa eommercialleasing program? IfBLM delays 

further oil shale leasing analyses until companies nominate lands for lensing and BLM has no 

mechanism to allow companies to nominate lands lor leasing, it is difficult to sec how there can 

be commereial level oil shale leasing. 

This is troubling for a number of reasons. NEPA requires agencies to assess the direct 

and indirect effects of a proposed action.66 It also requires analysis ofthc cumulative impacts of 

a proposed action. 67 The BLM proposes to complete the analyses for areas nominated for 

commercial OSTS leasing after the ROD. Since this information is critical to an informed 

decisioll on the allocation oflands available for leasing and should be considered in tbc OPElS, 

the fiLM effectively signed away its statutory responsibility to properly analyze a major federal 

action that required an EIS under NEP A when it entered into the Settlement Agreement. 6R 

"' Civil Action No. 09-cv-00085-JLK, 12, February 15, 2011. 

1,640 CFR ! 508.8. 

" 40 CFR 1508.7 

'" Sec 40 eFR 15()8.1S (b) (3) as i( applies to ndoption ora program (0 implemen1 3 specific statutory program, 

spccilica\ly EPACT. 

- 28 -
261 

In contrast the BLM incorporates information related to lands with wilderness 

characteristics inventoried over five years ago. It proposes to include priority areas for sage 

grouse in its lands lor exclusion irom leasing with no suppol1ing evidence for the selection of 

these core areas. Yet it fails to consider current evidence of interest il1lease areas; in facl, it 

prevents the consideration of this interest. The level of interest in oil shale and tar sands lease 

areas has a direct and indirect effect on oil shale development. Denial of consideration of 

industry interest has cumulative impacts both on the development oil shale and tar sands 

technologies as well as the implemcntation of a commercial oil shale tar sands leasing program. 

The Agreement did not require the BLM to predicate its leasing program on nominations 

o[Jands for leasing, nor did it prcvcnt the DLM [rom establishing a commercial leasing program 

subsequent to the January 2013 date. Its selection afthe Preferred Alternative indicates that the 

BLM did not seriously consider other options. 

By entering into an Agreement that effectively foreclosed the opportunity for industry to 

express an interest in prospective areas or nominate appropriate areas for leasing prior to a ROD 

on the FPEIS and creating a situation in which the agency claimed it could not even consider 

such areas for the pUTJloses of analysis in the DPEIS, the BLM : 

• Violates the express provisions of EP ACT to establish a commercial leasing program 

for oil shale and tar sands; and 

• Violates NEPA by segmenting issues to a degree that it is impossible for the agency to 

take the requisite hard look at thc environmental impacts of a commercial leasing 

program. 

Segmentation oflssucs Violates NEP A and Contravenes Intent uf EP ACT 

The DLM cannot properly analyze the impacts from oil shale and tar sands leasing 

because the agency has failed to: 

• consider expressions ofinterest in oil shale and tar sands areas 

• establish royalties, fees, rentals, bonus, and other payments for leases 

• consider the support and interest in Utah for the development of oil shale and tar sands 

resources 

• establish a program to facilitate land exchanges to consolidate land ovmership and 

mineral interests into manageable arcas. 6Q 

These actions arc not only required by EP ACT, they arc neccssary clements of a 

commercial leasing program. The 2008 PElS provided the environmental analysis required by 

[PACT [or a commercial leasing program, with the assumption that within a carefully prescribed 

time period the other critical components oflhe program would be in place. Four years later, 

these critical pieces remain in a state of flux. 

69 Public Law 109-58, "Oil Shale, Tar Sands, and Other Strategic and Unconventional Fuels Act of200S: Secti()n 

369 (e). (n), (0). 

- 29-
262 

Consider expressions (!linleres{ in oil shale and tar sands areas 

This was discussed at length earlier. 

Establish royalties, fees, rentals, bonus, and other payments/or lea.~es 

A recent oil shale ru1emaking agreement70 allows the BLM to change royalty rates for oil 

shale and tar sands leases, with the notice of proposed rulemaking (NPR) due out after tne 

DPEIS comment period closes. The BLM states that "determining commercial royalty rates,,71 is 

outside the scope of the congressional requirements of EP ACT for the 13LM's programmatic 

analysis for a commercial OSTS leasing program. By removing and replacing the cun'cnt royalty 

rate and creating even h'Teater uncertainty for industry, the BLM, as it did with the Settlement 

Agreement chose to further erode the formation ofa commercial oil shale and gas leasing 

program, 

Consider the support and inferest ill Wah/or fhe development of oil shale and tar sands 

resources 

The BLM acknowledges that Slate interest in leasing is relevant, stating ,'it has been 

suggested by one of (he cooperating agencies, and seconded by others, that BLM develop an 

alternative that would allow for larger scale leasing and development in Utah and Wyoming 

where the majority of the cooperators support a program lhat makes more federal oil shale and 

tar sands resources available for application for future leasing, while limiting development in 

Colorado, where the majority of cooperators favor a more cautious approach to leasing and 

development.,,72 Govemor Herbert has made it quite clear that Utah favors this approach.73 

However, The BLM dramatically reduced the acreage oflands allocated as available lor leasing 

in Utah in the Preferred Alternative in apparent conflict with the high interest demonstrated by 

the state for increasing oil shale and tar sands development. 

Establish a program 10 jClcilitate land exchanges /0 consolida/e land ownership alld mineral 

interests inro manageable areas 

The BLM admits it ha~ no plans in place for land exchanges. The DPEIS contains no 

discussion ofine ways BLM might facilitate such exchanges, either through requests for 

nominations flll'lands to exchange, determination of which federal lands are available for 

exchange, extra staff and budgets to identify and expedite proposed exchange opportunities, or 

streamlined NEPA and land resource appraisals to foster quicker exchanges. The DPEIS simply 

avoids the subject by claiming that «the possible locations for such filture exchanges are 

unknown at this time.,,74 Deferring or avoiding the identification of lands available for future 

exchange does nothing to move the BLM forward in facilitating or giving priority to land 

exchanges as rcquired by EPACT. 

The 2012 DPEIS was an ideal opportunity to remedy the lack of coordinated 

consideration of the cumulative impacts of these components on a commercial leasing program, 

Instead, the DPEIS segments thcse elements, removing them from even initial consideration, and 

,<I Civil Action No.-09-cv-00091-JLK 

11 Draft PElS, Chapter I, pg. 1-13. 

72 Draft PElS, 2.4.4, pg. 2-76. 

7l 

~ Utah Energy Initiative: A 10 Year Strategic _ Eller")' b Plan, Pg. . 7. 

Draft PElS, Chapter t, Pl'.. 1-12. 

- 30-
263 

cites the agency's self-imposed inability to weigh these essential factors asjustification for 

scaling back the lands available [or Jeasing even further than it did in the 2008 PElS. By 

excluding these signiiicant aspects of a commercial leasing program from anal ysis in the DPElS, 

the BLM fails to properly examine the fuJi range of impacts from oil shale and tar sands leasing 

as required by NEP A. and has improperly segmented the analysis of the proposaL 

ELM Overstates the Amount of Land Truly Available for Leasing 

BLM overstates the availability oil shale lands by failing to discuss the potential for 

conilicting known uses. Much of the land proposed for availability for oil shale leasing is 

already leased for oil and gas, and projects are planned to develop those resources. It is nearly 

impossible for both developments to occur on the same piece ofland. The discllssion in the 

DPEIS does not adequately reflect the tme status of lands available for oil shale development 

because of existing proposals The BLM uses out-of-date (pre-2005) information and grossly 

underestimates levels of oil and gas drilling in the Book ClifTs area.75 The DPEIS must be 

rewritten 10 discuss the conflict with oil and gas operations, discuss the minimal amount of lands 

available as a result for oil shale leasing in Utah in the next 20 years. 

The DPElS also needs to discuss making a suitable amount ofJands available for oil 

shale and tar sands leasing in the face ofthe oil and gas development. As discussed above, the 

oil shale industry is ready to proceed, and thc 8LM must provide enough resource to allow this 

industry to flourish. Allowing this will reduce our reliance on foreign oil, create jobs and bring 

significant economic development to every state involved. The state suggests modifying the 

definitiOll of the most geologically prospective oil shale lands in Utah to include resources to a 

depth ofJOOO feet. 

Conclusion 

The State of Utah appreciates the opportunity to work with the ELM on the development 

of active oil shale and tar sands industries in lilah, and stands ready to rework the DPEIS in 

order to do so. Specifically, we request that the BLM prepare the analyses requested by the state 

and local governments in Utah, and issue a Supplemental Envimrunentallmpact Statement 

which discloses these new analyses to public sClUtiny Imder the provisions ofNEPA. The state 

also urgently requests the BLM to immediately request futther time to complete thcse analyses 

from the Cowt, for the reason that the tight time frame originally sct out has proven too narrow 

to meet the provision of substantive federal law. The state oiTers to support the BLM in1his 

request 

"Utah Division or Oil, Gas, and Mining drilling statistics by county for Duchesne and Uintah Counties for the years 

2008 through 20 II give an average annual rate of264 oil wells in Duchesne County (Diamond Mountain area) and 

88 oil wells and 410 gas wells in Uintah County (£3ook Cliffs area). Using these updated average annual drilling rate 

figures for 20 years, rather than the inconect 15 yem planning level presented in Table 6.1.6-5, provides estimates of 

5280 oil wells in Duchesne COUnly (versu, BLM's 76 oil weUs) and 1760 oil and 8200 gas wells in Uintah County 

(versus BLM's 62 oil "nd 143 gas welis) as the expected amount over" 20-year planning horizon. Attachment A I, 

Section 6, Cunent Crude Source, pg A-I09, llceds \0 h(' revised to reflect current inrormation on oil production 

levels, which have increased significanlly in the last few years. For example, Utah is currently producing at leustS7 

10 5R,OOO banels per day compared to the 43,000 barrels per day depicted in Figure 8. The discussion of r ADD 4 

does not reflect the new pipeline connecting Salt Lake City. Utah to the blS V C¥-HS .. N'Cvm:\a 111urhet 

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264 

The State of Utah also respectfully formally informs BLM, pursuant to the terms of 

EPACT 2005, that it will not be bound by the artificial timeline set out in the Settlement 

Agreement providing that the amendments to the existing oil shale regulations will bc offered lor 

public comment on or about May 15,2012, after the comment period on the DPEIS has closed. 

The BLM is required by EP ACT 2005 to consider the views of the Governors of the states 

involved, and is required to consider the dTects of the land allocation decisions and the 

regulatory structure simultaneously as part of those consultations. The land allocation decisions 

and the leasing and royalty structure are part and parcel of the total leasing program envisioned 

by EPACT 2005. The state wilt not allow the law which created these consultation requirements 

to be artificially segmented by actions of the BLM and non-governmental parties, no matter the 

forum employed by BLM to create this improper segmentation. The statc will be offering the 

BLM substantive comment about the connection between the land allocation information in the 

DPEIS and the soon-to-be-allnouneed new regulatory structure. The state will require the BLM 

to consider any such comments as part of the record in the fina! decision concerning the Record 

of Decision based upon the current DPE1S. 

The State of Utah strongly supports the work done by the BLM which culminated in the 

2008 Records of Decision, and will actively and vigorously oppose any amendments or other 

changes to those decisions. The state specifically requests the BLM to consider the other 

alternatives within the DPEIS in light of the rush (0 poor analysis occasioned by the il\-

conceived timeline set out in the Settlement Agreement, and determine that more time is 

necessary for BLM to obtain sufTIciellt information to make a reasoned dccision. In light of the 

need for further information and analysis, and the need for a Supplemental EfS to provide this 

information to the public for review. Fundamentally, the state requests that BLM simply choose 

the No-action alternative. and aftlrn1 the earlier work. 

Thank you for the opportunity to work with you to improve the land in Utah, and to 

provide for a healthy economy. Additional comment is attached as an Addendum and Technical 

Comments. Please feel free to contact myself for any further information (hat you may need. 

Sincerely, 

)14-1.- ~JIj Kathleen Clarke 

Director 

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265 

Addendum To State of Utah Comments 

Environmental Permit Requirements 

Air Qualit)· 

The state is heavily engaged in studies designed to identify potential adverse impacts on 

regional haze [lnd winter ozone levels in the Uinlah Rasin. The state objects to the conclusory 

statements drawn from generalized information. The DPEIS indicates thaI PM2.5 and ozone 

could rise above acceptable levels in the Uintah Basin if oil shale and tar sands development 

begins on a commercial scale. 

The DPEIS, however, contains somc pro forma references to state and federal regulatory 

means for addressing air quality issues, particularly in the Uintah Basin, that lack the specificity 

required for infonned decision-making. Annual emission invenlory Jor criteria pollutants and 

VOCs for counties is ten years old76. UDAQ recommends updating the emissions to most 

current available inventory. 

Utah Division of Air Quality urges the BLM to identify best management practices 

(BMPs) for the reduction of PM, NOx, and VOC emissions from oil shale and tar sands 

operations. The Division also requests that BLM consider the cooperative efforts eunently 

undcrway statewide and regionally to tackle the challenges presented by wintertime ozone, The 

results of these studies and cooperative partnerships are important for BLM's decision-making 

process on the allocation of areas available for oil shale tar sands leasing and should be part of 

the DPEIS analysis. 

Regulatory Meehanisms 

A Memorandum of Understanding (MOU) signed by the Department of Agriculture, 

Department of the Interior, and the Environmental Protection Agency on June 23. 201 1, 

committed the signatory agencies to a clearly defined, cfficient approach to compliancc with 

NEPA regarding air quality and air quality values (AQRVs) in cOIU1ection with oil and gas 

development on federal lands. 77 The MOU established procedures for assessing impacts related 

to NAAQs and AQRVs. The DPEIS referenced the MOU for GHG emissions78 but failed to do 

the same for other criteria pollutants. 

According to Section V.D. oflhe MOU79, 

7£> Draft PElS, Chapter 3, 3.52, pp. 3.105.107. 

77 Memorandum or Understanding Among The U.S Department Of Agn'culture. US. Department or The Inten'or, 

And U. S. Environmental Protection Agency, Regarding Air Quality Analyses And Mitigation For Federal Oil And Gas 

Decisions Through Tile National Environmental Policy Act Process. 

: Draft PElS, Chapler4, 4-6.I.J.l, pg. 4-57. 

Memorandum of (1Ilderstnl1dlllg. J~g. 9 

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266 

.. ... the Lead Agency (BLM) will complete and documellt supporting air quality and 

AQRFs analyses prior /0 (f)ederal oil and gas planning, leasing, orfield development 

decisions. " (emphasis added) 

These air quulity and AQRVs analyses should incorporate the most current data. The 

county annual emissions inventory data cited in the DPEIS is ten years old. The Utah 2008 

Statewide Emission Inventory contains the latest data and is available on the UDAQ web site at: 

htt.n.;£!5V\\,\"...airqual i tY .utah. ~o\'IPlmllli I]g/J~n)issinn~lj1 ~~nlorv f20()8 S,lfl1.9!08 Stale l.isl.htrn. 

The stale summary, last updated in November 20] O. categorizes cmissions for the six 

criteria pollutants by area source, non-road mobile, on-road mobile, point source, biogcnies and 

wildfires: 

(http://www.deq.utah.!!o\'!scarch resutts.htrn"cx=003" 1 54 J 70477771 R5R73%3As!24mql!.\'!!k111&q= 20()8+em ission~'iJ1\'ell!(Jr\'+c(Junt\ &cof=j'ORl nt

",3/'. 9. 

The inventory ineludes detailed annual emissions from )Joint sources in each county 

(lml2.:/lwww.airqualit\'.ulah.goy/Plannjn!!/EmissionlnventOl'Y!200R Stale/200g FonnB COllntv[)ci<lils 11:::1 I O.pdJ) as well as from area sources 

(http://www.airgllality.l1lah.!!oyfl·JanningIEmissionInvenlorv12008 Slatl'!2008 Area revised 1130 1 O.pcll). 

UDAQ has pointed OU! this omission in previous comments. According to the MOU80, 

early in the NEPA process the lead agency will discuss with the agencies: 

• information about the affected environment to include in the baseline assessment; 

• methodology, assumptions, and scale ofthe analyses; and 

• monitoring protocols and mitigation 

The BLM has yet to include this important information in its air quality impact analysis. 

UDAQ requests the BLM update its data and utilize the 2008 emission inventory in its analysis 

for the DPEIS. 

Monitored concentrations representative of the study area81 reference concentration 

levels tor PM 10, PM2.5, and S02 from monitors in sUITounding states, specifically the Grand 

Junction eo Powell Station and Rock Springs, WY station. Data from these monitors, located at 

some distance from oil shale/tar sands resources in Utah, do no! provide the necessary specificity 

for an accurate accounting of emi~sion levels in the Uintah Basin. UDAQ, through its 2012 

Winter Ozone Study, is collecting air quality data from 20 fixed, distributed monitoring stations 

in the Basin and two air quality "super sites" in Roosevelt and Horscpool. Three permanent 

monitors in fruitland, Roosevelt, and Vcmal supply regional air quality information. Data from 

these sites should be considered in any analysis of air quality in the study area. 

About 75% of all PM2.5 found on UDAQ's monitoring ii1ters is created by secondary 

particulate formation, which occurs when precursor emissions, usually NOx, SOx, and YOe, 

80 Ibid 

"Drafl PElS. Chapler 3, Table 3.5.3-2, pro 3-f 12-113. 

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267 

react in the atmosphere to form PM2.S. Oil and gas operations emit precursor gases that 

contribute to the fomlation ofPM2.5 and oil shale development would likely do the same. 

UDAQ recommends the BLM utilize the data from the aforementioned monitoring 

stations located in the Basin, incorporate this data into the FPEIS, and consider it in its Record of 

Decision. Any impact assessment for air quality from oil shale and tar sands development should 

contain the available emissions data ii'om the Uintah Basin 2012 Ozone Study (see below). The 

preliminary results from this study. scheduled for release in July, will provide a more 

comprehensive picture of air quality conditions in the Basin. Given the challenges facing the 

Basin with ozone and PM2.5. the BLM shonld utilize the most up-to·date air quality information 

to make informed decisions on oil shale lease allocation dccisions. 

In addition, UDAQ requests the BLM rcference the MOll Appendix "Modeling 

Approaches to Evaluate Air Quality t(lJ' NEPA Decisions Regarding Federal Oil and Gas" in 

support of the requirements of Section V.D. Thc Reusable Modeling Framework (RMF) 

contained in the Appendix recommends that 

"(!)orfullJre emissions. pr(!ieCTions should be made,trom the base year to 10-15 years 

.forward 10 examine the potential.for maximum growth in the planning area. " 

Emissions projections will apprise the BLM of potential air quality issllcs associated with 

commercial scale oil shale development and should be part of the air quality analyses for lease 

allocation decision-making. 

Best MOImgement Practices 

Normally, the state uses the New Source Review (NSR) program to regulate oil and gas 

emissions, with sources subject to Best Available Control Technology (BACT) review, 

modeling, and public comment before receiving a permit. To qualify for NSR, ~ources must meet 

a minimum threshold of emissions-5 tons per year of any criteria pollutant, less than 500 

pOLlnds per year of any single hazardous air pollutant, or less than 2,000 pounds per year of 

combined hazardous air pollutants. If the source emits less than the threshold Ihey fall outside of 

NSR regulations (de minimis emissions). 

In the Basin, many ufthe oil and gas emission sources, including wellheads and tanks, do 

not meet the NSR threshold and are not regulated.82 RD&D oil shale projects will probably also 

not meet this NSR threshold. UDAQ and its partners in the Basin are working with stakeholders 

to detemline the feasibility of other regulatory measures for sources that fall outside ofNSR to 

establish better pollution controls for smaller sources. 

Emissions that fall within this de minimis exemption could include fugitive dust from 

mine operations, products of combustion including SOx, NOx, CO, C02, and VOC ii'om oil 

processing and handling equipmcnt. 

"lJi\C R307-413-2. 

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268 

Proposed National Environmental Standards for Hazardolls Air Pollutants or NESHAPS 

regulations on oil and gas sources83 could significantly lower emissions, particularly from VOC 

sources. These VOC reduction methods include the use of low bleed pneumatic controllers, wet 

seals on centrifugal compressors, rod packing replacement for reciprocating compressors, and 

the use of vapor recovery units on storage tanks. Use of these controls could prove crucial to 

protecting Basin air quality while allowing for resource development. 

We have included suggested oil shale development BMPs for fugitive dust, VOCs, and 

combnstion engines These BMPs include management practices for emissions from current oil 

shale devc!opment projects. The BMPs cited do not represent the full complement available for 

emissions reduction. 

Fligitive Dust 

Blasting 

• Stabilize surface soils where drills, support equipment, and vehicles will operate 

• Pre-water and maintain surface soils in a stabilized condition 

• Apply and maintain a chemical stabilizer on surface soils 

• Stabili7.e soil during blast preparation activities 

• Limit the blast footprint to no larger than what can be practically stabilized 

immediately following the blast 

• Maintain surface rock and vegetatioll where possible to reduce exposure of disturbed 

soil to .. vind 

• Stabilize soil after blasting 

• Water disturbed soils to form emst immediately following blast and safety clearance 

Clearing 

• StabiliZe surface soils where support equipment and vehicles will operate 

• Pre-water and maintain surface soils in a stabilizcd condition or, 

• Apply and maintain a chemical stabilizer on surface soils 

• Stabilize disturbed soil immediately after clearing and gl1lbbing activities 

• Water disturbed soils to form cmst, or 

• Apply and maintain a chemical stahilizer OJl disturbed soils lo form cruSL 

• Stabilize slopes at completion of activity 

• Stabilize sloping surfaces using soil binders until vegetation or ground cover can 

effectively stabilize the slope 

• Apply waleI' and maintain slopillg surfaces/wind breaks in crusted conditions 

Additional Ongoing Measures 

• Water unpaved roads periodically or apply chemical stabilizers 

• Remove dust-forming debris from roads promptly and scrape and compact unpaved 

roads frequently to stabilize the road surface 

• Restrict the speed of vehicles in and arouJld the mining operation 

• Revegelate, mulch, or otherwise stabilize the surface of all areas adjoining roads that 

arc a source of fugitive dust 

In 76 FR 52738, Tut~day August 23, 20 [ L 

·36 -
269 

• Restrict the travel of vehicles on other than established roads 

• Enclose, cover. water, or otherwise trcatloaded haul tnlcks to minimize loss of 

material to wind and spillage 

.Substitute conveyor systems for haul trucks and cover conveyor systems when 

conveyed loads are sul~ject to wind erosion 

• Minimize the area of disturbcd land 

• Revegelatc lands promptly 

• Plant special windbreak vegetation at critical points in the pem1it area 

• Control dust using water sprays, hoods. dust collectors or other controls 

• Reduce the pcriod oflimc between initially disturbing the soil and rcvcgetating or other 

surface ~1abilization 

• Restrict fugitive dust at spoil transfer and loading points 

• Control dust 1i-om shale storage piles through use of enclosures. covers, or stabilization 

Combustion Engines 

Require the following emission standards for stationary internal combustion engines: 

-2 g/bhp-hr of NO x for engines less than 300 horsepower 

• 1 g/bhp-hr of NO x for engines over 300 horsepower. 

Control emissions 1i-om engines utilizing Bcst Available Control Technology (BACT) 

such as lean-burn technology, catalysts, air/fuel ratio controllers or other technologies 

Schedule proper maintenance and upkeep of vehicles to ensure optimal functioning of 

engines 

Volatile Organic CompOlmdv 

• Use vapor control systems on tank breathing vents, with vapors routed to condensers 

andlor combustion for tanks larger than a ccrtain capacity84 is if thc material has a true 

vapor pressure greater than 5.2 kPa. This is equal to 5.2 bar, 0.05 atmospheres, or 0.76 

psig. 

• Conduct regular leak detection using a VOC detection device and repair all process 

connections in VOC service 

• Ensure regular maintenance of tanks, roof seals, hatch seals, and tank loading process 

connections 

• Replace safety relief yalves less than 48 hours after use 

• Opcratc thicfhatches in the locked position at all times when the tank itself is not being 

actively maintained 

• Discourage the use of surface cyaporation impoundments to receive produced 

wastewater 

• Use pneumatic controllers with a no bleed or low bleed design 

84 40 CFR GO Subpart Kb 

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270 

Studies and Partnership.1 

UDAQ is currently involved in scveml studies to address the problem of wintertime 

ozone in the Uintah Basin. Stakeholders from the oil and gas industry, federal land management 

agencies (including the BLM), several western states, and tbe EPA bavejoined forces to identify 

the causes of winter ozone and formulate mitigation strategies. 

In 2009 and 2010, monitors showed that concentrations of both PM2.S and ozone were at 

or ncar t11C current state and national standards. The EPA and the "tlte indian Tribe have four 

monitoring stations in the Uintah Basin: Myton, White Rocks. Ouray, and Red Wash. In the 

winter of 201 0, ozone levels reached a high 8-hour value of 139 ppm during inversion 

conditions, nearly twice the national health standard. UDAQ wintering monitoring studies for 

2007.2008. and 2009 have shown that. under inversion conditions, PM2.S concentrations are at 

or above the standard and can be as high as those seen along the Wasatch front. Due to low 

snow cover this winter, in 2012 ozone levels did not exceed these standards. However, UDAQ 

anticipates that under norlIlal snow cover conditions in the Basin, ozone levels will rise above 

this standard during wintertime inversions. 

The LJintah Basin 2012 Winter Ozone Study was a comprehensive study of the 

atmospheric chemistry and precursor gases that form wintertime ozone in the Basin. The study 

was by far the largest and most complex air quality study ever conducted in Utah. The nearly $3 

million efTort was funded by a number of agencies, including the Uintah Basin Impact Mitigation 

Special Service District, Western Energy Alliance. BLM's Utah Office, and EPA Region 8. 

Cooperative research work was undcrtaken by atmospheric research partners from lJSU. 

NOAA's Chemical Sciences and Global Monitoring Divisions, University of Colorado's Institute 

of Arctic and Alpine Research, DAQ, EPA, BLM, and local oil and gas producing members of 

the Western Energy Alliance. 

Study components inclllded: 

• Basin-wide ozone and precursor measurements to determine spatial extent of the 

problem. 

• Long-term monitoring of ozone and key precursors at two "super sites"-Roosevelt 

and Horse Pool-to provide baseline trend information against which energy production 

increases and mitigation work can be evaluated. 

• Intensive atmospheric chemistry studies to understand the chemical pathways and 

determine limiting formation precursors. 

• Development of a complete, detailed inventory of emissions sources in the Basin, 

including information on location, operation, and pollutants emitted. 

Preliminary results and conclusions are scheduled for release in July 2012. Thc goal of 

the study is to develop a conceptual model of wintertime ozone formation in the basin and 

idcntify appropriate and effective air pollution mitigation strategies. While the lack of snow this 

winter hindered effOlts to analyze the photochemical reaction of sunlight on snow (hat seems (0 

leads to ozone production, (he emissions inventory component of the study was still important. 

The emissions inventory identilicd source emittcrs, emission rates, and emissions characteristics. 

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271 

Source specific measurements located areas of high concentrations for precursor gases. This dala 

will nol only aid in identifying the location, level, and spatial representation of ozone and its 

precursors in the Basin, but will also assist in the development of mitigation measures and 

strategies for emissions reductions in areas where high levels of ozone have been detected. 

lltah, Colorado, and \Vyoming, the EPA, the ELM, and the U.S. Forest Service are 

participants in a pilot project called the Threc-State Study. The project will provide a regional 

assessment of air quality conditions by focusing on the impacts from oil and gas deve\opmenL 

Leasing allocation decisions in the DPEIS for oil shale and tar sands will be located in these 

three states and the findings from this project on air quality issues in the Uintah Basin will have 

bearing on oil shale development in the area. 

Specifically. the pi/Of p/'(~ieCffocu.l"e.\ on the flowing activities: 

• Expanding air quality monitoring to establish baseline conditions, track trends, and 

evaluate model performance; 

• Creating a data warehouse to store, manage, and share data among state and federal 

agencies, industry, and their contractors to supp0l1 modeling of air pollutants; and 

• Performing regional scale air quality modeling of current and projected conditions. 

UDAQ has also established an Oil and Gas Air Quality Partnership to evaluate the 

impacts of oil and gas development on air quality and determine the best approaches for 

managing the Uintah Basin air shed. lJDAQ will include oil shale development in this effort. 

Representatives from the foHowing agencies are involved in the partnership: 

Anadarko Petroleum 

Bill Barrett Corporation 

Bureau of Land Management 

Duchesne County Commission 

ECO Resources 

Energy Dynamics Lab 

Environmental Protection Agency 

GASCa 

McVehil Associates 

Newfield Exploration 

QEP 

Questar 

Red Leaf Resources 

Rocky Mountain Power 

SITLA 

TTi-County Health Department 

Uintah County Commission 

Uintab Impact Mitigation SSD 

Utah Cooperatives 

Utah Department of Enviromnenlal Quality 

Utah Division of Air Quality 

Utah Governor's Otnce 

Utah Petroleum Association 

Ute Energy 

Western Energy Alliance 

These collaborative efforts demonstrate the Willingness of parties involved in reSOllrce 

development in the Basin to work cooperatively in search of solutions. These partnerships and 

the resulting development of air quality mitigation strategies will have a direct bearing on the 

resource use decisions contained in the DPEIS and should be given thorough consideration. 

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272 

Water Quality 

Surface Water Qualit)' 

In Utah, oil shale reserves are located primarily in the Green River Fonnation within the 

Colorado River draina(!e. Surface waters in the Uintah Basin arc knovm for high salinity. Several 

rivers located in the ar~a are listed on Utah's 303(d) list ofimpaired water bodies for high 

salinity (total dissolved solids, or TDS) at levels that do not protect for agricultural uses. 

When pollutants impair the use of water a study is required to detennine how to reduce 

them and restore water quality. This study is known as a Total Maximum Daily Load (TMDL). 

A TMDL establishes the maximum amount of a pollutant allowed in the water while maintaining 

all of its designated beneficial uses. Several water quality studies have been conducted in the 

Colorado drainage that address the reduction of pollutants like salinity and the restoration of 

water quality. A full list of approved TMDL's for this area of Utah is located onlinc at or by 

request from the Division of Water Quality. 

The development of oil shale and tar sands as described in the DPEIS ",ill have impacts 

on the Bitter Creek and Willow Creek watersheds, which will have to be addressed. Willow 

Creek is on the 20 I 0 Utah 303( d) list oflmpaired Waters for biological degradation based upon 

macro invertebrate data. Bitter Creek frequently exceeds numeric water quality standards for 

both TDS (>1.200 rogll) and boron (>750 uglI). Currently, the main source ofTDS and boron in 

the Uintah Basin is from the erosion of weathered rock. TIle BLM should consider and, wherever 

possible, control for actions that could potentially increase either TDS or boron concentrations in 

the surrounding surface waters. 

Oil shale development can potentially cause impacts to surface water quality through: 

• Erosion; 

• Withdrawal of water for operations; and 

• Discharge of water used in operations 

Ground disturbance activities (erosion) can degrade surface water through drainage irom 

prepared sites, which can contribute sediment, salts, and possibly chemicals and oil shale 

products into receiving streams. Typically, DWQ minimizes the degradation to surrace watcr 

from ground disturbance activities through stonnwater permits. However, mining activities are 

exempt from this requirement unless the water comes into direct contact with tailings. The BLM 

should evaluate the potential for water-tailings contact. In the event a permit is not required for 

oil shale projects, DWQ recommends the development of a detailed plan that minimizes 

stormwater inl1uence on surface waters and a monitoring program that measures the 

effectiveness of mitigation measures. A voluntary mitigation plan would demonstrate a 

commitment by project developers to sustainable development Dnd would provide necessary data 

for future expansions. 

Withdrawal of groundwater during mining operations can potentially airect surface water 

quality. Significant decreases in groundwater aquifers can result in a corresponding decrease in 

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273 

inputs to streams or lakes. Such decreases would likely increase stream temperature and 

Dissolved Oxygen (DO), which could have damaging effects on fish and other wildlifc. 

It is ij'equently difficult or impossible to contain all of the groundwater withdrawn for 

mining operations, which necessitates a Utah Point Source Discharge Elimination System 

(UPDES) permit. 

Groundwater Permits 

Groundwater conditions in the southern Uintah Basin are poorly knO\m because the area 

has not been exploited for groundwater historically and the predominance of fine-grained 

sedimentary rocks in the area is not favorable to containing groundwater in aquifers. Aquifers 

controlled by the stratigraphy are present, mainly in the subsurface. The Douglas Creek and 

Bird's Nest aquifers are good examples of these types of aquifers. 

These aquifcrs will become increasingly important as the area is developed for oil shale 

and tar'sands operations. Isolated aquifers and zones of saturation such as PR Spring may be 

locally important SOUTCCS of water. Oil shale and tar sands operators should, as part of their mine 

development activities, prepare an inventory of springs and seeps near their proposed operation 

and note occurrences of groundwater in cxploratory drill holes and water wells. Operators should 

take samples from these sources 10 determine background groundwater quality and class. 

When ongoing monitoring or other reporting is necessary 10 ensure groundwater 

protection, the pennittee and DWQ will develop and mutually agree upon permit conditions. A 

draft version of the permit will be made available to the public for a 3D-day comment period, and 

after resolution of coneerns raised during this comment pemlit, a final permit will be issued. 

Groundwater Discbarge Permits 

The Utah Ground Water Quality Protection Rules (UAC R317-6) allow DWQ to protect 

Utah's groundwater resources by issuing ground water discharge permits. The rules require 

facilities that have the potential to cause a discharge of pollutants to groundwater to apply for a 

ground water discharge permit. l11ese facilities include milling and milling operations with waste 

management units such as tailings impoundments and waste storage piles. This requirement 

ensures that oil shale and tar sands facilities that have the potential to impact growldwater 

resources are regulated by the state to minimize or prevent degradation of groundwater quality. 

Groundwater discharge permits require site-specific. characterization of thc proposed 

facility including depth to ground water, hydraulic gradient, ground waler flow direction, and 

pre-operational background grolll1d water quality. 

The two primary components ofa groundwater discharge permit are best available 

technology and groundwatcr monitoring. Best available technology minimizes the discharge of 

contaminants from the waste source by applying control and containment technologies such as 

liners, leak detection syslcms, leak collection systcms, and pump-back systems. Groundwater 

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274 

quality monitoring in compliance wells measures the actual effect of the facility operations on 

groundwater quality. The rules utilize federal drinking water maximum contaminant levels as 

groundwater quality standards. Permit-specific protection levels are percentages of the standards 

based on the site- or well-specific Groundwater Class (Le., the better the ground water quality, 

the more stringent the protection level). If practical, based on depth to groundwater, compliance 

monitoring wells are used to provide an early warning of contamination. This allows time to 

implement corrective actions well before beneficial uses are adversely affected. Permit 

conditions can also address the discharge of subsurface water affected by a pcmlitted facility that 

may becomc a nonpoint source of pollutants to surface water. 

In some cases. after rcview of the material submitted in a groundwater discharge permit 

application, DWQ may conclude that the project qualifies for permit-by-rule status, if it has de 

minimus effect on water quality or if other regulatory progmms insure protection of water 

resources. 

Technical Comments 

Preamble, Page xxiii, line 15: 

Insert "SITLA" as an acronym for "School and Institutional Tnlst Lands Administration 

(Utah)" 

ES. 6.3, page ES-6, Jines 28-29: 

Core or priority sage grouse habitat, as defined by such guidance as the BLM or DOl 

may issue" has not been determined. DOl and BLM have eommitted to defer to state-level 

determinations of what constitutes such habitat. These processes are ongoing. As more fully set 

forth in the body of these comments: (l) the State and its constituent agencies cannot adequately 

comment on the proposed alternatives until the extent of sueh habitat is determined; and (2) the 

PElS appears to be based on maps of such habitat that have not been themselves released [or 

public comment or reviewed under NEPA. 

Chapter 1, Page 1-13, lines 32-37: 

It is erroneous to exclude oil shale regulations and national policy from the scope of the PElS. 

BLM is obligated to follow the law in its analysis. EP ACT 2005 explicitly makes development 

of oil shale resources a national policy priority. The PElS needs to include a detailed analysis of 

the relationship between each alternative and national policy as expressed in EPACT. Similarly, 

determination of commercial royalty rates should not be excluded from the scope of the PElS. 

Depending on the level at which such rates are set, the range offoreseeable development of oil 

shale resources will vary greatly. The analysis of each alternative should include analysis of 

development scenarios under various royalty rates, or else he delayed until royalty rates are 

determined, and then analyzed. 

- 42-
275 

Chapter 1, page 1-20, II. 20-23: 

The PElS slates that BLM has nol received any new infonnation since the 2008 OST 

PElS and ROD concerning the environmental consequences of commercial oil shale 

development. There is a wealth of puhlic inf(lrmation that is available and should be considered. 

These inelude multiple reports prepared on behalf ofthc U.S. Department of Encrgy by the 

University of Utah 's Institutc for Clean and Secure Energy on environmental, resource and 

socioeconomic consequences of unconvcl11ional fuel dc:velopment in the subject area, prepared in 

response to Section 369 of EPA CT. Significant informalion is also available with respect to 

deVelopment of oil shale and tar sands on stale trust lands in Utah, notably in the fonn of public 

Liles for mine pcnnitting on file with the Utah Division of Oil, Gas and Mining and the Utah 

Division of Water Quality. The DPEIS must be revised to take into account eaeh of these 

sources of information. 

Chapter 2, Page 2-13, II. 10-24.: 

As noted in the body of the state's letter, the PElS should eonfinn that just because BLM 

lands are withheld from competitive leasing docs not disqualify the lands from conveyance to the 

State by land exchange in accordance with Section 369(n) ofEPACT, other exchange authority, 

or state indemnity selection. 

This section of the PElS should also be reworded to discuss how BLM will follow 

Congress' mandatory directive in Section 369(n) of EPACT that it will give priority to land 

exchanges. As currently draft, the PElS notes the directive, and then devotes most discussion to 

why BLM will have problems with doing so. The PElS should reflect that by law such 

exchanges are to be a priority. The PElS should also note the environmental benefits ofland 

exchanges, including protection of natural values and other resources on state trust lands through 

conveyance to the United Slales. 

This section of the PElS also needs to be supplemented to renect legal alternatives to an 

appraisal process in concluding land exchanges. Existing BLM land exchangc regulations state: 

in the absence af current market iI?fiJrmation reliably supporting value. the 

authorized qjJicer may use other accr.'plable and commonly recognized methods to 

determine market value: 43 CF.R. 2201.3-2(('). 

This language has been used us the basis for multiple oil shale land exchanges between 

BLM and Utah on the basis of ton-for-ton conveyance of oil shale, adjustcd for energy content, 

withoutnccessity of appraisal. Similarly, the Utah Recreation Land Exchange Act 0[2009, Pub. 

1. 111-53, contains language for transfer ofl'ederal oil shale land to the State without appraisal, 

based on BLM reserving an interest in future oil shale production from the lands equal to 50% of 

bonuses and rentals, and BLM's royalty share, less preexisting mincral revenue sharing 

obligations to the State. See H. Rep. 111-79 at 6-7 (analysis of section 3(f)). Proposed 

- 43-
276 

legislation now pending in Congress as H.R. 4027 contains similar language with respect to 

mineral valuation. The PElS should recognize these authorities. 

Chapter 4: Effects of Oil Shale Technologies 

Table 4.1.1-1 Assumptions Associated with a Surface Mine with Surface Retort, page 4-3. 

This table needs further explanation of the data presented to improve clarity. For 

example. the "(i)ootprint of developmcnt arca (acres)" for Wyoming and Utah should give a 

number based on a time framc (per/yr) as is done with "water use," rather than the vague 

footnote explanation that it is the disturbance at any given time. The factor listed for "surface 

disturbance" is a lar!!er number of acres than one could assume is the cumulative life of mine 

disturbance and it w;uld be helpful to have the number in the table labeled as cumulative rather 

than having the reader refer to the footnote for extra clariiicalion. D1e "wastewater" factor is 

provided on a gallton basis, but the table does not contain any data on the annual or cumulative 

number of tons produced. Such data would make this number meaningful in relation to the other 

factors provided. The wastewater factor should be in gallons per year. or ac-ft Iyr, or gallons per 

barrel of oil produced in order to be meaningful. The ·'total employment" factor is not the slim of 

the direct and indirect employment factors and there is no explanation of how the BLM derived 

total employment [rom direct and indirect sources. 

Table 4.1.2-1 Assumptions Associated with an Underground Mine with Surface Retort, 

page 4-8. 

This table suffers from the same lack of clarity in dala presented as mentioned for Table 4.1.1-1. 

Tablc 4.1.3-1 Assumptions Associated with an In Situ Retort Project, page 4-11 

This table suffers from the same lack of clarity in the data presented as mention for Table 

4.1.1-1. 

4.1.6 Expansion of Electricity-Generating Capacity, page 4-13 

This section mainly refers to the high electricity need for in situ projects proposed for 

Colorado. and does not differentiate that from the lower power need for the mine and retort 

technologies proposed in Utah. Specifically, this section does not reflect that ENEFIT and Red 

Leaf assertion that their operation will supply nearly all their own project energy needs from the 

retorting process. In addition, the first paragraph hlcorrectly states that definitive infonnatiol1 

about the power requircments of commercial oil shale developmcnt is not available. This is not 

the case with the ENErlT technology. BLM's analysis is faulty because it does no! include 

specific infol111ation about ENEFIT and Red Lcaf teclmologies, which are both poised for 

commercial development in Utah. 

4.2.1.2 Acquisition, Conversion, or Transfer ofWa1cr Rights, page 4-19 

- 44-
277 

This section only discusses water rights in Colorado. not in Utah or Wyoming. The 

ENEFIT project acquisition included watcr rights. Thc DPEIS needs a more complete and 

balanced discussion about water rights for all three states. 

4.5 Watcr Rcsources, starting page 4-31 

The discussion in this section and various subscctions tends to use relative terms like 

"largc" and "small" without defining what is mennt quantitatively by such terms. For example, 

on page 4-33 under WaterlJse. online 41, the PElS states that "A large amount of water is 

required during the operations phase." Subsequent sentences give actual numerical ranges of 

water use, but nowhere is the tenn "large" actually defined. Likewise, on page 4-39. lhe last 

sentence ElS states that "(a) relatively large water-quality impact is expected in areas where 

population growth is large and the receiving water is small." The PElS should define such 

relative terms in quantitative terms. 

4.9.1.4.2 Power Generation Facilities, page 4-152 

This section relies on outdated infomJation that anticipates new power generation eoming 

from coal-fired power plants. Pending carbon management legislation and a surge of new 

domestic natural gas supplies means new power plants in Utah would likely be gas-fired. This 

assumption of coal-fired power generation and any associated analysis incorporating this 

assumption is oul-of~date for the present market situations. BLM needs to revise the DPEIS to 

reflect the current market situation for new power generation plants. 

4.15 Hcalth and Safety, page 4-199, Table 4.15.2 

At the beginning of Chapter 4, the BLM revised the size of mining and surface retort and 

in situ oil shale projects downward, but this table utilizes the 2008 scenario of a 1.000.000 

bbl/day oil shale industry. This table needs to have the size ofthe industry's health effects 

reduced to match the reduced sizc of the oil shale operations as provided earlier in Chapter 4. 

This would probably drop the overall industry to 14 facilities, with a production level below 

500,000 bbl/day. The accompanying text and footnote also appear to be inconsistent and provide 

an overestimation of the number of oil shale workers compared to the total employee numbers 

given in Table 4.1.1-1, 4.1.2-1, and 4.1.3-1 

Table 6.1.6-5, Projected Levels of Major Activities for Scvcn Planning Areas 

TIlis table presents faulty analysis of the level ofOSTS developments on llonfederal 

lands in Utah by simply using the phrase "potential unknown" to gloss over known development 

activities, particularly those in the Book Cliffs area that are mentioned in Appendix IJ of the 

PElS. 

- 45-
278 

This section only discusses water rights in Colorado, not in Utah or Wyoming. The 

ENEFIT project acquisition included water rights. The DPEIS needs a morc complete and 

balanced discussion about waler rights for all three states. 

4.5 Water Resources, starting page 4-31 

The discussion in this section and variou~ subsections tends to use relatil'e terms like 

"large" and "small" without defining what is meant quantitatively by such terms. For example, 

on page 4-33 under Water Use, on line 41. the PElS states that "A large amount of water is 

required during the operations phase," Subsequent sentences give actual numerical ranges of 

water use, but nowhere is tbe term "Iarge" actually defined. Likewise, on page 4-39, the last 

sentence EIS states that "(a) relatively large water-quality impact is expected in areas where 

population growth is large and the receiving water is small," The PElS sbould deline such 

rdati ve tenTIS in quantitative terms. 

4.9.1.4.2 Power Generation Facilities, page 4-152 

This section relies on outdated informatiOll that anticipates new power generation coming 

from coal-fired power plants. Pending carbon management legislation and a surge of new 

domestic natural gas supplies means new power plants in Utah would likely be gas-fired. This 

assumption of coal-fired power generation and any associated analysis incorporating this 

assumption is out-of-date for the present market situations. BLM needs to revise the DPEIS to 

reflect the current market situation lor new power generation plants. 

4.15 Health and Safety, page 4-199, Table 4.15.2 

At the beginning of Chapter 4, the BLM revised the size of mining and surface retort and 

in situ oil shale projects downward, but this table utilizes thc :1008 scenario of a 1,000.000 

bbJ/day oil shale industry. This table needs to have the size of the industry's health cffects 

reduced to match the reduced size of the oil shale operations as provided earlier in Chapter 4. 

This would probably drop the overall industry to 14 facilities, with a production level below 

500,000 bbl/day. The accompanying text and footnote also appear to be inconsistent and provide 

an overestimation of the number of oil shale workers compared to thc total employee numbers 

given in Table 4.1.1-1, 4.1.2-1, and 4.1.3-1 

Table 6.1.6-5, Projected Levels of Major Activities for Seven I'lanning Areas 

This tublc presents faulty analysis of the level of OSTS developments on nonfederal 

lands in Utah by simply using the phrase "potential unknown" to gloss over known development 

activities, particularly those in the Book Cliffs area that are mentioned in Appendix B of the 

PElS. 

·45· 
279 

OIL SHALE: A CENTURY OF FAILURE REPORT BY CHECKS AND BALANCES PROJECT, 

APRIL 2012 
280 

Since 1917, when a government official pers.naded a Nevada 

parole board to release a prisoner so the imn;.\te could deYdop 

his oil shale extraction idea. experts, insiders, execurivcs and rhe 

federal government have dumped billions into eHorts to rap oil 

shale, leaving nothing but ttiled projel:ts behind.lhe oil industry 

has had plenty of help. ]he federal government cr-atted oil shale 

policies dlat have etfectivdy transterred rhous<lnds of <letTS of public 

land to oil companies and have created a leasing structure rh<lt could 

potentially rransfer billions of dollars of public wealth to the oil 

companies, Never before have we given rhis much to an industry 

rh<l.r has yet to show cornmercial snccess, 

Not Dnc single oil shale project since the first attempts in the late 

1920$ has ever produced commercial fud from shale rocks. In 

fact, one of the fc\"vdirect results ofthc: federal suppOrt has been 

prCmattlfe oil shale booms thar have ttltimarely busred. 

for dtl the dl-orrs rhe Amelic-tO taxpayers haye made [O\vard 

developing oil shale for [he oil indus fry, every effort to sustain 

commercial production of the resource in the last century has 

failed. 
281 

p---- and "Welcome to Colorado's Newest. Ghost __ ,imJi __ ----,-"\l. Town,Complimentsof 

" ... Right then the news came on Exxon."~ 

and we saw it on t~levision. Then 

our next-door neighborahd hIS 

wife came over-the), JUSt rangthe 

doorbell and they say said, 'We've 

been trying to get in touch with 

you all day. Have you heard?' I said, 

'We j)lSt did: His wjfe was crying, 

I was crying. We all just sat ()n the 

stcps.arid we talked. It was like we 

were at a funeral!" ~ 'An employee at,'Exxon)s 

Grand Junction office 
282 

dUST TAKE A LOOK AT THESE 

HEADLINES fROM MAdOR AMERICAN 

PUBLICATIONS THROUGHOUT 

THE PAST 100 YEARS: 

Shale Will Yield Gasoline Supply 

Apri130, 19 J 6, New lork Times 

Oil Shale to Furnish Fuel 

October 17, 1946, The As.'ocidtea Pre,,:: 

First Oil Output From Shale 

Lands in West Due in '70 

April27, 1966, lVnu ]()J* Times 

Shale Oil is Coming of Age 

NO'l,rember 6,1981, }/ew J/nk Times 

And the optimism for oil shale is here again, especially amid rising 

oil prices. 

Yet oil companIes that obtained research oil shale leases atop ridl 

deposits in northwest Colorado still say it might be another decade 

before commercial oil shale production ever begins, ed10ing those 

headlines from the past 100 years. 
283 

In 1917, A.H. Crane ~ a prisoner serving rime tor burglary in <t 

Nev<lda STare prison -" received atter the warden reported 

Crane's claim to the feder<lJ goycrrunt'nt.\' A federal expen testified 

~.lr the stare's parole board that "Crane's method [I)f extracting oil 

from shale \vill be of almost incalculable yaJuc to tlH.'. governmem."w 

In the late 1920s, the Bmeau oO"fines spent 

research sire in -western Colorado.1' 1hey abandoned those eitons 

v,·hen ;-<'t,;i(-" were fonnd in the Unired Srares.l" 

lhe Bureau of ~iines continued research in ; \', l ;11 and) '-' 

and conducted additional 'work in Despite promises that 

com.mercial oil shale production \yas near, goyernment-sponsored 

fe-search in \vestem Colorado \\'Oltid end in the 1950s with litdc 

oil prodw.:ed. Evenrually, {he Bureau orLand Jvfanagemem in 2008 

approved a ~ j '" i dean up the government's 

comaminated oil shale research site in \vestem COior'ldo.16 

In the 1940s~ Congress passed the us. Synthetic Fuels Act, which 

duthorized taxpayer money to be spem 

a research station near Rifle. Colo.l~ About S18 million - nearly 

£220 million today ~was spent on oil shale research bctv',-ecn 1949 

and 1955.1q 'lIle rt~search at the. sire nIt imatdy f~tiled to susTain a 

commercial oil shale industry despire numerous promises that it 

\vo111d (see these articles ii'om '{ InK' and the \\ :dl 

Union Oirs first oil shale project, Colorado: In the- 19'50s, Union 

Oil Company of Cali Cornia operated an oil shale plam for tl1n::e 
284 

years, according [0 p( i 

ofpre\"ions oil shale projecrs, \J HO\vcver, commercial produ(tioIl of 

oll ,vas never sllsTained. 

Project Bronco, CoIorado: In 1966, the Awmk Energy 

Commission proposed defonating a SO··kiloton 'weapon in \Vestern 

Colorado 1"0 fe-cover oil Cram shale ~ a plan known as "{J1.' 1>' 

:~~,)l' '!,,"lU 'Ille detonaTion burton '\'as neyt,f pushed. 

The Colony Oil Shale project, Colorado: Exxon hmollsly closed 

This Colorado project in 1982 (see "Black Sunday" sidebar, page 

3), bur if actually began in 1963 as a joint venture among four 

companies. 1 In 1981, Exxon's parmer received a 

the projeCT. 

Paraho~Ute, Colorado! 'Ihe Paraho Development Corp" \vhid1 

tested oil shale extraction Tedmiqncs in Colorado, acquired leases 

along the \'{lhitc River lIear the Colofado .. Ctah border.2' 'lhe firm's 

research in Colorado during the 1970s spurred [he DOE to agree 

to ,1 contract \vith the firm for it to produce 100,000 barrels ofoiLl, 

However, rhe company never built any oil shale extr;.\ction facilities 

on irs Urah pTope.rries:~~ 

Prototype C~a oil shale lease, Colorado: GofrOn Company and 

Standard Oil Company acqUired a 5,120~acre federal "protorype" 

oil shale lease in 1974 and built facilities to burn oil shale rock and 

produce oiL ,(, 11lCY ·were "prematurely flooded in 1984 btcause of 

pump failure and the company \vas unable ro resume operations." 
285 

Prototype C-b oil shilie lease, Colomdo: Four companies acquired 

this fedt'ral "protofype" oil shale lease in the 19705. but it was 

suspended in 1987 (lnd pumping on the production on the lc:ase was 

stopped 1991Y No oil \yas ever prodnced h"om this !ease.2~ 

Prototype V-a. U~b leases~ LTtah: In the 1970s, three companies 

partnered to secure a ), 120·'acre federal "prototype" oil shale lease 

in Utah, along\vith an ;-ldjaccm 5,120··acre Icasc,29 \XThile several 

rons ofoii shale wefe extracted to rest mining conditions and 

technology, projects on dle leases \vere abandoned in the mid 

1980,<'" 

TOSCO Development Corporation~ Utah: ]11C company 

acqUired 29 srare leases in Urah to lap oil shale and performed 

initial devdopmem work on them from 1977 fO 1981. How{;ver, 

TOSCO then <lbandoned the project befl.)T'e final permitting and 

COHStn!ction began. 

M;lgic Circle Energy Company, Utah: ,\lagic Circle acquired 

about 76,000 acres ofstatt Urah leases in 1980 and would later 

spend $1 million to perform tests and feasibility studies for 

porculia1 oil shale extraction. 1 No mine or planr construction rook 

place on the leases. l' 

Chevron Shale Oil Company work, Colorado: In 1981, 

Chevron and Canoeo Shale oil began work on their Clear Creek 

project, !oc;ned on (I pri'vate 25,OOO-<lCre site north of De Beque. 

Constmcrion at d1t sire was haIred in 1984.'" 
286 

Union Oil's Parachute Creek proJect. Color;tdo: Union Oil 

Company ofCaJifornia (later Unocal) cOTlStructed the firsr ph8se 

of an oil shale projecr in 1980/\ In 1981, it received a S 

the price of oil at its shale project. 1~ 

Unocal called it quits in 1991. '(, Even \vhen annual production 

peaked at 1.5 million barrels, Unocallosr $7 tnilHon. 1

-

In February 2012, Che.vfon abandoned irs le:;tse for oil shale 

resourCeS in \'\7esrem Colorado and became the latesr ill a growing 

lisr of companies unable to rum ,1 profit by melting sO--C<liled oil 

shale rocks inro fneP~ 

ENDNOTES 

, Andrny t;llmfonL BOO)ntQ\m Blue': C()brado Oil .shale. lli)iS· 1'-IB~. (:\hYot, co: 1'18)1),1"11. 

lR8'i-19i1'),{A'iwot, en· 

\X;lU .\trcc'T.hurnaL ;':,'ptt'mlwr S. !9'%.~cn',~cd(\:t(lbtT 13. 2011. http:;' hiLly/ 

pAriSI' 
287 

l~' Ibid., h' 

:c, Ibid.A-2U 

Ibid.A-16 

Ibid.A-14. 

':0 Ihid.A·iS. 

'c'lbid.A·2I 

"'·Ibid.A-22 

Ibi,LA-20 

lbid.A-20. 

!bid.A·1S>. 

Ihid.A-lS 

A,sodated Prn~.l:ebl"U'l1"y 10, 1<)82. http://nytLlthi 

AU ph()t(lS coU1"te\)' of the United States Geological Surve), 

<luJ tht: Bvrc.au ofLaod1'hna!!CI1ICilt, 

A 
288 

NOT READY FOR PRIME TIME: PREPARED BY CHECKS AND BALANCES PROJECT

Not Ready For Prime Time 

Prepared by the Checks and Balances Project 

Oil shale is not ready for prime time, but don't just take our wordfor it .•. 

Despite what gets said by oil industry lobbyists in a staged hearing or by politicians out on the 

campaign trail, the oil shale industry itself and energy e}'.'perts have gone on record that a 

commercial scale oil shale industry is nowhere near a reality. 

Shell Oil, corporate website, accessed April 24, 2012 - "A commercial [oil shale] decision 

would be middle of the next decade and possibly later depending on the sequence and outcome 

of research activities." 

Jeremy Boak, director, Center for Oil Shale Technology and Research, Colorado School of 

Mines, E&E News, November 18, 2011 "It isn't obvious to me yet that we need to be putting 

a bunch of commercial leases out there because no one has a commercial process yet. .. I don't 

see anybody eager to go out and lease land now when they're still running experiments." 

Gene Whitney, Ph.D., manager, energy research, Congressional Research Service, House 

Natural Resources Committee oversight hearing, March 17, 2011- "We did not do a 

technically recoverable [oil shale] resource estimate because there isn't one technology yet that 

is proven." 

Memo by ExxonMobil, Colorado Springs Gazette, November 23, 2011 - "Many years of 

research and development will be required to demonstrate the technical, enviromnental, and 

economic feasibility of (oil shale) technology." 

Tom Yelverton, ExxonMobil, Grand Junction Daily Sentinel, November 11,2010 - "At 

best, commercial production is a decade away and most likely more." 

Patrick McGinn, ExxonMobiJ, Colorado Independent, October 15,2010 - "We plan to 

evaluate our in situ technology called Electrofrac thoroughly over several years before making 

any decisions on commercial proj ects." 

Glenn Vawter, director, National Oil Shale Association, Glenwood Springs Post 

Independent, March 31, 2008 - "The short answer is that I don't think we will see anyone 

embark on a commercial project for well into the next decade." 

Tracy Boyd, Shell Oil, Glenwood Springs Post Independent, November 11,2008 - "In fact, 

it could take up to 10 to 12 years of additional research, enviromnental analysis and permitting 

before a company could develop a federal oil shale lease." 
289 

STATE OF COLORADO ) 

)ss. 

COUNTY OF GARFIELD ) 

At 6 regular meeting of the Board of County Commissioners for Garfield County, Colorado, held at the County 

Administration Building in Glenwood Springs on __ • the_. day of_. __ --' 20-, there Were present: 

-;T,-,;om:"-":"Ja""nk=ov,,,,sky ........ __ , Commissioner 

... M",ik""e""S""am""so",n ___ ,. Commissioner 

.... J!l!.!ohn!!!.!!M~artm"':·!l-__ • Commissioner Chainnan 

.... J""ean"'-'Al"""'be""rico"'-__ , Clerk to the Board 

when the following proceedings, among others were bad and done, to-wit 

RESOLUTION NO. 12-_ 

RESOLUTION OPPOSING THE BLM'S OIL SHALE AND TAR SANDS PROGRAMMATIC 

ENVIRONMENTAL IMPACT STATEMENT, BLM PROJECT # WO-300-l310-PP-OSHL 

(HEREAFTER 201 I OSTS PElS) FOR LANDS ADMINISTERED BY THE BLM 

IN COLORADO, UTAH AND WYOMING 

WHEREAS, the Board of County Commissioners of Garfield County, State of Colorado 

("BOCC") is a legal and political subdivision of the State of Colorado for which the BOCC is 

authorizedto act; and 

WHEREAS, this Resolution is adopted in open meeting after due opportunity for public 

comment, by the Board of Commissioners of Garfield County, in order to redress the many 

violations of law, regulation, and policy by the BLM with respect to the BLM's 2012 OSTS 

PElS; and 

BACKGROUND 

As background to this Resolution, the BOCC recites the following grievances: 

WHEREAS, on April 14,2011, the BLM caused to be published in the Federal Register, 

Volume 76, No nfThursday, April 14, 2011, pages 21003-21005, a notice of intent to prepare 

the above-referenced 2012 OSTS PElS; and 

WHEREAS, the preliminary purpose and need statement in the notice of intent, states the 

PElS will analyze removing from oil shale and tar sands leasing "All areas that the BLM has 

identified or may identify as a result of inventories conducted during this planning process, as 

lands containing wilderness characteristics[.]" [d, at page 21004; and 

WHEREAS, the notice of intent further states at page 21004: 
290 

Lands that the BLM identifies as having wilderness characteristics will be 

considered during this planning initiative, as described above, and consistent with 

Secretarial Order No. 3310, dated Dec. 22, 2010, and BLM Manuals 6301 and 

6302. Future leasing of lands determined by the BLM to have wilderness 

characteristics, if compatible with the allocation decisions stemming from this 

initiative, will subsequently be assessed in accordance with BLM Manual 6303, 

as appropriate (Le., where the BLM has not determined, consistent with BLM 

Manual 6302, whether the lands with wilderness characteristics at issue should 

receive a wild lands designation, BLM Manual 6303 will apply); and 

WHEREAS, this language documents the BLM's intent to implement, administer and/or 

enforce Secretarial Order 3310 and one or more of the BLM guidance manuals promulgated 

under Order 3310; and 

WHEREAS, any attempt by the BLM to implement, administer and/or enforce 

Secretarial Order 3310, including any effort by the BLM to proceed further on the abovereferenced Programmatic BIS, violates the spending moratorium of Section 1769 of the April 21, 

2011 Congressional Continuing Resolution to Fund Fiscal Year 2011 through September 30, 

2011, which states: 

For the fiscal year ending September 30, 2011, none of the funds made available 

by this division or any other Act may be used to implement, administer, or 

enforce Secretarial Order No. 3310 issued by the Secretary of the Interior on 

December 22, 2010; and 

WHEREAS, this spending moratorium has been carried forward in all subsequent 

Congressional spending resolutions up to and including the current spending resolution; and 

WHEREAS, the 2012 OSTS PElS, is an admitted attempt by the BLM to implement, 

administer and/or enforce Secretarial Order 3310 and its policies and objectives, all in violation 

of the Spending Moratorium of the 2011 Continuing Resolution; and 

WHEREAS, the 2008 Oil Shale and Tar Sands Programmatic EIS (2008 OSTS PElS) 

was required under Section 369 (d) (1) of the Energy Policy Act of 2005 and was prepared in 

cooperation with 14 federal, state, and local governmental organizations; and 

WHEREAS, the 2008 OSTS PElS was 3 years in the making, and it honored the input of 

a task force of Governors and other stakeholders as per requirement of the 2005 Energy Policy 

Act; and 

WHEREAS, the Record of Decision (ROD) for the 2008 OSTS PElS amended 10 land 

use plans in Colorado, Utah, and Wyoming to make approximately 2 million acres of public 

lands available for potential leasing and development of oil shale and approximately 430,000 

2 
291 

acres available for tar sands leasing. Together with the regulations published in 2006 and 2008 

for oil shale and tar sands resources, the 2008 OSTS PEIS and subsequent land use amendments 

constituted a reasonable and rational establishment of an oil shale and tar sands program as 

mandated in the Energy Policy Act of200S; and 

WHEREAS, the oil shale and tar sands program to which the 2008 OSTS PElS and 

related regulations gave birth was a reasonable response to the fact that oil shale and tar sands 

resources in the Green River Formation located in northeastern Utah, northwestern Colorado and 

southwestern Wyoming may reach 8 trillion barrels of oil; and 

WHEREAS, the preferred altemative in the draft 2012 OSTS PElS drastically shrinks, 

diminishes and in many areas outright reverses virtually all of the lands made available for Oil 

Shale and Tar Sands development in 2008, and does so using the same data and science; and 

WHEREAS, such a drastic reversal in lands available for Oil Shale and Tar Sands 

development between the 2008 PElS and the 2012 preferred altemative, violates regulatory ran 

Task Force requirements of certainty for industry and investors; and 

WHEREAS such a drastic reversal of lands available for Oil Shale and Tar Sands 

development in 2008, constitutes a de facto, piece-meal revision of previous BLM Resource 

Management Plans; in violation of the Section 202 Planning Process under FLPMA; and 

WHEREAS, the preferred alternative in the draft 2012 OSTS PEIS entirely ignores the 

input of the task force and stakeholders which the 2005 Energy Policy Act directed the BLM to 

honor and follow; and moreover the draft 2012 OSTS PElS may well violate various memoranda 

of understanding (MOUs) with counties which require the BLM to publish the written input of 

cooperators who disagree with the preferred alternative; and 

WHEREAS the draft 2012 OSTS PElS preferred alternative significantly restricts the 

acreage allotted in the 2008 PElS for research and development leasing; and 

WHEREAS the draft 2012 OSTS PElS preferred alternative threatens to arbitrarily 

undermine the process and the work utilized in creation of the 2008 OSTS PElS, and essentially 

dismantle a reasonable and rational oil shale and tar sands program in violation of Section 369 of 

the 2005 Energy Policy Act; and 

WHEREAS, the 2012 OSTS PElS preferred alternative. is the creature of a friendly 

lawsuit settlement agreement between the BLM and ideological opponents to oil shale 

development, and is therefore entirely pre-determined and pre-decisional in violation of NEP A, 

with no apparent rationale for revising the acreages approved in 2008; and 

3 
292 

WHEREAS, the BLM has settled on a preferred alternative in the 2012 OSTS PElS 

admittedly without having first analyzed its impacts; BLM should be required to withdraw the 

preferred status of the alternative until it has performed this analysis; and 

WHEREAS, the acreage approved for Oil Shale and Tar Sands development in the draft 

2012 OSTS PElS preferred alternative bears no rational relationship to the stated purpose and 

need; and 

WHEREAS, the Department of Energy has basically abdicated the responsibility 

Congress placed upon it to defend and uphold a viable oil shale energy program in America, 

leaving it instead to the BLM encumbered by a host of anti-oil shale pro-wilderness groups 

steering BLM's every move; and 

WHEREAS, the alternative adopted in .the ROD of the 2008 OSTS PElS is now the No 

Action Alternative of the draft 2012 OSTS PEIS; and 

WHEREAS, the 2008 OSTS PElS chosen alternative is consistent with the multiple use, 

sustained yield of the Federal Land Policy Management Act (FLPMA); and 

WHEREAS, the 2008 OSTS PElS chosen alternative is consistent with county general 

plans and policies which call for responsible development of available energy resources; and 

WHEREAS, the development and productiOli of oil from oil shale has been proven 

beyond a doubt to be technologically and economically feasible; and 

WHEREAS, this same technology to extract oil from the oil shale rock is not only 

economically feasible, but it requires little to no consumption of water, contrary to the myths 

which falsely claim that oil shale extraction requires large consumption of water resources; and 

WHERAS, the energy captured in the extract of oil from shale (natural gas capture, etc.,) 

more than makes up for energy consumed in that extraction process, thus dispelling the myth that 

the oil shale extraction process consumes more energy than it produces; and 

WHEREAS, the rising price of gasoline, coupled with ever increasing loss of good 

paying jobs due to the Administration's policies against energy development on western public 

lands, result in increasing hardships for families and the local economy, to the point where some 

fear the window of opportunitY is about to close for a civil, lawful and orderly response as 

citizens feel more and more pressured and desperate financially; and 

WHEREAS, the 2012 OSTS PElS improperly limits technology testing to strictly in situ 

efforts and does not allow for development of other technologies; and 

4 
293 

WHEREAS, the BLM bas left insufficient time for the public and cooperators to 

meaningfully comment on the public draft 2012 OSTS PElS by the present comment deadline of 

May 4, 2012, because a highly relevant commercial oil shale BLM regulation is not due to be 

published until May 15, 2012 and the public should have the right to view that regulation fIrst 

and then submit comments on the draft 2012 OSTS PElS in light ofiliat regulation; and 

WHEREAS, the same problems with lack of consistency with local plans and policies 

and failure to honor the input of cooperators and all stakeholders, also besets many public lands 

ElS projects, in addition to the 2012 OSTS PElS. The cooperators from Utah and Wyoming have 

already unanimously requested for the No-Action alternative in the draft 2012 OSTS PElS 

become the preferred alternative. 

NOW TIlEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY 

COMMISSIONERS OF GARFIELD COUNTY, STATE OF COLORADO AS FOLLOWS: 

I. 

2012 OSTS 

Moratorium 

subsequent 

Garfield County declares the BLM's continuing to administer and carry out the 

PElS to be an open contempt and flaUliting of the Congressional Spending 

fust imposed in the 2011 Continuing Resolution and carried forward in all 

Congressional spending resolutions up to and including the present. 

2. GarfIeld County calls upon the BLM to cease all further activities with respect to 

administering and carrying out the 2012 OSTS PElS, because domg so constitutes an open 

Contempt and violation of the Congressional Spending Moratorium against implementing, 

administering and/or enforcing Secretarial Order 3310, which Spending Moratorium was first 

imposed m the 20 II Continuing Resolution and carried forward in all subsequent Congressional 

spending resolutions up to and mcluding the present. 

3. Garfield County calls upon the BLM to ~diately cease and desist all activities 

related to the above-referenced 2012 OSTS PElS and immediately publish a revised notice m the 

Federal Register signifying its cessation of all work on the Programmatic EIS in obedience to the 

above- quoted Spending Moratorium. Otherwise, the BLM would be in contempt of Congress. 

4. Should BLM continue to go forward with the 2012 OSTS PElS regardless of 

these grievances, the only legally, viable alternative would be if the BLM adopted the No-Action 

Alternative, which is identical to the Alternative chosen in the ROD of the 2008 OSTS PElS. 

5. The BLM should extend the May 4, 2012 deadline for public comment on the 

draft 2012 OSTS PElS at least 30 days after publication of the expected oil shale regulation due 

to be published on or around May 15,2012. 

6. The BLM should honor the input of cooperators, particularly if they are local 

govemments, as required by Section 202( c )(9) of FLPMA, in all matters, not just with respect to 

the 2012 OSTS PElS. 

5 
294 

DATED this _ day of ____ ---', 20_. 

ATIEST: 

Clerk to the Board 

BOARD OF COUNTY COMMISSIONERS OF 

GARFIELD COUNTY, STATE OF COLORADO 

By: _=--:--_______ _ Chairperson 

Upon motion duly made and seconded the foregoing Resolution was adopted by the following vote: 

Tom Jankovsky Aye 

Mike Samson Aye 

John Martin Aye 

Commissioners 

STATE OF COLORADO ) 

) ss. 

COUNTY OF GARFIELD ) 

1, Jean Alberico, County Clerk and ex-officio Clerk oflhe Board of County Commissioners in and for the County 

and State aforesaid do hereby certifY that the annexed and foregoing Resolution is truly copied from the Records of the 

Proceedings of the Board of County Commissioners for said Garfield County, now in my office. 

IN WITNESS WHEREOF, I bave hereunto set my hand and affixed the seal of said County, at Glenwood 

Springs, this _ day of , AD. 20_. 

County Clerk and ex-officio Clerk of 

the Board of County Commissioners . 

6 
295 

RESOLUTION OF MESA COUNTY, STATE OF COLORADO

HCM 2012-034 

RESOLUTION OF MESA COUNTY 

STATE OF COLORADO 

OPPOSING THE BLM'S 2012 OIL SHALE AND TAR SANDS PROGRAMMATIC 

ENVIRONMENTAL IMPACT STATEMENT, BLM PROJECT # WO-300-131 O-PP-OSHL 

(HEREAFfER 2011 OSTS PElS) 

FOR LANDS ADMINISTERED BY THE BLM IN COLORADO, UTAH, AND WYOMING, 

This Resolution is adopted in open meeting after due opportunity for public comment, by -the 

Board of Commissioners of Mesa County, in order to redress the many violations of law, 

regulation, and policy by the BLM with respect to the BLM's 2012 OSTS PElS. 

BACKGROUND 

As background to this Resolution, Mesa County recites the following grievances: 

WHEREAS, On April 14, 2011, the BLM caused to be published in the Federal Register, 

Volume 76, No 72rrhursday, April 14, 2011, pages 21003-21005, a notice of intent to prepare 

the above-referenced 2012 OSTS PElS; and 

WHEREAS, the preliminary purpose and need statement in the notice of intent, states the PElS 

will analyze removing from ail shale and tar sands leasing "All areas that the BLM has identified 

or may identify as a result of inventories conducted during this planning process, as lands 

containing wilderness characteristics[.]" ld., at page 21004; and 

WHEREAS, the notice of intent further states at page 21004: 

Lands that the BLM identifies as having wilderness characteristics will be 

considered during this planning initiative, as described above, and consistent with 

Secretarial Order No. 3310, dated Dec. 22, 2010, and BLM Manuals 6301 and 

6302. Future leasing of lands determined by the BLM to have wilderness 

characteristics, if compatible with the allocation decisions stemming from this 

initiative, will subsequently be assessed in accordance with BLM Manual 6303, 

as appropriate (Le., where the BLM has not determined, consistent with BLM 

Manual 6302, whether the lands with wilderness characteristics at issue should be 

receive a wild lands designation, BLM Manual 6303 will apply); and 

WHEREAS, this language documents the BLM's intent to implement, administer andlor enforce 

Secretarial Order 3310 and one or mare of the BLM guidance manuals promulgated under Order 

3310; and 

WHEREAS, any attempt by the BLM to implement, adniinister andlor enforce Secretarial Order 

3310, including any effort by the BLM to proceed further on the above-referenced Programmatic 
296 

EIS, violates the spending moratorium of Section 1769 of the April 21, 2011 Congressional 

Continuing Resolution to Fund Fiscal Year 2011 through September 30, 2011, which states: 

For the fiscal year ending September 30, 2011, none of the funds made available 

by this division or any other Act may be used to implement, administer, or 

enforce Secretarial Order No. 3310 issued by the Secretary of the Interior on 

December 22, 2010; and 

WHEREAS, this spending moratorium has been carried forward in all subsequent Congressional 

spending resolutions up to and including the current spending resolution; and 

WHEREAS, the 2012 OSTS PElS, is an admitted attempt by the BLM to implement, administer 

and/or enforce Secretarial Order 3310 and its policies and objectives, all in violation of the 

Spending Moratorium of the 20 II Continuing Resolution; and 

WHEREAS, the 2008 Oil Shale and Tar Sands Programmatic EIS (2008 OSTS PElS) was 

required under Section 369 (d) (I) of the Energy Policy Act of 2005 and was prepared in 

cooperation with 14 federal, state, and local governmental organizations; and 

WHEREAS the 2008 OSTS PElS was 3 years in the making, and it honored the input of a task 

force of Governors and other stakeholders as per requirement of the 2005 Energy Policy Act; and 

WHEREAS, the Record of Decision (ROD) for the 2008 OSTS PElS amended 10 land use plans 

in Colorado, Utah, and Wyoming to make approximately 2 million acres of public lands 

available for potential leasing and development of oil shale and approximately 430,000 acres 

available for tar sands leasing. Together with the regulations published in 2006 and 2008 for oil 

shale and tar sands resources, the 2008 OSTS PElS and subsequent land use amendments 

constituted a reasonable and rational establishment of an oil shale and tar sands program as 

mandated in the Energy Policy Act of 2005; and 

WHEREAS, the oil shale and tar sands program to which the 2008 OSTS PElS and related 

regulations gave birth, was a reasonable response to the fact that oil shale and tar sands resources 

in the Green River Fonnation located in northeastern Utah, northwestern Colorado, and 

southwestern Wyoming may reach 4 trillion barrels of oil; and 

WHEREAS, the preferred alternative in the draft 2012 OSTS PElS drastically shrinks, 

diminishes and in many areas outright reverses virtually all of the lands made available for Oil 

Shale and Tar Sands development in 2008, and does so using the same data and science; and 

WHEREAS, such a drastic reversal in lands available for Oil Shale and Tar Sands development 

between the 2008 PElS and the 2012 preferred alternative, violates regulatory ran Task Force 

requirements of certainty for industry and investors; and 

WHEREAS such a drastic reversal of lands available for Oil Shale and Tar Sands development 

in 2008, constitutes a de facto, piece-meal revision of previous BLM Resource Management 

Plans, in violation of the Section 202 Planning Process under FLPMA; and 

2 
297 

WHEREAS, the preferred alternative in the draft 2012 OSTS PElS entirely ignores the input of 

the task force and stakeholders which the 2005 Energy Policy Act directed the BLM to honor 

and follow; and moreover the draft 2012 OSTS PElS may well violate various memoranda of 

understanding (MOUs) with counties which require the BLM to publish the written input of 

cooperators who disagree with the preferred alternative; and 

WHEREAS the draft 2012 OSTS PElS preferred alternative significantly restricts the acreage 

allotted in the 2008 PElS for research and development leasing; and 

WHEREAS the draft 2012 OSTS PElS preferred alternative threatens to arbitrarily undermine 

the process and the work utilized in creation of the 2008 OSTS PElS, and essentially dismantle a 

reasonable and rational oil shale and tar sands program in violation of Section 369 of the 2005 

Energy Policy Act; and 

WHEREAS, the 2012 OSTS PElS preferred alternative is the creature of a friendly lawsuit 

settlement agreement between the BLM and ideological opponents to oil shale development, and 

is therefore entirely pre-detennined and pre-decisional in violation of NEPA, with no apparent 

rationale for revising the acreages approved in 2008; and 

WHEREAS, the BLM has settled on a preferred alternative in the 2012 OSTS PElS admittedly 

without having first analyzed its impacts; BLM should be required to withdraw the preferred 

status of the altemati ve until it has perfonned this analysis; and 

WHEREAS, the acreage approved for Oil Shale and Tar Sands development in the draft 2012 

OSTS PElS preferred alternative bears no rational relationship to the stated purpose and need; 

and 

WHEREAS, the Department of Energy has basically abdicated the responsibility Congress 

placed upon it to defend and uphold a viable oil shale energy program in America, leaving it 

instead to the BLM encumbered by a host of anti-oil shale pro-wilderness groups steering BLM's 

every move; and 

WHEREAS, the alternative adopted in the ROD of the 2008 OSTS PElS is now the No Action 

Alternative of the draft 2012 OSTS PElS; and 

WHEREAS, the 2008 OSTS PElS chosen alternative is consistent with the multiple use. 

sustained yield of the Federal Land Policy Management Act (FLPMA); and 

WHEREAS. the 2008 OSTS PElS chosen alternative is consistent with county general plans and 

policies which call for responsible development of available energy resources; and 

WHEREAS. the development and production of oil from oil shale has been proven beyond a 

doubt to be technologically and economically feasible; and 

3 
298 

WHEREAS, this same technology to extract oil from the oil shale rock is not only economically 

feasible, but it requires little to no consumption of water, contrary to the myths which falsely 

claim that oil shale extraction requires large consumption of water resources; and 

WHERAS, the energy captured in the extract of oil from shale (natural gas capture, etc.,) more 

than makes up for energy consumed in that extraction process, thus dispelling the myth that the 

oil shale extraction process consumes more energy than it produces; and 

WHEREAS, the rising price of gasoline, coupled with ever increasing loss of good paying jobs 

due to the Administration's policies against energy development on western public lands, result 

in increasing hardships for families and the local economy; and 

WHEREAS, the 2012 OSTS PElS improperly limits technology testing to strictly in situ efforts 

and does not allow for development of other technologies; and 

WHEREAS, the BLM has left insufficient time for the public and cooperators to meaningfully 

comment on the public draft 2012 OSTS PElS by the present comment deadline of May 4, 2012, 

because a highly relevant commercial oil shale BLM regulation is not due to be published until 

May 15, 2012 and the public should have the right to view that regulation first and then submit 

comments on the draft 2012 OSTS PEIS in light of that regulation; and 

WHEREAS, the same problems with lack of consistency with local plans and policies and failure 

to honor the input of cooperators and all stakeholders, also besets many public lands ElS 

projects, in addition to the 2012 OSTS PEIS. The cooperators from Utah and Wyoming have 

already unanimously requested for the No-Action alternative in the draft 2012 OSTS PElS 

become the preferred alternative. 

RESOLUTION 

NOW THEREFORE, BE IT RESOLVED BY MESA COUNTY, STATE OF COLORADO AS 

FOLLOWS: 

l. Mesa County declares the BLM's continuing to administer and carry out the 2012 OSTS 

PElS to be an open contempt and flaunting of the Congressional Spending Moratorium first 

imposed in the 2011 Continuing Resolution and carried forward in all subsequent Congressional 

spending resolutions up to and including the present; 

2. Mesa County calls upon the BLM to cease all further activities with respect to 

administering and carrying out the 2012 OSTS PEIS, because doing so constitutes an open 

contempt and violation of the Congressional Spending Moratorium against implementing, 

administering andlor enforcing Secretarial Order 3310, which Spending Moratorium was first 

imposed in the 2011 Continuing Resolution and carried forward in all subsequent Congressional 

spending resolutions up to and including the present; 

4 
299 

3. Mesa County calls upon the BLM to immediately cease and desist all activities related to 

the above-referenced 2012 OSTS PElS and immediately publish a revised notice in the Federal 

Register signifying its cessation of all work on the Programmatic EIS in obedience to the abovequoted Spending Moratorium. Otherwise, the BLM would be in contempt of Congress; 

4. Should BLM continue to go forward with the 2012 OSTS PElS regardless of these 

grievances, the only legally, viable alternative would be if the BLM adopted the No-Action 

Alternative, which is identical to the Alternative chosen in the ROD of the 2008 OSTS PElS; 

5. The BLM should extend the May 4, 2012 deadline for public comment on the draft 2012 

OSTS PElS at least 30 days after publication of the expected oil shale regulation due to be 

published on or around May 15,2012; 

6. The BLM should honor the input of cooperators, particularly if they are local 

governments, as required by Section 202(c)(9) of FLPMA, in all matters, not just with respect to 

the 2012 OSTS PElS. 

DULY MOVED, SECONDED AND PASSED THIS 16th day of April, 2012 

Sheila Reiner 

Mesa County Clerk & Recorder 

BOARD OF COUNTY COMMISSIONERS OF 

MESA COUNTY, COLORADO 

L~~ilj/! / 

By: ______ ~-? ___ L-____________ __ 

Chairman v{ 

5 
300 

MESA COUNTY NEWS RELEASE, APRIL 19, 2012, AND RESOLUTION NO. 2012-12 

Date: April 19, 2012 

~MESA ~COUNTY 

NEWS RELEASE 

Contact: Jessica Peterson 

Public Relations Director 

(970) 244-1640 

Jessica.peterson@mesacountv.us 

Mesa County Opposes Changes to Federal Plans for Oil Shale Leasing 

County Commissioners in three states are calling upon the Bureau of Land Management 

to stop the process for a new environmental impact statement. 

The Mesa County Board of Commissioners has unanimously approved a resolution calling on the federal 

Bureau of Land Management (BLM) to stop its plans to change an existing environmental impact 

statement on oil shale and tar sands resources in Colorado, Wyoming and Utah. 

"Mesa County has a long history of working closely with our federal agencies-including the BLM- and 

we still support the agency's 2008 environmental impact statement for our area," said Craig Meis, Chair of 

the Mesa County Board of Commissioners. "We do not support re-vamping the process to put more 

restrictions on energy development on BLM lands in our area." 

Eleven counties in Colorado, Utah and Wyoming are joining together to oppose the process to re-analyze 

the potential environmental effects of leasing BLM lands to access oil shale and tar sands resources. The 

BLM has published a notice of its intent to prepare a new 2012 Oil Shale and Tar Sands Programmatic 

Environmental Impact Statement (OSTS PElS). 

The Commissioners highlighted the fact that oil shale and tar sands located in northeastern Utah, 

northwestern Colorado and southwestern Wyoming contain significant oil resources. Their resolution 

states that the 2012 OSTS PElS will consider"removing from oil shale and tar sands leasing 'all areas that 

the BLM has identified or may identify ... as lands containing wilderness characteristics." 

"We feel the 2008 analysis--which took three years to complete--was very thorough and took into account 

local and state input," said Mesa County Commissioner Janet Rowland. "The preferred alternative in this 

new federal process aims to add restrictions to oil shale development that would have a serious negative 

impact on our local economy." 

"Mesa County is a regional economic hub for western Colorado and eastern Utah," added County 

Commissioner Steve Acquafresca. "As local government representatives, we want to make sure our local 

economy, environment and quality of life are taken into consideration when these important decisions are 

made: 

According to the resolution, '~he preferred alternative in the draft 2012 OSTS PElS drastically shrinks, 

diminishes and in many areas outright reverses virtually all of the lands made available for Oil Shale and 

Tar Sands development in 2008, and does so using the same data and science." 

Mesa County's resolution calls upon the BLM to discontinue the 2012 OSTS PElS effort. If the BLM moves 

forward with the 2012 planning process, the resolution recommends that Alternative A-no action-be 

chosen, as it is identical to the alternative chosen in the 2008 OSTS PElS. 

"The thoughtful and carefully regulated exploration and development of oil shale reserves is a vital 

component of energy development for our country and our local area," said Commissioner Meis. View his 

slide presentation online at: www.mesacounty.us. 

"Mesa County-Creating a community of opportunities for all residents 

with a focus on the future." Page 1 of 1 
301 

RESOLUTION NO. 2012-..E::: 

A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF RIO BLANCO 

COUNTY, COLORADO, OPPOSING THE UNITED STATE BUREAU OF LAND 

MANAGEMENT'S (BLM) 2012 OIL SHALE AND TAR SANDS PROGRAMMATIC 

ENVIRONMENTAL IMPACT STATEMENT, BLM PROJECT # WO-300-1310-PP-OSHL 

(HEREAFTER 2012 OSTS PElS) FOR LANDS ADMINISTERED BY THE BlM IN COLORADO, 

UTAH AND WYOMING 

Concerning Secretary of the Interior Secretarial Order 3310 issued December 22, 2010 

("Secretarial Order 3310"). 

WHEREAS, On April 14, 2011, the BLM caused to be published in the Federal Register, 

Volume 76, No 72/Thursday, April 14, 2011, pages 21003-21005, a notice of intent to prepare 

the above-referenced 2012 OsTs PElS; and 

WHEREAS, the preliminary purpose and need statement in the notice of intent, states the 2012 

OsTs PElS will analyze removing from 011 shale and tar sands leasing "All areas that the BLM has 

identified or may identify as a result of inventories conducted during this planning process, as 

lands containing wilderness characteristics[.)" Id., at page 21004; and 

WHEREAS, the notice of intent further states at page 21004: 

"Lands that the BLM identifies as having wilderness characteristics will be considered 

during this planning initiative, as described above, and consistent with Secretarial Order 

No. 3310, dated Dec. 22, 2010, and BLM Manuals 6301 and 6302. Future leasing of lands 

determined by the BLM to have wilderness characteristics, if compatible with the 

allocation decisions stemming from this initiative, will subsequently be assessed in 

accordance with BLM Manual 6303, as appropriate (Le., where the BLM has not 

determined, consistent with BLM Manual 6302, whether the lands with wilderness 

characteristics at issue should be receive a wild lands designation, BLM Manual 6303 will 

apply)"; and 

WHEREAS, this language documents the BLM's intent to implement, administer and/or enforce 

Secretarial Order 3310 and one or more of the BLM guidance manuals promulgated under 

Order 3310; and 

WHEREAS, any attempt by the BLM to implement, administer and/or enforce Secretarial Order 

3310, including any effort by the BLM to proceed further on the 20120sTs PEtS, violates the 

spending moratorium of Section 1769 of the April 21, 2011 Congressional Continuing 

Resolution to Fund Fiscal Year 2011 through September 30,2011, which states: 

1 
302 

"For the fiscal year ending September 30,2011, none ofthe funds made available by 

this division or any other Act may be used to implement, administer, or enforce 

Secretarial Order No. 3310 issued by the Secretary ofthe Interior on December 22, 

2010"; and 

WHEREAS, this spending moratorium has been carried forward in all subsequent Congressional 

spending resolutions up to and including the current spending resolution; and 

WHEREAS, the 2012 05TS PElS, is an admitted attempt by the BlM to implement, administer 

and/or enforce Secretarial Order 3310 and its policies and objectives, all in violation ofthe 

Spending Moratorium of the 2011 Continuing Resolution; and 

Concerning the 2008 OSTS PElS 

WHEREAS, the 2008 Oil Shale and Tar Sands Programmatic EIS (2008 OSTS PElS) was required 

under Section 369 (d) (1) of the Energy Policy Act of 2005 and was prepared in cooperation with 

14 Federal, state, and local governmental organizations; and 

WHEREAS, the 2008 OSTS PElS was three years in the making, and honored the input of a task 

force of Governors and other stakeholders as required by the 2005 Energy Policy Act; and 

WHEREAS, the Record of Decision (ROD) for the 2008 OST5 PElS amended 10 land use plans in 

Colorado, Utah, and Wyoming to make approximately 2 million acres of public lands available 

for potential leasing and development of oil shale and approximately 430,000 acres available 

for leasing and development oftar sands. Together with the regulations published in 2006 and 

2008 for oil shale and tar sands resources, the 2008 OSTS PElS and subsequent land use 

amendments constituted a reasonable and rational establishment of an oil shale and tar sands 

program as mandated in the Energy Policy Act of 2005; and 

WHEREAS, the oil shale and tar sands program which the 2008 05TS PElS and related 

regulations delivered, was a reasonable response to the fact that oil shale and tar sands 

resources in the Green River Formation located in northeastern Utah, northwestern Colorado 

and southwestern Wyoming are estimated to be the equivalent of 8 trillion barrels of oil; and 

WHEREAS, the 2008 OSTS PElS chosen alternative is consistent with the multiple use, sustained 

yield ofthe Federal land Policy Management Act (FlPMA); and 

WHEREAS, the 2008 OSTS PElS chosen alternative is consistent with the County Master Plan and 

policies which call for responsible development of available energy resources; and 

WHEREAS, the alternative adopted in the Record of Decision (ROD) of the 2008 OSTS PElS is 

now the No Action Alternative ofthe draft 2012 OSTS PElS; and 

2 
303 

Concerning the 2012 om PElS 

WHEREAS, the preferred alternative in the draft 2012 OSTS PElS drastically shrinks, diminishes 

and in many areas outright reverses virtually all of the lands made available for Oil Shale and 

Tar Sands development in 2008, and does so using the same data and science; and 

WHEREAS, such a drastic reversal in lands available for Oil Shale and Tar Sands development 

between the 2008 PElS and the 2012 preferred alternative, violates regulatory Task Force 

requirements of certainty for industry and investors; and 

WHEREAS, such a drastic reversal of lands available for Oil Shale and Tar Sands development 

in 2008, constitutes a de facto, piece-meal revision of previous BlM Resource Management 

Plans, in violation ofthe Section 202 Planning Process under FlPMA; and 

WHEREAS, the preferred alternative in the draft 2012 OSTS PElS entirely ignores the input of 

the task force and stakeholders which the 2005 Energy Poliey Act directed the BlM to honor 

and follow; and moreover the draft 2012 OSTS PElS may well violate various memoranda of 

understanding (MOUs) with counties which require the BlM to pUblish the written input of 

cooperators who disagree with the preferred alternative; and 

WHEREAS, the draft 2012 OSTS PElS preferred alternative significantly restricts the acreage 

allotted in the 2008 PElS for research and development leasing; and 

WHEREAS, the draft 2012 OSTS PElS preferred alternative threatens to arbitrarily undermine 

the process and the work utilized in creation of the 2008 OSTS PElS, and essentially dismantle a 

reasonable and rational oil shale and tar sands program in violation of Section 369 of the 2005 

Energy Policy Act; and 

WHEREAS, the 2012 OSTS PElS improperly limits technology testing to strictly in situ efforts and 

does not allow for development of other technologies; and 

WHEREAS, the 2012 OSTS PElS preferred alternative is the creature of a friendly lawsuit 

settlement agreement between the BLM and ideological opponents to oil shale development, 

and is therefore entirely pre-determined and pre-decisional in violation of NEPA, with no 

apparent rationale for revising the acreages approved in 2008; and 

WHEREAS, the BLM has settled on a preferred alternative in the 2012 OSTS PElS admittedly 

without having first analyzed its impacts; the BLM should be required to withdraw the 

preferred status of the alternative until it has performed this analysis; and 

WHEREAS, the acreage approved for Oil Shale and Tar Sands development in the preferred 

alternative ofthe draft 2012 OSTS PElS bears no rational relationship to the stated purpose and 

need; and 

3 
304 

Concerning Oil Shale Facts 

WHEREAS, the development and production of oil from oil shale has been demonstrated to be 

technologically and economically feasible elsewhere in the world; and 

WHEREAS, some technologies to extract oil from the oil shale rock are not only economically 

feasible, but require little or no consumption of water; and 

WHEREAS, the energy captured in the extraction of oil and other hydrocarbons from shale more 

than makes up for energy consumed in that extraction process; and 

Other Concerns 

WHEREAS, the riSing price of gasoline, coupled with ever-increasing loss of good paying jobs 

due to the Administration's policies against energy development on western public lands, 

results in increasing hardships for families and the local economy; and 

WHEREAS, the Department of Energy has basically abdicated the responsibility Congress placed 

upon it to defend and uphold a viable oil shale energy program in America, leaving it instead to 

a BLM encumbered by a host of anti-oil shale pro-wilderness groups steering the BLM's oil shale 

policy; and 

WHEREAS, the BLM has left insufficient time for the public and cooperators to meaningfully 

comment on the public draft 2012 OSTS PElS by the present comment deadline of May 4,2012, 

because a highly relevant commercial oil shale BLM regulation is not due to be published until 

May 15, 2012, and the public should have the right to view that regulation first and then submit 

comments on the draft 2012 OSTS PElS in light of that regulation; and 

WHEREAS, the same problems with lack of consistency with local plans and policies and failure 

to honor the input of cooperators and all stakeholders, also besets many public lands EIS 

projects, in addition to the 2012 OSTS PElS. The cooperators from Utah and Wyoming have 

already unanimously requested for the No-Action alternative in the draft 2012 OSTS PElS 

become the preferred alternative; 

NOW, THEREFORE, BE IT RESOlVED BY THE BOARD OF COUNTY COMMISSIONERS OF 

RIO BLANCO COUNTY, COLORADO, THAT: 

1. Rio Blanco County declares the BLM's continuing to administer and carry out the 2012 

OSTS PElS to be an open contempt and flaunting ofthe Congressional Spending Moratorium 

first imposed in the 2011 Continuing Resolution and carried forward in all subsequent 

Congressional spending resolutions up to and including the present one in effect. 

2. Rio Blanco County calls upon the BlM to cease all further activities with respect to 

administering and carrying out the 2012 OSTS PElS, because doing so is an open contempt and 

4 
305 

violation ofthe Congressional Spending Moratorium against implementing, administering 

and/or enforcing Secretarial Order 3310, for which the Spending Moratorium was first imposed 

in the 2011 Continuing Resolution and carried forward in all subsequent Congressional 

spending resolutions up to and including the present. 

3. Rio Blanco County calls upon the BlM to immediately cease and desist all activities related to 

the above-referenced 2012 OSTS PEI~ and immediately publish a revised notice in the Federal 

Register signifying its cessation of all work on the Programmatic EIS in obedience to the abovequoted Spending Moratorium. Otherwise, the BlM would be in contempt of Congress. 

4. Should BlM continue to go forward with the 2012 OST5 PElS regardless of these grievances, 

the only legally, viable atternative would be ifthe BlM adopted the No-Action Alternative, 

which is identical to the Alternative chosen in the ROD of the 2008 05TS PElS. 

5. The BlM should extend the May 4,2012, deadline for public comment on the draft 2012 

OSTS PElS by at least 30 days after publication ofthe expected oil shale regulation which is due 

to be published on or around May 15, 2012. 

6. The BLM should honor the input of cooperators, particularly if they are local governments, as 

required by Section 202(cj(9) of FlPMA, in all matters, not just with respect to the 2012 05T5 

PElS. 

DULY MOVED, SECONDED, AND PASSED ON A VOTE OF 2-FOR AND 

_O_AGAINST THIS j(. t! DAY OF 4+ 2012. 

ATTEST: 

BOARD OF COUNTY COMMISSIONERS OF 

RIO 

~~ 

BLANCO COUNTY, COLO,;.:RA:,:;D::,:O=----===_ 

/ 

Kenneth C. Parsons, Commissioner 

Kai M. Turner, Commissioner 

S 
306 

ECONOMIC IMPACT OF FAILURE TO IMPLEMENT LEGISLATIVE MANDATES OF SEC 369, 

ENERGY POLICY ACT 2005, A WHITE PAPER BY ANTON DAMMER, M.S., AND JAMES

BUNGER, PH.D. 
307 

OUR NEED FOR DOMESTIC ENERGY IS INCREASING, NOT DECREASING 

It is abundantly clear that US economy depends on affordable and available supplies of 

energy. While recent attention is being paid to prices, the long-term outlook places doubt on 

adequate supply. It is easy to see that the greater our domestic supply, and the more 

imported oil that is produced in the Western Hemisphere, the more secure will be our Nation 

and Economy. 

Congress recognized these facts when they passed the Energy Policy Act of 2005 (Act). In 

particular, Sec 369 of that Act focused directly on promoting the development of liquid fuels 

from the Nation's vast unconventional hydrocarbon resources. In particular, the law 

provided for the leasing of federal oil shale lands and the study and mitigation of technical, 

economic and regulatory impediments to unconventional fuels development. 

Immediately following passage of the Act, the Departments of Energy and Interior, assisted 

by the Department of Defense set about to pursue the mandates of Sec. 369. Tangible 

progress had been made in the prior Administration and this progress is outline in the 

Appendix at the end of this paper. However, further progress toward the goals of Sec 369 

have not only languished, but in certain instances have been obstructed by the current 

Administration. 

Given the increasing need for domestic energy, and the long lead times needed to produce 

such resources, what are the potential impacts of obstruction and delays in development of 

these resources? 

DEVELOPMENT OF RECOMMENDATIONS 

Following passage of the Act an Unconventional Fuels Task Force was fonned comprised of 

cognizant federal agencies (Energy, Interior and Defense), States that contained resources 

(Colorado, Utah, Wyoming, Kentucky and Mississippi), and local officials from potential 

producing areas. 

The Task Force was staffed by the Office of Petroleum Reserves, Office of Naval Petroleum 

and Oil Shale Reserves (NPOSR) who were charged with the responsibility of executing the 

mandates of Sections 369 (h) and (i). As of the end of 2008 NPOSR had completed all 

requirements save the "implementation" part of the program. That path to implementation is 

clearly defined in both the subject Task Force Report and the Strategic Plan: Unconventional 

Fuels Development within the Western Energy Corridor,' both found at 

www.unconventionalfuels.org. 

Simultaneously, the US Dept of Interior pursued their mandate to promulgate leasing 

regulations for oil shale. Part of this effort also involved the preparation of a Programmatic 

Environmental Impact Statement (PElS), the updating of Resource Management Plans 

(RMPs) in the oil shale resource areas, and the offering and issuance of technology Research, 
308 

Development and Demonstration (RD&D) leases. By the end of 2008, the Dept. of Interior 

had completed the PElS, had awarded 6 RD&D leases and on Nov 18, 2008 issued final 

leasing regulations. 

The Unconventional Fuels Task Force prepared a schedule for development and itemized in 

some detail the impediments to that development. Many of these impediments have their 

origins in policy and legislation controlled by the Federal Government. The greatest 

limitation to expeditious oil shale development is the uncertainty over access to resource and 

understanding of Federal regulations governing Federal lands. Had these impediments been 

mitigated, and leasing proceeded as mandated in Sec 369, the US would be well on its way to 

substantial production of oil from these vast, secure domestic resources. 

Instead, not only has the current Administration failed to implement the Task Force action 

items, but has actually withdrawn 'leasing, which would have engaged the private sector in 

advancing development. Additionally, they have allowed the regulatory process to remain in 

a state of confusion. In particular, they have threatened to reopen the RMPs, and they have 

threatened to change the terms of the RD and D leases. The Administration (through the 

Department of Interior) has been complicit in a recent court ruling (Feb 15, 2011) delaying 

indefinitely the commercial and RDand D lease activities. All of this adds uncertainty to any 

investment, and causes capital to remain on the sideline. 

The question some in Congress are asking, is 'what are the implications of these adverse 

policies to our Nation's energy supply and economic security?' The adverse impact of this 

Administrative action can be quantified by comparing the possible with the reality. 

nm ECONOMIC IMPACTS OF FAILURE TO IMPLEMENT RECOMMENDATIONS 

As part of the Strategic Unconventional Fuels Program, the Office of Naval Petroleum and 

Oil Shale Reserves developed an economic model to project potential economic benefits that 

would accrue from an oil shale industry over a 25 year period, 2009 - 2035. Three different 

development scenarios were modeled on 2010 $451bbl and 2035 $651bbl oil: 

1. Base Case: production of 0.5 million barrels per day by 2035 had no Government 

incentives other than a $401bbl floor and was based on development of three 

major insitu production companies. 

2. Moderate Case: Production of 1.5 million barrels per day by 2035 had a $40/bbl 

price floor and a $51bbl production tax credit and was based on six insitu projects 

and one surface retorting operation. 

3. Accelerated Case: Production of 2.4 million barrels per day by 2035 with a price 

floor of $40Ibbl, $51bbl tax credit, and cost shared demonstration facilities for 

three technologies and was based on a variety of 17 projects. 

Each scenario had a pre-production start-up time from between nine years for the Base and 

Moderate Cases and four years for the Accelerated Case. The clock on these cases was to 
309 

have started in 2008. Indeed, the Department of Interior promulgated regulations for leasing 

on November 18, 2008. 

With oil prices currently in the $100/bbl range and 20 I 0 monthly closing prices averaging 

$791bbl the economic benefits calculated in the model are modest. There are few experts who 

foresee an appreciable decline in future oil prices while many predict dramatic increases 

based upon continuing supply uncertainty and growing demand in developing nations. 

Technological progress in the private sector has been increasingly aggressive and productive. 

The cumulative economic benefits ofthe three cases in the model are: 

To adjust the model numbers to reflect the current situation, the following assumptions are 

applied: 

1. Oil price is increased by a flat 20% (the difference between the monthly closing 

average in 2010 of $79/bbl and the models 2035 price of $64/bbl). This is 

obviously very conservative since the difference in the 2035 price in the model 

and closing price of oil on March 1,2011 was close to 40%. 

2. There is no need for price floors, tax credits, and Federal cost-shared 

demonstrations. 

3. All projects are delayed by half of their economic life, or approximately 12 years. 

Under those very simplified assumptions, that do not account for the loss of time value of 

money nor current oil price escalation, the cost of government inertia is substantial, as below. 

It should also be noted that oil shale development, as with other oil and gas industry 

developments, are a source of high paying employment. In the negative employment 

environment we are now experiencing in the United States it is estimated that delay of oil 

shale development would result in the loss of high-paying direct jobs on the order of 4850, 

13,000, and 21,700 for the Base, Moderate, and Accelerated Cases respectively. 
310 

Additionally, indirect jobs in the private service sector are several times the number of direct 

jobs, and these are lost as well. 

CONCLUSIONS 

What makes oil shale important to United States national security is the nature of the 

resource itself. It is the largest hydrocarbon resource on earth. On a per acre basis, it is the 

most concentrated oil bearing resource on earth. Yet as a nation, we continue to avert 

attention from this valuable resource and consciously impede and deny those actions that are 

required to develop U.S. domestic resources in a safe and envirorunentally responsible 

manner. We continue, as a Government, to foreclose on our own success. This is 

mysteriously destructive behavior. In the Energy Policy Act of 2005 the President and the 

Congress of the United States declared that unconventional fuels, including oil shale, "are 

strategically important resources that should be developed to reduce the growing 

dependence of the United States on political{v and economical{v unstable sources of 

foreign oil imports". 

Today the implied threat engendered in those words could not be more poignant. 

Recent unrest throughout the Arab lateral has driven world oil prices over $100fbbl. In 

Section 369 of the Act Congress outlines a rational process to begin the requisite planning 

and analysis to fully understand and eventually develop our domestic oil shale resources. The 

important work accomplished by DOl has been indefinitely suspended through the settlement 

of the oil shale leasing regulations suit. The Unconventional Fuels Program within the Office 

of Petroleum Reserves in the DOE is being de-funded and essentially abandoned. All the 

extensive preparatory work accomplished by the Task Force and Ad Hoc Working Group is 

to be ignored and archived, to the detriment of the nation's energy security. It is in the hands 

of Congress to require that the provisions of the law be executed in a manner that will assure 

the objectives of the Act are accomplished. 
311 

APPENDIX - SUMMARY OF SEC 369 AND MANDATED ACTIVITIES 

SEC. 369. OIL SHALE, TAR SANDS, AND OTHER STRATEGIC 

UNCONVENTIONAL FUELS. 

Declaration of Polic.v. - Congress declares that it is the policy of the United States that 

(1) United States oil shale, tar sands, and other unconventional fuels are strategically 

important resources that should be developed to reduce the growing dependence of 

the United States on poUtically and econom,'cally unstable sources of foreign oil 

imports; 

(2) The development of oil shale, tar sands, and other strategic unconventional fuels, 

for research and commercial development, should be conducted in an 

environmentally sound manner, using practices that minimize impacts; and 

(3) Development of those strategic unconventionalfuels should occur, with an 

emphasis on sustainability, to benefit the United States while taking into account 

affected States and communities. 

There followed a number of provisions (Sections) of the Act to assign responsibility and 

assure implementation ofthe policy. 

SECTIONS (c) thru (e): Leasing Program for Research &Development; Programmatic 

Environmental Impact Statement and Commercial Leasing Program for Oil Shale and Tar 

Sands.-

The Secretary ofthe Interior was required to implement an oil shale and tar sands R&D 

leasing program to include: a Programmatic Environmental Impact Statement within 18 

months; final leasing regulations not later than 6 months after the EIS; and begin 

commercial leasing no later than 180 days after publication of the subject regulations. 

Accomplishments: The PElS and leasing regs have been completed. No commercial leasing 

has been offered or begun. 

SECTION (h): Task Force. -

The Secretary of Energy, in cooperation with the Secretary of the Interior and the Secretary 

of Defense was to establish a Task Force to develop a program to coordinate and accelerate 

the commercial development of strategic unconventional fuels and initiate partnerships with 

Alberta and nations with oil shale resources. Further, the Task Force was to make such 

recommendations regarding promoting the development of strategic unconventional fuels 

resources within the United States as it deemed appropriate. The Act directs that the Task 

Force provide Congress and the President a report that describes their analysis and 

recommendations within 180 days. (Section 369(i) of the Act designated the Office of 

Petroleum Reserves to coordinate and provide staff support to the Task Force.) 
312 

Accomplishments: 

Task Force established, with representatives of Sec. of Energy, Defense, and 

Interior: Governors of Colorado, Utah, Wyoming, Kentucky and Mississippi; 

and three local representatives from potentially effected counties - January 

2006. 

• Twelve Task Force Meetings and three conference calls held - March 2006 

and December 2009. 

Initial Report to Congress: "Development 0.[ America's Strategic 

Unconventional Fuels Resources", forwarded to Congressand the President 

September 2006. 

• Three Volume comprehensive report, with recommendations, ''America's 

Strategic Unconventional Fuels", forwarded to the President and CongressFebruary 2007. 

• Last Annual Report to Congress - December 2008 

SECTION 369 (i): Office 0/ Petroleum Reserves. -

Directed the Office of Petroleum Reserves to coordinate the creation and implementation of a 

commercial strategic fuel development program; promote and coordinate actions that 

facilitate development; and evaluate importance of fuels for the security of the United States. 

The Act directs the Secretary to submit a report to Congress and the President on activities 

under this section. 

Accomplishments: 

• Report to Congress and President, "Activities, Accomplishments, and Plans 

Related to Section 369 o/the Energy Policy Act 0/2005" completed and 

forwarded to Office of Management and Budget for clearance - January 2006. 

• Established an Ad Hoc Unconventional Fuels Working Group, over 30 

representatives of public and private interests, convening multiple strategic 

planning meeting - Jan. 2006 - October 2009. 

• Ad Hoc Working Group Strategic Plan - November 2008. 

• Comprehensive economics decision model "National Unconventional Fuels 

Model" - December 2005. 

• Report profiling companies engaged in domestic oil shale and tar sands 

resource and technology development "Secure Fuelsfrom Domestic 

Resources"- June 2007. 

• Report "Carbon and Water Resources Impactsfrom Unconventional Fuels 

Development in the Western Energy Con'idor" - Los Alamos National Lab 

Draft Completed June 2010. 

• Report" Oil Shale Research in the United States"- June 2009 

SECTION 369 (l): Cost-sharing Demonstration Techn%gies.-
313 

The Secretary of Energy shall identify technologies for the development of oil shale and tar 

sands ready for demonstration at commercially representative scale. ( Responsibility to 

Office of the Deputy Assistant Secretary for Oil and Gas Research and Development.) 

Accomplishments: None, due to lack offunding or appropriations. 

SECTION (m): National Oil Shale and Tar Sands Assessment.-

The Secretary of the Interior shall carry out a national assessment of oil shale and tar sands 

for the purpose of evaluating and mapping oil shale and tar sands deposits in the Green River 

Basin of Colorado, Utah, and Wyoming, Devonian shales east of the Mississippi; and areas 

ofthe central and western U.S. including Alaska, in that order of priority. 

Accomplishments: USGS has completed mapping the Colorado oil shale resource, 

increasing probable reserves estimates by 500 million barrels. Currently concluding work on 

Utah Green River Resource. 

SECTION (p): Heavy Oil Technology and Economic Assessment.-

The Secretary of Energy to update 1987 technical and economic assessment of domestic 

heavy oil resources prepared by the IOGCC, to include all of North America and all 

unconventional oil, including heavy oil, tar sands (oil sands) and oil shale. (Assigned to the 

Office of the Deputy Assistant Secretary for Oil and Gas Research and Development.) 

Accomplishments: 

• Report "A Technical, Economic, and Legal Assessment of North American 

Oil Shale, Oil Sands, and Heavy Oil Resources "- September 2007. 

University of Utah 

Conclusion: The Task Force concluded that: "The Nation is substantially at risk, from 

an economic and security perspective, to warrant development of an unconventional fuels 

program with attendant policies and government actions to promote and accelerate 

industry development". There has been misguided criticism regarding what is perceived as a 

recklessly accelerated pace of development of unconventional resources. Criticism that is 

founded in a distorted and exaggerated recollection of the history of past attempts to develop 

these resources and fueled by an almost complete misunderstanding of the objectives of 

Section 369 and subsequent analyses and plans published by the DOE. The intent of the 

Unconventional Fuels Program is to design a creative, rational, effective, and measured 

development roadmap that will mitigate the impacts the critics seem to believe are inevitable. 

The approach envisioned and designed by the Task Force and the Ad Hoc Unconventional 

Fuels Working Group is essentially an integrated regional energy development roadmap 

called the Western Energy Corridor Initiative. 

Without such a roadmap; without a clear understanding of the technical, economic, and 

social impacts associated with developing these resources solid decision-making based on 

facts gives way to decisions based on fear, innuendo, and misinformation. A worse scenario 
314 

would be to rush development of unconventional resources in response to crisis, in the same 

manner as the ill-fated and much criticize Colony project in 1982. The reason this is such an 

important program is to prevent what the critics fear the most. 

About the authors 

Anton (Tony) Dammer served as Director of the US Office of Naval Petroleum and Oil Shale 

Reserves (NPOSR) from 1988 until he retired from Government in 2008. During that time he 

managed the US interests in these important domestic resources, and was the driver to raise 

the profile on oil shale over the past decade. He can be reached at dtdammerial,cox.net. 

James Bunger has conducted research in unconventional fuels for more than 40 years. He 

served as technical project consultant for NPOSR, and co-authored the 2004 DOE 

publication Strategic Significance of America's Oil Shale Resources, credited by some as 

reinitiating the technical and policy dialog on US oil shale. He can be reached at 

jwba(aljwba.com. 
315 

LETTER TO THE SUBCOMMITTEE FROM DR. DAG NUMMEDAL, DIRECTOR, COLORADO

ENERGY RESEARCH INSTITUTE, AND DR. JEREMY BOAK, DIRECTOR, CENTER FOR OIL

SHALE TECHNOLOGY AND RESEARCH, COLORADO SCHOOL OF MINES
316 

unconventional energy industry were DOE's "Multi-Well Experiment", a federally funded 

set of experiments to fracture tight rocks to stimulate flow of gas in rocks where nature 

itself had not generated the appropriate fluid migration pathways. Most of these 

experiments were conducted in western Colorado in the 1980s. The program was 

managed by the Sandia National Laboratory, and co-investigators came from many 

universities, including the Colorado School of Mines. 

The Multi-Well Experiment also stimulated independent industrial experiments which in 

many cases expanded on and went beyond the DOE-funded research. The federal funds not 

only covered the cost of key, essential experiments, but they also helped establish a culture 

of experimentation and creativity throughout industry. A quick look at DOE's charts on 

America's historical oil and gas production demonstrates the value and impact of these 

Federal programs in the 80s. No less than four major domestic industries have emerged 

from them: 

1) Coal bed methane production. This was the first 'unconventional' gas industry that 

emerged because it is technologically the easiest. Basically, you just have to 

depressurize the coal seams to get the gas out of aqueous solution. Today, CBM 

accounts for 8% of national gas production. DOE funded a CSM-Ied project focused 

on managing the large volumes of produced water from CBM operations. 

2) Tight gas came next. This refers to natural gas production from artificially fractured 

sandstones. This industry grew rapidly in the 90s and has now reached a level of 

about 20% of u.s. gas production. It is a very big industry today in the Rocky 

Mountains region, and also elsewhere. CSM's Reservoir Characterization Project, an 

industry funded consortium at CSM, and several other research consortia have 

played leading roles in the development of the science and engineering of the tight 

gas industry. 

3) Shale gas came next - or actually in parallel - but it took longer to become a major 

national industry, because it is technically more challenging than fracturing the 

more brittle sandstones. Independent industrial pioneers played a very large role in 

developing the technologies that made gas production from shale possible. This 

industry has been growing very fast in the past 10 years, and is projected to become 

the dominant US natural gas resource pretty soon. The Unconventional Natural Gas 

Institute at CSM is actively pursuing a wide range of issues with respect especially to 

these complex rock systems. 

4) Last, and perhaps most important from a national security perspective, is the 

development of production of oil from tight rocks, which can be shale, sandstones or 

carbonates. Again, the technologies have their 'roots' in the Multi-Well Experiment 

that started 30 years ago, and evolved a lot since. The most visible unconventional 

shale-hosted oil plays is the Bakken in North Dakota, but the industry is very rapidly 

expanding nationwide, including new shale oil production in Colorado, Texas and 

other states. After 40 years of decline in domestic oil production, U.S. oil production 

has now been increasing again for the past 2 years, at a significant rate. CSM has 

active industry consortia on both the Bakken and Niobrara. Initial funding for the 

Bakken project came from DOE's National Energy Technology Laboratory. 
317 

Along with the development of these resources has come the need to better understand 

fracturing of these tight rocks, and CSM, through its industrial consortium on Fracturing 

Acidizing and Stimluation Technology (FAST) and the Center for Rock Abuse have provided 

important multi-participant research teams to understand the physical properties and 

behavior of a wide range of reservoir rock types 

This short and highly simplified look-back is important, because it demonstrates well how 

a strong, focused R&D partnership between the Federal government, corporations and 

universities help jump-start new industries. There are of course many examples in other 

fields of science and industry that demonstrate the same. We often hear in debates about 

federal funding for oil and gas research that "the wealthy oil and gas companies can pay for 

the research they need themselves". While true in principle, the statement misses the key 

point: American industrial progress is very much based on creativity. The Multi-Well 

Experiment, and the four new unconventional oil and gas industries that it created, were 

the results of combined use of federal, industrial and private capital in a highly creative 

R&D program. 

Fortunately, one new program somewhat akin to the Multi-Well Experiment has recently 

been created and is now operating in its 7th year: the RPSEA program (Research 

Partnership to Secure Energy for America). This is a creation of the National Energy Policy 

Act of 2004, and funds basic and applied oil and gas exploration and production research as 

well as environmental damage mitigation technology development. 

The RPSEA program has been remarkably successful in engaging more than 50 research 

institutions (public and private) and service companies across the nation in their 

sponsored research. The research funding awards are all based on formal peer reviews 

and the review system itself is the most rigorous that we have witnessed in any federal 

funding program we have participated in. First, the submitted proposals are sent for 

confidential reviews to the best scientists in the nation with active on-going research in the 

relevant topics. These reviewers score the proposals for their creativity and novelty. 

Those proposals that score high in round one are then submitted to a panel review where 

both industrial and academic researchers score the proposals again, this time very much 

based on whether or not the creative proposals also are industrially relevant. The final 

outcome is a first-class research program using federal funds very wisely combined with 

industrial cost share to further advance U.S. leadership in unconventional fossil energy 

developments. 

CSM has received several RPSEA awards, which has funded research projects on fracture 

prediction, co-produced water analYSiS, microbial methane production, reservoir sand 

body architecture analysis, and reservoir simulation. The extensive industry leveraging of 

the Federal resources allocated to these projects demonstrates the relevance to the private 

sector of the research. 

Allow me to comment briefly on the 'controversy de-jour': hydraulic fracturing of wells to 

access tight gas, shale gas and shale oil reservoirs. No industry is without some 

environmental challenges. We can eliminate the environmental challenges three ways: 
318 

shut the industry down, increase R&D to reduce the environmental risk, and/or provide 

affected people with correct technical information and compensate for all forms of damage 

(physical, chemical, acoustic, visual). History shows that research to reduce the risk is, by 

far, the most cost-effective strategy. The scientific and engineering advances made by the 

Multi-Well Experiment in the 80s and the "successor program" - RPSEA - today, have 

already spawned new and more environmentally-friendly drilling practices, better targeted 

well bores, many from multi-well platforms, vast improvements in the understanding of 

how to handle co-produced water, and better exploration to ensure hitting the 'sweet 

spots' for oil and gas production. 

Researchers in academe, government or industry, and industrial executives, are now 

certainly aware that society's pathways to sustainable energy must include improved 

knowledge and understanding of all subsurface processes, and we are increasingly looking 

at integrated systems engineering approaches to all aspects of extraction and injection of 

rocks and fluids into and out of the subsurface. 

Rising costs for oil have also led to a resurgence in interest in production of shale oil from 

oil shale by converting the solid hydrocarbons in these rocks through surface or in situ 

processes. Novel in situ processes for heating rock underground also depend upon 

understanding of fracturing processes driven by expansion of solids into liquids and gases. 

The oil shale industry has made great strides toward commercialization in the past decade, 

and now two companies are moving past the research phase to start planning commercial 

production of shale oil, potentially in the next 2-5 years. 

CSM has been an active participant in this evolution, through geologic, geochemical, 

geophysical and geomechanical research on the Green River Formation of Colorado, Utah, 

and Wyoming through COSTAR, the Center for Oil Shale Technology and Research. In 

addition, CSM hosts the Oil Shale Symposium in Golden every year, the premier 

international event for government, industry, academic and stakeholder communities to 

discuss and understand developments in this area. Finally, the Oil Shale Information Office 

has made great strides in making legacy and newer material on oil shale available to these 

communities through digitization and cataloguing of its extensive holdings in the Tell Ert! 

Oil Shale Repository in CSM's Arthur Lakes Library. 

DOE/NETL funding in the area has also supported projects at CSM to understand and 

evaluate the effects on local hydrologic systems of development of oil shale. This funding 

recognizes the Federal government's primary role as overall steward of the land in which 

these resources are found. No single leaseholder will have this responsibility, so there are 

important reasons for the government to invest in underlying research, and potentially in a 

coordination role (as was done in the :t980s) for understanding environmental impacts of 

oil shale development. 

In addition, new evaluations are under way of the very large resources of natural gas 

hydrates potentially available in marine and arctic environments. Understanding ofthe 

formation of hydrates had been driven for years by the needs of pipelines to provide flow 

assurance. Now this research is providing an important basis for understanding of these 
319 

large potential resources, and the 30-year-old Center for Hydrate Research at Mines has 

played a leading role in that transition. 
320 

U.S. DEPARTMENT OF ENERGY, OFFICE OF NAVAL PETROLUM AND OIL SHALE RESERVES, NOVEMBER 2008, ‘‘STRATEGIC PLAN: UNCONVENTIONAL FUELS DEVELOPMENT WITHIN THE WESTERN ENERGY CORRIDOR’’ 
321 

This Strategic Plan for Unconventional Fuels Development within the Western 

Energy Corridor was conceived and developed by an ad hoc working group with 

the support of the Office of Naval Petroleum & Oil Shale Reserves within the 

Department of Energy's Office of Petroleum Reserves (OPR), pursuant to the 

requirement for OPR to "coordinate the creation and implementation of a 

commercial strategic fuel development program for the United States" set out in 

Section 369(i)(1 )(A) of the Energy Policy Act of 2005 (public Law 109-58). The 

ad hoc working group is comprised of representatives from industry, government, 

academia, and national laboratories. 
322 

Table of Contents 

1. Overview .. 

2. Mission. 

3. Vision .. 

4. Situation and Challenges .. 

5. Strategic Goats .. 

6. Strategies .. 

7. Conclusion .... 

B. The Path Forward .. 

Summary of the Unconventional Fuels Development Strategic Plan 

Within the Western Energy Corridor.. 

..1 

........ 2 

. ..... 3 

. .... 3 

. ... 5 

. ............. 5 

. ... 7 

..7 

............. 9 
323 

Strategic Plan 

Unconventional Fuels Development 

Within the Western Energy Corridor 

1. Overview 

Section 369(h) and (i) of the Energy Policy Act of 2005 (EPACT05) directed the Department of Energy 

(DOE) to develop an Unconventional Strategic Fuels Program. It assigned to the DOE Office of 

Petroleum Reserves (OPR) the responsibility to "coordinate the creation and implementation of a 

commercial strategic fuels development program" and provide an ongoing program of evaluation, 

assessment, and recommendations regarding activities required to accelerate the development and 

manufacturing of strategic fuels from domestic unconventional fuels resources. It also assigned specific 

responsibilities to the Department of the Interior and to the Department of Defense. 

In 2006, the Secretary of Energy convened a Task Force on Strategic Unconventional Fuels consisting of 

eleven members' to develop the required Program. Coordination support for that effort was provided by 

OPR's Office of Naval Petroleum and Oil Shale Reserves (NPOSR). The Task Force evaluated the 

nation's liquid fuels situation and concluded" ... thal the domestic and global fuels supply situation and 

outlook is urgent. Increasing global oil demand, declining reServe additions, and our increasing reliance 

on oil and product imports from unstable foreign sources require the Nation to take immediate action to 

catalyze a domestic unconventional fuels industry,,2 Two reports by the Task Force that contain resourcespecific recommendations and integrated program development plans' were finalized in September 2006 

and September 2007, respectively, and transmitted to the Congress and the President. 

The next challenge facing government and industry is to coordinate, integrate, and organize the scientific 

and engineering efforts required to determine the potential impacts ofthis large development activity. To 

this end, an ad hoc unconventional fuels working group consisting of representatives from industry, 

government, academia, and national laboratories was organized by NPOSR to develop and execute plans 

that implement the Task Force's recommendations for accelerating and promoting the development of 

domestic unconventional fuels. 

Unconventional Fuels Resources in the Western Energy Corridor 

The Western Energy Corridor (Figure I), which extends from Alaska through western Canada and the 

western United States, contains some of the world's richest deposits of hydrocarbons and energy 

minerals, including trillions of barrels of oil equivalent in place (BOE) of conventional oil, natural gas, 

coal, oil shale, oil sands, heavy oil, and uranium. Development of the world-class unconventional 

hydrocarbon resources within this corridor could help to alleviate U.S. energy supply vulnerability, 

providing a strategic source of energy, including liquid fuels and other products far into the future. 

, Includes Secretaries of the Departments of Energy, Defense and the Interior; the Governors of the States of 

Colorado, Kentucky, Mississippi, Utah and Wyoming; and representatives oflocalities that would be impacted by 

the development of the unconventional resources. 

2 Task Force on Strategic Unconventional Fuels, 2007, America's Strategic Unconventional Fuels, Volumes J, II, & 

III, Completed September 2007.http://www.unconventionalfuels.org 

'Ibid 
324 

Concurrent development of unconventional 

fuels and other energy and mineral resources 

will create increasing competition for limited 

resources of water, and impacts to air, habitat, 

and wildlife in the region, Local communities, 

infrastructures, and economies will face 

increasing demand for roads, electricity, law 

enforcement, labor and other services as a 

result ofthis development. 

The Western Energy Corridor Initiative 

(WECr) has been conceived as a regionallyfocused effort to provide guidance to policy 

makers, industry, and other stakeholders on 

possible scenarios for development, including 

assessing impacts to the environment and local 

communities. 

The impetus for this effort comes from a 

common theme expressed by a broad spectrum 

of stakeholders that credible, science-based 

assessments are needed to quantifY potential 

development impacts and benefits in the 

context of other conventional and 

Figure 1. Selected Resources Within a Portion of 

the Western Energy Corridor 

unconventional energy resource development activity. Critical aspects of carbon management and 

responsible water use in a semi-arid environment must be addressed, as well as planned and ongoing 

energy resource development, and the environmental, water resource, infrastructure, labor, fiscal and 

economic demands that could be placed on the region under various development scenarios. 

This Strategic Plan for Unconventional Fuels Development specifies an approach for addressing these 

major development issues and helping DOE and NPOSR to fulfill their program integration 

responsibilities under the EPACT05 in coordination with other federal agencies including, but not limited 

to, the Departments of the Interior and Defense. The Strategic Plan: 

Articulates the mission of the proposed effort in the context of the current and expected future 

situation facing the nation, the industry and potentially impacted communities, 

Identifies the challenges to unconventional fuels development, 

Identifies the numerous stakeholders whose interests must be considered, 

Presents major assumptions that influence the path forward, 

Sets forth a vision for the future and articulates goals that must be achieved to fulfill that vision, and 

Lays out a strategy for achieving those goals. 

The plan builds on the analyses and plans prepared by the Task Force on Strategic Unconventional Fuels. 

2. Mission 

Bolster America's future fuel security by facilitating socially and environmentally responsible 

development of unconventional fuels resources in the Western Energy Corridor. Use sound 

engineering principles and science-based methods to define and assess benefits, impacts, uncertainties, 

and mitigation options, and to resolve impediments. 

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The initiative seeks to apply the principles of sound science and engineering and objective analysis to 

answer key questions about unconventional fuels development in the Western Energy Corridor that must 

be addressed to understand the potential benefits and impacts and to prepare the ground work for efficient 

commercialization of America's strategic unconventional fuels resources. These resources include oil 

shale, tar sands, coal-to-Iiquids, heavy oil, and oil that can be produced by carbon-dioxide enhanced oil 

recovery. Other unconventional fuels resources are not currently addressed by the strategic plan. 

A key component of the mission is to provide valuable information to decision makers and other 

stakeholders to help understand and evaluate these complexities and to provide the objective analytical 

basis for crafting and implementing development plans. 

3. Vision 

The nation will benefit from increased supply of domestically produced fuels, reduced imports, 

economic growth, employment, and public revenues. Industry and policy makers will have the objective 

scientific and technical information needed to make responsible investment and policy decisions. 

World-class expertise of nalionallabs, universities, industry, and other organizations will be integrated 

to address re~'ource, technology, economic, environmental, social, and related issues pertaining to 

unconventional energy resource development resulting in sound public policy. 

The Initiative envisions that government (local, state and federal), industry, environmental interest groups 

and other stakeholder will be provided with an objective evaluation of the potential impacts and benefits 

of various development scenarios. 

The engineering and science-based analytical basis will be created to support an assessment of the 

potential for sustainable development of unconventional fuels resources. Policy makers will have access 

to the best technical resources for assessing how growth of an unconventional fuels industry might benefit 

the nation and affected regions and how it might impact the environment and local economies. This 

information will support the development of sound public policies. 

By evaluating resource development options and their impacts and benefits under a range of scenarios and 

variables such as resource type, development pace, expected production levels, investment requirements, 

urgency, and impacts, this effort will enable the nation, affected states and localities, and private industry 

to prepare for and facilitate appropriate development. 

Proactive communication with and input from a diverse range of public and private stakeholders will 

ensure that analytical processes and products are focused, timely, useful and dynamic. 

4. Situation and Challenges 

SituatiOn 

The United States faces an unprecedented threat to its national and economic security due to the economic 

costs and supply risks associated with our increasing dependence on imported oil and gas - commodities 

for which other nations are competing, and for which future supply may be inadequate to support our fuel 

needs. This dependence makes the United States vulnerable to numerous potential natural, geopolitical, or 

market scenarios that could result in acute disruptions to the nation's energy supply. 

Recent increases in world oil prices, combined with increasing volumes of imports, have resulted in an 

enormous transfer of wealth from the United States to foreign oil suppliers, diminishing America's 

economic strength and stability. This situation suggests that the United States must consider responsible 

development of additional domestic hydrocarbon energy supplies, including the vast unconventional 

resources found in the Western Energy Corridor, to augment supply, reduce import dependence, enhance 

energy supply security, and strengthen the economy. 

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Unconventional fuels development will take place in an environment affected by internal and external 

market, economic, political, social: and technological forces and trends. 

Market: Global fuels markets are increasingly competitive; 77 percent of world proved reserves are 

controlled by national oil companies. Oil demand in some growing economies, e.g. India and China, 

is rising faster than industry can increase supply, contributing to rising oil and fuels prices. 

Economic: Higher oil prices make unconventional fossil energy resources more competitive and 

economically attractive. But as with conventional oil and gas, the capital costs for unconventional 

fuels are also rising due to global and regional competition for materials and workers. 

Environmental: Energy resource development must occur in compliance with existing and emerging 

law and regulation with the objective to minimize impacts on the environment. Pending initiatives to 

limit carbon emissions and establish "cap and trade" programs challenge industry to reduce carbondioxide (C02) formation and demonstrate cost-effective carbon capture and management strategies. 

Technology: Technologies already exist to recover and process unconventional fossil energy 

resources; some are already being applied at commercial scale outside the United States. Private 

industry is investing in research, development, and demonstration (RD&D) to improve process 

efficiency, reduce energy use, minimize water requirements, and limit environmental impacts. 

Physical Infrastructure: Physical infrastructure in the West may be inadequate to support highvolume energy development. Roads, rail, electric power, water systems, pipelines, and other 

distribution systems must be enhanced to support industry development, and associated growth. 

Social: Communities seek a~surances that renewed unconventional fuels development will not result 

in a repeat of the "bust" of the 1980s, which impacted some local economies for many years. A goal 

is to ensure against the risk of bust, and to dovetail growth opportunities with potential declines in 

other industries, most notably conventional oil and gas. 

Stakeholders: The views and interests of a diverse set of pUblic and private stakeholders will 

influence the scope and timing of unconventional resources development in the Western Energy 

Corridor and must be fully considered in the public discourse and subsequent development planning. 

Development Challenges 

Numerous strategic questions must be answered to facilitate responsible development planning: 

What are the expected impacts of various technologies and approaches for unconventional fuels 

recovery and processing on the environment (i.e. carbon emissions, air and water quality, surface 

disturbance, wildlife), and net external energy and water demand? How can these impacts be 

mitigated? Which approaches are best for sustainable energy production while reducing impacts? 

How will water, carbon, and other impact mitigation and management strategies affect process and 

project economics and industry development? 

What public infrastructure (including water supply) is needed to support regional unconventional 

fuels development under different development scenarios? 

How do current regulatory regimes and permitting processes constrain development or investment 

decisions? How can such processes be modified to facilitate planning without degrading 

environmental protection or regulatory compliance? 

What can be done to correct distortions and inaccuracies in the public's perception of unconventional 

energy resources and potential development impacts? 

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What fiscal regimes can be applied to provide 

development funding to affected communities? 

What organizational structure is needed to integrate 

analyses and resources and avoid stove-piping 

issues? 

5. Strategic Goals 

To achieve its vision, the initiative seeks to achieve 

several specific goals: 

Increase and diversifY domestic fuel production to 

reduce U.S. dependence on oil imports, create jobs, 

and stimulate economic growth. 

Produce and provide high quality, credible technical 

information related to unconventional fuel resources, 

technologies, energy infrastructure, environmental 

conditions, and development scenarios 

Understand the potential cumulative resource, 

environmental, infrastructure, and socioeconomic 

impacts and benefits of various unconventional fuels 

development scenarios. 

Assess socio-economic parameters of unconventional 

fuels development to inform and guide planning for 

industry development and community growth, 

avoiding adverse consequences and improving 

quality oflife in affected development areas. 

Foster effective, credible and transparent outreach 

and communications with and among stakeholders. 

6. Strategies 

Development of western unconventional fuels resources 

is largely a "Western States" issue. However, 

development planning is made more complex by the 

Federal government's ownership and stewardship of 

energy and other resources, and transportation, water, 

and energy infrastructure in the West; and by federal 

environmental, fiscal, and other regulatory structures and 

processes that would apply. 

As directed by Section 369 of the Energy Policy Act of 

2005, and recommended by the Task Force on Strategic 

Unconventional Fuels, an integrated program 

organization and management approach is needed for this 

initiative to facilitate coordination, interaction and 

collaboration among federal, state, regional, and local 

participants. the scientific and technical community, and 

other participating stakeholders. 

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This initiative will fully consider and build upon the analyses, recommendations, and plans that were 

developed by the Task Force on Strategic Unconventional Fuels. Its scope will include unconventional 

fuels, including: oil shale, tar sands, heavy oil, coal-to-liquids, and oil producible by carbon dioxide 

enhanced oil recovery methods in the Western Energy Corridor. 

The strategies to achieve the mission and associated strategic goals are described below: 

Work Through Effective Partnerships 

The activities to be performed will be conducted through an integrated partnership of government, 

national laboratories, and universities with input and collaboration of other stakeholders, including 

appropriate organizations in the Canadian provinces of Alberta and Saskatchewan, and other countries 

engaged in unconventional fuels development. 

Conduct Outreach EtTorts: Develop a proactive and effective communications outreach program to 

seek input to program development. analysis, and planning. 

Partner with National Laboratories and Universities: NPOSR will establish partnerships with key 

regional national laboratories and universities with the scientific and engineering expertise to carry 

the initiative forward. 

Work with International Partners: NPOSR will partner with appropriate organizations in Canada 

(including Alberta and Saskatchewan) and other nations to facilitate information sharing regarding 

unconventional fuels development. 

Facilitate Collaboration: Support and facilitate effective and constructive interactions among 

program participants and stakeholders that help to build consensus. Interagency and intra-agency 

collaborative efforts will be pursued among responsible federal agencies (including DOE, 001, and 

DOD), as well as offices and agencies of the relevant state and local governments. Coordination with 

001 efforts would include, but not be limited to, resource assessment, data collection, and mapping. 

• Share Information: Communicate activities, results, and products to stakeholder audiences through 

workshops, newsletters, websites, and other appropriate rneans. 

Establish an Effective Program Governance Organization 

Governance: An Executive Committee will be cornprised of representatives of the national 

laboratories, universities, and government. The Executive Comrnittee will organize, lead, evaluate 

progress, and ensure achievement of goals and objectives. It will be supported by working groups 

focused on unconventional resources and crosscutting technical, environmental, and economic issues. 

Budget and Funding: Identi:fY resource requirements; create a budget that cornbines available 

funding from participating organizations and congressional appropriations. The Executive Comrnittee 

will seek and coordinate the allocation of funding for activities to be performed under this strategy. 

Consider Forming a Western Unconventional Fuels Center: Unconventional fuels developrnent 

analysis and research fits within the scope and context of other research activities regarding energy 

development in the West. The potential attributes and benefits of a center of excellence focused on 

integrated assessment of western energy resources development issues and benefits will be evaluated. 

Conduct AnalysiS to Resolve the Uncertainties Affecting Development 

The study will pursue a multi-phased analytical approach consisting ofthree overlapping phases: 

Phase I - Comprehensive Baseline Assessment: To enable accurate and quantitative 

evaluations of environmental and economic impacts of unconventional fuels development, 

predevelopment or baseline conditions must be established. Baseline information will include 

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various data encompassing energy and other natural resources, air quality, water quality and 

quantity, technology, policy, economics, population dynamics, regUlations, etc. 

Phase II - Ana(vtical Tools and Framework: Assessing the cumulative impacts of 

unconventional fuels development will require the application of sophisticated modeling tools 

to characterize processes and activities at multiple scales and to consider the complex 

interdependencies of multiple alternative development scenarios involving diverse energy 

resources. 

Phase III - Integrated Impact Assessment of Development Scenarios: Potential impacts will 

be assessed within the context of other social, energy, economic, and infrastructure 

development in the region unrelated to unconventional fuel development. Participants will use 

the analytical frameworks and tools developed in Phase 11 to facilitate a regional decisionmaking mechanism that will focus local, state, and federal governments on basin and intra-basin 

impacts, benefits, and costs. The developed tools will support preparation of energy 

development plans by integrating the results of scenario comparisons and future development 

trajectories arising from the Phase 11 activities. 

Identify and Prioritize Focused RD&D 

Identify RD&D needs and priorities that must be pursued to facilitate responsible unconventional 

fuels development in the Western Energy Corridor. 

Prioritize RD&D based on objective criteria. 

Support planning for an integrated tecbnical program that responds to both industry and public 

sector needs and priorities implemented through competitive solicitations. 

7. Conclusion 

The substantial unconventional fuels resources in the Western Energy Corridor will play an increasingly 

important role in addressing our Nation's energy security vulnerability. Developing these resources 

comes with significant technical, socio-political, environmental, economic and infrastructural challenges, 

and is interrelated with other resource developments in the region. To address these challenges, NPOSR 

has developed a strategy to provide the technical foundation for assessing various development scenarios 

that will be used to craft a regional energy development plan. 

8. The Path Forward 

This Unconventional Fuels Development Strategic Plan will be forwarded by the members of the Initial 

Executive Committee to the Secretary of Energy for his consideration and approval. To address the 

challenges identified above and implement this strategic plan, a more detailed implementation plan is 

required. To this end, NPOSR and its national laboratory partners have developed an approach for 

implementation planning. While this broad strategy applies to all unconventional fuel resources in the 

Western Energy Corridor, implementation will initially focus on oil shale resources. 

The multi-phased effort is expected to take three years to complete. It is urgent that work begin quickly. 

Thus an Initial Implementation Plan for Oil Shale will be developed to identify and conduct baseline 

analyses that can be accomplished with available program resources. Additional program funding will be 

required to initiate and complete the full multi-year effort. The scope of work will be expanded to the full 

implementation plan for oil shale when additional resources become available. 

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Summary of the Unconventional Fuels Development StrategicPlan 

---- J Within the Western Ener!!v Corrid - - - _._-

Mission Bolster America's future fuel security by facilitating socially and environmentally responsible development of unconventional fuels resources in the 

Western Energy Corridor. Use sound engineering principles and methods to define and assess benefits} impacts, uncertainties, and mit

options, and to resolve impediments. 

Vision 

The nation will benefit from increased supply of domestically produced fuels, reduced imports, economic growth, employmen4 and public r

Industry and policy makers will have the objective scientific and technical information needed to make responsible investment and policy decisions

class expertise of national labs) universities, industry. and other organizations will be integrated to address resource, technology, economic, enviro

social, and related issues pertaining to unconventional energy resource development resulting in sound public policy. 

Goals and Objectives 

Increase and diversify domestic fuel production to reduce U.S. dependence on oil imports, create jobs and stimulate economic growth. 

Produce and provide high quality, credible technical infonnation related to unconventional fuel resources, technologies, energy infras

environmental conditions, and development scenarios 

Understand the potential cumulative resource, environmental, infrastructure, and socioeconomic impacts and benefits of various unconventio

development scenarios. 

Assess socio-economic parameters of unconventional fuels development to inform and guide planning for industry development and com

growth, avoiding adverse consequences and improving quality of life in affected development areas. 

Foster effective, credible and transparent outreach and communications with and among stakeholders. 

1".4 VI allv. Il:JU;v ... ., 

Work Through Partnerships Establish an Effective Conduct Analysis to Resolve Identify and Prioritiz

Analysis and Planning Uncertainties Affecting Focused RD&D Need

· Conduct outreach efforts Governance Organization Development · Identify RD&D n

· Facilitate effective collaboration · Create Executive · Assess resources, technology · Prioritize RD&D 

· Create partnerships with or among: Committee development characteristics, · Support planning 

-- National laboratories and universities · Initial and long-term constraints I opportunities integrated RD&D 

-- Federal, state, and local government funding strategies · Define I prepare decision to address needs I 

-- International partners (Provinces of · Planning and evaluation support I and analysis tools Alberta and Saskatchewan; Estonia; · Consider creation of a · Assess nasin characteristics Others Western Unconventional and potential impacts 

· Share information with participants and Fuels Center · Conduct regulatory f stakeholders permitting analysis 

· Prepare development plans