By John Kemp

LONDON Feb 15 (Reuters) – President Barack Obama’s policy on energy and climate change remains inscrutable, full of strategic ambiguity, which probably suits him just fine.

The soaring rhetoric in his State of the Union address – “for the sake of children and our future we must do more to combat climate change” – masks a more complicated, some would say pragmatic, approach to the role of clean technology and fossil fuels in meeting future energy demands while curbing greenhouse gases.

The administration’s commitment to tackling climate change by cutting emissions is not in any doubt. White House advisers are genuinely enthusiastic about the transformational potential of energy efficiency and zero-carbon technologies like wind and solar to meet future demand while sparking a new investment boom to fire up economic growth.

By contrast, the administration remains hostile to coal, and unsympathetic about gas and oil, even though hydraulic fracturing promises to bring more jobs and growth if some manufacturing is brought back to the United States to benefit from cheap gas prices, and free the country from dependence on oil imports from outside North America.

Advisers from the White House Council on Environmental Quality (CEQ) and other bureaus within the Executive Office of the President (EOP) have repeatedly briefed environmental activists to reassure them of the president’s commitment to aggressive steps to promote clean technology and penalise polluting businesses.

The latest volley of green briefings came ahead of the State of the Union, where White House staff appeared to provide strong steering to environmental lobbying organisations about how to interpret the contents of the address, which gave it a stronger green gloss than the president’s words alone might warrant.

In practice, the administration appears to be trying to find a middle way, one that keeps activists onside while not risking a complete breakdown in relations with the petroleum industry or being blamed for a new rise in energy prices.

SEEKING AN EQUILIBRIUM

Keystone XL is the most notable example of trying to keep all sides happy. Unwilling to anger activists by approving the pipeline, but also wary of the backlash from industry, the Canadian government, and the Washington establishment if the pipeline is blocked, the administration has played for time, postponing a decision again by insisting it needs more time to study the impact.

Some outside observers think that the administration will eventually approve the pipeline, but only after securing significant concessions, perhaps on an unrelated issue, like tougher emissions regulations for coal-fired power plants.

The same attempt to split differences is apparent with senior appointments. The three cabinet-level positions of most interest to climate activists and the energy industry are the Environmental Protection Agency (EPA), the Department of Energy, and the Department of Interior (which oversees oil and gas development on public lands).

All three have become vacant at the start of the second term. The president’s nomination for secretary of interior, Sally Jewel, combines a background as an energy engineer and in business as well as strong conservation credentials, drawing support from both environmentalists and organisations lobbying on behalf of more development on public lands in the western states.

The White House has not yet announced new chiefs for the EPA and the Energy Department. The suspicion is they are being treated as a package, with staffers trying to find a balanced and complementary set of nominations.

DRILLING, FAST AND SLOW

On the controversial topic of fracking, the president has welcomed the potential contribution to domestic energy production and energy security while promising tough safeguards.

“The natural gas boom has led to cleaner power and greater energy independence,” the president said in the State of the Union. “We need to encourage that.”

He promised to speed up new oil and gas drilling permits and reiterated that natural gas, which burns cleaner than coal, is part of his “all of the above” approach to energy policy.

But the president was silent on fracking for oil, which has similar if not greater potential to transform the U.S. economy, but is far more controversial with his environmental supporters.

He spoke about the potential for producing oil and gas from public lands and offshore areas “we, the public, own together” and called for using some of the royalties to fund an Energy Security Trust Fund.

The trust fund idea has received a cautious welcome from Senator Lisa Murkowski from Alaska, the highest-ranking Republican on the Senate Energy and Natural Resources Committee, and one of the party’s leaders on energy policy.

But it was twinned with a rhetorical commitment to use the trust fund to “drive new research and technology to shift our cars and trucks off oil for good”.

The president has promised environmental activists that drilling on public lands will only be done with enhanced safety regulations.

The Interior Department’s Bureau of Land Management (BLM) has been trying to draft new regulations governing hydraulic fracturing on public lands, but has withdrawn the rulemaking after receiving 170,000 comments and plans to issue new proposals later this year.

The EPA is developing its own guidance on the use of diesel fuel in hydraulic fracturing, which has drawn over 97,000 public comments.

Both rulemakings have been strongly opposed by the North Dakota state government as likely to add significantly to delays in obtaining drilling permits.

North Dakota’s Department of Mineral Resources identified the BLM and EPA regulations as two of four big threats to sustained development of the Bakken shale oil fields in a presentation to the state House of Representatives last month. The EPA’s guidance on diesel “could triple drilling permit approval time or worse,” the department told lawmakers.

Like the other governments in the Interstate Oil and Gas Compact Commission, North Dakota argues it has successfully regulated fracking under state law, so there is no need for the federal government to become involved. North Dakota has also complained about the slow speed of federal drilling approvals where they are already needed and fears that new regulations will make the backlog worse.

CONTRADICTORY IMPULSES

The administration is struggling with all the contradictions that have bedevilled U.S. energy policy since the 1970s.

The president’s commitment to tackling global warming and transforming the energy system into a cleaner one is sincere. But it wants the benefits from cheap energy, especially natural gas, too.

Senior officials still talk about the potential for creating millions of green jobs. But there is now a painful awareness of the potential benefits of many not-so-green ones as well, in oil, gas and energy-intensive industries like chemicals, fertilisers and heavy manufacturing that depend on cheap gas.

“All of the above” is an attempt to embrace the contradictions without being engulfed by them. The president is trying to persuade all sides (environmentalists and the clean technology industry, petroleum producers and manufacturers) that there is something in his policies for everyone.

The State of the Union was a classic example. It stuck to fairly broad phrases that committed Obama to very little specifically, but allowed everyone to project their own ideas and priorities on to the president.

Environmental activists are among the president’s most wholehearted supporters, and he cannot afford to disappoint them. Fossil fuel industries contain some of his bitterest foes, but he must still find a way to work with them.

It is a tricky balancing act. Energy and climate has become one of the most polarising issues in U.S. politics. The administration’s heart lies with clean tech, but its head says fossil fuels are too important to ignore. (Editing by Pravin Char)

President Ilves opens the first new oil shale mine in 40 years

TALLINN – Estonian President Toomas Hendrik Ilves opened on Thursday the Ojamaa oil shale mine in North East Estonia which is the first new oil shale mine opened in Estonia in 40 years, Eesti Paevaleht writes.

The Ojamaa oil shale mine belongs to the chemicals industry Viru Keemia Grupp (VKG). Its oil shale reserves are estimated at 58 million tons and operating period 15–17 years.

President Ilves acknowledged the 440 miners and engineers of the Ojamaa mine. VKG, which has more than 2,000 employees, is the largest Estonian oil shale processing company, which has its own mine, five oil shale processing factories and an energy company. A large part of the European cosmetics industry uses a chemical, produced of oil shale phenols in VKG, in making hair dyes.

BLM’s decision to revise oil shale decisions made in 2008 could have enormous impacts on domestic energy production.  Specifically, The Government Accountability Office states, “The U.S. Geological Survey (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.  This is an amount about equal to the entire world’s proven oil reserves.”^[1]  Nevertheless, BLM is now planning to reduce the amount of federal land available for oil shale development by 75%, with a 90% reduction in Colorado.  BLM is seeking to effectively eliminate oil shale development in the United States without offering any compelling basis, except for a lawsuit[2] challenging BLM’s initial 2008 oil shale determinations.^[3] 

In the protest, the CRE argues:

1. The Decision to Revisit the Oil Shale PEIS is Arbitrary and Capricious

2. The Proposed Land Use Plan Amendments are Arbitrary and Capricious

3. The Proposed Land Use Plan Amendments Violate the 2005 Energy Policy Act

4. The BLM Conclusions Regarding Water Usage are  not Based on Sound Science

5. BLM Has Failed to Comply with the Data Quality Act.

The CRE find its incomprehensible that oil shale offers the United States with the potential to extract over 1.5 trillion barrels of oil, an amount about equal to the entire world’s proven oil reserves, yet BLM has drastically shifted its position on oil shale in only 4 years without a compelling reason.  As part of its regulatory review process, the White House should reverse the unsubstantiated shift in policy by BLM regarding Oil Shale.

The Protest is available here: Oil Shale Protest – Center for Regulatory Effectiveness

Typically, Denver City Council proclamations are void of controversy, reserved to commending people for service or feel-good statements by the city’s lawmakers.

But on Monday, the council was divided over a proclamation that supports the “research-first” approach to oil-shale development proposed by the U.S. Bureau of Land Management that some in the industry vehemently oppose.

The council spent nearly an hour debating the proclamation, which is not a law and merely an official statement.

At the end, eight members voted in support, two against and two abstained — a rare division for a proclamation that normally gets unanimous approval.

“Occasionally it is important for the council to stand up and be counted on a controversial issue …, to plant a flag,” said councilman Chris Nevitt, who voted for the measure.”This is one of those times.”

The proclamation was focused on the possibility that future oil-shale development could use up Denver’s water supply.

“I think it’s important to state that it is part of our responsibility as elected officials to be looking out for the interests of the citizens of City and County of Denver,” said councilwoman Debbie Ortega.

But councilman Charlie Brown said the council’s proclamation could be seen as meddling in the affairs of the Western Slope. Brown voted against the proclamation.

“My concern is this policy and document will increase the rift between the Western Slope and Denver,” Brown said.

The proclamation supports a U.S. Bureau of Land Management position that companies seeking to lease land for oil-shale development should first “prove the technological, economic and ecological viability of oil-shale development, and the impact that mining and processing of oil-shale will have on statewide water demand and water quality.”

Oil-shale mining and processing on a commercial scale is not occurring in Colorado and is not to be confused with “shale oil” development that extracts oil from shale formations. Oil shale is a sedimentary rock rich in kerogen that through an expensive process can be heated to extract a crude-oil-like substance.

Councilman Chris Herndon said he, too, was distressed about the council making a statement that neither Denver Water nor Denver Mayor Michael Hancock have chosen to make. Herndon abstained.

“We are responsible for a lot of things on the council. Water is not one of them,” Herndon said. “I have full faith in Denver Water. We shouldn’t weigh in unless we don’t think they ware doing their job.”

Councilman Paul Lopez, who voted for the proclamation, said he doesn’t think Denver Water is doing an adequate job and it is the City Council’s responsibility to pay attention to how the city’s water is being used.

“I don’t really trust Denver Water with our water,” he said. “I don’t think it is a board with much oversight. … We have a say and it matters. When it comes to water, absolutely.”

Environmental groups filed a protest this week of a Bureau of Land Management plan to allocate more than 800,000 acres in Utah, Colorado and Wyoming for oil shale and tar sands development.

The Center for Biological Diversity, the Grand Canyon Trust, Living Rivers and the Sierra Club sent the protest Monday to BLM protest coordinator Brenda Hudgens-Williams.

A news release about the protest said such development would release “intensive greenhouse gas emissions, hasten Colorado River drying, threaten wildlife and increase local and regional air pollution.”

“The climate crisis is worsening every day. The last thing we need is to destroy our public lands for carbon-intensive oil shale and tar-sands mining,” said Taylor McKinnon, public lands campaigns director with the Center for Biological Diversity.

Last month, the BLM made public a plan that dramatically scaled back a Bush administration plan to allow leasing on rangelands in the three states.

The 806,000-acre recommendation — about 1,250 square miles — was one-third of what the Bush administration had proposed to lease.

BLM Colorado State Director Helen Hankins said the compromise proposal takes a responsible cautious approach to resource development.

“Today’s leases demonstrate our continued commitment to encouraging research and development that will help fill in some of the existing knowledge gaps when it comes to technology, water use and potential impacts of commercial-scale oil shale development,” Hankins said in a prepared statement issued Nov. 9 with its recommendation and a 6,245-page environmental impact statement. “To date, technological and economic conditions have not combined to support a sustained commercial oil shale industry, and this plan lays a strong foundation to explore oil shale’s potential.”

A 30-day protest period ended Monday, after the environmental groups filed their 94-page protest.

The protest can be found here

WASHINGTON: The United States is set to become the largest producer of crude oil by 2030, according to a recent forecast by the United Nations (UN).

The International Energy Agency (IEA) predicts the US will overtake Saudi Arabia and Russia in production amid a boom in unconventional drilling.

In Colorado, and other western US states, oil shale is one of the resources that could help make the US a net energy exporter in the foreseeable future.

According to the oil industry, the rock found in Colorado’s Piceance Basin could hold the key to America’s energy future.

Glenn Vawker, who heads the National Oil Shale Association, said: “There are estimates by our federal government that we could be producing up to one million barrels a day in twenty to thirty years.”

Colorado’s oil shale is often described as one of the richest hydrocarbon deposits in the world. The problem is that it takes a lot of money and resources to get the oil out of the rock.

Oil companies have set up multi-million-dollar pilot programs here, trying to figure out how to turn a profit.

To extract the oil, the companies have to cool the rock – a process the latest technologies do deep underground.

Roger Day, who is vice president of operations at American Shale Oil Corporation, said: “We’re working on what you call in-situ technology, which would heat the oil in the ground and produce the oil without bringing the rock to the surface. And our project – it will take about another five years to perfect this technology.”

China, Brazil and Estonia are also researching technologies to develop oil shale potential.

China is currently the largest producer in the world, with huge resources primarily in Fushun and Maoming but scientists said the US is in a position to take over that top spot.

Jeremy Boak, director at the Centre for Oil Shale Technology and Research, said: “We have the largest single resource in the world here. China has a very large resource and it is moving aggressively. It is currently, as far as I can tell, the largest single producer of oil from oil shale. But the total amount in still very tiny – about 30,000 barrels a day or so. Nevertheless, it’s being produced and they are ramping up.”

Industry insiders predict a shale boom in Colorado that would be immensely profitable for the state and help the US become energy independent. But some people are worried about the possible environmental impact of such a boom in the industry.”

Environmental advocates said the oil shale industry uses water that’s in short supply in the drought stricken western US.

David Abelson, who is an oil shale policy advisor at Western Resource Advocates, said: “Large-scale oil shale is predicted to consume vast quantities of water. The high-end estimates would be roughly 45 per cent more than Denver water supplies to its 1.3 million customers every year.”

This part of Colorado was producing large volumes of oil from shale during the 1970s fuel crisis, but industry was largely shutdown during the early 1980s.

But that earlier exploration involved what is now outdated technology. Figuring out how to tap into the rock in the most efficient AND environmentally-responsible way is the challenge currently facing America’s oil shale industry..

 Leasing plan based on old science, letter states

GLENWOOD SPRINGS, Colorado — Garfield County commissioners agreed Tuesday to file a formal protest with the U.S. Bureau of Land Management over its recent decision to reduce the amount of acreage available in northwest Colorado for oil shale leasing.

The protest letter, along with what’s known as a Request for Information Quality Act Review, both call into question the scientific data used by the BLM in coming up with the plan.

In particular, advances in oil shale technology that have come about since 2008 related to water usage, aquifer protection and greenhouse gas emissions were not taken into account in the new plan, the county’s protest documents state.

The county also claims that the BLM decision is in violation of the 2005 federal Energy Policy Act, because it limits the potential for commercial oil shale production.

Both documents will be forwarded to BLM and U.S. Department of Interior officials in Colorado and in Washington, D.C., asking that the environmental review be reopened.

Under the record of decision released by the BLM in early November, an additional 26,000 acres in Colorado would be made available for oil shale research, development and demonstration (RD&D) projects.

That’s compared to 360,000 acres that would have been available under the Bush-era plan issued in 2008.

Overall, the BLM’s new plan would make about 667,000 acres of federal lands available to lease for oil shale research, but mostly in Utah and Wyoming. The 2008 plan called for around 2 million acres to be made available.

“If most of the available lands are in Utah, then that’s where these RD&D leases are going to go, rather than some coming here in Garfield and Rio Blanco counties,” Commissioner Tom Jankovsky said in voting with Commissioner John Martin to file the protest and request to reopen the review process. Commissioner Mike Samson was out of town and not able to attend the Tuesday meeting.

“We would see a huge benefit if oil shale can be developed in our counties,” Jankovsky said, speaking to the potential for jobs and other economic benefits.

Jankovsky also countered arguments by citizens at Tuesday’s meeting who said opening up more acreage for oil shale development would lead to the same kind of boom-and-bust cycle seen with oil shale in the past.

“The reason we need to have more land available for leasing is so we don’t have that boom and bust,” Jankovsky said. “If nothing’s done, what happens is there will be some sort of emergency, the flood-gates will open on oil shale, and we’ll be the sacrificial lamb here in western Colorado.”

He said it makes more sense to have a process in place that provides a reasonable path to commercial production after the research and development is done.

But some members of the public who spoke at the meeting questioned whether oil shale would ever prove to be a viable energy source.

“I would urge caution in projecting the economic benefits of oil shale,” said Lisa Bracken, a Silt-area resident. She has been critical of the county’s efforts to monitor for water and air quality impacts associated with oil and gas development.

“I think we do need to ask for more clarity on the true potential for commercial-scale development of oil shale,” Bracken said. “Human health and preservation of our environmental sustainability are extremely important as well.”

Glenwood Springs resident Anita Sherman questioned the county’s level of effort to oppose the federal government’s plans for oil shale.

“As a county resident I would like to see as much energy going into other opportunities,” she said in reference to developing renewable energy resources.

Brad McCloud, executive director of the Grand Junction-based nonprofit Environmentally Conscious Consumers for Oil Shale, supported the county commissioners in filing the objections to the BLM plan.

“We believe oil shale has a future,” said McCloud, whose organization was involved with and endorsed the 2008 oil shale leasing plan. “It’s not the silver bullet, but it should be part of this country’s energy picture.”

Glenwood Springs resident and oil shale supporter Floyd Diemoz said a plan that opens federal lands for research and development without assurances that energy companies can proceed to commercial production is a failed plan.

“This is just going to stop oil shale,” Diemoz said of the new leasing plan.

SALT LAKE CITY (AP) — The U.S. Department of the Interior scaled back a Bush administration plan Friday to lease Western range lands for development of oil shale and tar sands, the unconventional sources of oil found in pockets of the Rocky Mountains.

Federal officials said they were set to authorize 1,250 square miles of public land for commercial leasing in Colorado, Utah and Wyoming. That’s a third of the range lands that President George W. Bush planned to offer, and the new administration said it was taking wilderness-quality lands off the table.

On paper, the Rocky Mountain oil shale deposits could yield a great abundance of oil — more than 1 trillion barrels — but environmental groups say it would involve ripping up public lands and depleting scarce sources of water. Political leaders in Arizona and Nevada and farmers worry about a diversion of Colorado River water. Big-game hunters oppose the intrusion of mining. Thousands of pages of comments have been filed on the plans.

The U.S. Bureau of Land Management said it selected the best reserves for oil shale, a rock that contains fossilized algae, a primitive form of oil that never received enough heat or pressure to produce liquid crude. It’s also a hard nut to crack — major oil companies are still experimenting with ways to make production economical, notably by baking rock in the ground to release fluids.

Environmental groups applauded Interior Secretary Ken Salazar‘s caution. Utah politicians called it short-sighted.

“Once again, despite President Obama’s calls for an ‘all of the above’ energy approach, his administration is moving to limit American energy production and the jobs that come with it,” said Sen. Orrin Hatch, R-Utah. “The West has the resources and the abilities to lower energy costs and create jobs but Washington continues to stand in the way. Today’s announcement just doesn’t make sense, and it needs to be reversed.”

Sen. Mark Udall, D-Colo., struck a measured response, saying he was concerned about the use of limited water supplies.

“Nonetheless, I look forward to seeing this technology explored further. We need an all-of-the-above energy policy,” Udall said Friday. “The Interior Department‘s decision ensures that we will not be out over the front of our skis with untested technology.”

The federal government has yet to authorize widespread development, instead leasing 160-acre research plots to a handful of companies testing extraction methods. Rifle, Colo.-based American Shale Oil LLC is heating an underground zone by pumping a pool of oil down a well and blasting it with hot fuel gas.

The BLM said players must prove their research before winning larger commercial leases. It approved another two research leases Friday, to ExxonMobil Exploration Co. and Natural Soda Holdings Inc. for in-ground development in Colorado’s Piceance Basin.

The Piceance Basin doubles as a “mule-deer factory,” said the National Wildlife Federation, warning widespread development could break up habitat there.

In Wyoming, the BLM said it was putting limits on development in areas where sage grouse gather. That was small comfort to the Laramie-based Biodiversity Conservation Alliance, however. The group said any kind of development can chase off sage grouse, the birds that puff themselves up in mating dances.

The U.S. Fish & Wildlife Agency is under court orders to determine by 2015 whether sage grouse deserve protection under the Endangered Species Act.

Also in Wyoming, the BLM pulled the Red Desert’s Adobe Town from consideration, a 128-square-mile wilderness study area rich in fossils.

A host of Republican politicians sounded off Friday.

“The Obama Administration should cancel this plan and work with Congress and governors on solutions that will create jobs and strengthen our energy security,” said Sen. John Barrasso, R-Wyo.

Rep. Ed Whitfield, R-Ky., chairman of the House Energy and Power Subcommittee, said the Obama administration was “locking up” as much potential oil “as the rest of the world’s proven reserves combined.”

Skeptics point to failed oil-shale efforts since the 1920s. They expect newcomers to do no better.

“We’ve seen small companies make big claims before going bust,” said Matthew Garrington of the industry watchdog group called the Checks and Balances Project, based in Denver and Washington, D.C. “This is the same empty promise.”

SALT LAKE CITY – Dozens of protesters gathered at the Bureau of Land Management Office in downtown Salt Lake City on Monday to voice their opposition to massive tar sands and oil shale plans in Utah.

The groups Peaceful Uprising and Utah Tar Sands Resistance say their protest is in response to a recent decision to lease nearly one million acres of Utah, Colorado and Wyoming public lands for tar sands and oil shale development.

“We believe that this is a terrible way to use our lands. It’s very destructive. It’s akin to mountain top removal in terms of how much land is destroyed. It will poison the water and devastate the habitat of all sorts of natural species,” said Rapheal Cordray with the Utah Tar Sands Resistance.

Protesters say the event is part of a week of actions by more than 40 communities around the world demanding an end to tar sands mining.

The Interior Department on Friday issued a final plan to close 1.6 million acres of federal land in the West originally slated for oil shale development.

The proposed plan would fence off a majority of the initial blueprint laid out in the final days of the George W. Bush administration. It faces a 30-day protest period and a 60-day process to ensure it is consistent with local and state policies. After that, the department would render a decision for implementation.

The move is sure to rankle Republicans, who say President Obama’s grip on fossil fuel drilling in federal lands is too tight.

Interior’s Bureau of Land Management cited environmental concerns for the proposed changes. Among other things, it excised lands with “wilderness characteristics” and areas that conflicted with sage grouse habitats.

Under the plan, 677,000 acres in Colorado, Utah and Wyoming would be open for oil shale exploration. Another 130,000 acres in Utah would be set aside for tar sands production.

The administration and Democrats said that while the plan would curtail what was originally sought for oil shale development, it still opens up a significant amount of land that was previously unavailable for the energy production method.

The administration noted the plan pushed forward Friday also included two research, development and demonstration (RD&D) leases for oil shale development.

“The proposed plan supports the Administration’s all-of-the-above approach to explore the full potential our nation’s domestic energy resources and to develop innovative technology and techniques that will lead to safe and responsible production of resources, including oil shale and tar sands, which industry recognizes are years from being commercially viable, but require RD&D today,” Interior spokesman Blake Androff said.

Sen. Mark Udall (D-Colo.) praised the plan, saying the administration exercised the right amount of caution on oil shale development, which has not yet been brought to commercial scale and brings concerns about the amount of water used in the practice.

“I am glad the Interior Department is taking measured steps to encourage research and development of our oil shale resources. With water being one of our most precious commodities in the West, I have concerns about the potential impacts of commercial oil shale development. Nonetheless, I look forward to seeing this technology explored further,” Udall said in a Friday statement.

Oil shale development is not to be confused with drilling into shale formations for oil and natural gas. The practice, which involves separating hydrocarbons bound up in rocks, has not been widely executed since Exxon’s failed Colorado venture in the 1980s.

Bobby McEnaney, senior lands analyst with the Natural Resources Defense Council, praised Interior Secretary Ken Salazar for the proposed final plan.

“By significantly reducing the acreage of wilderness potentially available for leasing, Secretary Salazar is laying out a creative, thoughtful and more responsible approach in managing some of our most precious resources,” McEnaney said in a Friday statement.