Energy Matters: Can America free itself of high cost energy?

By David Cohen/Danvers Herald

Wed Feb 27, 2008, 07:25 PM EST

Danvers - "Since the early 1980s, oil shale was not on the U.S. energy policy agenda, and very little attention was directed at technology or energy market developments that might change the commercial prospects for oil shale."

That is a near quote from the RAND corporation in a 2005 report entitled: "Infrastructure, Safety, and Environment." An additional quote states: "The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of oil resources now in place within the Green River Formation range from 1.5 to 1.8 trillion barrels. Not all such resources are necessarily recoverable. For potentially recoverable oil shale resources, Rand derived an upper bound of 1.1 trillion barrels of oil and a lower bound of about 500 billion barrels. It is enough to know that any amount in this range is very high. For example, the midpoint of the estimate range, 800 billion barrels, is more than triple the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, 800 billion barrels of recoverable resources would last for more than 400 years."

If the U.S. could replace crude oil imports from outside of the North American Free Trade Agreement (NAFTA) region with synthetic crude oil derived from shale, we would solve our high cost energy supply problems for several centuries. Flooding the U.S. and world markets with syn-crude will drive down petroleum prices with supply and demand pressure and extend existing reserves far into the future.

So why are we not doing this? Why are we trying to relieve energy shortages with dead end programs like making ethanol from corn? We already know that the ethanol program barely scratches the surface and provides few if any advantages to the consumers or our economy. In fact, it has already driven up the cost of food.

What can our lawmakers do to promote rapid development and exploitation of our huge shale resources? There are many ways to raise the incentive to act quickly; however, I will offer a few ideas in this column.

We could enact a tax break or credit for energy companies that produce syn-crude from shale, coal, tar sand, or organic refuse. That credit would be tied to the number of barrels of synthetic crude oil produced per annum. We could also arrange a similar credit for reducing the annual number of barrels of petroleum crude imported from outside of the NAFTA region.

With such incentives, energy companies like BP, Exxon, Shell and others might be tripping over each other to get at the Green River Formations of oil shale. The technology is already known. Fuel derived from oil shale has been manufactured and successfully tested as far back as 30 years ago. This writer personally ran a test on a jet engine combustion system in the 1970s with aircraft fuel manufactured from oil shale. It behaved indistinguishably from a petroleum-derived fuel.

It has been estimated that syn-crude from shale can be competitive with petroleum at $70 per barrel and that developments by Shell Oil Co. may reduce that price significantly lower. So it is already significantly cheaper than petroleum, now selling at about $100 per barrel.

Exploitation of our shale fields would not only remove a possible energy driven economic disaster that has been forecast for the middle of this century, but it would stabilize our fuel hungry military requirements far into the future. It may even provide us with the energy we need to fight off the effects of global warming. Global warming may well be non-reversible. If that is so, we will need vast amounts of energy for seawater desalination, dike construction and operation, CO2 sequestration, and all other energy consuming systems that will be needed in the future.

J. David Cohen lives on Cornell Road in Danvers. He is a retired professional engineer, license 30246, who worked at General Electric Aircraft Engines in Lynn for 45 years.