Oil Shale Developments in Colorado

Worldwide oil shale deposits have been estimated to contain 2.8 trillion barrels of oil. Over half of these known oil shale resources are contained within the Green River Formation in Colorado, Wyoming, and Utah; reserves of 1.5 trillion barrels of oil.

As a result of the recent dramatic increases in oil prices, the allure of oil shale resources in the Western United States has increased greatly. The promise an inexpensive energy source, tax revenues, employment, and domestic energy security has long been targeted by producers, consumers and policy makers. Legislation in the Energy Policy Act of 2005 attempts to encourage the development of oil shale resources with provisions to expedite the leasing process.

Four companies have subsequently taken advantage of the new legislation and been granted six RD&D leases; five of which are located in Colorado’s Piceance Basin, the most prospective region containing oil shale resources, and intend to utilize variations on in-situ retorting.

Despite the recent flurry of legislative and leasing activities, oil shale extraction still fails to address the environmental concerns which have historically hindered development. Water is the most integral and controversial aspect of oil shale extraction in the western United States of which the impact from oil shale development reaches far beyond production consumption requirements. Groundwater, surface water, and alternative uses will all be impacted by oil shale development.

Until water issues and the interest of Colorado’s people can be reconciled, oil shale extraction lacks local support; a key provision of the Energy Policy Act for the development of federal lands containing oil shale resources.