17

• Board Meeting Date: 7/11/2007
• Description: WSP Section - Intrastate Water Planning - Oil Shale Water Use
• Board Meetings - Doc Type: Memo

:1
" !:
:1

~

40 Oil Shale Development in the United States: Prospects and Policy Issues

first-served, BACT-based permitting process may become lengthy and highly conten-
tious, and this could result in a less competitive and extremely small oil shale indus-
try.
For air quality permits, consideration should be given to developing an alterna-
tive approach in which emission limits for initial plants are established so that future
production growth can occur within the allowable PSD Class II and Class I incre-
ments. Advances in regional air quality modeling malke feasible multiple case studies
involving alternative geographic locations and hypothetical emission levels. If timed
to yield early results, regional air quality modeling will also serve as useful input to
work on a Programmatic EIS conducted to inform government decisions regarding
the environmental impacts of alternative strategies for leasing public lands.

Greenhouse Gas Emissions
Challenges. Heating oil shale for retorting, whether aboveground or in situ,
requires significant energy inputs. Over at least the next few decades, this energy will
be supplied by fossil fuels, as discussed in Chapter Three. As a result, the production
of petroleum products derived from oil shale will entail significantly higher emissions
of carbon dioxide, compared with conventional crude oil production and refining. In
addition, the high temperatures associated with surface retorting can cause a release
of carbon dioxide from mineral carbonates contained in oil shale.
A significant number of individuals, nongovernmental organizations, and firms
in the United States have expressed their concerns with the adverse consequences of
continued levels of greenhouse gas emissions. It is not unreasonable to anticipate that
individuals and organizations concerned with the lack of progress by the U.S. gov-
ernment in addressing global warming will oppose oil shale development.
Opportunities for Action. The U.S. government has not yet adopted a strategy
directed at significantly reducing emissions of greenhouse gases. The prospect of oil
shale development provides an additional motivation for consideration of market-
based approaches, such as carbon taxes or "cap and trade" programs, so that green-
house gas reductions can be achieved in an economically efficient way. If a market-
based approach is adopted for the United States, the costs of minimizing, controlling,
or trading greenhouse gas emissions in oil shale production will be shifted to the pro-
ducers and consumers of shale oil and shale oil-derived petroleum products. Under
such a framework, the decision, at least with regard to greenhouse gas emissions,
about whether to go forward with oil shale development, and how, will be industry's
and not the government's.

Water Quality
Challenges. All of the Green River Formation oil shale deposits lie within the
Colorado River drainage basin. Degradation in water quality stemming from oil shale
development could have adverse consequences not only to the Colorado River Basin