Secretary Salazar Finalizes Plan Promoting Responsible Oil Shale and Tar Sands Research, Demonstration and Development

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BLM proposes revisions to commercial oil shale regulations to ensure fair return to taxpayer; will open 60-day public comment period

03/22/2013

Contact: Jessica Kershaw (DOI) 202-208-6416
Amy Krause (BLM) 202-912-7236

WASHINGTON – As part of President Obama’s strategy to continue to expand safe and responsible development of the nation’s energy resources, Secretary of the Interior Ken Salazar today announced the Department’s final plan for encouraging research, development and demonstration (RD&D) of oil shale and tar sands resources on Bureau of Land Management (BLM) lands in Colorado, Utah and Wyoming.

The Record of Decision and plan amendments make nearly 700,000 acres in Colorado, Utah and Wyoming available for potential oil shale leasing and about 130,000 acres available for potential tar sands leasing in Utah. In November 2012, the BLM signed two additional leases for RD&D oil shale proposals to encourage industry to develop and test technologies aimed at developing oil shale resources on a commercial scale.

“This plan maintains a strong focus on research and development to promote new technologies that may eventually lead to safe and responsible commercial development of these domestic energy resources,” Secretary Salazar said. “It will help ensure that we acquire critically important information about these technologies and their potential effects on the landscape, especially our scarce water resources in the West.”

As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year the President has been in office, with domestic oil production currently higher than any time in two decades and natural gas production at its highest level ever.

[...]

U.S. Dept. of Interior

First the same old lie…

“As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year the President has been in office…”

The rise is U.S. domestic oil and gas production over the last decade is not any “part of the Obama Administration’s all-of-the-above energy strategy.”

The Maobama Maladministration has played no role whatsoever in that rise in oil and natural gas production, none, nada, zip…

The only portion of U.S. domestic oil and gas production that is in any way part of Dear Leader Chairman Maobama’s all-of-the-above energy strategy is that from Federal mineral leases. Oil and natural gas production from Federal leases has been declining since at least 2010.

With leasing activity subdued and permit approvals dragged out from 30-60 to more than 365 days, the ONRR revenue from the Gulf is at least $3 billion and more likely $10 billion lower that it should be.

Leasing is down because most of the lease sales since 2010 were cancelled. Permits that used to take 30-60 days to approve, now take 6-24 months. The most recent sale, held last Wednesday, was one of the weakest Central Gulf of Mexico Lease Sales in history. OCS 227 was the weakest Central Gulf sale in at least 10 years. It was weaker than the March 2009 sale in the aftermath of the financial crash, oil & gas price collapse and Hurricane Ike.

Now for the energy idiocy…

“Secretary of the Interior Ken Salazar today announced the Department’s final plan for encouraging research, development and demonstration (RD&D) of oil shale and tar sands resources on Bureau of Land Management (BLM) lands in Colorado, Utah and Wyoming.”

RD&D??? Good effing grief!!! Boot Salazar is perhaps the only person on the face of the Earth with less competence in energy economics than Al Gore.

They continue to keep the potentially most prolific undeveloped hydrocarbon resource potential in the U.S (possibly the world) off limits to actual exploitation, while they p!$$ away hundreds of billions of taxpayer dollars actually building solar, offshore wind and biofuels infrastructure that will cost energy consumers far more money for far less reliable sources of electricity and transportation fuels…

The USGS estimates that the Green River Oil Shale of the Piceance Basin contains more than 1 trillion barrels of ***recoverable*** oil.

The vast majority of this play is under Federal control and largely unavailable for meaningful exploitation efforts. Maobama & Boot actually rescinded the Bush administration decision to open this area up to actual exploitation prior to closing it off and then reopening some of the acreage to RD&D.

The Green River Oil Shale in just the Piceance Basin of Colorado contains more than 1 trillion barrels of recoverable oil (kerogen).

The kerogen is a waxy precursor of oil. It was long thought that mining was the only way to recover it. Shell recently demonstrated that the kerogen can be economically produced without having to mine it. Unlike all of the green schist foisted on the taxpayers by Enviromarxists, this play is both technically and economically exploitable now.

Just imagine what would happen if the Federal gov’t wasn’t doing everything in its power (actually beyond its lawful powers) to impede domestic oil production…

In my hypothetical production forecast, I projected Green River oil shale production to reach 15 million BOPD by 2096. Am I being overly optimistic in projecting more than 15 million barrels per day (BOPD) of production from oil shales by 2100? Shell estimates that they could be producing 500,000 barrels per day from the Picenance Basin with a very small footprint using an in situ recovery process…

Technical Viability and Commercial Readiness (pp 18-24)

Shell has tested its in-situ process at a very small scale on Shell’s private holdings in the Piceance Basin. The energy yield of the extracted liquid and gas is equal to that predicted by the standardized assay test.13 The heating energy required for this process equals about one-sixth the energy value of the extracted product. These tests have indicated that the process may be technically and economically viable.

This approach requires no subsurface mining and thus may be capable of achieving high resource recovery in the deepest and thickest portions of the U.S. oil shale resource. Most important, the Shell in-situ process can be implemented without the massive disturbance to land that would be caused by the only other method capable of high energy/resource recovery—namely, deep surface mining combined with surface retorting. The footprint of this approach is exceptionally small. When applied to the thickest oil shale deposits of the Piceance Basin, drilling in about 150 acres per year could support sustained production of a half-million barrels of oil per day and 500 billion cubic feet per year of natural gas.

[…]

Once oil shale development reaches the production growth stage, how fast and how large the industry grows will depend on the economic competitiveness of shale derived oil with other liquid fuels and on how the issues raised in Chapter Five are ultimately resolved. If long lead-time activities are started in the prior stage, the first follow-on commercial operations could begin production within four years. Counting from the start of the production growth stage and assuming that 200,000 barrels per day of increased production capacity can be added each year, total production would reach 1 million barrels per day in seven years, 2 million barrels per day in 12 years, and 3 million barrels in 17 years.

Assuming a 12-yr lead time to reach the production growth stage, it will take ~30 years to reach 3 million barrels per day. If production continued to grow at a rate of 1 million BOPD every 5 years… Oil shale production from just the Piceance Basin could reach 15 million BOPD by the end of this century.

The hydrocarbon characteristics of the the oil shales of the Green River formation in the Piceance Basin are superior to those of the Athabasca oil sands. The hydrocarbon areal density is about 13 times that of the Athabasca deposits. The Green River hydrocarbons are not technically “oil;” it’s a form of kerogen. But, for or refining purposes, it’s oil. It will be booked as oil, just like the Athabasca tar sand oil is. It’s a high-grade refinery feedstock…

“Kerogen can be converted to superior quality jet fuel, #2 diesel, and other high value by-products.”

Canadians are currently producing ~ 1 million barrels of oil per day from Athabasca oil sand deposits. They expect to increase that to 2 million barrels per day over the next decade. The Green River oil shale deposits in the Piceance basin could easily outperform Athabasca within a decade and with a much smaller environmental footprint.

Athabasca oil sands are currently economically competitive with the OPEC basket. Green River formation oil shales are superior, by a wide margin, to Athabasca oil sands. The Green River oil shales would yield 100,000 bbl of 38° API sweet refinery feed per 160,000 tons of ore & overburden. Athabasca oil sands yield 100,000 bbl of 34° sweet refinery feed per 430,000 tons of ore & overburden. The unconventional oil is actually very light and very sweet; the OPEC Basket is actually heavier (32.7° API).

Athabasca is economically competitive now. Green River could be economically competitive now. The only obstacles to US energy security are environmental terrorists and the U.S. government.

“Peak Oil,” if it exists, won’t be reached for hundreds of years if the U.S. government would just get out of the way. About 80% of the most prospective Green River deposits are under Federal leases. The Obama administration effectively blocked exploitation of the Green River oil shale last year.

We could actually have achieved “North American energy independence by 2020 if the voters had fired #OccupyWhiteHouse and put their Enviromarxist allies on a short leash.

Unfortunately, a bit over 50% of the electorate this past year was composed of Marxists & morons.

Going Green

Offshore Wind Passes in Senate, Gov. O’Malley’s Signature Next

The construction of a wind power farm off the coast of Ocean City could begin as early at 2017

By Jessica Wilde, Capital News Service

Gov. Martin O’Malley’s offshore wind energy bill is on its way to his desk for a signature, having passed in the House in February and in the Senate on Friday.

Five friendly Senate amendments are expected to be approved easily by the House.

The new legislation will funnel $1.7 billion of ratepayer subsidies over a 20-year period toward the construction of a wind power farm 10 to 30 miles off the coast of Ocean City as early as 2017.

“It’s about a better Maryland for tomorrow,” said Sen. James Mathias Jr., D-Worcester, the former mayor of Ocean City, who changed his vote to support the bill.

O’Malley’s previous two attempts to push the legislation—the first more ambitious —never made it to the Senate floor largely because of concerns about the cost to Marylanders.

His first initiative also failed because utility companies would have had to make nearly 20-year commitments to buy offshore wind energy.

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GreenbeltPatch

Offshore wind is, by far, the most expensive source of electricity. An offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime. 34¢/kWh is almost three times the average retail residential electricity rate in the U.S.

The much ballyhooed Cape Wind project, off Cape Cod, is projected to have a 454 MW installed capacity. It will cost approximately $2.5 billion to build. This works out to $5,506,608 per MW. A natural gas plant generally costs less than $900,000 per MW.

Cape Wind currently has a long-term contract to sell half its output for 18.7¢/kWh.  The average U.S. residential rate is in the neighborhood of 12¢/kWh.

Maryland has come up with a novel solution to make offshore wind more affordable to consumers…

Opinion: Local Editorial
Martin O’Malley’s wind-power welfare

If offshore wind energy were the way of the future, government would not have to subsidize it at all, let alone to the tune of $1.7 billion.

Maryland Gov. Martin O’Malley, D, justifies the subsidy he will soon provide to offshore wind based on the industry’s enormous upfront costs. He routinely fails to mention that investors routinely swallow large upfront costs to get a piece of industries that promise future profits. In the case of offshore wind, because the industry is not so promising, investors would never back it without O’Malley’s massive pre-emptive government bailout.

O’Malley is campaigning already for the Democratic presidential nomination in 2016. This is the real reason behind the wind power subsidies he will soon sign into law. It is a sad reflection on the integrity of Democrats in the state legislature that they have rubber-stamped O’Malley’s latest corporate welfare plan. Although Marylanders will pay only a small additional amount on average — about $1.50 per month for residential customers, and a 1.5 percent surcharge on Maryland businesses — every penny is being directed to businesses that have O’Malley’s ear. By diffusing the costs of highly concentrated benefits, O’Malley has found a way to squeeze ordinary residents of his state even further than they are currently squeezed, enrich a few wealthy developers, and come off looking like some kind of environmentalist hero.

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The Examiner

$1.7 billion in taxpayer-funded subsidies divided by 200 MW works out to $8.5 million worth of SUBSIDIES per MW of installed capacity!!!

They could build a 200 MW solar PV plant for less than the cost of the subsidies!

They could build 2,000 MW of natural gas-powered generating capacity for the cost of just the subsidies…

200MW Of Offshore Wind Blowing This Way

The exact percentage of state electricity sales that must be met by offshore wind under the state RPS will be determined annually by state regulators, and will be based on the creation of “offshore wind renewable energy credits” (ORECs).

Roughly 200 megawatts (MW) of offshore wind capacity will likely be built as a direct result of the bill, and Governor O’Malley has previously said 40 turbines will be built about 10 miles off the coastline, creating 850 green jobs.

[...]

Read more at http://cleantechnica.com/2013/03/08/…z0tBdmufETJ.99

The $1.7 billion subsidy will be paid out over 20 years… $85 million per year… $100,000 per year per green job created ($2 million per green job)…

And this is just the cost of the SUBSIDY!!!

At 12¢/kWh and a 38% capacity factor, the Maryland offshore wind farm would generate about $80 million per year in gross revenue. The levelized generation cost (LCOE) would run about $226 million per year.

So, you will have an investment that could never pay itself off or even cover half its LCOE at market prices.

For this monstrosity to break even, with the subsidy, Maryland electricity consumers will have to pay 17¢/kWh.

Maryland taxpayers will have to cover 17¢/kWh, so that Maryland’s electricity consumers will only have to pay 17¢/kWh (assuming that the power company is a non-profit). I guess this will only be a burden on the Marylanders who both consume electricity and pay taxes. 

 Our Department of Energy recently agreed to spend $169 million more of the taxpayers’ money to subsidize similar boondoggles.

Science 8 March 2013:
Vol. 339 no. 6124 pp. 1198-1201
DOI: 10.1126/science.1228026

A Reconstruction of Regional and Global Temperature for the Past 11,300 Years

Shaun A. Marcott, Jeremy D. Shakun, Peter U. Clark, Alan C. Mix

Surface temperature reconstructions of the past 1500 years suggest that recent warming is unprecedented in that time. Here we provide a broader perspective by reconstructing regional and global temperature anomalies for the past 11,300 years from 73 globally distributed records. Early Holocene (10,000 to 5000 years ago) warmth is followed by ~0.7°C cooling through the middle to late Holocene (<5000 years ago), culminating in the coolest temperatures of the Holocene during the Little Ice Age, about 200 years ago. This cooling is largely associated with ~2°C change in the North Atlantic. Current global temperatures of the past decade have not yet exceeded peak interglacial values but are warmer than during ~75% of the Holocene temperature history. Intergovernmental Panel on Climate Change model projections for 2100 exceed the full distribution of Holocene temperature under all plausible greenhouse gas emission scenarios.

Science

Marcott et al., 2012 is behind a paywall; however the supplementary materials include a link to their proxy data.

This paper appears to be a text book example of creating a Hockey Stick by using a low resolution time series for the handle and a high resolution time series for the blade…

Let’s test one of the 73 proxies.

I picked ODP-1019D, a marine sediment core from just offshore of the California-Oregon border because it has a long time series, is a an annual reconstruction and has a nearby long time series instrumental record (Grants Pass OR).

ODP-1019D has a resolution of 140 years. Grants Pass is annually resolved…

Let’s filter Grants Pass down to the resolution of the Marcott et al. reconstruction…

Grants Pass sure looks very anomalous relative to the rest of the Holocene… Right?

Well, not so fast. ODP1019D only has a 140-yr resolution. The record length at Grants Pass is less than 140 years. So, the entire Grants Pass record would be a single data point in the ODP-1019D record…

While, the most recent ~140 years might be warmer than most of the rest of the Holocene in this particular area, does anyone else notice what I did?

The Grants Pass/ODP-1019D area has been warming at a fairly steady rate for 6,500 years…

I don’t know how many of these proxies I will have time to analyze… Probably not very many. Maybe this could become a WUWT crowd-sourcing project.