Over the last 40 years, the United States has become increasingly dependent on foreign oil and reluctant to develop domestic, fossil fuel resources. Today, America imports two-thirds of its oil at a cost of $300 billion per year, much of it from politically unstable, Middle East countries which control 45% of the world's oil, overall.
This is occurring despite the existence of bountiful, untapped oil resources within the United States. Developing these resources could free America from imports, create badly needed, oil-production jobs and meet U.S. energy demand for the next 200 years. With nearly three-fourths of Americans favoring increased energy exploration, the only obstacle standing in the way of our energy independence is a lack of political vision and will.
We need only look to our Canadian neighbors to realize how forging ahead politically to develop oil resources could help increase our energy supplies, boost our sagging economy and increase our tax base. Canada's experience could become our own, if we simply took the initiative and plunged ahead with proven technologies that could release not only oil from the ground, but our country from crippling, energy dependency.
Canada's Oil Sands
Canada supplies more oil to the United States than any other single country in the world. Canadian oil represents 21% of our imports, double that of Saudi Arabia, our nation's second largest oil supplier. But while Saudi Arabia has an estimated remaining 270 billion barrels of oil, Canada's total oil sands resources are placed as high as 2.6 trillion barrels, which includes the Athabasca Oil Sands Deposit in Alberta, the largest petroleum resource in the world.
The successful development of Canada's oil sands arose from a long-term, committed partnership between government and industry focusing together on economic, environmentally sound and technologically innovative methods of oil sand extraction and processing. For over 30 years, the Canadian government worked with the oil industry to conduct research and to foster a financial environment to help support the growth of its oil sands. Government tax incentives and infrastructure construction have significantly benefited the industry, helping transform Canada into an energy super power, creating tens of thousands of jobs and infusing billions of dollars into the economy.
Canadian oil sand production now stands at more than one million barrels per day and is expected to approach 2.5 million barrels per day by 2017. Meanwhile, production costs for Alberta's oil sands declined by as much as 80% between 1980 and 2003, according to the Oil and Gas Journal.
Oil sands resources successfully compete with conventional fuels, achieving high recovery efficiencies, dependable production rates and uniform, high quality products. Federally mandated reclamation requirements have insured that development sites are returned to their natural state. New technologies could further reduce emissions and energy use for production, plus improve water management.
Alberta's oil sands development has demonstrated an effective balance between environmental protection, economic growth and energy security, according to the Canadian Energy Research Institute (CERI), a non-profit, energy think tank. Every dollar invested in oil sands creates $9 of economic activity, according to the CERI, which estimates the economic benefit of oil sands could reach $885 billion from 2000-2020.
U.S. Oil Shale Deposits
A similar resource exists within the southwestern United States. Oil shale deposits there have a commercial viability comparable and in sufficient magnitude to the Alberta oil sands. In comparison to Saudi Arabia's oil reserves, America's recoverable oil shale resources are nearly three times as large, according to a 2008 report by the Utah Mining Association. That study affirmed that utilizing U.S. oil shale deposits could provide America with the "potential to be completely energy self-sufficient, with no demands on external energy sources."
Oil shale, a sedimentary rock, contains kerogen, a less evolved form of crude oil. With additional oil-extraction processing, kerogen can be used to produce jet fuel, diesel, gasoline and heating oil. The oil shale extraction process "results in products that are super clean -- even cleaner than super diesel (ultra low sulfur diesel)," according to Dan Kish, senior vice president for policy at the Institute for Energy Research.
The largest, richest and most concentrated deposits of kerogen are found in the Green River Formation in Colorado, Utah and Wyoming. These states comprise respective percentages of 60%, 30% and 10% of the available resources, with sufficient oil shale to meet U.S. energy demand for the next 200 years.
Locked within these oil shale resources are approximately 2 trillion barrels of oil, according to a 2005 report given to President Bush and the Congress, by the Task Force on Strategic Unconventional Fuels. Depending on technological developments and economic feasibility, an estimated 800 billion barrels of oil could be recovered, three times the proven oil reserves in Saudi Arabia.
Oil shale conversion is a proven technology that has been used in other parts of the world for over 50 years. Since the 1950s, Brazil has used oil shale to produce commercial fuel. Estonia currently derives 85% of its electricity from oil shale and China now produces 1.5 million barrels of shale oil per year. In the United States, shale oil technology has been developing for close to 30 years. It's an energy production process far ahead of techniques for renewables and biomass, with far greater potential to meet U.S. energy needs sooner.
Oil Shale Demonstration Projects
Several companies have experimented with extraction methods that could result in commercial production in the near term, with development price estimates of $30 to $55 per barrel of oil.
Utah-based Red Leaf Resources, which estimates a 100,000 barrel of oil yield per acre, uses an environmentally-sensitive proprietary technology to encapsulate the shale at depths of 60 to 90 feet in a lined capsule. Using natural gas heaters, Red Leaf heats the oil shale and extracts the oil. The depleted shale, an inert inorganic material classified as "non-hazardous" by the EPA, is thus contained in an impermeable shell. In other countries, spent shale has been used for cement manufacturing, construction materials and road base. Reclamation of the land occurs within weeks of completion of the extraction process. Red Leaf currently operates on School and Institutional Trust Lands for its demonstration project, but estimates it can move into limited commercial production within one year without access to federal land.
The Shell Oil Corporation has completed several research and demonstration projects within the Green River oil shale formation over more than 30 years. Shell utilizes a patented, in situ technology. Without mining the rock, Shell heats oil shale formations at depths of 1,000 feet to 650-700 degrees Fahrenheit for three to five years. Heating allows kerogen oil (2/3 of the volume) and gas (1/3) to be released from the shale and brought to the surface using traditional pumps. The process requires no open-pit or subsurface mining, avoids groundwater contamination and does not produce shale waste or other unwanted byproducts. Estimated oil yields using this technology in the kerogen-rich Green River formation are 1 million barrels per acre.
A June 2008 Zogby poll found that 74% of American voters supported increased energy exploration. The federal government owns 80% of oil shale lands in the United States, the parcels with the richest kerogen deposits. Yet, despite the will of the American people to increase domestic energy supplies and take advantage of these vast resources, politicians have successfully thwarted these desires. Politics has trumped market forces and resource availability to actually decrease American-extracted oil supplies, especially under the new administration.
Championing environmental concerns ahead of economic and national security interests, politicians -- largely Democratic -- have advanced legislation that discourages new development, particularly in offshore areas and for unconventional sources, thereby increasing our dependency on foreign oil. Environmental groups have been allowed to sabotage government-issued leases for exploration. For example, in 2007, Representative Henry Waxman (D-CA) added Section 526 to the Energy Independence and Security Act, a clause that banned the use of oil shale and other fossil fuel sources.
Previously, oil shale development seemed to be moving forward. Under the Energy Policy Act of 2005, the Secretary of the Interior was directed to provide an environmental impact statement for a commercial oil shale leasing program on public lands. The Act authorized the acceleration of oil shale development in Colorado, Utah and Wyoming and set up a task force to study the fuel's potential. Following completion of the study, preparation of leasing regulations and the release of the environmental impact statement, six of 19 available leases were made available in November 2008. Bans on leases for oil shale research, development and demonstration projects were rescinded.
But, in February 2009, when Ken Salazar became Secretary of the Interior for the Obama administration, additional lease offers were withdrawn that would have made expansions of existing programs possible. Salazar also called for a reexamination of proposed royalty rates. Although he didn't cancel existing leases, Salazar's announcement appeared to signal that the pace of oil shale development in the United States would be slowed. A 90-day public comment period, followed by a four-month evaluation period prior to any new proposals for a second round of leasing arrangements is now in place.
The current, U.S. administration focus on renewable options, such as wind and solar -- which make up only 1% of current usage -- plus unproven alternatives, such as biomass, will lead to rising dependence on foreign oil and increased opportunity costs at home. Wind farms occupy thousands of acres to produce electricity at seven times the cost of an average, coal-fired plant. Solar cells take up several square miles of land to achieve a similar result. Both rely on unpredictable energy sources, the sun and the wind.
Similarly, an acre of corn yields only five barrels of corn ethanol with an energy yield of less than two-thirds of a gallon of oil. Cellulosic ethanol from grasses yields 800 barrels per acre which a seeming improvement until compared against the yield from oil shale of 100,000 to 1 million barrels per acre.
A report by U.S. Dept. of Energy's Office of Naval Petroleum and Oil Shale Reserves suggest that the richness and magnitude of America's oil shale resources warrants management as a long-term strategic resource. However, long-term investments must have income flow to encourage investors and new capital. Economic incentives already exist in the free market that lend themselves to the development of resources like oil shale. Government should get out of the way and allow free enterprise to develop this ample resource so that America can achieve greater energy independence and not compromise our national security in the balance.
The cost of developing new technologies and sources needs to be weighed against the heavy cost of further reliance on imported oil. The "hidden cost" of defending oil supplies in the Persian Gulf alone is conservatively estimated at $305 billion annually.
Oil shale development would stimulate the economy with money that would otherwise be spent overseas. It would contribute to our national security and mean that the United States would not have to import hundreds of billions of barrels of oil from the Persian Gulf. With oil sands and oil shale resources , the combined U.S. and Canadian energy supplies would comprise the largest oil reserves in the world and make the United States independent of Persian Gulf oil.
 Oil and Gas Journal, July 14, v. 101.27.  "Developing of Utah Oil Shale and Tar Sands Resources," Utah Mining Association, October 2008.  "Development of America's Strategic Unconventional Fuels Resources," September 2006.  "America' Oil Shale, A Roadmap for Federal Decision Making," December 2004