The perils of 'unconventional oil'

Last week, the Bush Administration released a royalty plan to encourage extraction of oil shale and further recommended that the congressional moratorium on extraction, in place since October 2007, be dropped.

Mr. Bush said in a statement on June 18 that the Green River Basin likely holds 800 billion barrels of oil and that "if it can be recovered it would equal more than a century's worth of currently projected imports." 

While there is little debate about the President's estimate, the challenges and risks of pursuing "unconventional oil" are significant. It's hard to get, extremely costly, dangerous to the environment, and difficult to use. 

If these reasons aren't enough, oil shale holds less energy per pound than a pile of municipal trash or cow manure.

In fact, oil shale has roughly the same amount of energy per pound as a baked potato, according to a report (PDF) from the Community Office for Resource Efficiency. And, like a potato, oil shale must also be cooked before it can be used.

Boiling the Rockies
Oil companies such as Shell have been working in the Rockies to develop an "in-situ" process where application of heat and pressure will extract petroleum from the oil shale while it's still in the ground. 

This process uses huge amounts of energy to create a "freeze wall" and then uses additional energy to boil shale for years to extract the oil from the rock. 

Yet it's still not known where this energy will come from or if the freeze wall will be able to protect groundwater from contamination.

Even dirtier than crude
If the extraction of oil shale looks anything like it's unconventional-oil cousin, the Athabasca tar sands, the damage to the environment will be astronomical, says the Environmental Defense Fund.

Once the oil is extracted, it's still so dirty it must first be refined on-site simply to bring its quality up to that of crude oil.  This produces huge amounts of excess sulfur, which is accumulating in the Arctic in piles larger than the Great Pyramids of Egypt.

Meanwhile, U.S. refineries are not fully equipped to process the resulting "synthetic crude" and must be upgraded before they can turn the oil into gasoline.

A better plan
Our energy challenges demand more than new ways to boil rocks. 

We need to give businesses incentives to pursue fresh paths that will break our addiction to oil. 

We need to encourage wide adoption of proven technologies that use energy more efficiently and expand our nation's ability to harness renewable sources of energy. 

By making our economy more productive with each unit of energy and using new energy sources to drive that economy, we can profitably restore security and prosperity at the same time. 

RMI's comprehensive, market-led plan for doing this is available free at oilendgame.com.

Michael Ogburn is a senior consultant with Rocky Mountain Institute's transportation group, MOVE.