Subscribe to TNA daily
updates

User Name

Password

Remember Me

Forgot
your password?

Forgot
your username?

Create
an account

Log
in Register

Home

U.S. News

Congress

Politics

Immigration

Healthcare

Foreign Policy

Crime

Constitution

World News

Africa

Asia

Australia

Europe

North America

South
America

Economy

Economics

Commentary

Markets

Sectors

Sci/Tech

Computers

Environment

Energy

Space

Culture

Family

Biography

Education

Faith and
Morals

Opinion

Becky Akers

Sam Blumenfeld

Selwyn Duke

Steve Farrell

Jack Kerwick

Ralph Reiland

Thomas Sowell

Chip Wood

History

Ancient

European

World

American

Reviews

Movies

Books

Contact Us

Voting Index

You
are here: HomeSci/TechEnergyThe
Green River Formation: World's Largest Oil Shale Deposits

Tuesday,
15 May 2012 09:30

The Green River Formation: World's Largest Oil Shale
Deposits
Written by  Bruce Walker

font size decrease
font size
increase
font size

Print

Email

A stretch of largely vacant federal lands in Utah, Wyoming, and Colorado may
hold more recoverable oil than all the rest of the world put together. That is
what Anu Mittal, Director
of Natural Resources for the General Accounting Office, informed the House
Science Subcommittee on Energy and the Environment in her written testimony on
May 10:

The Green River Formation — an assemblage of over
1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and
Wyoming — contains the world's largest deposits of oil shale. USGS [U.S.
Geological Survey] estimates that the Green River Formation contains about 3
trillion barrels of oil, and about half of this may be recoverable, depending on
available technology and economic conditions.

The Rand Corporation, a nonprofit research
organization, estimates that 30 to 60 percent of the oil shale in the Green
River Formation can be recovered. At the midpoint of this estimate, almost half
of the 3 trillion barrels of oil would be recoverable. This is an amount about
equal to the entire world's proven oil reserves. ...

As you can imagine having the technology to
develop this vast energy resource will lead to a number of important
socioeconomic benefits including the creation of jobs, increases in wealth and
increases in tax and royalty payments for federal and state governments.

This sounds like very good news for America. Cheap, abundant oil produced
within the nation will produce high-paying jobs in the oil and gas industry,
reduce the country's balance of payments, and provide American consumers and
industry with more money to spend and to expand. Ms. Mittal, however, added some
caveats:

While large-scale oil-shale development offers
socioeconomic opportunities it also poses certain socioeconomic challenges that
also should not be overlooked. Oil shale development like other extractive
industries can bring a sizable influx of workers who along with their families
put additional stress on local infrastructure. Development from expansion of
extractive industries has historically followed a boom-and-bust cycle making
planning for growth difficult for local governments.

The federal government is in a unique position to
influence the development of oil shale because nearly three-quarters of the oil
shale within the Green River Formation lies beneath federal lands managed by the
Department of the Interior’s (Interior) Bureau of Land Management (BLM).

Developing oil shale and providing power for oil
shale operations and other activities will require large amounts of water and
could have significant impacts on the quality and quantity of surface and
groundwater resources. In addition, construction and mining activities during
development can temporarily degrade air quality in local areas. There can also
be long-term regional increases in air pollutants from oil shale processing and
the generation of additional electricity to power oil shale development
operations. Oil shale operations will also require the clearing of large surface
areas of topsoil and vegetation which can affect wildlife habitat, and the
withdrawal of large quantities of surface water which could also negatively
impact aquatic life.

Despite Ms. Mittal's cautionary comments, the aggressive recovery of these
reserves could do more than simply provide the economy with large amounts of
cheap oil and stimulate the oil and gas industry. Because this oil is largely on
federal lands, an enormous amount of federal revenue could be generated through
lease options and royalty payments without raising tax rates at all.

How much? The standard royalty payment in the oil and gas business is
“one-eighth of production free and clear of costs” or 12.5 percent of the value
of the oil extracted. Assuming that the 3-trillion barrel figure is accurate and
that the price of oil remains in the neighborhood of $100 per barrel, then the
federal non-tax revenue from royalties alone could be as high as $37.5 trillion.
However, that figure is no doubt an overestimate of revenue. As more oil is
extracted, the price of oil will drop, and hence it will not be economically
feasible to recover more of the oil at that point.

But even if only 30 percent of those royalty revenues flowed into the U.S.
Treasury, that would be enough to pay off the entire national debt without
raising tax rates or cutting federal spending. Moreover, state taxes on oil and
gas produced would enable state governments to keep tax rates low without
affecting government operations.

The high-paying oil field jobs produced would also create more taxable income
not only among those directly working in the oil industry but also in the
service businesses of those states in which the oil workers lived. The oil-field
workers would also pay more federal income taxes as their incomes rose, and thus
the need for federal programs to assist the poor would decline.

There is mineral and energy wealth all around us. Nodules on the floors of
the world's oceans are such a source of wealth. In near space there is an
asteroid 500 meters wide which has, in pure form, more platinum than has been
found on all of our planet, and enterprising men are working to bring that
wealth to us.

The limitations on the creation of wealth in human society seem to be only
those imposed by government. If federal overregulation does not stand in the
way, oil and gas extractable in North Dakota and in the Green River Formation of
the Rocky Mountains may solve a whole slew of social and economic problems
caused by federal deficit spending.

Photo: Vials containing oil extracted from shale are seen on a
sample of shale at the CF Technologies lab in Boston, Jan.
21, 2008.: AP Images

Tweet

More in this
category: «
Japan Without Nuclear Power For the First Time Since 1970 Welcome
to the Renewable Energy Future: A Lesson From Germany »

Login to post comments

back
to top

Affiliates and Friends

The John Birch Society

Liberty News Network

Freedom Project

American Opinion
Foundation

Campus Liberty
Alliance

Character
First

Social Icons

Twitter Facebook RSS-Feed

Latest Tweets

About TNA

That
freedom shall not
perish.

Designed by JoomShaper
Powered by Joomla! Valid XHTML and CSS
Scroll to Top

About

Staff

Contributors

Shop

Subscribe

Get
Involved

Employment

Advertise

Contact
Us