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US BLM issues draft PEIS for oil shale and oil sands; significantly scales back public land available for commercial leasing

4 February 2012

The US Bureau of Land Management (BLM) has published the Notice of Availability (NOA) of the Draft Programmatic Environmental Impact Statement (PEIS) and Possible Land Use Amendments for Allocation of Oil Shale and Tar Sands Resources on Lands Administered by the BLM in Colorado, Utah and Wyoming. The publication opens a 90-day public review and comment period.

Any new land allocation decisions made on the basis of the Final PEIS would replace the land allocation decisions made in 2008 that proposed making up to 2 million acres of public lands available for commercial oil shale leasing in Utah, Colorado, and Wyoming and 431,000 acres available for oil sands leasing in Utah.

The Draft PEIS analyzes several alternatives for land allocation and resource management. If the BLM decides to adopt the Preferred Alternative, 461,965 acres would be available for research and development of oil shale, a kerogen-rich rock (35,308 acres in Colorado; 252,181 acres in Utah; and 174,476 acres in Wyoming). In addition, 91,045 acres in eastern Utah would be available for activities related to oil sands.

Oil shale is a term used to describe a wide range of fine-grained, sedimentary rocks that contain solid bituminous materials called kerogen. It should not be confused with “shale oil,” which is not addressed by the draft PEIS. Kerogen, which is organic matter derived mainly from aquatic organisms, releases petroleum-like liquids when subjected to high temperatures. Developers have been trying to produce oil from this rock in an economically-viable way for more than a century. The majority of US oil shale (and the world’s largest oil shale deposit) is found in the Green River Formation in Colorado, Utah, and Wyoming.

Oil sands (tar sands) are sedimentary rocks containing a heavy hydrocarbon compound called bitumen. They can be mined and processed to extract the oil-rich bitumen, which is then refined into oil. However, unlike the oil sands deposits in Canada, oil is not currently produced from oil sands on a significant commercial level in the United States. Additionally, the US tar sands are hydrocarbon-wet (“oil-wet”), whereas the Canadian oil sands are water-wet. This difference means that US tar sands will require different processing techniques.

Because there are still many unanswered questions about the technology, water use, and impacts of potential commercial-scale oil shale development, we are proposing a prudent and orderly approach that could facilitate significant improvements to technology needed for commercial-scale activity. If oil shale is to be viable on a commercial scale, we must take a common-sense approach that encourages research and development first.

—BLM Director Bob Abbey

To date, technological and economic conditions have not combined to support a sustained commercial oil shale industry in the United States, and there is currently no commercial development of oil shale in the areas under review in the draft PEIS. Lands that would be open to oil shale development under the Preferred Alternative would be available for Research, Development, and Demonstration (RD&D) leases. The BLM could issue a commercial lease after a lessee satisfies the conditions of its RD&D lease and meets all federal regulations for conversion to a commercial lease.

Additionally, following the recommendations of the Government Accountability Office—which determined that several fundamental questions about oil shale technologies remain unanswered, including critical questions about water demands—the United States Geological Survey (USGS) is undertaking an analysis of baseline water resources conditions to improve the understanding of groundwater and surface water systems that could be affected by commercial-scale oil shale development.

A 90-day public review and comment period began on 3 February 2012 and is scheduled to end on 4 May 2012. Public meetings on the Draft PEIS will also be held in Rifle, CO; Rock Springs, WY; Salt Lake City; and Vernal, UT.

Background. In September 2008, BLM issued a Proposed Plan Amendments/Final Oil Shale and Tar Sands (OSTS) Programmatic Environmental Impact Statement (PEIS) analyzing the environmental and socioeconomic impacts of amending land use plans in Colorado, Utah, and Wyoming to designate public lands administered by the BLM as available for commercial leasing for oil shale or oil sands development.

The November 17, 2008, Record of Decision (ROD) that followed this PEIS adopted the proposed land use amendments reflecting the allocation decisions analyzed in the OSTS PEIS. These land allocation decisions, which are currently in effect, were challenged in a lawsuit brought by a coalition of environmental organizations in January 2009. As part of a settlement agreement entered into by the United States to resolve the lawsuit, the BLM is reexamining the land allocations and is considering excluding certain lands from future leasing of oil shale and tar sands resources.

The BLM proposes to amend 10 land use plans in Colorado, Utah, and Wyoming to describe those areas that will be open and those that will be closed to application for commercial leasing, exploration, and development of oil shale and tar sands resources. The analyses in the current PEIS have been developed to evaluate the effects of this proposed action and its alternatives.

The alternatives considered by the BLM in the current PEIS include:

  • Alternative 1, No Action Alternative, No Change to 2008 Decision, Oil Shale. Lands available for lease under the 2008 land use plan would remain available for future leasing consideration.

  • Alternative 1, No Action Alternative, No Change to 2008 Decision, Tar Sands.

  • Alternative 2, Oil Shale Conservation Focus Alternative (2a), and with RD&D First Requirement (2b), Oil Shale. Under this alternative, 10 land use plans in Colorado, Utah, and Wyoming would be amended to designate less than 830,000 acres as available for future commercial leasing. The 2b variant maintains the lands open for future leasing consideration as the same as those in Alternative 2(a), but only for RD&D leases.

  • Alternative 2, Conservation Focus Alternative, Tar Sands. Under this alternative, six land use plans in Utah would be amended to designate less 18 than 229,000 acres as 19 available for future commercial oil sands leasing.

  • Alternative 3, Oil Shale Research Lands Focus (RD&D with PRLA only), Oil Shale. Under this alternative, 10 land use plans would be amended such that public lands for commercial leasing would be available only where there were existing RD&D leases at the time the ROD for the 2012 Final OSTS PEIS is signed. The six current RD&D leases contain terms and conditions that could allow commercial development of the original leases and the associated preference right lease area (PRLA) totaling 30,720 acres. Another three potential RD&D leases (two in Colorado and one in Utah) are currently undergoing NEPA analysis.

    Maximum acreage of these three leases, if approved, would be 1,920 acres, bringing the total acreage to 32,640 acres as available for potential oil shale leasing under this alternative.

  • Alternative 3, Pending Commercial Lease, Tar Sands. Because there is no specific “RD&D” program for oil sands, this alternative would also analyze foregoing the leasing of tar sands for the commercial development of fluid mineral resources, entirely, except for one tar sands lease currently under consideration.

  • Alternative 4, 2008 Moderate Development Alternative (2008 OSTS PEIS ROD minus Adobe Town and ACECs) (4a), and with RD&D First Requirement (4b), Oil Shale. Under Alternative 4, the BLM would amend 10 land use plans in Colorado, Utah, and Wyoming to designate acreage less than 2,017,714 acres as available for future consideration for leasing for commercial oil shale leasing and less than 430,686 acres as available for application for commercial tar sands leasing.

  • Alternative 4, Tar Sands Moderate Development Alternative (2008 OSTS PEIS ROD minus Adobe Town and ACECs), Tar Sands. Under Alternative 4, the BLM would amend four land use plans in Utah to designate acreage less than 430,686 acres as available for application for commercial tar sands leasing.

Preferred Alternative. The BLM has chosen Alternative 2(b) as the preferred alternative for oil shale, and Alternative 2 as the preferred alternative for tar sands. With respect to oil shale, the BLM would like to maintain focus on RD&D projects, so as to obtain more information about the technological requirements for development of this resource, as well as the environmental implications, before committing to broad-scale commercial development. For instance, the BLM looks forward to gaining a clearer understanding of the implications of development of oil shale for water quality and quantity.

Water-wet vs. oil-wet. The term oil sands or tar sands describes sandstones or friable sand (quartz) laden with a viscous, extra-heavy crude oil known as bitumen. Significant amounts of fine material, usually largely or completely clay, are also present. The degree of porosity—which varies from deposit to deposit—is an important characteristic in terms of recovery processes.

In the PEIS, BLM notes that the properties and composition of the oil sands and the bitumen significantly influence the selection of recovery and treatment processes and vary among deposits. In water-wet sands such as in the Canadian Athabasca deposit, a layer of water surrounds the sand grain, and the bitumen partially fills the voids between the wet grains.

By contrast, oil sands in Utah lack the water layer. The bitumen is directly in contact with the sand grains without any intervening water and are referred to as “oil-wet.”

Utah deposits range from largely consolidated sands with low porosity and permeability to, in some cases, unconsolidated sands. High concentrations of heteroatoms tend to increase viscosity, increase the bonding of bitumen with minerals, reduce yields, and make processing more difficult, according to the PEIS.

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February 4, 2012 in Oil sands, Oil Shale | Permalink | Comments (8) | TrackBack (0)

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Comments

Hope that ways will be found (and effectively used) to reduce environmental damages. Alberta is one very bad example.

I have been reading about the natural gas and biomass to methanol to DME to synthetic gasoline process. We could make enough to replace 10% of the gasoline used in the U.S. That might reduce the need for doing oil sands right now and if we buy enough time then for good.

It takes extra infrastructure to get tar sands oil to the point it can even be called "crude" - even more so for shale oil. And as for any infrastructure the company will want to minimize the cost-to-benefit ratio by maximizing throughput. So once you let them get even a small operation going the company will "hard push" to get more and more land opened up for development and to keep the operation going for as many years as possible.

Stop them now while you still can.

The problem with the water-wet sands is that the fines are electrically charged and do not flocculate. Maybe this would be less of a problem with hydrocarbon-wet sands. Light hydrocarbons could be used to loosen the bulk of the bitumen, and supercritical CO2 to scavenge the solvent without leaving any troublesome residues.

Canada will sell oil (from the 200+ billion barrels tar sands reserves) to Asia for $15/barrel more than it currently gets from USA. This could mean huge added revenues for Canada and improved trade balance with Asian countries like China, Japan and Korea etc.

A Trans mountain LNG pipeline could also be extremely beneficial because Canada would get up to $15 from Asian customers instead of $3 per unit from south of the border customers.

Asian capital, labor and know how (from China-Korea-Japan) is available to build the two large diameter pipelines and the new West coast deep water port.

PM Harper will advance the negotiations during his current visit to China.

Would locally produced oil for shales also sell at a $15/barrel discount as Canadian oil from tar sands do?

Yup, Harper's in China and the reports say he could even get a pair of pandas after this trip - which is the kind of gift China only gives to leaders who don't bring up the things China doesn't want to talk about, like their human rights record, their recent UN veto on Syria, etc.

The sooner Salazar and the other foolish Luddites are removed from office, the sooner North America can be energy independent and released from mideast petro-blackmail...

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