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The U.S. has long wanted energy independence.However, the U.S. dropped the ball on breaking into the oilshale industry 30 years ago, says former Department of Energy official Anton Dammer.
In his is testimony before the House Energy and Commerce Committee today, Dammer says that the development of the Canadian oil sands in Alberta long ago helped Canada become energy independent. Canada’s proved reserves of oil have increased to 176 billion barrels, second only to Saudi Arabia.
The U.S. in comparison has about 22 billion barrels in proved reserves. From Dammer:
“Proved reserves are, in a very real sense, the definition of energy independence. Insurance, so to speak, that mitigates being held hostage to imported oil. I will discuss the massive oil shale resource in this country later in my talk.”
After the Arab Oil Embargo ended in 1973, the U.S. government awarded protoype oil shale leases: two in Colorado and two in Utah. Two leases in Wyoming got no bids. Dammer says his old office – the Naval Petroleum and Oil Shale Reserves – worked on the oil shale development plan for reserves outside Rifle, Colorado. In fact in 1980, the Synthetic Fuels Corporation was established and allocated tens of billions of dollars for the development of energy sources in the U.S..
But Dammer said all of this ended just as soon as it had started gaining momentum. After the collapse in oil prices in the early 1980s, the U.S. had no programs in place to support research and development of oil sands and oil shale. Alberta did:
“And it seemed that as soon as development gained momentum it came to an end in 1982 with the precipitous drop in oil prices and the realisation that prices would not escalate as originally speculated. Colony [the Exxon Colony project] abruptly closed its doors without warning in an event that is popularly referred to as Black Sunday. The event continues to evoke strong emotions to this day as it resulted in loss of thousands of jobs and precipitous decline in property values. It remains a rallying cry for the opposition to oil shale development in the region to this day.
Other large enterprises eventually followed Colony. Unocal continued operation for several years as did Occidental Petroleum on one of the Federal leases, but they too eventually discontinued operations. The DOE Anvil Points R&D facility was closed and reclaimed and the Naval Oil Shale Pre-Development Program suspended. The Synthetic Fuels Corporation was essentially defunded and eventually drifted out of business after closing out its few obligations.
Unlike Alberta oil sands development, the United States abandoned oil shale and the technical advancements gained during the 1970’s and before.”