Author Archives: checks-and-balances

This week Steven Hall, Communications Director for the Bureau of Land Management’s (BLM) Colorado State Director Helen Hankins, lashed out at the Checks and Balances Project for questioning his boss’s land use decisions. Unfortunately, rather than offer a counterpoint, or even simply more information, Hall ducked the issue, preferring to play the victim.

According to Scott Streater's story in E&E, Hall says, Checks and Balances Project "have substituted personal attacks for public debate." Anyone who reads our recent post on this issue – or any of our posts on Colorado BLM – can see that we stick to policy and focus on facts. Facts being what Hall failed to reference in his emotional response to our latest post.

This isn’t the first time that Hall has used rhetoric to avoid substance when discussing critical drilling and leasing issues. When Hall was asked about proposed drilling parcels within yards of schools and straddling irrigation ditches that many organic farms rely upon, he flippantly commented that the leases were probably controversial because: “…if you walk out of the High Country News with your cup of herbal tea you can see some of these parcels.” Hall’s response dismissed valid concerns from residents, business owners, farmers and ranchers about fracking’s impacts on their water and lands.

Even after these sensitive leases were deferred last February, in response to public outcry, Hall said: “The deferral is not permanent.”

Under Dir. Helen Hankins’ watch, Colorado BLM has a disturbing record of offering drilling leases on sensitive land, at the behest of big oil and gas interests. In 2012, they proposed leases near Dinosaur National Monument and Mesa Verde National Park – against the wishes of the National Park Service (NPS), Colorado Parks and Wildlife, and La Plata County officials. Perhaps this is why, according to the Wilderness Society, Dir. Hankins’ policies have resulted in protests against 85 percent of Colorado leases in fiscal year 2012, compared to 33 percent throughout the rest of the Rocky Mountain region.

Full story: Colorado BLM communication director ducks issues, local concerns on controversial drilling plans

Is Colorado BLM Director Helen Hankins backpedaling on decisions to halt controversial drilling plans next to Mesa Verde National Park, Dinosaur National Monument, and in the North Fork Valley?

Barely a month after deferring oil and gas leasing decisions, Dir. Hankins’ staff are showing signs she is planning to welch on her office’s commitment to protect national parks and the heart of North Fork’s economic and agricultural center.

Earlier this week, the Durango Herald reported that:

[Connie] Clementson [Field Manager of the BLM Tres Rios office] made clear that the decision to defer the leases in Southwest Colorado does not take that land off the table for future development. After the BLM answers all the protests received about the lease sale, the land could be renominated for leasing as soon as August or November, Clementson said.

The Tres Rios field office manages lands near Mesa Verde National Park. The National Park Service criticized Dir. Hankins plans to offer leases for drilling on these lands and cited the lack of coordination by her staff.

When BLM announced the oil and gas deferrals near North Fork’s agricultural community, the Montrose Daily Press reported the following comments by Colorado BLM Communications Director Stephen Hall:

The deferral is not permanent, but the parcels won’t be offered for lease any time soon, said Steve Hall, communications director for the BLM in Colorado. “We didn’t put a timeframe on it. It’s safe to say we aren’t going to have them up (for bid) in the near future,” he said. “But we didn’t do what some had asked, which is defer them until the new resource management plan.”

Dir. Hankins already deferred those North Fork leases earlier in 2012, then reinstated most of them after the public scrutiny died down. Is that what she’s doing now? And does Dir. Hankins plan to reoffer these same, heavily protested leases based on 30-year-old data?  Instead of being a real estate agent for Big Oil and driving-up speculation on public lands, Hankins should do the right thing and put our national parks, water and local economies on equal ground with oil and gas development.

Full story: Colorado BLM using stalling tactic at Mesa Verde, new drilling proposals could come back this summer

Colorado just had a record breaking year for oil production. According to the Colorado Oil and Gas Conservation Commission director, the state has “been adding at least 2,000 new wells per year for the past nine years.” Oil production in the U.S. is at the highest levels in 20 years. New Department of Interior data shows oil production on federal lands is up 7 percent in 2012.

But these facts haven’t stopped the oil and gas industry and their supporters, like Rep. Doug Lamborn, from spinning tall tales about how red tape and the Obama Adminstration are putting up obstacles to drilling. (Speaking of tall tales, Rep. Lamborn chairs a subcommittee hearing next week, where he’ll likely peddle additional taxpayer-funded handouts to Big Oil for more failed oil shale speculation on public lands as key to our energy future.)

A new report from the Center for Western Priorities (CWP) – Follow the Oil – shows that industry claims that the Obama Administration is putting up obstacles to drilling don’t hold up.  It turns out that technology, geology and price are the key factors that drive where and how much industry drills.

According to the report:

“A combination of low natural gas prices and new shale extraction techniques inspired industry to look toward a more profitable commodity: shale oil. As a result, oil and gas companies moved their operations to areas where shale oil was abundant and offer the greatest potential profit.

The large majority of shale oil plays exist under nonfederal lands. Even in the Rocky Mountain West, where more federal land is located, 89 percent of the shale oil and mixed oil and gas plays are under nonfederal lands.”

Check out this map from Follow the Oil –which clearly shows that most oil and gas plays are located on nonfederal lands.

Read the complete report.

Full story: Economics and geology driving factors behind where drilling happens, not policy

This blog is part of a series about Enefit, known at home in Estonia as Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

Contaminated groundwater, 600-foot high piles of oil shale waste that spontaneously ignite, and the emission of “lots of carbon dioxide”; all of this comes from a company that claims to be “highly dedicated to lessening the environmental impact of our production processes.” A look at the facts reveals that, despite its claims, Estonian oil shale company Eesti Energia’s operations have been anything but environmentally friendly.

For several decades Eesti Energia, an Estonian government-owned corporation, has been extracting oil shale, and using it to generate Estonian electricity at a stunning environmental cost. In the United States, Eesti Energia is known as Enefit. In 2011, Enefit bought the largest privately held oil shale reserve in Utah, and since then it has been experimenting with oil shale found on that land.

Since Eesti Energia has brought its oil shale technology to our shores through Enefit’s Utah project, we think a quick review of the company’s environmental record is in order. That way, Utahns can see what could be in store for them.

 

 

A polluted lake near an “ash” mountain in NE Estonia. Source: EcoCrete Project

First off, let’s see what the Estonians think of oil shale. A member of the Estonian Parliament described oil shale waste as a problem “for which there is no solution at present.” Researchers at Estonia’s Tallinn University of Technology and the Estonian Fund for Nature describe the oil shale industry’s environmental impacts as “huge.”

Scientists at Tartu University and the Institute of Ecology even wrote a paper in which they explain how Estonian oil shale’s waste is hazardous.

“[The] Processes of oil shale mining, combustion in power plants, and thermal processing in chemical plants generate a huge amount of solid waste…Semi-coke dumps surrounding the plants of oil shale thermal processing. Semi-coke is a residue classified as environmentally harmful due to its components like sulphides, volatile phenols, benzo(a)pyrene, etc.”

– “Artificial Mountains in North-East Estonia: Monumental Dumps of Ash and Semi-Coke.” Tartu University and the Department of North-East Estonia. 2005.

In fact, these waste products are so unstable, they have been known to spontaneously combust and contaminate groundwater and soil. As of 2005, 27 percent of oil shale landfills in Estonia had self-ignited.

“Observation of groundwater and soil illustrate that the environment close to burning landfills is contaminated with molybdenum, copper, sulphate, arsenic, oil products, and PAHs…”

– “Life Cycle Analysis of the Estonian Oil Shale Industry.” Estonian Fund for Nature and Tallinn University of Technology. 2005.

In spring 2012, The Baltic Course magazine reported that one of these massive oil shale waste piles caught fire during the winter, and still continued to burn. The magazine also noted there is, “no universal solution to extinguish such a fire.”

In addition to water and ground pollution, Eesti Energia’s CEO, Sandor Liive admitted producing energy from oil shale creates significant global warming pollution, or “lots of carbon dioxide,” as he puts it.

“The risk concerning the price of carbon dioxide is relatively high for Eesti Energia because our production involves the emission of lots of carbon dioxide.”

–  Sandor Liive, CEO Eesti Energia. Interview with Eesti Paevaleht. BBC Monitoring Europe. 04 July 2011.

 

 

Arial photo of a pile of oil shale ‘ash’ in Estonia. Source: EcoCrete Project.

Eesti Energia isn’t the only company experimenting with the rock that admits oil shale has negative environmental impacts. In 2012, Anton Dammer, a former Senior VP at oil shale company Red Leaf Resources, testified to Congress:

“I worked in Estonia for several years…The old antiquated surface retorts that [Eesti Energia] use are pretty nasty business…They produce a lot of semicoke. You know, they call them the Estonian Alps…I can’t tell you exactly all the technical details of it, but it’s – it’s much improved, but you would never want the retorts that are operating – operating in Estonia to come to the United States.”

– Anton Dammer, Senior Vice President of Red Leaf [Resources]. CQ Transcript, House Committee on Science, Space and Technology, Subcommittee on Energy and Environment. 10 May 2012.

Eesti Energia’s environmental track record shows its claims of environmental friendliness ring hollow. Oil shale production’s health and environmental risks present a clear case against allowing oil shale companies increased access to public lands. Until they can prove they have a commercially viable technology that won’t pollute our communities’ air and water supplies with harmful waste, they shouldn’t receive more handouts.

Full story: Eyes on Enefit: Oil shale extraction an environmental threat

This blog is part of a series about Enefit, and Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

History has shown that for more for more than a century, oil shale isn't a commercially viable energy source in the U.S. Oil shale is actually a rock that doesn’t contain oil at all (pdf). It’s kerogen, or fossilized algae, locked in shale rock. In order to turn oil shale into oil, the rock has to be superheated for months or even years, and then processed. That takes a lot of energy, money and potentially a lot of water.

Yet, that hasn’t stopped industry executives and supporters, like ECCOS, from promoting oil shale as being on the verge of economic viability.

So it was surprising to read an interview (pdf) with the CEO of Eesti Energia (parent company to Enefit) which is regarded as the world leader in oil shale, admit that oil shale isn’t profitable.

“True, most of the investments are made under various subsidy schemes because even current free market prices are not high enough to make investments financially profitable.” – Sandor Liive, Esti Energia CEO, Eesti Paevaleht website via BBC Monitoring Europe, July 4, 2011

It’s great to see this type of candor and acknowledgement that Eesti Energia has been able to produce commercial oil shale in Estonia due to significant government subsidies. Now it looks like Eesti Energia is asking for more subsidies. But it turns out that not everyone thinks that’s a good idea, as some elected leaders in Estonia are raising questions about oil shale investments:

“The upcoming sharp increase in the power tariffs will almost double the prices of daily goods and services from January 2013, but this is not enough for Eesti Energia. While this year the company received 150 million euros in state subsidies, it is demanding another 200 million in 2013…Eesti Energia…pay[s] a few tens of millions of euros in oil-shale resource fee every year, but earn hundreds of millions of euros in net profit…benefitting from publicly owned oil-shale.” – Edgar Savisaar, Chairman of Estonian Centre Party, Text of report from Aripaev website via http://www.bbn.ee October 18, 2012

FYI, 200 million euros is the equivalent of approximately $264 million.

You can read previous installment of Checks and Balances Project’s Eyes on Enefit series here.

Full story: Eyes on Enefit: Oil shale CEO says investments in oil shale aren’t profitable

This blog is part of a series about Enefit, and Eesti Energia, covering the company’s financial outlook, background and status of its Utah project.

Despite posturing by Enefit’s corporate officers, internal documents and tests show that the company’s attempts to extract and process oil shale in Utah have run into trouble.

Enefit Chairman Harri Mikk has said that their technology “does not need to be proven.” (ed. note – Harri Mikk resigned from the board effective Dec. 31, 2012)

This past June, Enefit CEO Rikki Hrenko made the following statement:

“And most importantly for our project in Utah, and for our activities here in the U.S., we also have demonstrated proven commercial shale oil production.”

But Eesti Energia’s CEO, recent test results, and internal documents tell a very different story.

In late 2012, Estonian newspaper Postimees reported that the company had experienced delays and setbacks with its new Enefit 280 technology.

Sandor Liive, chief executive officer of Eesti Energia [Estonian state-owned power company] said that the company has failed to put their new [oil shale] production plant into operation due to technological problems and, therefore, the launch of the plant has been postponed until the new year. – BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees, November 30, 2012

 

"But it is not a big surprise that a new technology does not work right away,” said Sandor Liive, CEO Eesti Energia – BBC Monitoring Europe, Text of report by private Estonian newspaper Postimees, November 30, 2012

According to the Postimees, the delay puts on hold the company’s plans for similar facilities in the United States and Jordan.

Enefit’s new oil shale technology had only been tested in a lab until recently when, after technical delays, the Enefit 280 plant began producing oil from oil shale in December of 2012.

Back here in the United States, the Salt Lake Tribune reports that Enefit is experiencing difficulties applying its technology to Utah oil shale deposits, and specifically that the company hasn’t been able extract oil from the oil shale ore mined in Utah as easily as executives had hoped and promised. Tests have proven Utah’s oil shale to be “stronger and drier” than Estonian oil shale.

Following the tests, Enefit CEO Hrenko said that “…the results were positive…” yet an internal company document, obtained by an Estonian newspaper, stated that “the tests are not promising.”

The Vernal Express also reported that:

Enefit’s Utah project has proven to be “unexpectedly difficult to do,” and that tests indicate that Utah oil shale requires more energy to break down than expected, resulting in higher carbon dioxide emissions.

What Enefit called, “a simple mining project” has experienced significant delays and requires additional funds. Eesti Energia now projects Enefit’s Utah project will need an additional 37 million Euro in investment. And, Estonian mining experts say oil production from Utah oil shale is still decades away.

The financial and environmental risk posed by this still unproven technology demands that companies like Enefit fully prove the viability of their technologies before they are given access to more public land for oil shale extraction.

Read the first installment of Checks and Balances Project’s Eyes on Enefit series.

Full story: Eyes on Enefit: Untested technology, unproven results