On September 26, 2018, the U.S. Bureau of Land Management (BLM) issued their Record of Decision (ROD) to approve a 14-mile long “energy corridor” across public lands in Uintah County, Utah to support development of a planned 27,000 acre South Project oil shale mine to be developed by Estonia-based Enefit American Oil. The ROD followed a six-year environmental study and preparation of the Final Environmental Impact Study issued by the BLM following extensive public comment.
Figure 1. Exposures of the Eocene Green River Formation lacustrine oil shale near the proposed South Project oil shale mine.
Source: Enefit American Oil
Approval of the right-of-way applications will allow Enefit to construct pipelines for water and natural gas supply, and oil product lines. In addition, Enefit will upgrade local roads and install electrical power lines. Construction activities will provide for up to 110 jobs for several years, and help with the Federal Government’s goal for American energy independence, according to BLM Deputy Director Brian Steed. The planned mine will use traditional mining and on site refining to produce up to 50,000 bo/d using commercially proven closed-system retort technology while maintaining high environmental standards.
The proposed South Project oil shale mine is located on private land in southeast Uinta Basin (Figure 1) which has a long history of oil and gas production since 1925. The basin produced 24 million barrels of oil and 370 billion cubic feet of gas in 2016 (Utah Geological Survey, 2018). Increased drilling associated with the introduction of extended length horizontal wells and multi-stage hydraulic fracture stimulation technology targeting unconventional tight oil formations helped to establish peak oil production of 33 million barrels in 2014.
Figure 2. Uinta Basin oil production increased consistently each year from 2004 to 2014 following the rise in West Texas Intermediate Spot oil price, but has since declined with the price of oil. Source: Utah Geological Survey and U.S. Energy Information Administration.
The decline in oil production in the Uinta Basin since 2014 is a result of the reduced drilling activity due to the decline in world oil prices (Figure 2). Continued expansion of oil production in the basin is limited by current capacity of the Salt Lake City refinery to process waxy crude. Development of oil shale resources will help supplement declining oil production in the basin.
Enefit began the environmental review with the BLM in 2012 when West Texas Intermediate crude oil price was near $90/bbl (Figure 2). Because the project was initiated prior to the collapse in oil price in 2014, it is unknown what sustained oil price is required by Enefit to commercially produce oil from their Utah oil shale resource. Outside of the U.S. Enefit has long established oil shale production in Estonia, and has begun construction of an oil-shale fired electrical power plant in Jordan.
In addition to oil and gas production, Utah also produces energy from coal, coalbed methane, geothermal, and is beginning to commercially develop the largest tar sand deposit in the U.S. Development of Utah’s oil shale and other unconventional and alternate resources is an example of utilizing a variety of energy resources represented by EMD that form the sustainable energy future strategy for AAPG as expressed by AAPG President Denise Cox in the July, 2018 Explorer Magazine: Sustainable Development in Energy and AAPG.
For more information related to the Record of Decision, visit the BLM website.
Additional information on oil shale is available from the following: