Lawmakers visit an oil-shale area of Utah

VERNAL — The energy scene in rural Duchesne and Uintah counties is important, and not just to Utah, about 80 state lawmakers were told here Tuesday.

"The nation expects a lot from this area of the country," said Andrew Bremner, director of government affairs for the Independent Petroleum Association of Mountain States. The association's members are very active in Uintah and Duchesne counties. Out of the 50 drilling rigs in Utah, 46 are in the Uinta Basin and about 85 percent of those are typically owned by independents.

While oil and gas are the bread and butter of the energy industry in the two counties, state legislators learned during their two-day fact-finding tour of energy-rich eastern Utah that there's a new frontier in energy production: oil shale and tar sands.

Lawmakers were taken by bus Tuesday to see remote sites in Uintah County where oil shale and tar sands abound. Development of these resources is so new that the production process is still in the pilot phase in the United States.

It's estimated there is enough oil shale to provide 400 years of fuel at present consumption, said Dan Elcan, one of the three principals in OSEC (Oil Shale Exploration Co.). OSEC was named by the Bureau of Land Management as its nominee for a 160-acre oil-shale research, development and demonstration program about 50 miles southeast of Vernal.

The goal of the BLM oil-shale program is to promote commercially viable and environmentally sound oil-shale production to augment domestic oil production, Elcan explained to lawmakers.

The oil-shale operations will be headquartered in the White River Mine facility, a $300 million oil-shale mine that was abandoned by its owners after the energy bust of the mid-1980s.

Elcan said his company may be coming to state lawmakers to ask for some incentives when production ramps up to an anticipated 50,000 barrels a day in the beginning of operations.

Temple Mountain Energy, a tar-sands venture not too far from the oil-shale operations of OSEC and Oil Tech, a smaller oil-shale venture operating in the county, would also put heavy pressure on county roads when they are in full operation.

Jim Runquist, a principal in Temple Mountain, talked to legislators about the process of turning tar sands into a black oil. The water needed for the process will come from the Green River, he said.

"It's a lot of water, but it's a closed loop system, and we still have to bring water in," he said, adding the process has to be environmentally sound, unlike tar-sands production in Canada where toxic-waste water pits miles wide abound on the landscape.

The lack of refinery capacity in Salt Lake City coupled with the transportation issue will both have to be overcome, said Runquist.