Worse Than Solyndra!
Remember how the failure of solar-panel manufacturer Solyndra, which had received $535 million in federal loan guarantees, supposedly showed the folly of government support for renewable energy? By that measure, it's way past time to give up on our century-old search for fuel from oil shale. A new report from the nonpartisan group Taxpayers for Common Sense details the billions of dollars wasted over the years in the quest for a domestic fuel source that still remains unproven.
Since the 1980s, oil shale has been showered with billions in tax credits, price guarantees, and loan guarantees. In addition, public lands have been given to private companies for oil shale research and development without requiring the payment of rents, bonuses, or royalties for facilities producing at less than commercial scale. After decades of federal support, oil shale has yet to be commercially produced. And simply making more federal lands available or limiting regulations on resource extraction is not a solution to our nation’s debt crisis. It could even lead to greater taxpayer liabilities down the road.
Oil shale, it must be noted, is not to be confused with "shale oil," i.e., oil released from shale rock formations by a hydraulic fracturing process similar to that used to release natural gas. Oil shale is a sedimentary rock containing fossilized organic matter called kerogen, which, the report notes, "requires a large and expensive energy investment to produce liquid fuel." The heyday of oil shale was in the 1980s, following the oil shocks of the 1970s; old timers will remember the "Synfuel" debacle, which cost the government $20 billion but produced no fuel. A further $3.2 billion went to loan guarantees, and $3.6 billion to price guarantees. And the waste continues: Just this spring, Congress proposed still further federal funds to this loser technology. Subsidies are only considered foolishly spent, apparently, when they don't go to the fossil-fuel industry.
Photo of oil shale in open cast mining quarry by koer/iStock