GRAND JUNCTION, Colo. — Taxpayers for Common Sense, a nonpartisan budget watchdog group, is protesting a Texas congressman's proposal to allocate $50 million in federal funding over the next five years for oil-shale research and development.
The group's co-founder Jill Lancelot and former Grand Junction mayor and city council member Jim Spehar, met last week with the Free Press to talk about its report, “Subsidizing Oil Shale: Tracing Federal Support for Oil Shale Development in the United States” that calls for ending taxpayer-funded subsidies for oil-shale exploration.
Oil shale is a sedimentary rock that contains liquid hydrocarbons that are released when heated to high temperatures. Oil shale is found primarily in the Green River Formation of Colorado, Utah and Wyoming. Producers are challenged with how to create more energy out of the rock than energy used to obtain the liquid fuel in the first place, the report states.
Billions of taxpayer dollars have been given to the oil shale industry over the past century, and there's still no commercially viable product, Lancelot said.
Layers of federal subsidies have already been given in the form of loan guarantees, price guarantees and public land giveaways, she said.
“Taxpayers for Common Sense advocate no subsidies for any energy source,” Lancelot said. “Let the marketplace dictate.”
Glenn Vawter, executive director of the National Oil Shale Association in Glenwood Springs, said his organization is neither for, nor against Rep. Ralph Hall's proposal to spend federal money on oil shale.
The money would go to government agencies like the Department of Energy to do oil-shale research, Vawter said.
“We're not seeking subsidies like the bygone era,” Vawter said.
The Department of Interior is currently drafting new rules concerning oil-shale development on public lands. The new rules will determine the royalty rate the industry pays to develop resources on public lands.
The new rule-making is what triggered the report, Lancelot said.
Under the previous administration, the Bureau of Land Management set oil-shale royalty rates at 5 percent — less than half the rate set for oil and gas development on public lands.
A portion of the royalties that companies pay for the publicly-owned resource go toward communities impacted by energy development.
“These communities have to pay for the increased demands of development, including work-force housing, child care, safety enforcement, health care and wear and tear on roads. We can't do that if royalty rates are set at bargain basement prices,” Spehar said.
Tax credits for a proven energy source — wind energy — are set to expire in a few weeks — prompting the loss of 500 wind-energy jobs in Colorado. Four-thousand jobs have been lost nationwide due to the uncertainty of the tax credits, according to the American Wind Energy Association. Colorado senators are pushing for an extension of the wind production tax credit.
Colorado Congressman Scott Tipton has been a vocal advocate of temporarily extending the wind tax credit, Tipton spokesman Joshua Green said.
“The wind energy has told us they only need this tax credit for another couple of years,” Green said. “We don't want to extend this indefinitely.”
We need to make cuts in federal spending, and so we will look for existing monies to pay for an extension, he said.
As far as Hall's proposal to fund $50 million in federal dollars for oil-shale research and development, Tipton and his staff are in the process of reviewing the legislation, Green said.
Written By: Sharon Sullivan
Original Publication URL: http://www.gjfreepress.com/article/20121207/COMMUNITY_NEWS/121209972/1059&ParentProfile=1059&profile=1059
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