Oil Shale (not Shale Oil) and Oil Sands Projects Underway in Utah

A major challenge facing oil companies in the Uinta Basin is how to transport the crude to market. Alignments have been winnowed and the mode appears to be selected - rail. Total cost: $2 billion to extract $30 billion worth of oil and gas reserves.

Shale oil is associated with fracking. Mining oil shale, on the other hand, some may recall, was an expensive project undertaken by President Jimmy Carter that ended in failure. He may have been 30 years ahead of his time. Oil sands, also called tar sands, are mined in Alberta, Canada and may be transported to Gulf area refineries via the controversial Keystone XL Pipeline pending a decision by President Obama.

An oil shale project in the environmental review process is located in Utah's Uinta Basin. "After studying 26 possible routes for a rail line to transport crude oil from the Uinta Basin, the Utah Department of Transportation (UDOT) revealed Friday (June 13) that only one is feasible," writes Lee Davidson about the Uinta Basin Energy and Transportation Study.

That is a 100-mile route southwest to Price would require a 10-mile tunnel through mountains. [See map inset.] It could connect with national rail lines near Price, and take oil to Wasatch Front refineries or anywhere else in the nation to expand Utah energy markets.

Energy development would be lucrative for the state, according to the study results.

The study concluded that there is over $30 billion worth of energy development potential in the Basin. If this potential is realized, it could generate $10 billion of economic revenue and 27,000 jobs statewide over the next 30 years.  

However, transport costs will be considerable, explained John Thomas, UDOT project manager for the Uinta Basin rail environmental impact statement (EIS) process. "National averages predict a construction cost of $10 million per mile for the main line, plus $100 million a mile for the tunnel — for a rough estimate of $2 billion overall."

According to a phone call with state Sen. Kevin Van Tassell, chairman of the Senate Transportation and Public Utilities and Technology Committee, a public-private type of partnership would likely finance the transport project.

He added that a rail line had many advantages over a pipeline. The viscosity of the oil may lend itself more for rail transport, and bringing a rail line to the basin would allow for transporting heavy equipment and serve farming interests as well

Last August, Davidson's colleague, Brian Maffly, wrote about groundwater impacts described in the permitting process:

The proposed permit, which puts Utah a step closer to seeing its vast shale deposits mined on an industrial scale for the first time, would excuse Red Leaf Resources from full-scale groundwater monitoring because the company's process doesn't use water, the spent ore is dry and not much groundwater moves through the project area — a finding environmentalists dispute.

The project is not without opposition, as we noted in January.

Gaylen Webb wrote about the Springs Oil Sands project in the Uinta Basin for Utah Business in November, 2012. Earlier, the Utah Water Quality Board approved the first ever tar sands mine on U.S. soil.

Full Story: Wells to rails: Utah may build $2 billion line to ship oil

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