US study urges major unconventional fuels effort

05 October 2007 01:03  [Source: ICIS news]

WASHINGTON (ICIS news)--The US could produce more than 7m bbls/day of transportation fuels from coal, oil shale, tar sands and other unconventional resources by 2035 and should launch a major public-private effort to do so, a multi-agency study said on Thursday.

 

The Task Force on Strategic Unconventional Fuels, a joint study group of federal and state agencies created by the 2005 Energy Policy Act, warned that “the domestic and global fuels supply situation and outlook is urgent”.

 

Citing Department of Energy (DOE) data, the task force report noted that between 1985 and 2004 US demand for oil and refined products increased by 25% to 20m bbls/day and imports doubled to more than 12m bbls/day or 58% of demand.

 

Department forecasts put US oil and refined products imports at 18m bbls/day or 65% of demand by 2030.

 

As those imports increasingly come from nations unfriendly to the US or are threatened by regional instability, “the nation is substantially at risk from an economic and national security perspective”, the study said.

 

That risk, said the task force, “warrants development of an aggressive integrated unconventional fuels development programme” involving both the public and private sectors.

 

The US, said the report, “is endowed with a wealth of resources that can be converted to fuels for transportation, home heating and other uses”, including “coal, oil shale, tar sands, heavy oil and oil producible by carbon dioxide enhanced recovery”.

 

However, advancing development of these energy assets is impeded by government restrictions on access to resources on public lands, uncertain regulation, permitting processes and timelines that frustrate planning and increase costs, the study said.

 

The report said that federal and state governments “must share in the early development risk to achieve the significantly greater public benefits of an accelerated development case”.

 

Among other things, it called for open access to unconventional fuels resources on public lands, government incentives that reduce investment risk and accelerate returns on investment, and government efforts at all levels to “provide a predictable schedule for permitting approvals”.

 

The full 450-page report is available on the task force’s Web site.

By: Joe Kamalick
+1 713 525 2653

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