	Background

One unconventional energy resource that has received renewed attention  in recent years in the United States is oil shale. The federal government is in a  unique position to influence the development of oil shale because nearly  three-quarters of the oil shale within the Green River Formation lies  beneath federal lands managed by the Department of the Interior’s  (Interior) Bureau of Land Management (BLM). The Department of Energy (DOE), advances  energy technologies, including oil shale technology, through its various  offices, national laboratories, and arrangements with universities. Opportunities Presented by Future Oil Shale Development

Our October 2010 report found that oil shale development presents  significant opportunities for the United States. Increasing domestic oil production. Being able to tap the vast amounts  of oil locked within U.S. oil shale formations could go a long way  toward satisfying the nation’s future oil demands. At the midpoint of this  estimate, almost half of the 3 trillion barrels of oil would be  recoverable. This is an amount about equal to the entire world’s  proven oil reserves. Development of oil shale resources could  also yield important socioeconomic benefits, including the creation of  jobs, increases in wealth, and increases in tax and royalty payments  to federal and state governments for oil produced on their lands. Uncertainty about viable technologies. Environmental impacts on water, air, and wildlife. Construction and mining activities during the development of  oil shale resources can temporarily degrade air quality in local  areas. There can also be long-term regional increases in air  pollutants from oil shale processing and the generation of  additional electricity to power oil shale development operations. Oil shale operations are likely to clear large surface areas  of topsoil and vegetation, and as a result, some wildlife habitat will  be lost. In addition,  the withdrawal of large quantities of surface water for oil shale  operations could negatively impact aquatic life downstream of the  oil shale development. Socioeconomic impacts. Oil shale development can bring a  sizeable influx of workers, who along with their families, put additional  stress on local infrastructure such as roads, housing, municipal water  systems, and schools. As noted in our 2010 report, development from  expansion of extractive industries, such as oil shale or oil and gas,  has typically followed a “boom and bust” cycle, making planning for  growth difficult for local governments. Furthermore, development of a  future oil shale industry would have the potential to replace traditional  rural uses by the industrial development of the landscape, and tourism  that relies on natural resources, such as hunting, fishing, and wildlife  viewing, could be negatively impacted. Federal Agencies Can Proactively Take Actions to Prepare For Oil Shale Development

Our 2010 report noted that current federal research efforts on the impacts  of oil shale development do not provide sufficient data for future  monitoring and that there is a greater need for collaboration among key  stakeholders to address water resources and research issues related to  oil shale development. However, our October 2010 report noted that Interior and DOE  officials generally have not shared information on oil shale research and  that there is a need for federal agencies to improve their efforts to  collaborate and develop more comprehensive baseline information on the  current condition of groundwater and surface water in these areas. We recommended that the Secretary direct BLM and  USGS to establish comprehensive baseline conditions for groundwater and  surface water quality, including their chemistry, and quantity in the  Piceance and Uintah Basins to aid in the future monitoring of impacts  from oil shale development in the Green River Formation; model regional groundwater movement and the interaction between  groundwater and surface water, in light of aquifer properties and the  age of groundwater, so as to help in understanding the transport of  possible contaminants derived from the development of oil shale; and  coordinate with DOE and state agencies with regulatory authority over  water resources in implementing these recommendations, and to  provide a mechanism for water-related research collaboration and  sharing of results.
Why GAO Did This Study

Fossil fuels are important to both the global and U.S. economies, and unconventional oil and gas resourcesresources that cannot be produced, transported, or refined using traditional techniquesare expected to play a larger role in helping the United States meet future energy needs. With rising energy prices one such resource that has received renewed domestic attention in recent years is oil shale. Oil shale is a sedimentary rock that contains solid organic material that can be converted into an oil-like product when heated. About 72 percent of this oil shale is located within the Green River Formation in Colorado, Utah, and Wyoming and lies beneath federal lands managed by the Department of the Interiors Bureau of Land Management, making the federal government a key player in its potential development. In addition, the Department of Energy (DOE), advances energy technology, including for oil shale, through its various offices, national laboratories, and arrangements with universities.
GAOs testimony is based on its October 2010 report on the impacts of oil shale development (GAO-11-35). This testimony summarizes the opportunities and challenges of oil shale development identified in that report and the status of prior GAO recommendations that Interior take actions to better prepare for the possible future impacts of oil shale development.

What GAO Found

In its October 2010 report, GAO noted that oil shale development presents the following opportunities for the United States:
Increasing domestic oil production. Tapping the vast amounts of oil locked within U.S. oil shale formations could go a long way toward satisfying the nations future oil demands. Oil shale deposits in the Green River Formation are estimated to contain up to 3 trillion barrels of oil, half of which may be recoverable, which is about equal to the entire worlds proven oil reserves.
Socioeconomic benefits. Development of oil shale resources could lead to the creation of jobs, increases in wealth, and increases in tax and royalty payments to federal and state governments for oil produced on their lands. The extent of these benefits, however, is unknown at this time because the ultimate size of the industry is uncertain.
In addition to these opportunities and the uncertainty of not yet having an economical and environmentally viable commercial scale technology, the following challenges should also be considered:
Impacts on water, air, and wildlife. Developing oil shale and providing power for oil shale operations and other activities will require large amounts of water and could have significant impacts on the quality and quantity of surface and groundwater resources. In addition, construction and mining activities during development can temporarily degrade air quality in local areas. There can also be long-term regional increases in air pollutants from oil shale processing and the generation of additional electricity to power oil shale development operations. Oil shale operations will also require the clearing of large surface areas of topsoil and vegetation which can affect wildlife habitat, and the withdrawal of large quantities of surface water which could also negatively impact aquatic life.
Socioeconomic impacts. Oil shale development can bring an influx of workers, who along with their families can put additional stress on local infrastructure such as roads, housing, municipal water systems, and schools. Development from expansion of extractive industries, such as oil shale or oil and gas, has typically followed a boom and bust cycle, making planning for growth difficult for local governments. Moreover, traditional rural uses would be displaced by industrial uses and areas that rely on tourism and natural resources would be negatively impacted.
GAOs 2010 report found that federal research efforts on the impacts of oil shale development did not provide sufficient data for future monitoring and that there was a greater need for collaboration among key federal stakeholders to address water resources and research issues. Specifically, Interior and DOE officials generally have not shared information on their oil shale research efforts, and there was a need for the federal agencies to improve their collaboration and develop more comprehensive baseline information related to water resources in the region. GAO made three recommendations to Interior, which the department generally concurred with and has already begun to take actions to address.