A New Era is upon Us

There is no question that the world is entering a new era - an era of fuel insecurity-- regardless of the timing of peak oil, discovery of new petroleum reserves is lagging severely behind levels of petroleum consumption.

As oil becomes more scarce, the impact on the global and American economy will be dire, causing a transportation crisis for individual Americans, raising prices of food and other necessities, and straining even the military's need for fuel.

This Crisis is here to Stay - Unless We Act Now

Unlike what we've seen in the past, this crisis is here to stay. It is not based solely on politics, but stems from fundamental supply and demand principles. Aggressive and urgent action is required so that our nation is better prepared to face this crisis.

Development of the oil shale reserves in the western United States will mitigate the impending crisis, not only by bringing oil prices down but by guaranteeing a supply of crude oil as conventional oil production slows down and competition for limited supplies increases.

• Rising oil prices would have a very dramatic impact on our economy and our standard of living Domestic shale oil could reduce that impact, effectively counterbalancing the impact of oil shortages in the United States.
• Securing a domestic supply of oil would aid in national defense by assuring that the military is provided for in a time of war and be prepared for one
• In a flagging economy, a new domestic energy industry provides new jobs and new sources of tax revenues. Because most of the nation's oil shale reserves underlie federal land, the federal government would be entitled to royalties of over $5 billion/year from shale oil production.

The government's choices in how much to support and encourage the development of national oil shale resources will impact the future of America's fuel security.

In addition to government resources, a firm national policy is necessary for the development of the industry: the government has the power not only to remove the legal and procedural obstacles to extraction and production, but to encourage investors to take part in creating and expanding the industry: assuring the successful development of the oil shale industry requires both removing obstacles, and providing incentives.

The Role of Government

• Uncertainties constraining private sector investment in the development of the oil shale industry include:
  • Absence of clear rules governing environmental standards, permitting processes and timelines
  • Absence of clear rules governing commercial regulations
  • Access to resources on public lands
  • Price and market risks
  • Future royalty structure
  • Environmental standards, permitting processes and timelines
  • Infrastructure requirements
• The federal, state and local government can promote the oil shale effort by:
  • Establishing oil shale as a priority for liquid fuel alternatives
  • Developing a comprehensive oil shale policy with concrete production goals
  • Promoting leasing programs, environmental assessments, expedited permitting and water and other resource sharing plans
  • Supporting R&D and technology efforts through federal grants and other incentives
  • Providing market assurance through tax credits and price guarantees
  • Investing in infrastructure support and protection

The Case of Canada and the Alberta Tar Sands