You are on page 1of 40

If Not Now, When?

Addressing Oil Shale’s Contribution to Climate Change in Production Boom
By Michael Diamond OCCASIONAL PAPER 47

the Midst of the U.S.

2013

International Research Center for Energy and Economic Development Occasional Papers: Number Forty-Seven

IF NOT NOW, WHEN? ADDRESSING OIL SHALE’S CONTRIBUTION TO CLIMATE CHANGE IN THE MIDST OF THE U.S. PRODUCTION BOOM

by

Michael Diamond

ISBN 0-918714-73-7

Copyright © 2013 by the International Research Center for Energy and Economic Development No part of this publication may be reproduced or transmitted, except for brief excerpts in reviews, without written permission from the publisher.

Cost of publication: U.S. $10.00

INTERNATIONAL RESEARCH CENTER FOR ENERGY AND ECONOMIC DEVELOPMENT (ICEED)
850 Willowbrook Road Boulder, Colorado 80302 U.S.A. Telephone: (303) 442-4014 Fax: (303) 442-5042 Email: iceed@colorado.edu Website: http://www.iceed.org

If Not Now, When? Addressing Oil Shale’s Contribution to Climate Change in the Midst of the U.S. Production Boom
Michael Diamond*

Introduction: You Can’t Have Your Cake and Eat It Too! As U.S. policy makers push to facilitate the development of fossil fuels on public lands, prospects for meaningful domestic progress on climate change appear increasingly dim. The Obama administration released its comprehensive national energy policy in early 2011, highlighted by a major initiative calling for a 33-percent reduction in U.S. oil imports by 2025.1 Prominent in the Administration’s strategy for achieving this ambitious goal has been increasing domestic oil production, particularly from unconventional fuels. “[Oil companies] are just sitting on supplies of American energy waiting to be tapped,” President Obama proclaimed. “That’s why part of our plan is to provide new and better incentives that promote rapid, responsible development of these resources.”2 Indeed, since President Obama took office in 2008, total domestic oil production has increased by nearly 1.4 million barrels per day.3 Unconventional supply sources, particularly those derived from shale, have been at the center of this production boom. Shale gas has increased from a negligible component of the nation’s gas production at the turn of the century to nearly a third today, and rose from 4.86 trillion cubic feet (tcf) in 2010 to 8.13 tcf in 2012.4 Similarly, in the last two years alone U.S. tight oil5 production has more than doubled, rising from 800,000 barrels per day in 2010 to 2 million barrels per day in 2012.6 In this context, climate change has become an “elephant in the room,” receiving only scant discussion in the public decision-making progress despite the obvious implications posed to it by the production boom.

Oil shale, a separate resource base with a confusingly similar name to shale oil and gas, represents another unconventional fuel source with potentially even greater implications for energy and the climate. The largest concentration of oil shale lies in public lands in the Green River Formation, an area that stretches between northwest Colorado, northeast Utah, and southwest Wyoming, and was recently opened to development of oil shale. 7 The Green River Formation alone contains an estimated 800 billion barrels of recoverable oil.8 To comprehend the magnitude of this resource, consider that the entire country’s reserves of oil are roughly 22 billion barrels—a mere 2.75 percent of the total oil shale reserves.9 President Bush finalized the opening of new lands in the Green River Formation for oil shale development in 2008, but only three years later, prompted by environmental concerns, the Obama administration announced that it would “consider whether it is still appropriate for the land identified in 2008 to remain open for oil shale and tar sands leasing and development.”10 The contribution large-scale production of oil shale would make toward global warming has been particularly controversial in the debate over the fate of the Green River Formation’s oil shale reserves.11 The Obama administration’s announcement that it would be reconsidering development in the Green River Formation came just two weeks after it set out a new energy policy, the cornerstone of which was the increase of domestic energy output. Almost simultaneously, the Obama administration proclaimed an urgent need for domestic energy production and stunted the development of the largest U.S. fuel resource. Indeed, you can’t have your cake and eat it too. This paradox raises increasingly relevant questions as to the means of addressing environmental concerns during a national explosion of production of unconventional fossil fuel resources. How can policy makers reconcile the need to curtail emissions of greenhouse gases with the revolutionary expansion of unconventional fuel output? More specifically, as we consider the possibility of a boom in oil shale potentially dwarfing that currently under way in shale gas and oil, can we assess and mitigate the implications such development poses to the climate?

2

This article discusses the regulation of oil shale in the Green River Formation, arguing that analyses of the relationship between its development and climate change, conducted pursuant to the National Environmental Policy Act (NEPA), have not provided a meaningful discussion of related greenhouse gas emissions and how they may be mitigated. The first part of this article provides an overview of oil shale and its effects on the environment and documents Canada’s experience becoming a major producer of unconventional fuels. Part II discusses how policy makers weigh considerations of climate change into NEPA analyses. Part III examines how the Bureau of Land Management (BLM) has addressed climate change in the process of opening federal lands within the Green River Formation for application for leasing for oil shale development. Part IV provides a critical analysis of this process and outlines options for mitigating the impacts of oil shale development upon the climate that the BLM has not considered. The fifth section concludes by arguing that a thorough discussion of the contributions major energy-related initiatives will have upon the climate is needed prior to these initiatives’ implementation. Part I. Oil Shale and Its Regulation Background on Oil Shale: As the largest untapped U.S. energy resource, oil shale has the potential to provide the country with an economic windfall and to significantly improve national energy security. Surely, U.S. oil shale’s most noteworthy characteristic is its raw size. The Green River Formation alone most likely contains even more recoverable reserves than all of Saudi Arabia.12 A recent economic analysis indicates that projected development of oil shale would lead to billions of dollars of growth in gross domestic product (GDP), along with the generation of substantial public revenues.13 Additionally, by offsetting billions of dollars in expenditures that would otherwise be spent on oil imports, oil shale production could improve U.S. energy security and, more generally, contribute to the meeting of foreign policy objectives.14 As a preliminary matter, “oil shale” must be distinguished from “shale oil.” Shale oil is oil trapped in shale rock formations and

3

produced similarly to shale gas through hydraulic fracturing. 15 Spurred by recent technological developments, production of shale oil and gas has skyrocketed in recent years. In contrast, because of high production costs and technological uncertainty, oil shale has yet to be produced on a meaningful scale in the United States.16 Notably, oil shale is not oil. Instead, the term refers to sedimentary rock that has not been under the necessary heat, pressure, and depth for enough time to form crude oil—essentially a geologically immature form of petroleum.17 When heated to extreme temperatures, oil shale releases a petroleum-like liquid called kerogen. 18 This process, referred to as retorting,19 is undertaken in one of two ways.20 The first, surface retort, is the older, more labor-intensive process. Here, shale producers mine the shale from the earth, haul it to a processing facility to crush the rock, extract the kerogen, upgrade it to a refinable substance through a water-intensive hydrogenation process, and, finally, refine it into gasoline or jet fuel. 21 This process is as cumbersome and costly as it appears; consequently, oil producers disfavor it today. The newer method, in-situ retort, is the process of using heat to extract the oil while leaving the rock in place.22 In-situ retort requires at least two years of underground heating at temperatures as high as 700 degrees Fahrenheit. To prevent oil and gas from escaping and contaminating groundwater, the entire heating system must be contained by freeze walls, which are wells circulating refrigerated fluid around the in-situ area. The very verbosity needed to explain the process of producing oil shale on a basic level demonstrates an important point: “[i]t is not just a matter of sticking a steel straw in the ground like we did in Texas in 1932.”23 Compared to conventional oil drilling, production of oil shale entails significantly higher costs and imposes significantly greater consequences to the environment. Consequently, oil shale brings new economic and environmental challenges to policy makers attempting to regulate it appropriately. Environmental Consequences of Oil Shale Production— Effects on Land, Water, Air, and Wildlife: The most immediately

4

noticeable consequence of oil shale production in the Green River Formation will be to the lands overlying the shale resources. Currently, these lands are used for recreational hiking, fishing and hunting, fossil collecting, sheep and cattle grazing, and conventional oil and gas drilling.24 None of these uses will be possible on areas with commercial oil shale production. Because oil shale development will lead to permanent topographic changes, it will have significant impacts on local flora and fauna. 25 The Green River Formation has considerable ecosystem diversity and houses a number of species listed as threatened or endangered by the U.S. Fish and Wildlife Service.26 While some of these species may be able to adapt to a degree of habitat disruption, others are dependent on unique characteristics of the Green River Formation.27 Another widely voiced concern is the effect of oil shale development on water. For one, because oil shale production requires so much water, the Bureau of Land Management has estimated that oil shale production would lead to an 8.2-percent reduction in the annual flow of Colorado’s White River where it meets the Green River in northeastern Utah.28 This is a major concern because of the scarcity of water in the region. Water quality is another issue as mine drainage and discharge could flow into the water supply. 29 The spent shale leachate is another major issue, as it will have a high salinity content and contain small amounts of toxic substances. 30 The sheer magnitude of leachate that would accompany commercial oil shale production makes all of this a very significant concern. Finally, mining oil shale will release significant quantities of air pollutants, including sulfur dioxide, particulates, carbon monoxide, ozone, lead, and nitrogen oxides.31 Health impacts of these pollutants are well documented. Subject to the most controversy, however, are the implications oil shale production has for the earth’s climate.32 Environmental Consequences of Oil Shale Production— Contribution to Global Climate Change: Heating oil shale for retorting always requires significant energy inputs, likely to be provided

5

by coal. 33 This process is so energy-intensive that production of even 100,000 barrels of oil per day would require roughly an input of 1,200 megawatts of power, necessitating the construction of a power plant large enough to serve a city of 500,000 people.34 The Department of Energy hopes to ramp up oil shale production to achieve a 2-million barrel per day (b/d) industry by 2020.35 Such a production level would necessitate the construction of 24,000 megawatts of new power. This is a staggering number, demanding the construction of enough new power-generating facilities to serve a city of 10 million. While the carbon output associated with oil shale varies with the methods and energy sources used for production, well-to-wheels carbon dioxide (CO2) emissions from oil shale production in any case would be markedly greater than those from conventional oil. Current studies estimate that full-fuel-cycle CO2 emissions from oil shalederived liquid fuels are likely to be 23 to 73 percent higher than those from conventional gasoline.36 Roughly half of these emissions result from the production of the fuel prior to its actual combustion as a fuel.37 This varies with a number of factors, most prominently with the shale quality and the retorting technology used.38 Canada’s Tar Sands and Climate Obligations: Tar sands are a similar resource to oil shale in that neither are oil but, instead, require energy-intensive extraction, separation, and upgrading before they can finally be refined into a liquid fuel. Like oil shale, tar sands can be extracted using either surface mining or in-situ retort. Regardless of the method used, production of each impacts the environment more severely than conventional oil output. Likewise, tar sands production causes substantially greater greenhouse gas emissions than that of conventional oil (table 1). 39 Depending on the technology used for production, tar sands emit an average range of 14 to 25 percent more greenhouse gases than conventional oil.40 Canada possesses the world’s largest tar sands resource, with at least 175 billion barrels of economically recoverable oil.41 In 2010, Canada produced 1.5 million b/d from its tar sands and expects output to increase to 3.5 million b/d by 2025.42

6

Table 1
EMISSION FACTORS FOR HIGH CARBON-INTENSITY FUELS Well-to-Wheel Emissions (in grams of CO2 equivalent per megajoule– gCO2e/MJ) Tar Sands Synthetic crude oil (in-situ production) Surface mining (ex-situ processing) Oil Shale In-situ processing Ex-situ processing
a

Greenhouse Gas Percentage Increase vs. U.S. 2005 Averagea

Range

116

25%

16% to 37%

106 137 159

14% 49% 73%

8% to 19% 23% to 49% 47% to 73%

The U.S. 2005 base line, as estimated by the U.S. Environmental Protection Agency, includes emissions from higher carbon-intensity crude oils produced domestically and imported. The base line would be lower if these crude oil sources were removed. Source: Simon Mui et al., GHG Emission Factors for High Carbon Intensity Crude Oils, 2, (National Resources Defense Council, September 2010, ver. 2), available at http://docs.nrdc.org/energy/files/ene_10070101a.pdf.

Tar sands production represents a staggering 8 percent of the Canada’s total GHG emissions, making it the country’s largest single GHG emissions source.43 When Canada ratified the Kyoto Protocol in 2002, it committed to reducing its GHG emissions to 6 percent below 1990 levels by 2012. Since then, Canada has been the only country to ratify and subsequently disavow its Kyoto obligations. As of late 2009, Canadian emissions had surged to 26 percent greater than 1990 levels.44 Largely as a result of tar sands production, Canada ranks last among the G8 (Group of Eight) countries in addressing GHG emissions and 56th of 57 countries catalogued in the Climate Change Performance Index. 45 With the Chairman of the Intergovernmental Panel on Climate Change (IPCC) having stated

7

that Canada simply does “not want to do anything on climate change,”46 tar sands production has damaged the country’s reputation as a leader in environmental progress. With an oil shale resource base four times greater than Canada’s tar sands, U.S. policy makers should look warily to its northern neighbor’s experience in producing unconventional fuels. While Canada’s tar sands emit an average range of 14 to 25 percent more greenhouse gases (GHGs) than does conventional oil, oil shale emits between 23 and 73 percent more GHGs than conventional oil. Though tar sands production has certainly provided Canada with a monetary windfall, it has forced Canada to withdraw from its obligations under the Kyoto Protocol, tarnished its reputation, and rendered the country a major obstacle in international climate negotiations. Both the quantity and carbon-intensity of U.S. oil shale, significantly greater than those of tar sands, loom ominously over any hopes the United States has to meaningfully address climate change. U.S. Policy on Oil Shale and the Energy Policy Act of 2005: Federal interest in oil shale dates back 100 years when the United States Navy established the Naval Petroleum and Oil Shale Reserves as a measure of energy supply security for its fleet.47 Federal interest has continually resurged during times of supply scarcity or high prices, with the government having set up new programs during World War II, the Korean War, and during the oil embargoes of the 1970s to promote development of the resource. 48 However, economics have continued to preclude efforts toward significant development. Immediately upon taking office, President George W. Bush established the National Energy Policy Development Group and directed it to develop “a national energy policy designed to help the private sector . . . promote dependable, affordable, and environmentally sound production and distribution of energy for the future.”49 Flowing from the report’s emphasis on increasing domestic energy production, the BLM began efforts to promote the development of oil shale on public lands.

8

Toward this end, the U.S. Senate Committee on Energy and Natural Resources heard testimony to “discuss opportunities to advance technology that will facilitate environmentally friendly development of oil shale and oil sands resources.”50 Almost all of the witnesses here were energy executives and Bush administration officials, and the testimony overwhelmingly focused on the need to “encourage, facilitate, and accelerate the development” of oil shale.51 A handful of voices, however, did advocate environmental responsibility and ideals of sustainability.52 The above events culminated with the passage of the Energy Policy Act of 2005 (EPAct 2005), where Congress unequivocally declared—as U.S. policy—that “oil shale, tar sands, and other unconventional fuels are strategically important domestic resources that should be developed.” 53 Despite being primarily an energy statute as opposed to an environmental one, the Act still insists that oil shale be developed “in an environmentally sound manner, using practices that minimize impacts.”54 The Act further states that development of oil shale should be done “with an emphasis on sustainability, to the benefit the United States while taking into account affected States and communities.”55 Congress intended that EPAct 2005 would jumpstart the development of unconventional fuels in the Green River Formation. In compliance with the National Environmental Policy Act, EPAct 2005 required the BLM to complete a Programmatic Environmental Impact Statement (EIS) “for a commercial leasing program for oil shale and tar sands resources on public lands.”56 This has led to a protracted and heavily litigated EIS process, one that highlights the difficulties of addressing unconventional fuels’ impacts on the climate. Next, we provide an overview of how climate change is considered under NEPA, followed by a discussion of the Programmatic EIS’ assessment on climate change. Part II. Consideration of Climate Change under the NEPA Overview of the National Environmental Policy Act: NEPA has long been regarded as the “magna carta” of U.S. environmental protection. NEPA requires that agencies develop an Environmental

9

Impact Statement for all proposed major federal actions significantly affecting the quality of the human environment.57 The purposes of the EIS are to ensure that agencies carefully consider the environmental impacts of their decisions and that parties associated with the decision-making process have relevant environmental information available to them.58 An EIS includes a detailed statement of the impacts, adverse environmental effects, and analysis of alternatives. The required analysis of alternatives to the proposed action lies “at the heart of the [EIS]”59 and includes consideration of “appropriate mitigation measures not included in the proposed action or alternative.”60 Mitigation, in turn, is defined to include: (a) avoiding the impact altogether by not taking a certain action or parts of an action; (b) minimizing impacts by limiting the degree or magnitude of the action and its implementation; (c) rectifying the impact by repairing, rehabilitating, or restoring the affected environment; (d) reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action; and (e) compensating for the impact by replacing or providing substitute resources or environments.61 When the proposal brings “adverse environmental effects which cannot be avoided,” a discussion of how these effects may be mitigated is particularly critical.62 This discussion forms the foundation for any mitigative actions that will occur thereafter. However, the Supreme Court has made it clear that NEPA only requires a discussion of potential mitigation actions and not an actual plan to be formulated and adopted.63 In other words, the mitigation requirement is procedural, not substantive. Still, if mitigation is not discussed in sufficient depth to ensure that a project’s environmental consequences have at least been fairly evaluated, courts must reject as arbitrary and capricious the agency’s subsequent actions based upon the NEPA discussion.64 Greater complexity arises when actions may not significantly affect the environment independently but when significant impacts “resulting from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of

10

what agency . . . or person undertakes such other actions.”65 NEPA requires that agencies address these as “cumulative impacts,” which include “individually minor but collectively significant actions taking place over a period of time.”66 The Court of Appeals for the Ninth Circuit explained the need for cumulative impacts analyses in Native Ecosystems Council v. Dombeck, where it required that the Forest Service’s road density standards amendments be subjected to a cumulative impacts analysis.67 Without a cumulative analysis, the court reasoned, “the Forest Service will be free to amend road density standards throughout the forest piecemeal, without ever having to evaluate the amendments’ cumulative environmental impacts.”68 Prior to farther-reaching agency actions, “such as the adoption of new agency programs or regulations,” agencies often undertake a Programmatic EIS. 69 This is a broader EIS addressing relatively general matters, after which more specific EISs are to be conducted evaluating site-specific issues accompanying any given project.70 In a Programmatic EIS, the agency engages in “tiering,” where it covers certain matters from a broader perspective, and “subsequent narrower statements or environmental analyses … incorporat[e] by reference the general discussions and concentrat[e] solely on the issues specific to the statement subsequently prepared.”71 In comparison to the site-specific EIS, the Programmatic EIS is tailored to address cumulative impacts, providing a high-level analysis of actions that would lead collectively, but not independently, to significant environmental impacts. 72 One important use of the Programmatic EIS is to “formulate mitigation efforts comprehensively,” including addressing “mitigation parameters at the broad landscape, ecosystem, or regional level.”73 Climate Change under NEPA: Because global warming is caused by the aggregation of individually small greenhouse gas (GHG) emissions, consideration of these emissions is particularly appropriate in cumulative impacts analyses at the Programmatic level. Although the United States has no comprehensive federal law limiting the emissions of GHGs that contribute significantly to climate change, federal agencies must consider in their NEPA analyses

11

the impacts of GHG emissions resulting from major federal actions.74 The Ninth Circuit made this clear in a case in which environmental organizations had challenged the National Highway Transportation Safety Administration’s issuance of a final rule implementing light truck Corporate Average Fuel Economy (CAFE) standards, arguing that the agency failed to take a “hard look” at the rulemaking’s GHG implications and further failed to adequately analyze alternatives or the rule’s cumulative impacts.75 Citing the rules for cumulative impacts analyses of the Council on Environmental Quality’s (CEQ), the agency that oversees NEPA, the court explained that although an individual rule setting a CAFE standard may only have an “individually minor effect on the environment,” the rules are “’collectively significant actions taking place over a period of time.”76 The court made it clear that “[t]he impact of GHG emissions on climate change is precisely the kind of cumulative impacts analysis that NEPA requires agencies to conduct.”77 The Adequacy of NEPA Climate Analyses: However, the incremental nature of climate change’s exacerbation makes its incorporation into NEPA analyses an inherently difficult task. Commenters have documented that significant uncertainty surrounds the threshold at which emissions can be said to “significantly affect[] the quality of the human environment” and thus require NEPA review.78 Furthermore, while it is clear that GHG emissions are contributing to global warming, there is no way to link specific emissions to specific climate impacts or to particular environmental consequences of climate change.79 Consequently, it has remained unclear precisely what NEPA analyses of actions’ contributions to climate change must entail and, perhaps more importantly, whether they can lead to any reductions of GHG emissions. In part as a result of this uncertainty, significant litigation has surrounded the questions of when climate change must be included in NEPA analyses, and whether studies that do consider climate change do so with sufficient rigor. Recent cases evaluating NEPA discussions of climate change demonstrate that such studies, even

12

when determined to be adequate by courts, have not resulted in meaningful analysis.80 Critically, agencies have seldom considered in their NEPA analyses measures to mitigate the impacts GHG emissions have on the climate.81 The BLM’s climate analyses demonstrate the fact that typical NEPA climate analyses do not lead to actual mitigation efforts. The BLM has been a leader among agencies in factoring climate change into NEPA analyses; since 2001 it has been required to “consider and analyze potential climate change impacts when . . . making major decisions regarding the potential utilization of resources under the Department’s purview.”82 However, a recent analysis of 35 EISs conducted by the BLM between 2007 and 2008 found that only three discussed GHG mitigation.83 More commonly, BLM has included a general discussion of climate change but provided no quantification of GHG emissions, concluding that the project analyzed would make only a negligible contribution to climate change. Even in the few cases where BLM has quantified GHG emissions, upon comparing them to national or even global emissions the agency has concluded that they would be negligible.84 NEPA analyses in a few cases have led developers to commit to some form of climate mitigation efforts. In one case, developers of a new coal-fired power plant committed to implementing certain carbon sequestration measures, although these were made conditional upon the technological and commercial feasibility of these measures.85 In another case addressing the expansion and modernization of a gypsum processing plant, arising under California’s more stringent state-level version of NEPA, the applicant committed to acquiring carbon credits to offset increased GHG emissions. 86 This lack of consistency has led commentators to criticize the ambiguity surrounding agencies’ climate change obligations under NEPA.87 The CEQ’s NEPA-Climate Guidance Document: The Council on Environmental Quality recently attempted to clarify the standards for consideration of climate change in NEPA analyses, releasing a Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions (“Guidance”).88 Although the

13

Guidance has yet to be finalized, agencies will rely upon it in crafting their NEPA analyses.89 Notably, the Guidance does not apply to Federal land and resource management decisions90 but, nonetheless, it represents an indicator of the current regulatory climate vis-à-vis GHGs; agencies making resource management decisions will undoubtedly look to it for general guidance.91 The Guidance recommends conducting a quantitative and qualitative analysis of GHG emissions for any actions that would reasonably be anticipated to cause direct emissions of 25,000 metric tons or more of GHG emissions on an annual basis.92 To determine the extent and depth of its analysis, the Guidance suggests that agencies use a “rule of reason.”93 By this standard, agencies’ actions should be “commensurate with the importance of the GHG emissions of the proposed action,” considering “the consequences of actions over which it has control or authority.”94 Provided that an action meets the threshold for quantitative and qualitative analysis, the Guidance recommends that agencies should “consider mitigation measures and reasonable alternatives to reduce action-related GHG emissions.”95 In these studies, the quality of any proposed measures to mitigate GHG emissions should “be carefully evaluated.” 96 Among the mitigation options the Guidance suggests are enhanced energy efficiency, lower emitting technology, renewable energy, planning for carbon capture, and sequestration.97 Furthermore, the Guidance describes analysis of alternatives as “an essential element of the NEPA process,” which aims to “ensure that each agency decision maker has before him and takes into proper account all possible approaches to a particular project (including total abandonment of the project) which would alter the environmental impact and the cost-benefit balance.”98 The Guidance recommends that agencies utilize Programmatic EISs for “proposals regarding long-range energy, transportation, and resource management programs” and describe GHG emissions in the aggregate.99 It suggests that individual, project-level analyses tier from the emissions and climate discussion in the Programmatic EIS, allowing them to “summarize the relevant issues discussed in the programmatic statement.”100

14

Tiering, Shell Games, and the Difficulty of Meaningfully Discussing Climate Change in a Programmatic EIS: The Guidance makes it clear that programmatic evaluations are the preferred forums for analyzing the impacts of long-range energy and resource management programs upon the climate. This follows the reasoning, articulated in the CEQ’s previous Guidance document on considering climate change in NEPA analyses, that:
Analysis of the impacts of such emissions or sinks at the project level, however, would not provide meaningful information in most instances. Efforts would be better spent in assessing federal programs which may affect emissions or sinks of these gases. This type of approach recognizes that individual projects may increase greenhouse gas emissions by only marginal amounts, but that the cumulative effect of such emission could be more dramatic.101

This can help to comprehensively address the complex and interrelated affects agency actions may have upon the climate, particularly when individual EISs would not provide a forum far-looking enough to satisfactorily address them. As the Programmatic EIS has a substantial influence upon the projects within its ambit, the discussion of mitigation options at the programmatic level provides an important source of options to be implemented at the project level. Furthermore, because Programmatic EISs occur prior to the start of individual projects, they can serve as a tool to analyze the scope of the broad initiative as a whole and its relative merits. It is at this stage that the NEPA’s goal of truly informed decision making can be served most directly. However, the use of tiering from programmatic analyses introduces the danger that in conducting subsequent, narrower EISs, agencies will claim that certain issues have already been addressed sufficiently at the programmatic level and ultimately fail to ever conduct meaningful analysis of that issue. Agencies could thereby use the programmatic analysis as a shield that protects them against later calls for rigorous analysis at the individual level. Thus, if a given issue is addressed in a Programmatic EIS in a cursory, but arguably sufficient, analysis, it may never be meaningfully considered in subsequent analyses. Commenters have referred to this problem as agencies playing “shell games,” meaning that they describe certain issues only

15

vaguely in the Programmatic EIS, but then rely on their analysis of that issue in a subsequent individual EIS.102 For instance, in City of Tenake Springs v. Clough,103 an agency was purchasing timber from the Tongass National Forest, and it was reasonably foreseeable that the agency would purchase more timber in the future. The court required the agency to conduct a cumulative effects analysis in order to prevent it from inadequately assessing certain issues through segmentation. The agency challenged the requirement that it conduct a cumulative impacts analysis, arguing that it had already done so in a prior land management plan. While the court rejected the argument as disingenuous, this illustrates the potent danger of agencies attempting, through “shell games,” to avoid considering difficult issues. Similarly, agencies could defend a lack of cumulative impacts analysis in a programmatic evaluation by stating that it will conduct such analysis at the individual level. But at the individual level, the agency could then claim that the analysis is beyond the individual project’s scope. Ultimately, the issue may be neglected. This danger is particularly potent with respect to climate change, where actual impacts and standards for analyzing them are relatively uncertain. As discussed above, NEPA analyses related to climate change are frequently conducted cursorily, with little meaningful discussion of potential mitigation measures. In the context of the BLM’s Programmatic EIS for the opening of federal lands to leasing for oil shale production, uncertain standards surrounding the consideration of climate change may lead to a failure to address projects’ most significant environmental impacts. Part III. The BLM’s Consideration of the Climate in Its Oil Shale Programmatic Environmental Impact Statement The BLM has now conducted two Programmatic EISs to evaluate the environmental and socioeconomic impacts of opening massive swaths of land for oil shale and tar sands development. The first was conducted shortly after the passage of EPAct 2005 and, after settlement of a lawsuit by environmental groups that alleged that the EIS was deficient, BLM took a “fresh look” at the land

16

allocations and issued a second Programmatic EIS.104 In the new EIS, the BLM considered whether it was appropriate to open these lands for potential development. Neither Programmatic EIS, however, adequately considers the impact oil shale development will have on the climate nor any potential measures to mitigate this impact. 2008 Final Programmatic EIS: EPAct 2005 ordered the BLM to “ensure expeditious compliance”105 with its duties under NEPA, ambitiously requiring a Programmatic EIS to be completed within 18 months of its enactment.106 The 2008 Programmatic EIS analyzed the effects of the opening of the Green River Formation’s lands for oil shale leasing and potential development of those lands.107 As a result of the rushed time frame, the Programmatic EIS did not address regulatory changes accompanying publication of the oil shale management regulations and was, in fact, released before the BLM issued its final rule on oil shale management.108 The report was narrow in scope, analyzing only the effect of opening the lands for application for leasing, rather than the effects that would accompany actual leasing and energy production on those lands. According to the BLM, because this action merely opened land to potential future leasing and did not “authorize any ground-disturbing activities” or represent “an irreversible or irretrievable commitment of resources,” it would have no impact on the environment.109 As discussed below, this development introduces the danger of “shell-games,” under which certain issues, particularly mitigation of oil shale development’s effects on climate change, are unlikely ever to be analyzed with adequate rigor. The BLM’s statement that the opening of lands for leasing was not “irreversible” gave it the ability to postpone consideration of the probable impacts of its decision. The Programmatic EIS documented a laundry list of potential impacts but generally refused to make firm conclusions.110 For instance, discussing impacts on land use the report listed a slew of different uses, and vaguely concluded that oil shale development “could have a direct effect on these uses, displacing them from areas being developed to process oil shale.” 111 Likewise, the report named 32 species that are listed or are candidates

17

for listing under the Endangered Species Act but then “punted,” stating that because “actual project locations and footprints will not be determined until some later date,” it could make no real assessment of the projects’ effect on these species.112 The 2008 Programmatic EIS scarcely mentioned climate change, and its few discussions of the issue were superficial. The document acknowledged climate change’s reality and importance but hedged against this acknowledgment by emphasizing uncertainty regarding the precise impact of GHG emissions on the climate, clouding its responsibility under the guise of “scientific uncertainty.” 113 Distorting the conclusion of the IPCC that the increase in global temperatures is very likely114 due to the increase in GHG emissions, the report stated “observed climatic changes may be caused by GHG emissions or may reflect natural fluctuations.”115 While it is impossible to claim with absolute certainty that GHG emissions cause climate change, the Programmatic EIS minimized overwhelming scientific consensus and presented the possibility that GHGs cause climate change as comparable to the possibility that they do not. The report also emphasized that the energy development would occur with many currently unproven technologies and that the size of projects and production levels could not yet be precisely quantified.116 Grounded in this emphasis of uncertainties, the Programmatic EIS simply did not discuss potential effects of oil shale development on climate change.117 Likewise, there was no discussion of potential options for mitigation of impacts on the climate. Its lack of discussion of climate change based upon these uncertainties seems disingenuous, however, as the Programmatic EIS made a number of forecasts based on speculative estimates. For instance, the report assumed the construction of 9,940 megawatts of new electricity generation from coal-fired power plants and discussed non-GHG emissions in some depth.118 In light of its estimation of emissions of traditional pollutants, the Programmatic EIS’s refusal to attempt to quantify GHG emissions is difficult to justify. Ultimately, the Programmatic EIS found no “impacts on the environment or socioeconomic setting of the area under consideration.”119

18

Because the Programmatic EIS claimed to be merely “the first step in the process” of developing the Green River Formation’s unconventional fuels, it left genuine consideration of environmental damage and potential mitigation measures to a later date.120 2012 Final Programmatic EIS: The 2012 EIS proposes under its preferred alternative to significantly decrease the amount of area to be made available, reducing the land for oil shale development from 2,000,000 acres to 676,967 and reducing the land for tar sands from 430,000 acres to only 129,567.121 Like its predecessor, the Programmatic EIS emphasizes that it only analyzes effects of the land being made “available for application for leasing,” rather than simply “available for leasing.”122 With this distinction, the BLM highlights the fact that additional analysis pursuant to NEPA and other statutes will be required before any land is actually leased. As compared to the 2008 Programmatic EIS, the 2012 study discusses climate change more extensively but adds little substance.123 Unlike the original analysis, the 2012 study does not cast doubt on climate change’s reality or the fact that it is clearly exacerbated by GHG emissions. Instead, it provides an overview of the scientific consensus surrounding climate change and its regional impacts. The Programmatic EIS states that it is not currently possible to predict the quantity of GHG emissions associated with its making lands available for application for leasing.124 Instead, the Programmatic EIS states that quantitative analyses could be conducted when individual project applications are submitted to the BLM. Thus, the EIS describes potential GHG emissions of oil shale and tar sands development only in qualitative terms, i.e., it simply lists potential sources of emissions such as electricity generation, oil shale surface or underground mining, retorting, and waste disposal. 125 Beyond this, the EIS provides little information concerning the impacts of oil shale development on the climate. The Programmatic EIS does include a brief, superficial discussion of the cumulative climate change impacts of oil shale development. It states that oil shale emissions may actually lead to reduced global GHG emissions, because transportation of domestically produced oil

19

shale for ultimate use would lead to less transportation emissions than transportation of oil produced from greater distances abroad. The EIS neglects to consider any studies of GHG emissions associated with oil shale that strongly suggest otherwise. Regarding mitigation of GHG emissions, the Programmatic EIS provides a single sentence:
GHG emissions that may be related to climate change impacts may be reduced, regardless of their source (e.g., oil shale or conventionallyderived carbon-based energy sources) through the use of emission controls or by sequestering GHGs.126

Following the issuance of its 2012 Draft Programmatic EIS, the BLM received an incredible amount of commentary from the public, including from approximately 600 individuals, organizations, businesses, and government agencies. Approximately 160,000 comments were received from individuals affiliated with various organizational campaigns. 127 Many of these commentators urged the agency to consider climate change more thoroughly, including “reasonable mitigation measures, protocols or policies to guide oil shale and tar sands leasing and development considerations.”128 In denying requests that it give greater consideration to these issues, the BLM relied heavily on the fact that the Programmatic EIS only analyzed land allocation decisions, not permits to actually produce oil shale. Additionally, the BLM repeated that estimations of emissions at the programmatic stage would be premature and speculative, because applications detailing proposed land use and technologies would be needed to provide ample specificity to justify quantitative analyses. As a result, the Programmatic EIS leaves the bulk of the responsibility of addressing climate change in the hands of local BLM field offices, through site-specific EISs. 129 This decision, while helping to streamline development of oil shale at any given location, runs the risk of failing to consider the forest among the trees, since environmental impacts of oil shale projects are obviously much less on an individual scale than when considered cumulatively. Though each actual development project requires an independent EIS, these

20

will primarily consider site-specific impacts and related mitigation measures.130 The Programmatic EIS Does Not Adequately Consider Climate Change: The BLM has not provided a meaningful discussion of the contribution the opening of enormous areas to oil shale development will make toward climate change. By leaving to sitespecific environmental analyses the task of substantively discussing potential climate impacts and mitigation measures, the Programmatic EIS has neglected to consider the collective impact of its decision on the climate, precisely the critical component of its decision. As the report made clear, its purpos e was merely to “assess the range of possible impacts that may occur, a relatively cursory discussion of environmental impacts may be justifiable with respect to localized environmental impacts.” 131 Indeed, a localized EIS will precede any actual development and is well suited to discuss methods of mitigating adverse effects to, for instance, a local animal population. The BLM is correct to emphasize that the Programmatic EIS is merely one step toward the development of oil shale in the Green River Formation and that significant uncertainty regarding the technologies used and extent of development remains. Project-level NEPA analyses also will consider the broader effects of individual commercial-scale projects through cumulative impacts analyses. Nonetheless, the piecemeal approach is inadequate if the BLM is to meaningfully address the impacts of oil shale development on climate change. While individual oil shale projects will affect the global climate, it is the greater opening of enormous areas of land for energy-intensive mineral development that will impact the climate most profoundly. Among all the world’s environmental issues, the problem of accumulated effects is most manifest with respect to climate change, as it is caused precisely by the accumulation of GHGs from countless emitters. As explained in the CEQ’s Guidance document, a Programmatic EIS, designed to account for the impacts that arise from the accumulation of comparatively less significant actions, is the appropriate instrument available to consider

21

the implications oil shale development in the Green River Formation will have on the global climate. 132 While the 2012 Programmatic EIS represents an improvement over the 2008 study by virtue of its acknowledging the contribution of human activity toward global climate change, it does not provide the information necessary for policy makers to carefully consider the environmental effects of the BLM’s action. Unfortunately, the Programmatic EIS was the best juncture for planners to consider the collective environmental impact of the opening of these lands to oil shale development. Following precedent from past Programmatic EISs, planners at this point could have “formulate[d] mitigation tools comprehensively,” setting the stage for implementation of such measures when oil shale is developed at the commercial level.133 Going forward, the BLM could potentially engage in “shell games” during NEPA analyses of individual projects and, absent a comprehensive discussion at the programmatic level, is unlikely to consider a wide range of alternatives or options to mitigate emissions. As discussed below, several options are available to mitigate the oil shale program’s impact on the climate; many of these would best fit in the Programmatic EIS as opposed to a project-level study. The current Programmatic EIS will not facilitate any of these mitigative actions. Part IV. If Not Now, When? Mitigating the Climactic Effects of the Exploitation of U.S. Oil Shale If the United States is to seriously address climate change, it absolutely must mitigate carbon emissions associated with commercialscale production of oil shale. Given projected increases in global demand for oil and the BLM’s ambitious goals for oil shale development, the lack of adequate consideration of its effects on the climate could have major implications.134 For a project with impacts so far-reaching as the BLM’s opening federal lands to facilitate the recovery of an estimated 800 billion barrels of underlying oil shale, a proportionately broad assessment of methods of addressing its impacts on the climate is appropriate. The Programmatic EIS should have carefully examined the consequences

22

of this development and explored opportunities to mitigate its adverse effects. Mitigation Strategies: Several potential methods of mitigating oil shale’s climate impacts exist. As discussed below, these options are unlikely to be implemented at the project-level absent some broader mitigative initiative. The following presents some prospective strategies to mitigate emissions from oil shale development. 1. Clean Energy Inputs: Using low- or zero-carbon energy sources to generate the electricity needed for oil shale production would significantly reduce its carbon intensity. The Programmatic EIS projects that conventional coal-fired plants would provide the new electricity capacity needed for oil shale production. 135 Researchers estimate that substituting natural gas for coal would nearly halve retorting’s carbon burden. 136 Use of the newest, highefficiency gas plants could reduce emissions by an additional 10 to 15 percent. 137 Finally, use of near-zero-carbon energy sources would render emissions from oil shale-derived fuels comparable to those of conventional oil.138 Tests for wind- and solar-based retorting methods are currently under way.139 2. Carbon Capture and Storage: The Department of Energy (DOE) has identified the capture of carbon produced by oil shale as potentially necessary for its commercial production. 140 The DOE suggests that captured carbon be injected into oil wells at other sites for enhanced oil recovery, used for coalbed methane extraction, or otherwise stored.141 Researchers have estimated that the Piceance Basin, located within the Green River Formation in northwestern Colorado, could potentially house 50 billion tons of carbon produced from oil shale operations.142 However, commercial-level carbon capture and storage (CCS) is very expensive, and few large-scale projects currently exist.143 As pointed out by an organization that advocates CCS development, building the business case for these projects is “difficult and timeconsuming.” 144 Even at the demonstration level, projects must be underpinned by a regulatory environment facilitative of carbon management.145

23

3. Alternative Means of Production: Novel ideas for oil shale development exist, but these tend to come with significant trade-offs. For instance, one recent article suggests using the oil shale’s own energy to fuel its extraction.146 Referred to as “Electricity Production with in-situ Carbon Capture” (EPICC), this process would use waste heat from a fuel cell to heat the oil shale under ground. The EPICC process would ultimately create electricity under ground, and the additional waste heat generated would be used to further retort the oil shale. Though this process would produce low-carbon energy from oil shale, it would do so in the form of electricity rather than as a liquid transportation fuel. Using electricity as a transportation fuel would require widespread adoption of electric cars, which obviously presents a host of its own obstacles. 147 Other similar pilot-stage “greener approaches” for oil shale development are generally plagued by high costs.148 4. Carbon Offsets: A carbon offsets program would be the most comprehensive tool for addressing oil shale production’s GHG emissions.149 In such a program, emitters of carbon would trade the right to emit with entities that sequester carbon. Sequestration could be accomplished through several mechanisms.150 Most simply, carbon can be biologically captured by plant photosynthesis or naturally in soils by vegetation. Artificially, carbon may be stored in subsurface saline aquifers, reservoirs, ocean water, aging oil fields, or several other types of carbon sinks. The carbon offsets program would work as follows. The government would place a mandatory limit on the quantity of GHGs that oil shale-producing entities may emit. A producer of oil shale could enter into a contract with, for example, a wheat farmer, who could change certain agricultural methods to capture more carbon or plant trees to restore degraded land.151 Such a program would require certification, which could be done either governmentally or privately. Funding to oversee the program would be appropriated from royalty payments being collected for use of the public land. Several precedents exist for a program of this sort. The Kyoto Protocol’s Clean Development Mechanism allows polluters to take

24

on projects that reduce GHG emissions, such as reforestation investments.152 Polluters can then use these projects as credit toward meeting their own emissions reduction targets. Polluters may also purchase these reductions in quantified credits from other entities that unilaterally undertake such projects. As an example of a domestic governmental program, the Clean Water Act’s wetlands mitigation program offers an additional precedent. Authorized by Section 404 of the Clean Water Act, mitigation banks are wetlands or other aquatic resource areas that have been restored, established, enhanced, or in certain circumstances preserved for the purpose of compensating for damage to wetlands elsewhere.153 To economize these actions, the government awards credits that are bought and sold. Hundreds of mitigation banks currently operate in the United States.154 Key to this and any offsets program, of course, is a legal limit on the quantity one can pollute. Most germane is the Regional Greenhouse Gas Initiative, a regional cap-and-trade program among 10 Northeastern states. 155 Under this initiative, all power plants in these states with a capacity of over 25 megawatts are subject to a mandatory cap on their GHG emissions. This cap, beginning in 2009 with 2005 emission levels, gradually decreases until 2018. Generators that fail to meet the standard may purchase offsets from other entities within the participating states. Implementing Mitigation Measures: Without high-level consideration of the impacts of the oil shale program on climate change, major initiatives such as those outlined are unlikely to be undertaken. As discussed in the CEQ’s NEPA Task Force Report, the Programmatic EIS provides an opportunity to “formulate mitigation efforts comprehensively.” 156 The most powerful potential mitigation measures, as described above, would generally require highlevel coordination prior to the undertaking of any individual commercial projects. For instance, the Global CCS Institute advises that pre-construction planning of a CCS project should take between four and seven years and constitute 10 to 15 percent of the cost of the total project.157 Likewise, significant coordination among customers

25

of the power plants used to fuel oil shale development will necessarily precede planning and construction of such plants. The absence of a comprehensive, early-stage discussion and evaluation of such measures will inhibit their future implementation. Part V. Conclusion The cursory nature of the BLM’s discussion of climate change in both of its Programmatic EISs raises a broader concern: as the federal agencies continue to undertake far-reaching actions to facilitate domestic energy production, where will climate change fit? The explosion in development of unconventional fuels has major implications for climate change. Technological progression in methods of fuel development will continue to affect the economic and environmental costs of oil shale and other unconventional fuels. Monitoring these developments, policy makers should engage in public, comprehensive discussions of environmental issues, including the climate, prior to authorizing major projects facilitating development of oil shale and other unconventional fuels. Post-authorization analysis of oil shale development’s implications to the climate may amount to too little, too late. Decision makers should be mindful of NEPA’s objective of ensuring that “the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts.”158 Accordingly, agencies should closely examine the effects oil shale development will have on the climate and consider potential means of mitigating them before providing the broad authorization needed to facilitate their development. The Programmatic EIS is the appropriate vehicle for accomplishing this preliminary analysis. As courts have explained, the Programmatic EIS provides the opportunity for a more exhaustive consideration of the effects of, alternatives to, and mitigation options for, large-scale programs.159 Absent sufficient consideration at the programmatic level, meaningful analysis of climate change is unlikely to take place at the individual project level and, ultimately, no EIS may ever give the issue its due analysis. Unfortunately, Programmatic EISs have thus far seldom provided a sufficiently

26

rigorous analysis of climate change and almost never discussed mitigation measures.160 These discussions are the very purpose of NEPA, and climate change is the most important environmental issue the world has faced. It is only fitting, then, that statutorily required environmental analyses of broad government programs include a thorough assessment of their effects on the climate, including considering means to mitigate their adverse effects.
Editor’s note: This article was published in the Journal of Energy and Development, volume 37, issue number 2. NOTES * Michael Diamond is an attorney practicing at the law firm of Van Ness Feldman, LLP., in Washington, D.C., where he focuses on regulatory issues surrounding the transportation of natural gas. He holds a J.D. from the Ohio State University, Moritz College of Law, and a B.A. from the University of Wisconsin-Madison. The opinions expressed in this paper are his own and do not reflect the views of the law firm or any other attorneys with which the author is associated.

Editorial note: The citation system used here follows the accepted legal style. The White House, Blueprint for a Secure Energy Future (March 30, 2011), available at http://www.whitehouse.gov/sites/default/files/blueprint_secure_ene rgy_future.pdf. 2 Remarks by the President Obama on America’s energy security, March 30, 2011, Georgetown University, Washington, D.C., available at http://www. whitehouse.gov/the-press-office/2011/03/30/remarks-president-americas-energysecurity. 3 U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook 2013 Early Release, Early Release, Liquids and Natural Gas Supply and Prices, Oil and Gas Supply, Reference Case, available at http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2013ER&subject=0-AE O2013ER&table=14-AEO2013ER&region=0-0&cases=early2013-d102312a. 4 Frank A. Verrastro, Center for Strategic and International Relations, The Role of Unconventional Oil and Gas: A New Paradigm for Energy, 67 (April 17, 2012), available at http://csis.org/files/publication/120417_gf_verrastro.pdf,
1

27

and Energy Information Administration, Annual Energy Outlook 2013 Early Release, Early Release, Liquids and Natural Gas Supply and Prices, Oil and Gas Supply, Reference Case. 5 “Tight oil” is defined as “resources in low-permeability reservoirs, including shale and chalk formations.” 6 Energy Information Administration, Annual Energy Outlook 2013 Early Release, Liquids and Natural Gas Supply and Prices, Oil and Gas Supply, Reference Case. 7 Bureau of Land Management (BLM), 2012 Oil Shale and Tar Sands Final Programmatic Environmental Impact Statement, available at http://ostseis.anl. gov/documents/index.cfm [hereinafter Programmatic EIS]. 8 BLM, Press Release: “Western Oil Shale Potential: 800 Billion Barrels of Recoverable Oil,” July 22, 2008, available at http://www.blm.gov/wo/st/en/info/ newsroom/2008/July/NR_07_22_2008.html. Oil shale is not technically oil but can be converted into kerogen, a product similar to petroleum that can be refined into liquid fuel. See Part II, infra. 9 Energy Information Administration, Annual Energy Outlook 2013 Early Release, Liquids and Natural Gas Supply and Prices, Oil and Gas Supply. 10 BLM, News Release: “Oil Shale and Tar Sands,” April 13, 2011, available at http://www.blm.gov/wo/st/en/prog/energy/oilshale_2.html. 11 See, e.g., Karin P. Sheldon and Paul Komor, Oil Shale Development and Climate Change, DENVER POST, December 18, 2009, available at http://www.denverpost.com/opinion/ci_14020099; James Hansen, Game Over for the Climate, N.Y. TIMES, May 10, 2012, at A29. See also Adam R. Brandt, Jeremy Boak, & Alan K. Burnham, Carbon Dioxide Emissions from Oil Shale Derived Liquid Fuels, in OIL SHALE: A SOLUTION TO THE LIQUID FUEL DILEMMA, (Olayinka I. Ogunsola et al., eds., American Chemical Society, 2010). 12 Carrie Covington Doyle, The Modern Oil Shale Boom: An Opportunity for Thoughtful Mineral Development, 20 COLO. J. INT'L ENVTL. L. & POL'Y 253, 255 (2009). 13 A. Dammer & J. Bunger, Economic Impacts of Failure to Implement Legislative Mandates of Section 369 of the Energy Policy Act of 2005, March 2012, available at http://republicans.energycommerce.house.gov/Media/file/He arings/Energy/20120320/HHRG-112-IF03-WState-DammerA-20120320.pdf. 14 U.S. Department of Energy, Office of Naval Petroleum and Oil Shale Reserves, Strategic Significance of America’s Oil Shale Resource, March 2004, available at http://fossil.energy.gov/programs/reserves/npr/publications/npr_strategic_ significancev1.pdf. 15 For a brief overview of the production of shale oil using hydraulic fracturing, see DOE, National Energy Technology Laboratory, Exploration & Production Technologies, Production Technology, Hydraulic Fracturing, available at http://www.netl.doe.gov/technologies/oilgas/publications/eordrawings/Color/colhf.pdf.

28

16 The most current study estimates that, depending on the technology used and resource quality, the average minimum price at which oil shale can be economically developed ranges from $38 to $62 per barrel. Significantly, oil shale production demands high capital investment and long periods of time between expenditure of capital and return on investment. See generally Khosrow Biglarbigi et al., Economics of Oil Shale Development, 263-84, in OIL SHALE: A SOLUTION TO THE LIQUID FUEL DILEMMA 1 (Olayinka I. Ogunsola et al., eds., American Chemical Society, 2010). Globally, only Estonia and Brazil have produced any oil shale on a small commercial scale. Id. 17 Emily Knaus, James Killen, Khosrow Biglarbigi, and Peter Crawford, An Overview of Oil Shale Resources, in OIL SHALE: A SOLUTION TO THE LIQUID FUEL DILEMMA, 1 (Olayinka I. Ogunsola et al. eds., 2010). 18 James T. Bartis et al., RAND Corp., Oil Shale Development in the United States Prospects and Policy Issues ix, (2005), available at http://rand.org/ pubs/reports/R2293, [hereinafter RAND Report]. 19 “Retorting” is the process of heating the rock and capturing the resultant liquid. Id. at ix. 20 U.S. Department of Energy, Energy Information Administration (EIA), Annual Energy Outlook 2009 (Washington, D.C.: EIA, 2009). See also RAND Report, supra note 18, at 12-14. 21 Id. 22 Id. 23 James Howard Kunstler, “Blowing Green Smoke,” April 4, 2011, available at http://kunstler.com/blog/2011/04/blowing-green-smoke.html. 24 RAND Report, supra note 18, at 35. 25 Id. at 36. 26 Id. The Bald Eagle, Colorado Pikeminnow, Boreal Toad, and Parachute Beardtongue (plant species) are among the Green River Formation’s threatened or endangered species that would be affected by oil shale development. 27 Id. 28 National Resource Defense Council, Driving it Home: Choosing the Right Path for Fueling North America’s Transportation Future 12, (2007), available at http://www.nrdc.org/energy/drivingithome/contents.asp, [hereinafter NRDC Report]. 29 RAND Report, supra note 18, at 41. 30 Id. 31 NRDC Report, supra note 28, at 12. 32 In the notice and comment proceedings supporting the BLM’s Programmatic EIS for the expansion of lands available for oil shale production in the Green River Formation, over half of the public comments on air quality were related to climate change. Ken Peacock, Wyoming Game and Fish Department, “Climate Change and the BLM” 6, available at http://gf.state.wy.us/climatechangeworkshop/index.asp.

29

33 In 2011, coal accounted for 86 percent of all electric generation in Wyoming, 80 percent in Utah, and 66 percent in Colorado. See http://www.eia.gov/ beta/state. 34 NRDC Report, supra note 28, at 12. 35 Office of Deputy Assistant Secretary for Petroleum Reserves, Strategic Significance of America’s Oil Shale Resource: Volume 1, Assessment of Strat egic Issues, 24 (March 2004), available at http://www.evworld.com/library/ Oil_Shale_Stategic_Significant.pdf. Notably, this was a critical policy report leading to the enactment of the Energy Policy Act of 2005. See Part III, infra (discussing enactment of the Energy Policy Act of 2005). 36 Brandt et al., supra note 11. 37 Id. 38 Id. 39 See Table 1, infra. 40 Id. 41 Energy Information Administration, Country Analysis Briefs: Canada (July 2009), available at http://www.eia.doe.gov/cabs/canada/Full.html. 42 Canadian Association of Petroleum Producers, 2010-2025 Canadian Crude Oil Forecast and Market Outlook, (June 9, 2010), available at http:// www.capp.ca/aboutUs/mediaCentre/NewsReleases/Pages/2010-Oil-Forecast.as px#ERg5kwEqhwK4. 43 Marc Humphries, North American Oil Sands: History of Development, Prospects for the Future, (Congressional Research Service, Washington D.C. 2008). The sands’ overall emissions have dramatically increased with rising production, despite the industry’s success in reducing its emissions by 29 pe rcent between 1995 and 2004. Id. 44 The Tar Sands Group and Climate Action Network Canada, Tarnishing the Maple Leaf: How the Tar Sands Drive Canada’s Climate Positions 2, (December 2009), available at http://www.climateactionnetwork.ca/e/publications/tarnishingthe-maple-leaf.pdf. 45 Ecofys for Allianz and WWF, G8 Climate Scorecards 15 (2009) cited in The Tar Sands Group and Climate Action Network Canada, supra note 45, at 2. 46 Rajendar Pachauri, Chairman of the IPCC, Associated Free Press, 6/12/07, cited in The Tar Sands Group at 8, supra note 45. 47 Anthony Andrews, Oil Shale: History, Incentives, and Policy: CRS Report for Congress (Apr. 13, 2006), available at www.fas.org/sgp/crs/misc/RL 33359.pdf. See also Environmentally Conscious Consumers for Oil Shale, History, available at http://www.eccos.us/index.php?option=com_content&view=arti cle&id=17&Itemid=13. 48 Environmentally Conscious Consumers for Oil Shale, History, available at http://www.eccos.us/index.php?option=com_content&view=article&id=17& Itemid=13.

30

49 National Energy Policy Development Group, Reliable, Affordable, and Environmentally Sound Energy for America’s Future, (May 2001), available at www.wtrg.com/EnergyReport/National-Energy-Policy.pdf. 50 The Vast North American Resource Potential of Oil Shale, Oil Sands, and Heavy Oils, Parts 1 and 2, Oversight Hearings Before the H. Subcomm. on Energy and Mineral Resources of the H. Comm. on Resources, 109th Cong. (2005). 51 Id. at 33 Testimony of Stephen Mut, CEO Shell Unconventional Resources Energy, S. Hrng. 109-35. 52 Id. at 4, 51. See, e.g., Testimony of Raul Grijalva, Representative of Arizona, and Russell George, Executive Director of the Colorado Department of Natural Resources. 53 Energy Policy Act of 2005, 42 U.S.C. § 15927(b)(1). 54 Id. at § 15927(b)(2). 55 Id. at § 15927(b)(3). 56 EPAct 2005, 42 U.S.C. § 15927(d)(1). 57 NEPA, 42 U.S.C. § 4332(2)(C), (2010). 58 Department of Transportation v. Public Citizen, 541 US 752, 768 (U.S. 2004). 59 CEQ Alternatives Including the Proposed Action, 40 C.F.R. § 1502.14 (2009). 60 Id. See also 42 U.S.C. § 4332(2)(C)(iii). 61 CEQ, Definition of Mitigation, 40 C.F.R. § 1508.20. 62 Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 351-52 (1989) (“Implicit in NEPA’s demand that an agency prepare a detailed stat ement on ‘any adverse environmental effects which cannot be avoided should the proposal be implemented’ is an understanding that the EIS will discuss the extent to which adverse effects can be avoided.” See also Mark Squillance and Alexander Hood, NEPA, Climate Change, and Public Lands Decision Making, 42 ENVTL. L. 469 (2012). 63 Methow Valley, 490 U.S 332 at 352. 64 Id. at 351-53 (An EIS must contain a “reasonably complete discussion of possible mitigation measures.”) 65 40 C.F.R. § 1508.7. 66 Id. 67 304 F.3d 886 (9th Cir. 2002). 68 Id. at 897. 69 40 C.F.R. § 1502.4(b). 70 CEQ Definition of Tiering, 40 C.F.R. § 1508.28 (1992). See generally Matthew C. Porterfield, Agency Action, Finality and Geographical Nexus: Judicial Review of Agency Compliance with NEPA’s Programmatic Environmental Impact Statement Requirement After Lujan v. National Wildlife Federation, 28 U. RICH. L. REV. 619 (1994).

31

71 Id. The regulation describes tiering as appropriate when analyses are “[f]rom a program, plan, or policy environmental impact statement to a program, plan, or policy statement or analysis of lesser scope or to a site-specific statement or analysis.” 72 40 C.F.R. §§ 1508.7 (“Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.”); 1508.25(a)(2). 73 NEPA Task Force, CEQ, The NEPA Task Force Report to The Council on Environmental Quality: Modernizing NEPA Implementation 35 (2003), available at http://ceq.hss.doe.gov/ntf/report/chapter3.pdf. 74 Center for Biological Diversity v. National Highway Traffic Safety Administration, 508 F.2d 508, 550 (9th Cir. 2007). In several other instances, courts have rejected agencies’ NEPA analyses for neglecting to sufficiently consider climate change. See Border Power Working Group v. Dept. of Energy, 467 F.Supp. 2d. 1040 (S.D. Cal. 2006) (NEPA analysis of GHG emissions required in review of proposed construction of electric transmission lines carrying electricity from gas-fired plants in Mexico to consumers in California); Mid States Coalition for Progress v. Surface Transportation Board, 345 F.3d 520 (8th Cir. 2003) (requiring analysis of GHGs in NEPA review of construction of railroad lines to carry coal to power plants). See also Amy L. Stein, Climate Change under NEPA: Avoiding Cursory Consideration of Greenhouse Gases, 81 U. COLO. L. REV. 473, 487 (2010); (“inclusion of climate change in NEPA documentation is now unavoidable”); Kevin T. Haroff & Katherine Kirwan Moore, Global Climate Change and the National Environmental Policy Act, 42 U.S.F. L. REV. 155, 182 (2007) (“Under the appropriate circumstances, there is little doubt … the impact of greenhouse gas emissions on climate change is an issue properly within the scope of NEPA’s environmental-review requirements.”). 75 Center for Biological Diversity v. National Highway Traffic Safety Administration, 508 F.2d 508, 514 (9th Cir. 2007). 76 Id. at 548, citing 40 CFR § 1508.7. 77 Id. at 550. 78 See generally Madeline June Kass, A NEPA-Climate Paradox: Taking Greenhouse Gases Into Account in Threshold Significance Determinations, 42 IND. L. REV. 47 (2009). 79 Id. 80 Amy L. Stein, Climate Change under NEPA: Avoiding Cursory Consideration of Greenhouse Gases, 81 U. COLO. L. REV. 473, 477 (2010). 81 Id. 82 Secretary of the Interior, Order No. 3226, Amendment 1, Evaluating Climate Change Impacts in Management Planning (2009), available at http://www.blm.gov/pgdata/etc/medialib/blm/wo/Information_Resources_Man agement/policy/im_attachments/2009.Par.9479.File.dat/IM2009-148_att3.pdf.

32

Stein, supra note 81 at 477. Id. 85 BLM, Toquop Energy Project: Draft Environmental Impact Statement ES-5 (2007). 86 BLM, United States Gypsum Company Expansion/Modernization Project: Final Environmental Impact Report/Environmental Impact Statement 4.0-78 (2008), available at http://www.blm.gov/ca/st/en/fo/elcentro/recreation/ohvs/isd ra/dunesinfo/docs/isdramp.html. 87 E.g., Stein, supra note 81. 88 Nancy H. Sutley, Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, (February 18, 2010), available at http://ceq.hss.doe.gov/nepa/regs/Consideration_of_Effects_of_GHG_ Draft_NEPA_Guidance_FINAL_02182010.pdf. 89 See Mark Squillance and Alexander Hood, “NEPA and Climate Change,” in The NEPA Litigation Guide, 261 (American Bar Ass’n, 2nd ed. 2012). 90 Id. at 2. The Guidance also states that the CEQ “seeks public comment on the appropriate means of assessing the GHG emissions and sequestration that are affected by Federal land and resource management decisions.” 91 See Squillance and Hood, NEPA, Climate Change, and Public Lands Decision Making, 42 ENVTL. L. 469 (2012). 92 Nancy H. Sutley, Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, (February 18, 2010), available at http://ceq.hss.doe.gov/nepa/regs/Consideration_of_Effects_of_GHG_Draft_NE PA_Guidance_FINAL_02182010.pdf. 93 Id. at 4, citing DOT v. Public Citizen, 541 U.S. 752, 767 (2004). 94 Id. at 5. 95 Id. at 5. 96 Id. at 6. As options for reducing or mitigating GHG emissions, the document cites “enhanced energy efficiency, lower GHG-emitting technology, renewable energy, planning for carbon capture and sequestration, and capturing or beneficially using fugitive methane emissions.” Id. 97 Id. at 6. 98 Id. at 9. 99 Id. at 6. 100 Id. 101 CEQ, Guidance Regarding Consideration of Global Climatic Change in Environmental Documents Prepared Pursuant to the National Environmental Policy Act. Memorandum to heads of federal agencies (October 8, 1997). 102 See Beth C. Bryant, NEPA Compliance in Fisheries Management: The Programmatic Supplemental Environmental Impact Statement on Alaskan Groundfish Fisheries and Implications for NEPA Reform, 30 HARV. ENVTL. L. REV. 441, 450 (2006); Courtney A Schultz, History of the Cumulative Effects
84

83

33

Analysis Requirement Under NEPA and its Interpretation in U.S. Forest Service Case Law, 27 J. ENVTL. L. AND LITIGAT. 125, 165 (2012). 103 915 F. 2d 1308 (9th Cir. 1990). 104 2008 Oil Shale and Tar Sands Final Programmatic Environmental Impact Statement [hereinafter “2008 Programmatic EIS”], (Sept. 4, 2008), available at http://ostseis.anl.gov/documents/index2008.cfm, 2012 Oil Shale and Tar Sands Final Programmatic Environmental Impact Statement, [hereinafter “2012 Programmatic EIS”], (Nov. 9, 2012) available at http://ostseis.anl.gov/documents/ peis2012. 105 42 U.S.C. § 15921(a)(1). 106 Id. § 15927(d)(1). The final PEIS was significantly delayed, finally released 37 months after EPAct’s passage. See Press Release, BLM, BLM Identifies Lands for Potential Development of Significant Oil Shale Resources (Sept. 4, 2008), available at http://ostseis.anl.gov/documents/index.cfm. 107 42 U.S.C. § 15927(d)(1). Notably, the Act does not actually lease new lands, but simply makes more land available for lease under the BLM’s co mmercial leasing program. 108 See First Amended Complaint for Declaratory and Injunctive Relief and Petition for Review of Agency 2009 WL 2491560 (D.Colo.) (Trial Pleading). BLM published the PEIS on Sept. 5, 2008, and published the final rule on oil shale management on Nov. 18, 2008. 109 2008 Programmatic EIS at ES-5. 110 See Doyle, supra note 12, at 271-72. 111 2008 Programmatic EIS at 4-17. The list of land uses includes “recreation, mining, hunting, oil and gas production, livestock grazing, wild horse and burro herd management, communication sites, and ROW corridors (e.g. roads, pipelines, and transmission lines).” 112 Id. at 3-158-59. 113 Id. at 3-100 (“The assessment of the relationship between GHG emissions and climate change is in its formative phase, and it is not yet possible to know with confidence the net impact on climate.”). 114 The IPCC uses the term “very likely” to indicate a probability of b etween 90 and 95 percent. 115 2008 Programmatic EIS at 3-100. 116 Id. at ES-8 – ES-9. 117 See generally id., Chapter 6 (analyzing potential direct, indirect, and cumulative effects associated with oil shale and tar sands development). See also Western Resource Advocates et al., “Detailed Comments on Oil Shale and Tar Sands DPEIS” at 26-29, (Mar. 20, 2008), available at http://docs.nrdc.org/land/files/lan_ 08032001A.pdf. 118 Id. at 6-185. 119 Id. at ES-6.

34

Id. at ES-6 – ES-8. 2012 Programmatic EIS at ES-1. 122 Id. 123 Id. at § 3.5.1.2, pp. 3-98 – 102. 124 Id. at 4-56. 125 Id. at 4-57-58. 126 Id. at § 4.6.2, p. 4-63. 127 Organizations included the Center for Biological Diversity, Colorado Environmental Coalition, Defenders of Wildlife, EarthJustice, Institute for Energy Research, National Wildlife Federation, Sierra Club, The Wilderness Society, and an Unidentified Campaign. 128 See 2012 Programmatic EIS, Appendix J: Summary of Public Scoping Comments for the Programmatic Environmental Impact Statement and Possible Land Use Plan Amendments for Allocation of Oil Shale and Tar Sands Resources on Lands Administered by the Bureau of Land Management in Colorado, Utah, and Wyoming, at J-17. 129 Id. 130 Id. at ES-4. 131 Id. at 3-1. 132 EISs must consider “cumulative effects,” which are “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.” 40 C.F.R. § 1508.7. Still, the Programmatic EIS is required expressly to consider these cumulative effects and remains the instrument through which broad mitigation could be developed. 133 NEPA Task Force, supra note 74, at 35. 134 INTERNATIONAL ENERGY AGENCY, WORLD ENERGY OUTLOOK 2012, (Nov. 12, 2012). 135 Programmatic EIS at 4.1.6. This electricity would be generated through a combination of construction of new power plants and expansion of existing power plants. BLM states that natural gas would likely be used for new power plants given recent industry trends, but assumes substantial expansion of currently existing coal plants. 136 Brandt et al., supra note 11. 137 Id. 138 Id. 139 Peter M. Crawford, INTEK, Developing Greener Approaches for Oil Shale Development, (Presented to 29th Oil Shale Symposium, Golden, CO 2009), available at http://www.ceri-mines.org/documents/29thsymposium/ presentations09/PRES_092_Crawford-Peter2a.pdf. 140 DOE OFFICE OF PETROLEUM RESERVES, “FACT SHEET: OIL SHALE AND THE
121

120

35

ENVIRONMENT,” 2 (Jun. 18, 2007), available at http://www.fossil.energy. gov/search/fossilweb/query.html?col=sitewide&qs=&qp=&qc=&pw=100%25&ws= 0&la=en&qm=0&st=1&nh=10&lk=1&rf=0&oq=&rq=0&si=1&qt=fact+sheet. 141 See generally DOE OFFICE OF PETROLEUM RESERVES, FACT SHEET: CARBON MANAGEMENT FOR STRATEGIC UNCONVENTIONAL RESOURCES, available at http:// fossil.energy.gov/programs/reserves/npr/Carbon_Management_Fact.pdf. 142 Genevieve Young, Abstract, Carbon Storage and Resource Development Potential of the Piceance Basin, (Colorado Geological Survey 2006), available at http://www.ceri-mines.org/documents/P01-GenevieveYoung.pdf. 143 See The Global CCS Institute, The Global Status of CCS: 2012, available at http://www.globalccsinstitute.com/publications/global-status-ccs-2012/on-line/47941. 144 Id. at ch. 3. 145 Id. 146 Hiren Mulchandani and Adam R. Brandt, Oil Shale as an Energy Resource in a CO2 Constrained World: The Concept of Electricity Production with in Situ Carbon Capture, 25 ENERGY FUELS 1633 (American Chemical Society 2011). 147 The EPICC process’s major flaw is that it would not create a fuel that runs in any of the 250 million internal combustion engine-driven vehicles currently on the road, thus sacrificing oil shale’s chief benefit of being a domestically abundant transportation fuel. 148 See, e.g., Peter M. Crawford, INTEK, Developing Greener Approaches for Oil Shale Development, (Presented to 29th Oil Shale Symposium, Golden, CO 2009), available at http://www.ceri-mines.org/documents/29thsymposium/presentations09/ PRES_09-2_Crawford-Peter2a.pdf; and Center for Oil Shale Technology and Research, 30th Annual Oil Shale Symposium, Session 13: Carbon Management, available at http://www.costar-mines.org/oss/30/30th _Oil_Shale_Symposium.html#ses13. 149 See generally Carolyn V. Currie, A Solution to Climate Change Economics – A Carbon Swap Bank, 11 INTERDISCIPLINARY ENVTL R. 236 (2010), available at http://carolyncurrie.wordpress.com/2010/08/27/a-solution-to-climate-change-econo mics-a-carbon-swap-bank/. 150 For overview, see id. 151 Id. 152 Kyoto Protocol to the United Nations Framework Convention on Climate Change, Article 12, opened for signature Dec. 10, 1997, 37 I.L.M. 22. 153 U.S. EPA, Mitigation Banking Factsheet, (January 12, 2009), available at http://www.epa.gov/owow/wetlands/facts/fact16.html#two. 154 National Mitigation Banking Association, “What is Mitigation Banking?” available at http://www.mitigationbanking.org/about/whatismitig ationbanking.html. 155 Regional Greenhouse Gas Initiative, “Program Design,” available at www.rggi.org/design. 156 NEPA Task Force, supra note 74, at 35. 157 Global CCS Institute, The Global Status of CCS: 2012, Appendix B: Asset

36

Lifecycle Model, available at http://www.globalccsinstitute. com/publications/globalstatus-ccs-2012/online/48591. 158 Methow Valley, 490 U.S. 332 at 349. The Methow Valley Court also highlighted the importance of making such information available to the public, to play a role in the decision-making process and the decision’s implementation. Id. 159 Scientists’ Institute for Public Information, Inc. v. Atomic Energy Comm’n, 481 F.2d 1079, 1087 (D.C. Cir. 1973). 160 Stein, supra note 81, at 477.

37