THE BLOG
05/20/2010 10:42 am ET Updated May 25, 2011

Oil Shale: A Bad Bet Then, a Bad Bet Now

One night.

That's all it took to collapse an entire region. On May 2, 1982, over 2,000 workers set out, like they always did, to Exxon's Colony Project, a nearly $1 billion oil shale venture in northwest Colorado. But they found the gates locked and the lights off. They couldn't even retrieve their personal belongings.

That day is known in Colorado as Black Sunday, the day when Exxon pulled the plug on its oil shale project, a dirty, water-and-energy-intensive process in which rock is heated to extremely high temperatures until it oozes a petroleum-like substance. The oil companies exited shale country without hesitation, and left behind an economic bust from which it took northwest Colorado a decade to recover.

While recent news coverage has rightfully been devoted to the oil disaster in the Gulf, this month's anniversary of Black Sunday is an important reminder of how oil shale promises have collapsed on the backs of thousands of workers and their families.

In the late 1970's, the U.S. was in the midst of an energy crisis. Many gas stations had no gas to sell, and the ones that did saw lines that stretched for miles. Amid the crisis, President Carter created the Federal Synthetic Fuels Corporation. This new corporation was tasked with allocating billions of dollars in guaranteed loans to alternative fossil fuel endeavors, such as oil shale.

Exxon descended upon northwest Colorado, and began to promise things that, in the end, turned out too good to be true. With over 20,000 jobs promised, the surrounding area began to boom. As federal dollars flowed in, this part of northwest Colorado quickly expanded its infrastructure to get ready for the coming prosperity.

In a report known as the "white papers," Exxon officials claimed that the Colony Project would produce 8 million barrels of oil per day by 2010. It's 2010, and it looks like they were off by about 8 million barrels. This vast miscalculation cost thousands of Coloradans their jobs.

It turns out that the Colony Project was only feasible while gas prices remained abnormally high, and while federal subsidies continued to flow.

After Exxon's hasty departure, businesses closed, banks went belly-up, and foreclosures began to spin wildly out of control.

Big Oil once again has northwest Colorado in its crosshairs.

Recent legislative initiatives are only furthering oil companies' desire to begin new oil shale development. Today, lawmakers in Washington aren't paying attention to the past failures of oil shale ventures. Instead, the same false hopes that constructed the first boom and bust are taking hold in current legislation, such as the Energy Policy Act of 2005, which paved the way for new exploration into oil shale.

The policy mandates that the Department of the Interior offer up federal lands for research and commercial oil shale leases. In addition, it started royalty rates at an extremely low rate of 5 percent.

Since Black Sunday, Big Oil has invested millions in trying to make oil shale profitable. But oil companies haven't found a way to turn a profit without help from the federal government, through subsidies or extremely low royalty rates. The technology simply isn't there.

During the energy crisis of the 1970's, industry and government quickly embraced oil shale as a fuel of the future, without looking at the facts. We can't let that happen again.

Even worse, Big Oil has no plan for how to cut down on the vast environmental costs of oil shale production.

The energy needed to facilitate the process is staggering. A modest 100,000-barrel-per-day operation would need 1,200 megawatts of electricity, enough power for a city of 500,000. Huge amounts of greenhouse gases would be released during the process as well.

And in a state where water scarcity is already a growing problem, oil shale production would take a heavy toll on available water supplies. It's estimated that between two and five barrels of water are needed to extract each barrel of oil.

Colorado found a better way.

In 2004, voters passed a renewable energy standard referendum requiring that the state's utility companies obtain ten percent of their energy from renewable sources by 2015.

Only furthering the state's dedication to clean energy, Colorado Governor Bill Ritter recently signed legislation increasing the state's renewable energy standards. The new law requires Colorado utility companies to obtain 30 percent of their energy from renewable sources by 2020.

Oil shale is a direct affront to Colorado's clean energy leadership. Legislation in Washington needs to take cues from Colorado's renewable standards, not from what's underneath its mountains.

We can't succumb to another empty promise from oil shale. Our planet can't handle it and the people of western Colorado can't either.

Rather than embracing a gamble with oil shale, it's time to fully invest in low-carbon alternatives, such as better fuel economy requirements, plug-in electric cars fueled by solar power, and smart growth and public transportation infrastructure that give Americans choices other than cars.

There are important parallels to be seen between failed oil shale endeavors and the current crisis in the Gulf. Oil drilling is inherently dirty and unpredictable. Whether the final product comes from a rock or an underwater reservoir, the economic repercussions from failed ventures is catastrophic. Along with growing reports of dead wildlife, the Gulf spill is projected to cost the Louisiana fishing industry $2.5 billion, while costing Florida's tourism industry roughly $3 billion. The ultimate cost, however, won't be realized for decades.

As we watch events unfold in the Gulf, keep Black Sunday, and the toll it took on a region's livelihood, in mind.

We need to leave oil shale and all other fossil fuels where they belong: in the ground.