Show Energy report cites ob St de deto I to scale long oil shale A A number of synthetic fuels projects that will the economic and In I fuels industry and reach the scale full production stage will b be considerably less than currently projected by In in- in industry Large capital outlays coupled with a tightening of financial assistance by the Synthetic Fuels Corporation were cited as the major obstacles to large large- scale dev development in Utah ac ac- ac according cording to a report Issued by the the Utah Energy Office a division of the Depart Depart- Department ment of Natural Resources and Energy The purpose ot of the report Assess ment of Oil Shale and Tar Sand Develop Develop- Development Development ment In Utah Phase II is to gain In in- in insight sight on the likelihood of a commercial Industry developing in Utah to analyze potential constraints to that development and to discuss any array of policy options available to the state which would possibly alleviate those constraints Some possible state policy options resulting from the reports report's analysis in in- in include clude state federal land exchanges facility procedures tax Incentives and permit acquisition streamlining Op Op- Options were viewed as enhancing project economics and thus improving the likelihood of development In the states Twelve synthetic fuels projects are proposed for construction in and around the states state's Uintah Basin But to Utah Energy Office program specialist Rick Anderson the likelihood of all 12 projects being built Is very small The report concludes that current economic conditions and relatively stable oil prices have In poor project economIcs for most developments Anderson says that unless there Is a major in the price of crude oil very few projects will willbe willbe be developed In Utah Phase I of the report which was com com- completed In 1980 dealt with identification of Utah resource bases and establish establish- establishment establishment ment of likely production scenarios World crude oil prices were rising significantly at the time the Phase I report was completed Anderson said The Phase I conclusion was based on the assumption that world oil prices would continue to escalate to a level where synthetic fuel development would be competitive with crude oil Conse he continued the price of crude oil has leveled off and the rate of return on developments does not provide enough incentive for scale large private inv investments The current world market market value of crude oil ollis is about 34 per barrel The pre pre- present present sent cost to produce a barrel of synthetic crude oil ranges from 40 per barrel to toas toas as high as 60 or more per barrel Complicating matters the Synthetic F Fuels els Corporation established by the theUS US Congress to assist in the develop develop- development ment of alternative fuel sources has demonstrated a conservative philosophy regarding subsidies to develop develop- MOFFAT VERNAL COUNTY i I 5 H A m w I 64 OURAY RANGELY i BONAN BONANZA 51 I 0 i 6 6 4 l Q a DUCHESNE COUNTY I 17 1 el I I 0 pc 9 9 I V 8 RIO BLANCO 1 3 2 J- J COUNTY till UINTAH AH COUNTY GARFIELD 10 I COUNTY W 8 S L LI i I MESA COUNTY 1 GRAND COUNTY O I 9 F A iao I SR 1 Magic Circle 7 White River Shale 2 8 C S A 3 Agency Draw 9 Rainbow 4 Ute 10 P PR R Springs 5 11 Great National 6 Tosco 12 PROPOSED projects located in and around Uintah County The 12 projects represent a combined barrels of oil per day production Estimates also project that over 10 billion in capital and over laborers ment Of the 10 billion initially earmark earmark- earmarked earmarked ed for project subsidies 6 billion will go goto goto to coal 3 billion for oil shale and 1 billion for tar sands and heavy oil pro pro- projects projects The Phase II report indicates that competition for these subsidies will be keen with no assurance that Utah pro pro- projects will receive assistance The report identifies potential air quality violations from the cumulative emissions of the proposed projects as another obstacle to widespread development in Utah Anderson says however air quality standards likely would not be breached by Individual plants due to the expected drop In the number of projects that will reach production The assessment also addresses site leasing and permitting operation costs labor force availability and water and power requirements The report con con- concludes concludes that while some of these Issues present difficulties none are insurmountable Of the 12 projects analyzed in the study 11 h have ve sufficient resource bases to maintain projected production levels for 20 to 30 years One site has a pro pro- projected resources base of 15 years The most optimistic projected level of pro pro- production for the combined projects is barrels per day by 1995 The report estimates that for every barrels of oil produced projects will require 17 billion of finance capital megawatts of elec elec- elec electricity per year feet acre of water per year and 2800 laborers |