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Better Resource Assessments Would Improve Resource Development

New energy sources — even new forms of conventional energy sources — take decades to bring to market and are highly sensitive to national and global market conditions. Like all currently used sources, new energy sources also carry environmental costs. Therefore, their contribution to a diversified energy portfolio needs to be appropriately valued to account for the net benefits of development.

AP/SOUTHERN UTAH WILDERNESS ALLIANCE/   KEVIN WALKER   Hatch Point, the rock outcropping at right, is an area proposed for oil and gas drilling on Bureau of Land Management (BLM) land outside Canyonlands National Park in southeastern Utah. The National Park Service filed objections with BLM on Aug. 5, 2005, saying the rigs would spoil the views from the national park, including views of La Sal Mountains in the background.

Public land managers would do well to include economic and environmental considerations earlier in the assessment process than would traditionally be the case.

AP/ED ANDRIESKI   A pair of young osprey spread their wings in the wind on their nest in Parachute, Colo., on July 19, 2005. As the energy industry studies the possibility of restarting oil shale production in the Rockies, the region is still trying to figure out how the current natural gas boom is affecting wildlife and an economy that relies on tourism and recreation.

Only a subset of the technically recoverable natural gas is recoverable at current prices.

In assessing the viability of new supplies of domestic natural gas and oil resources, for example, public land managers would do well to include economic and environmental considerations earlier in the assessment process than would traditionally be the case. By understanding the differences in the economics of production and environmental assets at different locations, public land managers could set priorities for opening lands to development. More gas and oil could be extracted faster, more efficiently, and at less cost to the environment.

Conventional assessments of natural gas and oil resources estimate the “technically recoverable” resource, which refers to the amount of a resource that is considered recoverable given certain assumptions about technical capabilities. However, the definition of the term “technically recoverable” is unclear and inconsistently applied among traditional assessments. In all cases, the “technically recoverable” resource fails to represent the amount of a resource that is realistically recoverable, because the assessments of technically recoverable resources disregard political, economic, environmental, and other considerations.

We propose a way of assessing resources that puts more useful information in the hands of decisionmakers. In simple terms, our proposed approach involves overlaying two assessments: the amount of oil and gas available as a function of development cost, and the amount of oil and gas associated with various environmentally valuable resources. Overlaying maps of these assessments can reveal the locations of greatest likely development and least likely harm.

We applied this approach to the Greater Green River Basin, which lies mostly in southwestern Wyoming. The area not only is a potential source of oil shale, as described on previous pages, but is also estimated to contain about 15 percent of the nation’s natural gas resources.

As expected, we found that only a subset of the technically recoverable natural gas in the basin is recoverable at current prices. Moreover, some areas with relatively high natural gas concentrations overlap areas with critical environmental characteristics, such as relative proximity to human settlements, relatively shallow groundwater, relatively important riparian habitats, and relatively high quantities of terrestrial vertebrate species (see the two maps below for an example). These insights would be useful in determining whether or not to develop natural gas from areas that might appear promising based on the economic analysis alone but that might also pose significant environmental consequences.

The information gleaned from this method of assessing resources would be especially useful to public land managers, who could improve the efficiency of the development process by establishing priorities in granting permits for natural gas and oil exploration and production. This information could also help policymakers at many levels of land management develop strategic resource plans, render difficult decisions about access to federal lands, and understand the potential consequences of those decisions.

Some Areas with Relatively High Natural Gas Concentrations Overlap Areas with Critical Environmental Characteristics
SOURCE: Assessing Natural Gas and Oil Resources, 2003.