In total, they have drilled hundreds of exploratory bore holes in the northwestern portion of the state — according to some residents, the number is as high as 2,700 but the company’s CEO, Steve Smith, said they’ve done over 1,500 holes of drilling.
Their search got a boost in July 2013, when the governors of Mississippi and Alabama signed a Memorandum of Understanding that raised a few eyebrows. Govs. Bryant and Bentley agreed to study tar sands resources in their states, drawing on “best practices” developed in Canada to determine whether the mixture of heavy crude oil and sand could be extracted and refined.
Tar sands, referred to by the industry as oil sands, or perhaps most accurately as bituminous sand, have garnered significantly more attention in recent years, as Canada’s industry booms and the environmental consequences and climate impacts of the practice come into focus. While the years-long battle over whether to approve the controversial Keystone XL tar sands pipeline has brought the issue into the mainstream in the U.S., Americans are largely unaware of the sizable deposits in several states and the renewed push to extract them.
Bentley reiterated his interest in his January 2014 State of the State address, announcing the creation of the Alabama Oil Sands Program to “begin the study and research of one of this state’s greatest energy resources.” Further cementing the state’s intentions, the legislature gave the Alabama Oil and Gas Board authority over tar sands mining and they are currently drafting the first formal regulations, setting the course for future development.
Shortly after Bentley’s address, Cecilia Hicks, a resident of Colbert County, Alabama, remembers the phone calls starting. A real estate agent on the other end asked if she’d be willing to sell a portion of her land, even 10 acres. “She said she was local and had a customer who was interested in it,” Hicks recalled recently from her mid-1800′s era log home, which stands on property she has owned for more than 30 years. “I told her I wasn’t at all interested.”
It isn’t hard to see why. Theirs is a verdant and peaceful pocket of northwest Alabama, crossed by two-lane roads and dotted with small, neat homes and farming equipment. Residents all wave to each passing car, regardless of whether they know the driver. Once Hicks made it clear that there were no circumstances under which she’d sell her land, the real estate agent then tried her stepson who, according to Hicks, declined each escalating offer, finally saying, “you can get back in touch with me when you’re offering a million dollars an acre.”
Hicks, 80, “had never heard of tar sands” when she began talking to people in the area about this particular company’s interest, but the industry and state lawmakers have known for some time that Alabama’s Hartselle sandstone is thought to contain the third largest tar sands resource in the country. Moving beyond the small-scale mining of asphaltic sand that has occurred to date, however, to the full extraction and separation of heavy crude oil has been too expensive and technologically complex.
Exactly what lies beneath the surface isn’t totally certain; while state officials have long been aware of the existence of oil sands deposits, “comprehensive studies are few and far between, and data and samples have been lost over time,” according to the Geological Survey of Alabama. The agency undertook an assessment of tar sands resources, completed in 1987, that estimated subsurface reserves of 7.5 billion barrels of oil in the state, plus an additional 350 million barrels less than 50 feet below the surface.
Bentley aims to change that uncertainty. Along with the governor’s interest in developing the state’s tar sands resources, recent developments over the past year, like the land acquisition that has occurred around Hicks and in neighboring Lawrence County, and the state Oil and Gas Board moving forward with drafting formal regulations for mining, have sparked the concern of a core group of residents. They’ve held a series of informational meetings, pressed state agencies for information, and conducted their own research into the resource and the main company, MS Industries.
“These are not local people. They are not here to do us good,” said Hicks, who proudly announced in her sweet Southern drawl that she had attended all but one of the meetings (and her daughter attended that one). “They are here to make somebody money and I have no idea who that somebody is.”
Several steps remain before the emergence of a tar sands industry in Alabama. MS Industries, the most active company thus far, says its plans are on hold until the state regulations are drafted. Ultimately, the recent drop in oil prices could further complicate or derail any future tar sands development. However, Alabama is just one of multiple U.S. states being eyed by industry as they increasingly look to pursue high-risk energy sources, like tar sands, horizontal drilling and fracking of oil and gas, or coalbed methane.
Cecilia Hicks sits on the front porch of her Colbert County home.
CREDIT: KILEY KROH/THINK PROGRESS
Created in Alabama in 2010, MS Industries is a research company, according to CEO Steven Smith. It’s been reported that the company has acquired more than 2,500 acres of land in Colbert and Lawrence counties; Smith said the total is less than that, but declined to give an exact number. While he does not come from a petroleum engineering background and has not been engaged in a tar sands mining project before, Smith said every member of their group brings a unique set of experience to the table. “We’re doers, I mean we’re pioneers,” he said. “Our group, that’s what we do.”
Earlier this year, the company claimed to have developed a proprietary technology to extract the heavy oil and separate it from the sandstone. Typically, the bitumen-rich rock is extracted and processed in two main ways: open pit mining or in-situ drilling. The bulk of large-scale tar sands extraction in Canada is done via in-situ drilling, where steam is pumped underground to liquefy the heavy oil and bring it to the surface. For deposits that are closer to the surface, an open-pit mine can be used. In-situ mining in particular is an energy- and water-intensive process that brings a host of environmental and public health concerns, including the destruction of forests, and water and air pollution — all before the heavy crude oil is even transported or burned.
And it’s important not to be fooled by the talk of small-scale mining, said Joel Mize, a Colbert County resident with a 50-year career in petroleum engineering. Surface mining, or strip mining, involves “a peeling back” of the soil and any vegetation on top of the target zone with a bulldozer or backhoe, likely some sort of dynamiting to break up the rock, and then bringing in larger-haul trucks to transport the rock to a processing facility. In short, a disruptive process regardless of the size.
Smith and Chief Operations Officer John Christmas have sought to distinguish their company’s plans from the tar sands extraction underway in Canada, saying they would extract the oil-bearing rock through surface mining and transport it to a processing facility. The two told the Huntsville Times in May that “their newly-developed method — the details of which they declined to disclose — will create virtually no waste.” In addition, they said the company had invested $20 million in the technology and holds “more than 22″ related patents. The Times’ search of existing patents with the U.S. Patent and Trademark Office, however, found no mention of MS Industries or its executives.
Petroleum companies pursuing tar sands mining in Utah have touted similar proprietary technologies. U.S. Oil Sands, a Canadian company, expects to begin extracting heavy oil next year using “a citrus based bio-solvent that naturally separates the bitumen from the oil sand” and eliminates the need for the large, chemical-laden waste ponds found in Canadian tar sands development. Regardless, environmentalists remain staunchly opposed to the project, which they say could irreversibly mar the ecosystem and consume huge amounts of energy and water — a particularly acute concern for the parched Southwest.
What’s driving these companies to pursue the extraction of a difficult resource using experimental techniques? Dr. Nick Tew, State Geologist of Alabama and State Oil and Gas Supervisor said the renewed interest in Alabama’s resources is partially due to “advancements in extraction technologies that potentially apply to the development of resources like the Alabama oil sands.” The much stronger force, however, is economic. “Over the past few years, crude oil prices have remained high and this fact, as much as anything, has stimulated interest,” he said via email.
“If you’re asking the real story, we are coming to the end of conventional oil,” said Dr. Berna Hascakir, assistant professor in the Harold Vance School of Petroleum Engineering at Texas A&M University. Meanwhile, “the gap between the demand and the production is rising readily and quickly.”
To fill that gap, the oil and gas industry has set its sights on the unconventional resources, like shale oil, and even more challenging formations such as tar sands. “We are not in the state still fully that we can recover those resources conventionally,” said Hascakir. “Conventionally means that we shouldn’t give harm to the environment … the technologies should be feasible and it should be [easy] to extract.”
The revived interest in tar sands mining in Alabama attracted the attention of Mize, who said he considered being involved in the development of the resource until he began looking into what it would entail. “Most engineers like myself have been taught that mankind can overcome whatever challenges nature gives, like going to the moon or whatever, but I’m convinced that in this particular case, mankind cannot overcome the downsides of this particular resource,” Mize said. “That’s why I’m against it. It’s the first energy project I’ve ever been against.”
In order to tap into their main target resource, operations will need to access a geological formation “that contains both the heavy oil as well as aquifer water in the same zone,” he said. Nature has developed a “fragile balance” that simultaneously holds the oil while allowing water to flow through and be used for springs and wells; disrupting that balance, and breaking the thin membrane holding the oil in place will lead to “unavoidable mixing of oil and water,” Mize explained.
As the Oil and Gas Board works to develop the state’s first regulations to govern tar sands mining, Tew said that “the protection of water resources, both surface and groundwater, is a primary and important responsibility.” Since the rules and regulations are currently being drafted, he was unable to offer more specifics, but added, “I can assure you that protection of these resources will be adequately addressed in the rules that are finally adopted.”
However, multiple residents pointed to the initial exploratory activity conducted by MS Industries as proof that adequate attention is not being paid to the potential damaging effects of such operations. The hundreds of bore holes drilled by MS Industries are not only a threat to groundwater, said Lauderdale County resident John Crowder, but once drilled, the holes have been left uncovered.
Crowder, a member of the core group of concerned residents who boasts a 27-year career with multiple federal agencies, including the Fish and Wildlife Service and Environmental Protection Agency, said their complaints regarding the uncovered bore holes have largely been met with apathy from the state. “I’m concerned with the way this has been going from a regulatory standpoint,” Crowder said. “They have said there is no reason to be concerned about bore holes because these are shallow holes, but that does not compute.” As proof, he cited a publication by the Geological Survey of Alabama that said groundwater in the three-county area comes from dug or drilled wells as shallow as 10 feet.
Bituminous rock found on the Martin family property.
CREDIT: KILEY KROH/THINK PROGRESS
The large number of core test wells that have been drilled is a concern to Mize, along with the way they were left. Drilling so many wells would indicate the company was looking at exploration targets throughout a large area and leaving them unsealed dramatically increases the risk of cross-flow from the area of oil concentration into the water zone, he said.
Tew said he was aware of the concerns regarding the test holes that have been drilled by MS Industries, but “under current Alabama law … the drilling of stratigraphic test core holes that are drilled purely for the purpose of sampling and/or evaluating earth materials is not a regulated activity.”
MS Industries CEO Smith brushed off the complaints. “The radicals you’re speaking to, they really don’t have any concern about the poor people around there or anything that’s going on,” he said. “There’s nothing in any mining law, exploration law, transcript ever written that any damage could be done in 25 to 30-foot, two-inch bore holes.” What’s more, Smith said, the holes were filled in. “I’m gonna say maybe not all, but almost every case.”
After collecting samples from hundreds of test holes in the two counties, Smith said the company presented its findings to Dr. Tew and the Oil and Gas Board in May and told them in no uncertain terms, “we do not deem it economically feasible and do not believe it will ever be mined.” Smith said the Oil and Gas Board “oohed and aahed over our core library, which is second to nothing that any of them had ever seen, and they just said, ‘this is incredible. And you can’t extract it?’ And we said, ‘no you can’t.’” Smith’s admission appears to be the first time the company has said publicly they do not intend to move forward with tar sands mining.
Tew remembered the meeting differently. He described the conversation between the board and MSI as a “rather general” discussion of the company’s properties, research, and core tests. “They did not indicate to us, in my recollection, at that time that they had made any determinations about the feasibility of this and said that they were still looking at the feasibility of [tar sands mining],” he said. What’s more, Tew said in a follow-up email that the meeting in question occurred in mid-July.
In August, MS Industries released a statement through its attorney, Chuck Kelley, that said the company was in a “holding pattern” before determining whether the project was economically feasible. “We cannot and will not mine oil sands until the Oil and Gas (Board) regulations are approved and those regulations, once adopted, will tell us a great deal as to whether our plans are commercially viable,” the release read.
“Let me just be clear, it’s not economically feasible for us right now. At this time,” Smith said in a second interview. “Plus, we don’t even know what the regulations will be — they may be too far reaching for anybody to do it.”
A third conversation with Smith saw him return to his initial position. “Any regulations that they may have are not going to have an effect on us one way or another. We’re not going for it,” he said. Smith did not elaborate on what had changed in the two months since the August release the company put out, but did say, “we have to pay the bills like everybody else.”
Asked for clarification on any decisions that had been made and when state regulators were notified, company attorney Kelley said via email that the August release “speaks for itself” and “that a final determination as to the economic feasibility of oil sands mining cannot be fully established until the Alabama Oil and Gas Board promulgates its regulations.”
According to Smith, the material MS Industries found in its exploratory drilling was not what they expected and didn’t lend itself to being mined. “It’s black rock that contains oil; most of the hydrocarbon has evaporated,” he said. To the question of what might make the project economically feasible to pursue, Smith said he wasn’t sure, but added that a heated pipeline would help.
As for the company’s current plans, “we’re a sand and gravel operation,” said Smith, adding in the third interview that the company was working on tar sands mining in two other countries. Kelley declined to specify which countries the company was looking at or elaborate on the company’s future initiatives beyond sand and gravel. “At the current time, our main focus and objective is to provide much needed jobs to the good people of Northwest Alabama while being a responsible corporate citizen and environmental steward,” he wrote.
Regardless of MS Industries’ plans for the land it owns in Alabama, they’re unlikely to be the last company to show an interest in the state. Archer Petroleum, a Canadian-based company, said in a January corporate update that it began acquiring interests in tar sands in Kentucky and Utah in 2013 and was interested in expanding into Alabama. “The Company has established excellent working relationships with family‐based landholders to acquire further production projects and is also turning its focus toward similar relationship‐building with families in the state of Alabama, where estimated heavy oil from oil sands reserves totals some 6.4 billion barrels,” the update stated.
And as with most fossil fuel development projects, the prospect of more jobs, regardless of how risky or short-term they may be, is appealing to some residents and local lawmakers. While jobs estimates for tar sands mining in Alabama have not been conducted, Lawrence County Commissioner Prentis Davis, who represents the Wolf Springs area, told the Associated Press he’s particularly interested in the potential for jobs and economic development. “I’m willing to do whatever it takes in my power to help them,” Davis said.
Several of the area’s residents are similarly enthusiastic. “I stand up for this because it means new jobs for the area,” Russellville resident Chuck Borden said at a community meeting this past summer.
Tew emphasized that no mining activity has been proposed to the board and won’t be until the regulations are drafted and approved. In the meantime, discussions of economics are likely premature. “Industry always wants certainty, so when you have a regulatory framework in place that provides the rules of the road,” he said. “I don’t know that it makes it more economically feasible but gives people the rules to proceed.” And if the price of crude oil continues on its recent downward trajectory, that factor will likely determine the feasibility of future tar sands development more than any other.
Several residents of this bucolic area fear that, ultimately, demand for oil and quest for profit will render some sort of tar sands development inevitable. For these Alabamans, short-term jobs and as yet unspecified economic benefits are not enough to justify something they believe would permanently damage a very special place.
“There will be oil and gas industry investors that might profit from this but not the workers and not the citizens, certainly, because quality of life in the area is great,” said Sheree Martin, a lawyer and professor whose family has owned land in Colbert County for five generations. In a walk around the family property, with some combination of Martin’s four dogs never straying too far, the loudest noise was the steady hum of cicadas.
“It’s very shortsighted to say, let’s try this out and see how it goes,” Martin said. “Because once something is destroyed, you can’t put it back. It’s experimental.”
Sitting on the steps of her parents’ home, Martin looked out at the road, where passersby stopped to take watermelon and okra from a small stand Martin sets up and leave money in a plastic container. “Do we see large dump trucks going down the road? Or 18-wheelers hauling things?” she asked. “People move to the country because they want to live where it’s peaceful and quiet; they don’t want to live in an industrial zone.”
Martin has been outspoken in her concerns regarding both MS Industries as a company and the potential for air, soil, and water contamination if any tar sands mining is approved. Her activity clearly struck a nerve with MS Industries CEO Smith, who became noticeably agitated when discussing Martin and the other residents who have organized against the prospect of tar sands extraction.
“Let me correct you, the residents are not concerned about it,” Smith said. “It’s [Martin] and a couple of other individuals that are, I won’t use the correct term, I’ll just say ill-informed. They’re not informed at all. They deal from a position of no facts whatsoever.”
With MS Industries and any other interested company forced to hold off on any tar sands mining until the state finalizes its regulations, the residents of northwest Alabama will continue to gather, spread information and organize other residents to participate in the public comment process. In a state where lawmakers and regulators have long been cozy with the fossil fuel industry, they believe their efforts are even more critical — simply because the stakes are so high within northwest Alabama and beyond.
“Noise will be a concern, kind of the overall pollution from the resource when you consider all of the carbon dioxide that will release from the fuel itself, from the processing operation, the trucking operation, mining operation — when you add all that up, this resource is the next dirtiest thing to coal,” said retired petroleum engineer Mize. “Consequently, it’s not something that needs to be a national priority today.”
Original Article
Source: thinkprogress.org/
Author: BY KILEY KROH
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