skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Volume 9: A Review of Socioeconomic Impacts of Oil Shale Development WESTERN OIL SHALE DEVELOPMENT: A TECHNOLOGY ASSESSMENT

Abstract

The development of an oil shale industry in northwestern Colorado and northeastern Utah has been forecast at various times since early this century, but the comparatively easy accessibility of other oil sources has forestalled development. Decreasing fuel supplies, increasing energy costs, and the threat of a crippling oil embargo finally may launch a commercial oil shale industry in this region. Concern for the possible impacts on the human environment has been fostered by experiences of rapid population growth in other western towns that have hosted energy resource development. A large number of studies have attempted to evaluate social and economic impacts of energy development and to determine important factors that affect the severity of these impacts. These studies have suggested that successful management of rapid population growth depends on adequate front-end capital for public facilities, availability of housing, attention to human service needs, long-range land use and fiscal planning. This study examines variables that affect the socioeconomic impacts of oil shale development. The study region is composed of four Colorado counties: Mesa, Moffat, Garfield and Rio Blanco. Most of the estimated population of 111 000 resides in a handful of urban areas that are separated by large distances and ruggedmore » terrain. We have projected the six largest cities and towns and one planned company town (Battlement Mesa) to be the probable centers for potential population impacts caused by development of an oil shale industry. Local planners expect Battlement Mesa to lessen impacts on small existing communities and indeed may be necessary to prevent severe regional socioeconomic impacts. Section II describes the study region and focuses on the economic trends and present conditions in the area. The population impacts analyzed in this study are contingent on a scenario of oil shale development from 1980-90 provided by the Department of Energy and discussed in Sec. III. We recognize that the rate of development, the magnitude of development, and the technology mix that will actually take place remain uncertain. Although we emphasize that other energy and mineral resources besides oil shale may be developed, the conclusions reached in this study reflect only those impacts that would be felt from the oil shale scenario. Socioeconomic impacts in the region reflect the uneven growth rate implied by the scenario and will be affected by the timing of industry developments, the length and magnitude of the construction phase of development, and the shift in employment profiles predicted in the scenario. The facilities in the southern portion of the oil shale region, those along the Colorado River and Parachute Creek, show a peak in the construction work force in the mid-1980s, whereas those f acil it i es in the Piceance Creek Bas into the north show a construction peak in the late 1980s. Together, the facilities will require a large construction work force throughout the decade, with a total of 4800 construction workers required in 1985. Construction at the northern sites and second phase construction in the south will require 6000 workers in 1988. By 1990, the operation work force will increase to 7950. Two important characteristics of oil shale development emerge from the work force estimates: (1) peak-year construction work forces will be 90-120% the size of the permanent operating work force; and (2) the yearly changes in total work force requirements will be large, as much as 900 in one year at one facility. To estimate population impacts on individual communities, we devised a population distribution method that is described in Sec. IV. Variables associated with the projection of population impacts are discussed and methodologies of previous assessments are compared. Scenario-induced population impacts estimated by the Los Alamos method are compared to projections of a model employed by the Colorado West Area Council of Governments. Oil shale development in the early decade, as defined by the scenario, will produce growth primarily in Battlement Mesa, Rifle, and Grand Junction. By 1985, the population of Battlement Mesa is projected to be 8500, the population of Rifle to increase to 8000, and the population of Grand Junction to increase by 2000 persons. Rangely's population is expected to double in this period, and Meeker will increase to 5200. By 1986, population pressures in the south will accelerate the growth rate of Meeker and Rifle and the entire region will experience a growth surge in 1988 induced by the second phase of construction at the oil shale sites. The regional population influx is estimated to increase to 40 600 by 1988 and drop to 38 300 by 1990. This drop reflects the decrease in construction activity at the close of the decade, as specified by the scenario. Difficulties associated with the appraisal of public service needs are discussed in Sec. V. Conceptual problems in adopting adequacy standards are outlined and methodologies employed by other assessments are reviewed. Sources of disagreement over the cost of public facilities are also described. Using standards developed in 1979 by the Colorado Department of Local Affairs, we estimated that the public capital expenditures implied by the scenario-induced population growth would exceed $190 million over the decade. However, if the costs of public facilities in Battlement Mesa are internalized by the company, the total estimated capital costs would be $135 million. Use of a fiscal capacity model, developed by the State of Colorado, projected municipal revenue shortfalls in the early years of the scenario. These estimated shortfalls would be greatest in Meeker and in Rifle. These findings reaffirmed the conclusions of previous studies, which found that after the critical initial years of capital shortages, revenues would be sufficient to finance operating expenses of local government. Comprehensive fiscal planning, however, is handicapped by the multiple jurisdictions and uneven distribution of fiscal impacts. Studies show work force estimates are strongly affected by worker living conditions, which directly affect worker productivity and turnover. Presently, new housing starts meet only current demand and thus vlould not accommodate a large influx of populatiol'). The lack of excess housing may be traced to a perception of risk by investors, who see uncertainties in national government and industrial development policies as stumbling blocks to the commercialization of oil shale. Provision of adequate housing for an oil shale "boom" may be handicapped not only by this perception of risk, but by lack of materials and construction labor, lack of mortgage capital, and inflationary land speculation. In Sec. VI, we discuss these obstacles to providing an adequate supply of housing and review problems associated with estimating housing demand. Intervention by industry or by the state or Federal Government may be necessary to guarantee housing availability. The scenario predicts approximately 8100 new households in the region by 1985 and 4600 more by 1990. If only half of these households enter new homes, we estimate that $261 million in mortgage capital (1980 dollars) will be needed by 1985 and a total of $404 million by 1990 (1980 dollars). The inability of local financial institutions to meet mortgage capital requirements may present a major impediment to oil shale commercialization. There may simply be no affordable place to live. Social pressures associated with rapid population growth are well documented. Several groups of people are more vulnerable to negative impacts of rapid growth: wives of construction workers, the aged, people on fixed incomes, and children. Case studies have indicated that rapid population growth has been accompanied by rising crime rates, alcoholism, juvenile delinquency, child and spouse abuse, and a general increase in civil disorder. Nevertheless, well-planned and coordinated human services and programs designed to relieve stress, to provide a sense of community, and to integrate newcomers into the community may alleviate some of the negative consequences of rapid social change. In Sec. VII, we examine the factors that lead to social disruption and other negative consequences of social change in western rural communities. The importance of policy as a variable affecting social impacts is also discussed. State and local governments have recognized the need to plan for growth although there continues to be much skepticism with regard to oil shale development. The planning activities of these governments are described in Sec. VIII. In addition to the development of comprehensive land use plans, local governments have developed mechanisms to define community needs. To prepare for growth that was forecasted for the late 1970s, local governments have obtained financial assistance from state and Federal programs to upgrade existing water and sewer systems, streets, schools, and other public facilities. Consequently, some of the communities in the region have excess capacity in their water and sewage treatment facilities and in their schools. There is a great reliance on external financial assistance for the construction of major public facilities that places heavy burdens of grantsmanship on local governments.« less

Authors:
Publication Date:
Research Org.:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
1127241
Report Number(s):
PNL-3830 V. 9
DOE Contract Number:  
DE-AC06-76RL01830
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
04 OIL SHALES AND TAR SANDS

Citation Formats

Rotariu, G. J. Volume 9: A Review of Socioeconomic Impacts of Oil Shale Development WESTERN OIL SHALE DEVELOPMENT: A TECHNOLOGY ASSESSMENT. United States: N. p., 1982. Web. doi:10.2172/1127241.
Rotariu, G. J. Volume 9: A Review of Socioeconomic Impacts of Oil Shale Development WESTERN OIL SHALE DEVELOPMENT: A TECHNOLOGY ASSESSMENT. United States. https://doi.org/10.2172/1127241
Rotariu, G. J. Mon . "Volume 9: A Review of Socioeconomic Impacts of Oil Shale Development WESTERN OIL SHALE DEVELOPMENT: A TECHNOLOGY ASSESSMENT". United States. https://doi.org/10.2172/1127241. https://www.osti.gov/servlets/purl/1127241.
@article{osti_1127241,
title = {Volume 9: A Review of Socioeconomic Impacts of Oil Shale Development WESTERN OIL SHALE DEVELOPMENT: A TECHNOLOGY ASSESSMENT},
author = {Rotariu, G. J.},
abstractNote = {The development of an oil shale industry in northwestern Colorado and northeastern Utah has been forecast at various times since early this century, but the comparatively easy accessibility of other oil sources has forestalled development. Decreasing fuel supplies, increasing energy costs, and the threat of a crippling oil embargo finally may launch a commercial oil shale industry in this region. Concern for the possible impacts on the human environment has been fostered by experiences of rapid population growth in other western towns that have hosted energy resource development. A large number of studies have attempted to evaluate social and economic impacts of energy development and to determine important factors that affect the severity of these impacts. These studies have suggested that successful management of rapid population growth depends on adequate front-end capital for public facilities, availability of housing, attention to human service needs, long-range land use and fiscal planning. This study examines variables that affect the socioeconomic impacts of oil shale development. The study region is composed of four Colorado counties: Mesa, Moffat, Garfield and Rio Blanco. Most of the estimated population of 111 000 resides in a handful of urban areas that are separated by large distances and rugged terrain. We have projected the six largest cities and towns and one planned company town (Battlement Mesa) to be the probable centers for potential population impacts caused by development of an oil shale industry. Local planners expect Battlement Mesa to lessen impacts on small existing communities and indeed may be necessary to prevent severe regional socioeconomic impacts. Section II describes the study region and focuses on the economic trends and present conditions in the area. The population impacts analyzed in this study are contingent on a scenario of oil shale development from 1980-90 provided by the Department of Energy and discussed in Sec. III. We recognize that the rate of development, the magnitude of development, and the technology mix that will actually take place remain uncertain. Although we emphasize that other energy and mineral resources besides oil shale may be developed, the conclusions reached in this study reflect only those impacts that would be felt from the oil shale scenario. Socioeconomic impacts in the region reflect the uneven growth rate implied by the scenario and will be affected by the timing of industry developments, the length and magnitude of the construction phase of development, and the shift in employment profiles predicted in the scenario. The facilities in the southern portion of the oil shale region, those along the Colorado River and Parachute Creek, show a peak in the construction work force in the mid-1980s, whereas those f acil it i es in the Piceance Creek Bas into the north show a construction peak in the late 1980s. Together, the facilities will require a large construction work force throughout the decade, with a total of 4800 construction workers required in 1985. Construction at the northern sites and second phase construction in the south will require 6000 workers in 1988. By 1990, the operation work force will increase to 7950. Two important characteristics of oil shale development emerge from the work force estimates: (1) peak-year construction work forces will be 90-120% the size of the permanent operating work force; and (2) the yearly changes in total work force requirements will be large, as much as 900 in one year at one facility. To estimate population impacts on individual communities, we devised a population distribution method that is described in Sec. IV. Variables associated with the projection of population impacts are discussed and methodologies of previous assessments are compared. Scenario-induced population impacts estimated by the Los Alamos method are compared to projections of a model employed by the Colorado West Area Council of Governments. Oil shale development in the early decade, as defined by the scenario, will produce growth primarily in Battlement Mesa, Rifle, and Grand Junction. By 1985, the population of Battlement Mesa is projected to be 8500, the population of Rifle to increase to 8000, and the population of Grand Junction to increase by 2000 persons. Rangely's population is expected to double in this period, and Meeker will increase to 5200. By 1986, population pressures in the south will accelerate the growth rate of Meeker and Rifle and the entire region will experience a growth surge in 1988 induced by the second phase of construction at the oil shale sites. The regional population influx is estimated to increase to 40 600 by 1988 and drop to 38 300 by 1990. This drop reflects the decrease in construction activity at the close of the decade, as specified by the scenario. Difficulties associated with the appraisal of public service needs are discussed in Sec. V. Conceptual problems in adopting adequacy standards are outlined and methodologies employed by other assessments are reviewed. Sources of disagreement over the cost of public facilities are also described. Using standards developed in 1979 by the Colorado Department of Local Affairs, we estimated that the public capital expenditures implied by the scenario-induced population growth would exceed $190 million over the decade. However, if the costs of public facilities in Battlement Mesa are internalized by the company, the total estimated capital costs would be $135 million. Use of a fiscal capacity model, developed by the State of Colorado, projected municipal revenue shortfalls in the early years of the scenario. These estimated shortfalls would be greatest in Meeker and in Rifle. These findings reaffirmed the conclusions of previous studies, which found that after the critical initial years of capital shortages, revenues would be sufficient to finance operating expenses of local government. Comprehensive fiscal planning, however, is handicapped by the multiple jurisdictions and uneven distribution of fiscal impacts. Studies show work force estimates are strongly affected by worker living conditions, which directly affect worker productivity and turnover. Presently, new housing starts meet only current demand and thus vlould not accommodate a large influx of populatiol'). The lack of excess housing may be traced to a perception of risk by investors, who see uncertainties in national government and industrial development policies as stumbling blocks to the commercialization of oil shale. Provision of adequate housing for an oil shale "boom" may be handicapped not only by this perception of risk, but by lack of materials and construction labor, lack of mortgage capital, and inflationary land speculation. In Sec. VI, we discuss these obstacles to providing an adequate supply of housing and review problems associated with estimating housing demand. Intervention by industry or by the state or Federal Government may be necessary to guarantee housing availability. The scenario predicts approximately 8100 new households in the region by 1985 and 4600 more by 1990. If only half of these households enter new homes, we estimate that $261 million in mortgage capital (1980 dollars) will be needed by 1985 and a total of $404 million by 1990 (1980 dollars). The inability of local financial institutions to meet mortgage capital requirements may present a major impediment to oil shale commercialization. There may simply be no affordable place to live. Social pressures associated with rapid population growth are well documented. Several groups of people are more vulnerable to negative impacts of rapid growth: wives of construction workers, the aged, people on fixed incomes, and children. Case studies have indicated that rapid population growth has been accompanied by rising crime rates, alcoholism, juvenile delinquency, child and spouse abuse, and a general increase in civil disorder. Nevertheless, well-planned and coordinated human services and programs designed to relieve stress, to provide a sense of community, and to integrate newcomers into the community may alleviate some of the negative consequences of rapid social change. In Sec. VII, we examine the factors that lead to social disruption and other negative consequences of social change in western rural communities. The importance of policy as a variable affecting social impacts is also discussed. State and local governments have recognized the need to plan for growth although there continues to be much skepticism with regard to oil shale development. The planning activities of these governments are described in Sec. VIII. In addition to the development of comprehensive land use plans, local governments have developed mechanisms to define community needs. To prepare for growth that was forecasted for the late 1970s, local governments have obtained financial assistance from state and Federal programs to upgrade existing water and sewer systems, streets, schools, and other public facilities. Consequently, some of the communities in the region have excess capacity in their water and sewage treatment facilities and in their schools. There is a great reliance on external financial assistance for the construction of major public facilities that places heavy burdens of grantsmanship on local governments.},
doi = {10.2172/1127241},
url = {https://www.osti.gov/biblio/1127241}, journal = {},
number = ,
volume = ,
place = {United States},
year = {1982},
month = {2}
}