Alternative Fuels

Parachute Creek Shale Oil Project's Economic and Operational Outlook Gao ID: RCED-87-126 June 18, 1987

In response to a congressional request, GAO assessed the economic and technical viability of the Parachute Creek shale oil project.

GAO found that: (1) the project's economic viability is difficult to forecast, since it will depend upon the oil prices that prevail after price supports are exhausted; (2) using recent oil price projections, the project's after-tax cash flow from 1995 through 2005 could be negative by as much as $286 million; (3) total federal assistance over the life of the project could be from $968 million to $1.5 billion, including production tax credits and price guarantees; (4) under the terms of the assistance agreement, $500 million in price and loan guarantees is contingent on the feasibility of installing a fluidized-bed combustor; and (5) because of current operational problems and the difficulties likely to be encountered, the project's technical viability with or without the combustor is uncertain.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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