BLM Scales Back Leases for Oil Shale
by Peter Shelton
Feb 09, 2012 | 1523 views | 0 0 comments | 6 6 recommendations | email to a friend | print
Administration Cites Unproven Technology, Concerns Over Water Use

WASHINGTON, D.C. – Interior Secretary Ken Salazar announced Friday, Feb. 3, that the Bureau of Land Management will take a more cautious approach to oil shale development in Colorado, Utah and Wyoming. The decision is a significant reversal of a 2008 Bush administration plan to speed up oil shale development in the Rocky Mountain West.

The move has already angered Capitol Hill Republicans and oil industry spokesmen.

The new proposal, which is backed by conservation groups, agricultural interests, some local officials and many Democrats, would reduce the available federal lands for oil shale development in the three states by 75 percent. In addition, it would only allow research on existing leases until industry demonstrates that commercial development is technically viable and environmentally safe.

Colorado suffered from the collapse of the previous oil shale “boom,” which promised jobs and prosperity (centered in the Parachute-Battlement Mesa area) in the 1980s. At that time Exxon and Unocal had prophesied “the next Saudi Arabia” in the vast oil shale reserves beneath the western Rocky Mountains. Because the bituminous material in the shale must be heated to over 750 degrees Fahrenheit before it can be refined, costs at that time turned out to be too great. Now, with oil prices at $100 per barrel, Big Oil wants another go at what they claim is “200 years of energy independence.”

The Bush Administration had allowed 2 million acres of public land to be included in the leases. The new plan leaves 461,965 acres for research and development of oil shale, including 35,308 acres in Colorado, 252,181 acres in Utah and 174,476 acres in Wyoming.

BLM Director Bob Abbey said in the announcement, “The preferred alternative continues our commitment to encouraging research, development and demonstration projects so that companies can develop technologies that can lead to economic and commercial viability. [But] because there are still many unanswered questions about the technology, water use and impacts of potential commercial-scale oil shale development, we are proposing a prudent and orderly approach that could facilitate significant improvements to technology needed for commercial-scale activity.”

Water is the primary concern of the agricultural and other communities. Friday's announcement drew early support in Colorado from Bill Midcap, director of renewable energy for the Rocky Mountain Farmers Union.

“We already face a water shortage in the West that threatens farmers and ranchers,” he said in a statement. “We simply cannot gamble away our water on oil shale speculation and risk losing the farming and ranching economy that we depend upon for our food and fiber.” Midcap said existing research and development projects should help determine how much water will be needed before commercial leasing begins.

The State of Colorado last year said it, too, has concerns about the impact oil shale development could have on its economy and natural resources. In comments to the BLM last spring, state officials said commercial oil shale development “would likely constitute the largest industrial development in the state's history, with enormous implications for all of northwest Colorado and for the state.”

Both Colorado Senators responded positively to Salazar’s announcement. Sen. Michael Bennet’s office released a statement saying, “In Colorado, we have seen what can happen when we rush into oil shale development.  We need to be certain we can do this in an environmentally sound, socially responsible and economically viable way – particularly with regard to water, which is critical to farmers, ranchers and the economies of western communities.

“Secretary Salazar’s announcement marks a balanced and prudent next step in our efforts to ensure that any commercial oil shale development is done in a thoughtful manner. An emphasis on continued research is entirely appropriate in advance of crafting any commercial development guidelines that continue to protect our natural resources and provide a fair return to American taxpayers in the process.”

Critics of the move included U.S. Representative Doc Hastings (R-Wash.), chairman of the House Committee on Natural Resources, who said the Interior Department's announcement was an example of President Barack Obama's plans to block domestic energy production.

“The Obama administration has a plan to lock up U.S. energy resources and send jobs overseas,” said Hastings in a statement. “This unfortunately is just one more example to add to the ever-growing list of Obama administration actions that block U.S. energy production.”

“The administration is sending negative signals to industry and capital markets at exactly the wrong time,” chimed in Jack Gerard, president of the American Petroleum Institute.

Sen. Udall’s statement in support of Interior’s decision concluded: “For the sportsmen, farmers, ranchers and communities on the Western Slope that depend on clean air and clean water, making sure development is done right the first time is vital to their way of life.”

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