BLM finalizes oil shale acreage, announces royalty proposal

The Bureau of Land Management has finalized plans to sharply reduce the amount of land available in Colorado, Wyoming and Utah for possible oil shale leasing, and require a research-first approach.

The agency today also said it is seeking public comment on proposed revisions to royalty rates and other regulations applying to commercial oil shale development. It has identified several options for amending the rates, and is considering whether to keep the flexibility to adjust rates as more information is learned about the production costs, energy requirements and impacts of various extraction technologies.

Royalty rates adopted by the administration of George W. Bush consist of a 5 percent that grows over time to 12.5 percent. Interior Secretary Ken Salazar has said that initial rate would shortchange taxpayers.

The BLM said it has decided to make about 679,000 acres available for potential oil shale leasing in the three states, and 130,000 acres available for potential tar sands leasing in Utah. Only 26,300 acres is made available in Colorado, compared to about 360,000 acres previously.

Overall, the oil shale acreage is down from about 2 million acres the Bush administration made available for potential commercial leasing. In addition, the acreage will be available initially only for research, development and demonstration leases, with the ability for companies to convert to a commercial lease after meeting clean air and water and other requirements.

“This plan maintains a strong focus on research and development to promote new technologies that may eventually lead to safe and responsible commercial development of these domestic energy resources,” Salazar said in a news release. “It will help ensure that we acquire critically important information about these technologies and their potential effects on the landscape, especially our scarce water resources in the West.” 


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