Ban on oil shale revived

A moratorium on oil shale development that appeared to be dead was sparked back to life Thursday by Senate Majority Leader Harry Reid.

Reid, a Nevada Democrat, sought to have the moratorium placed before the Senate.

“There is a possibility the Senate will be asked to vote on re-establishing the moratorium on oil shale extraction,” Reid’s office said in a statement. It didn’t elaborate on the form that the revived moratorium might take, however.

A group of 140 members of the House, meanwhile, wrote to the House leadership declaring Oct. 1 American Energy Freedom Day and promising they would uphold a veto should the moratorium be revived.
Unless Congress extends the moratorium, it expires at the end of September with the end of the current fiscal year.

Shell Oil. Co., generally considered a leader in the technology needed to boil petroleum from shale, said it welcomed the end of the moratorium that has prevented the writing of regulations and commercial leasing of oil shale.

“Shell is eager to see the moratorium on finalizing oil shale regulations lifted,” the company said in an e-mail statement. Establishing regulations for commercial development “is an important step for all companies seeking to understand the commercial terms on which oil shale development will take place in order to allow them to plan for the future,” Shell said.

Shell operates three, 160-acre research-and-development plots on federal land in northwest Colorado. The Bureau of Land Management administers six demonstration leases overall, five in Colorado and one in Utah.

The Bush administration, meanwhile, said it had made no decision on the legislation that would keep the
federal government operating into the coming fiscal year. The shale moratorium will lapse if it’s not included in that continuing resolution.

Sen. Ken Salazar, D-Colo., said Wednesday the moratorium died at the insistence of President Bush, but administration officials said otherwise.

The White House continues to review legislation that would allow the government to continue operating beyond the end of the fiscal year and has not made a decision to accept the continuing resolution,” a spokeswoman for the Office of Management and Budget said.

“I can say with absolute certainty” the White House never made lifting the bans on oil shale or offshore drilling a condition of his approval of the continuing resolution, OMB spokeswoman Corinne E. Hirsch said Thursday.

Reid’s effort to revive the shale moratorium drew criticism from House Republican leader John Boehner of Ohio, who called it an “insult to the American people and yet another example of Democrats acting to make energy more expensive for working families and small businesses.”

The oil shale of the Green River Formation in Colorado, Utah and Wyoming contains 800 billion to 1.8 trillion barrels of the equivalent of oil.

An energy source that rich deserves careful treatment, said Jim Bartis of the Rand Corp., a think tank that has monitored shale.

Treating shale with royalties structured on the same lines as coal or oil won’t work, Bartis said.

“It’s about how you do this so you can develop without having to compromise our values of air quality and environmental protection,” he said.

At the same time, he said, “it’s important to get this early commercial experience. We need to develop an approach that motivates a few firms to spend the hundreds of millions of dollars that are required,” ensure them an honest profit and make sure taxpayers benefit, as well.


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