Club 20: Details sought on surplus cleanup funds

A Western Slope organization wants a full accounting of the money held by the federal government from natural gas production on former Naval Oil Shale Reserve lands.

Club 20, the Western Slope lobbying and promotional organization, wants the explanation in the wake of a letter from the Bureau of Land Management in which federal officials reaffirmed that the fate of tens of millions of dollars from oil drilling remains in the hands of Congress.

If nothing else, Club 20 would like to know exactly how much money is at issue, Executive Director Reeves Brown said.

“It has jumped around with big numbers and with big consequences for the affected communities,” Brown said.

The Bureau of Land Management said in a letter sent Tuesday that it is holding $67 million in royalty money from production on Naval Oil Shale Reserve Nos. 1 and 3 lands in Garfield County.

That’s the amount of money left over after the federal departments of Energy and the Interior were compensated with $64.8 million for costs incurred in environmental cleanup and other activities, according to the letter sent to Club 20 by Sally Wisely, the Colorado state director of the Bureau of Land Management.

The disposition of the leftover money “is a congressional decision,” Wisely wrote.

Government officials in northwest Colorado, however, maintain it was promised to the state.

Officials from four counties most affected by the natural gas boom — Garfield, Mesa, Moffat and Rio Blanco — are seeking legislation that would direct the leftover money to them to help deal with the effects of population growth, road wear and other issues.

The issue reaches back to the 1997 act transferring control of the oil shale reserves from the Department of Energy to Interior.

The legislation called for environmental cleanup and reimbursement of Department of Energy spending from the proceeds of natural-gas production and required the departments to certify when enough money had been collected from the royalties.

The departments, however, didn’t make their certifications until millions of additional dollars were collected.

All the money put into the account after June 2006 ought to be directed to Colorado, said Jim Evans, chairman of the Club 20 Oil Shale Committee.

BLM officials wrote Dec. 15, 2005, that they anticipated collecting all the royalty money to meet their obligations by June of the next year.

“I believe that from June 2006 on, Colorado should get 49 percent” of the natural gas royalties from the reserves.
Colorado Republican Sen. Wayne Allard and Democrat Sen. Ken Salazar have a measure in Congress that would split half the royalties before certification among the four heavily affected counties.

Under that measure, Garfield and Rio Blanco counties would receive 40 percent each of that money, and Mesa and Moffat counties would each get 10 percent.

The wells on the former reserves still are producing about $2.7 million per month in royalties.

That money is being split 51 percent to the federal government and 49 percent to Colorado.


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