Oil shale leases to undergo revisions

Obama team plans 'go-slow approach’

The Obama administration will pursue a second round of oil shale-research leases, but in a different manner than the one contemplated by the Bush administration.

Interior Secretary Ken Salazar, formerly a Colorado senator and critic of Bush’s handling of shale leases, will seek public comment on the form that the new leases will take and opened the door to looking anew at the royalty schedule put in place by the previous administration.

The congressman who last year led the effort to overturn the moratorium on issuing oil shale regulations, said he was discouraged.

Salazar’s “ ‘go-slow’ approach may block the badly needed progress we need in our effort to get a reliable, affordable supply of fuel for our vehicles in this country,” said U.S. Rep. Jim Matheson, D-Utah. “I’ve yet to hear an argument against moving ahead with commercial leasing that doesn’t rely on outdated information. The truth is that new methodology is on the horizon, and it should be allowed to compete for commercial development.”

If oil shale technology proves to be commercially viable, “taxpayers should get a fair rate of return from their resource,” Salazar said.

In its final days, the Bush administration said the Bureau of Land Management would offer research-and-development leases for 640 acres, four times the size of the existing research leases.

In withdrawing the Bush administration proposal for leases, Salazar said he would seek public comment for 90 days on the terms and conditions of the next round of research leases.

Three companies are now working on five, 160-acre leases in northwest Colorado and a fourth is working on a similar lease in Utah.

Salazar’s decision was greeted with general approval from environmental organizations and Colorado officials.

“Moving forward in this manner will allow us to take into account the impacts on water, power and local communities,” said Rep. John Salazar, D-Colo., whose 3rd Congressional District includes northwest Colorado’s shale-rich Green River Formation.

Sen. Mark Udall, D-Colo., pointed to the collapse of the oil shale industry in 1982 and the economic damage it did.

“We need to walk before we run when it comes to this energy source,” Udall said in a news release.

Gov. Bill Ritter said he welcomed the opportunity to comment on how the second round of leases can be structured and deal with the implications to Western Slope communities.

“Most certainly this is an opportunity for the new administration to demonstrate some level of commitment to things such as responsible oil shale development,” said Frank Smith, energy organizer for the Western Colorado Congress.


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