Ritter support for Salazar’s shale plans is right for western Colorado
Gov. Bill Ritter should be applauded for his support of Interior Secretary Ken Salazar’s plan to impose strict accountability rules for a new round of research and development leases for oil shale and his request for the Interior Department’s inspector general to investigate the last-minute shale leases granted in the final days of the Bush administration.
“The potential for oil shale development in Colorado and the economic opportunity it represents is huge,” the governor said. “But the prospect of commercial-scale activities raises significant questions about how oil shale can be successfully integrated into our state’s economy and how we can protect the state’s environment, water and communities.”
Under the new rules, companies may nominate 160 acres for research and development purposes. If research leads to commercial potential, another 480 acres could be added. In awarding leases, preference will be given to applications that help answer key research questions, including economic viability, environmental impact, water use, energy requirements, water quality issues and socioeconomic impacts on nearby communities.
To ensure prompt implementation of research-and-development proposals, the rules establish “diligence milestones” that must be met, and require quarterly reports on research progress. A development plan must be submitted within nine months after a lease is granted, state and local permits should be obtained within 18 months after approval of plans and infrastructure should be in place within 24 months.
A team of Bureau of Land Management and state officials will review leases to weigh their potential for success against impacts to land, water and communities.
These rules represent significant changes from the Bush administration’s generous land grants, lax regulations and low royalty payments. Potential commercial leases are reduced from 5,120 acres under the Bush rules to 640 acres under Salazar’s new rules.
The vague criteria under which the Bush Interior Department evaluated nominations for research-and-development parcels is replaced by a specific list of research questions to be addressed by research programs.
Although both state Sen. Josh Penry and former Congressman Scott McInnis were quick to criticize Ritter because the new rules prohibit commercial development until critical environmental, economic and social-impact questions are answered, Ritter is likely to receive a more sympathetic hearing from Western Slope voters.
Voters are also likely to agree with Ritter’s endorsement of Salazar’s call for the inspector general of the Interior Department to investigate leases signed in the final days of the Bush administration. These last-minute leases amended current research-and-development leases to make transition to commercial operations easier, and established low royalty rates and favorable conditions for commercial development.
“Taxpayers deserve answers to serious questions about why these lease addenda were granted at the eleventh hour, under what circumstances and at what potential expense to the federal treasury,” Salazar said.
Extrapolating from the recently released poll by the Western Organization of Resource Councils that showed majorities of Colorado’s 3 District voters support the Clean Water Act and the proposed FRAC Act, it is difficult to imagine that these same voters would approve development of oil shale before water and energy requirements are known, environmental impacts assessed and impact on communities evaluated.
A powerful coalition of environmental organizations, sporting groups, outfitters, public health advocates, municipalities and other organizations and individuals united behind reform of the Colorado Oil and Gas Conservation Commission and the development of new state rules for oil and gas drilling a few years ago. That same coalition is very likely to resist allowing commercial oil shale development to proceed without convincing evidence it is compatible with clean water supplies, protected wildlife habitat and healthy and safe communities.
While there is some question from environmental and conservation groups as to the necessity for a second round of research-and-development leases on public lands, there seems to be general agreement that Salazar’s plan is the most responsible approach to evaluating the commercial potential of oil shale against environmental and social costs.
Penry and McInnis can make the economic argument to fast track commercial development of oil shale, but Ritter’s support for a federal plan that addresses water and energy consumption, impacts on wildlife habitat, air and water quality and quality of life for local communities is more likely to resonate with Western Slope voters.