Senators say no choice but to lift oil-shale ban

The price of White House support for legislation enabling the federal government to operate beyond the end of the month was lifting a ban on commercial oil shale leasing, Colorado’s senators said Wednesday.

Sen. Ken Salazar, D-Colo., angrily characterized the president’s insistence on the lifting of the ban on shale leasing as “another Bush administration giveaway” of public lands that might contain trillions of dollars worth of value.

Sen. Wayne Allard said he was delighted with the turnaround, hailing the “Democratic Party’s return to reason.”

Both senators said Bush’s demand that the moratorium on shale leasing be lifted was a pivotal issue in the negotiations between the nation’s legislative and executive branches.

A spokeswoman for the Office of Management and Budget, which conducts budget negotiations for the White House, said offshore drilling was the most significant chip in the negotiations.

In a statement of administration policy, the president called for lifting the ban on offshore drilling first, then lifting the oil shale ban “to allow the development of this vast resource that, if fully realized, could produce the equivalent of more than a century’s worth of oil imports at current levels.”

Salazar, who last year sought the moratorium, said he would act immediately in January to place new requirements on shale leasing aimed particularly at having companies declare how much water they plan to use and where they would get it.

Colorado Gov. Bill Ritter said in a letter to Bush that he remained “steadfastly opposed to lifting the current oil-shale moratorium,” and he called for the administration to “work with us” to meet the nation’s energy needs.

The administration’s insistence on lifting the oil shale moratorium could be traced to a meeting he had over the August break with Jim Nussle, head of the Office of Management and Budget, to stress the importance of oil shale, Allard said.

Most congressional Republicans agreed with lifting the moratorium, as did several Democrats, Allard said.

The moratorium would have expired at the end of the current fiscal year on Sept. 30. Without congressional action to extend it, the ban would automatically expire.

The House, however, voted last week to lift the moratorium and give states the option to allow development on federal lands within their borders.

U.S. Rep. James Matheson, D-Utah, sought to break the moratorium in Utah, and he said he welcomed the latest development.

“The bottom line is that the moratorium on oil shale development lapses in a week because I succeeded in building strong bipartisan support for opening up the option,” Matheson said in a news release. “We need to find more oil in our country, and Utah’s resources are a key part of that effort.”

The Interior Department, which issued draft regulations for oil shale, will be free to complete the rules and eventually to issue commercial leases.

The regulations will contain the royalty for oil shale production, and opponents of the moratorium had pointed to the lack of a royalty structure as an impediment to shale development.

Commercial leasing is at least three years away, Allard said, largely because companies dealing with oil shale have said it will take them at least that long to make decisions about commercial production.

It could be much longer than that, said Reeves Brown, executive director of Club 20, the Western Slope lobbying and promotional organization.

Oil shale is “at least a decade, two NEPA (National Environmental Policy Act) analyses and several hundred million dollars away,” Brown said.

Dropping the moratorium amounts to “quite a change in things,” Rio Blanco County Commissioner Ken Parsons said.

Rio Blanco County and Garfield County contain the bulk of the state’s shale resources.

“History is going to have to judge that one for us,” he said.


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