There’s no need to rush leasing 
of federal commercial oil shale plots

By Mike King

The state of Colorado is blessed with resource riches and is doing its part to help the country meet its energy needs while holding those producing our energy resources to the highest environmental and community standards.

We have championed a diverse energy portfolio focusing on sustainable energy resources that have brought thousands of new jobs to Colorado and are producing 2,000 megawatts of clean, renewable energy.

We are producing valuable oil and natural gas resources that we all use and rely on, while increasing setbacks from dwellings, requiring disclosure of chemicals used to extract oil and gas and calling for monitoring of nearby water wells.

And we are making opportunities available for Coloradans and all Americans with respect to energy security and energy affordability by supporting the exploration of new technologies, such as those that could unlock Colorado’s oil shale reserves, as a way to further diversify our energy supplies one day.

Colorado is actively participating in the research to eventually develop our oil shale resource, which is both abundant and in the national interest. But we have steadfastly insisted that before any large-scale, commercial leasing or development occur, the technology and environmental oversight be rigorous, that state and local needs be anticipated and funded, that the cumulative impact of development on both public and private lands be mitigated and that resource allocation and regulatory decisions be made deliberatively to ensure they are done right.

Speculative oil shale leasing could hinder further research by locking up valuable lands, and setting lease terms such as royalty rates could either give away substantial public value if too low or stifle eventual development if too high.

The right policies — based on results of research, public analysis and debate — will result in a fair return to companies and to the public, and will realize the substantial value of Colorado’s world-class oil shale resources.

Oil shale has never existed in a vacuum, and today is no exception, as any oil shale development would have to compete with existing resources and activities. We are currently experiencing an unprecedented energy boom in many areas of our state, and we are mindful of lessons learned from prior experience with oil shale boom and bust cycles.

Areas of Colorado’s oil shale resources overlap with increasing tourism and recreation opportunities, and commercial leasing of oil shale would put more pressure on an already-fragile ecosystem and public temperament.

Additionally, horizontal drilling has opened up huge oil and natural gas resources that were previously thought to be unrecoverable or uneconomic. This fact has taken some of the pressure off of the perceived necessity for immediacy in oil shale development, and we now appear to have breathing room to evaluate the feasibility and environmental impacts of technology still in its infancy.

The U.S. Bureau of Land Management recognized this recently when it finalized its careful and thoughtful approach to potential development of our oil shale resource. In doing so, Interior Secretary Ken Salazar also issued two new research, development and demonstration, or RD&D leases in Colorado. The state now hosts seven of the nine federal oil shale RD&D leases.

These leases are instrumental in helping to provide the thorough understanding of how eventual development could affect our environment, water supplies and communities before steps are taken toward large-scale leasing and commercial activity. We applaud and thank the BLM and Salazar for proceeding in an appropriately cautious way.

We’re also conscious of concerns — and share those concerns — about our global climate and the impact of carbon fuels. It’s why Gov. John Hickenlooper’s administration champions natural gas in electricity and transportation as a verified path to reduce climate-warming emissions. It’s why we wholly support the continued and robust deployment of renewable resources, more efficient use of energy and ongoing improvements in capturing methane associated with oil, gas and coal development.

While the challenges we deal with at the Colorado Department of Natural Resources have evolved in the last eight years, one thing has stayed the same: our insistence that federal and state policies on oil shale be cautious and incremental. As then-DNR Director Russell George said in testimony at a 2005 congressional field hearing in Grand Junction, “It is essential that Congress consider the life cycle of oil shale development as it contemplates a renewed national oil shale effort. Only this view will portray the complete picture, so that the appropriate technology, environmental and economic structures can be defined and funded for a successful long-term effort.”

DNR recognizes the national importance of oil shale and strongly supports research efforts to determine a viable technology for oil shale extraction, as well as efforts to explore the feasibility of commercial development.

Fortunately, this is also Salazar’s position, and it will be the right approach for Colorado and the nation into the future.

Mike King is executive director of the Colorado Department of Natural Resources.


COMMENTS

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With the war on coal, no real control of the EPA and increasing costs forced on the petroleum energy producers, inflation at the gas pump and at the grocery store will only continue to get worse as increased production costs are passed on to the consumer.

Energy costs are one of the primary factors driving inflation. It’s somewhat of a paradox to the environmentalist agenda, but the more energy costs rise from more restriction, the more attractive oil shale becomes. The enviromentalists are, in reality, shooting themselves in the foot by further limiting oil shale development.

At least it’s nice to know that they will have to pay for the increased costs of living right along with the rest of us.

In CO two coal mines were recently given the green light (by the Obama administration) for expansion, one allowing new roads and methane vent wells in a roadless area.  Meanwhile the BLM (under the Obama administration) is allowing Oxbow to move forward with its exploratory drilling for a band new mine on Oak Mesa. 

Oil is being produced in the U.S. at record rates. Indeed, oil futures continue to trend down. Natural gas remains glutted and thus ‘depressed’ on the Market.

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