360,000 acres delineated for oil shale development
Nearly 360,000 acres in western Colorado are to be set aside for oil shale development, part of 1.9 million acres containing shale and tar sands.
The Bureau of Land Management on Thursday released its final documents needed to set aside the lands for commercial oil shale development, but a congressional moratorium remains in place for at least another month preventing the development of regulations for commercial oil shale production.
Still, the action sparked criticism from Gov. Bill Ritter and Colorado Sen. Ken Salazar, both Democrats.
The federal government “has once again failed to act as a responsible partner for Colorado,” Ritter said in a statement. “The Bush administration is engaging in last-minute maneuvering in its waning days rather than developing a comprehensive, meaningful and responsible long-term energy policy for America’s future.”
The administration, said Salazar, was “rushing ahead with a last-minute fire sale of commercial oil shale leases at any cost.”
Colorado, however, “loses when leaders like Ken Salazar put the far-left environmentalists ahead of what’s best” for the state, said Steve Wymer, spokesman for Sen. Wayne Allard, R-Colo., a proponent of lifting the moratorium on completing regulations for commercial oil shale production.
Moving ahead with the final programmatic environmental impact statement doesn’t amount to that much, said Glenn Vawter, executive director of the National Oil Shale Association.
“This is really just kind of a modest first step,” Vawter said.
About 140,000 acres in Colorado were excluded because of environmental sensitivity, Vawter said. “It looks like a balanced approach.”
Three companies are now operating six research and development leases, each 160 acres, in northwest Colorado.
Shell Oil Co. holds three of those leases and is working on its freezewall technique aimed at preventing groundwater contamination from the process the company hopes to use to heat the rock to free petroleum.
By some estimates, Shell and other companies could produce 50,000 barrels of petroleum per day on each 160-acre lease and the companies could convert them to 5,120-acre commercial leases if they can show commercial production.
Shell, however, has said it’s years from deciding whether its process can be a commercial success.
The 1.9 million acres marked for possible development lie atop about the equivalent of 800 billion barrels of oil, according to the Interior Department.
The bureau’s decision also affects 631,000 acres in Utah and 1 million acres in Wyoming.
The next step toward development is for a leasing process similar to that used to lease federal lands for production of natural gas, oil and other resources.
Final regulations governing that process, including a determination of the federal royalty level for oil shale, remain stymied by the moratorium, though the Interior Department has released draft rules that seek comments from the industry about how best to determine those royalties.
“Releasing the final environmental document was premature,” said Frank Smith, oil shale organizer for the Western Colorado Congress in Grand Junction.
The framework for oil shale production was established in the 2005 Energy Policy Act, but that passed before technologies for extracting petroleum from rock were perfected, Smith said.
Those technologies remain to be perfected, he said.
The timeline set in the 2005 legislation “was not rooted in reality,” he said.
The draft statement was published in the Federal Register in December, and the Bureau of Land
Management received more than 105,000 comments on it.
The bureau will wait at least 60 days after the publication of the final statement before issuing a record of decision approving the amendments to 12 land-use plans for the affected areas.