Fresh look 
at oil shale
 regulations is overdue

Conservationists and the energy industry are wondering when the federal government will release a review of oil shale regulations that is now three and a half months late in coming.

Under an agreement settling litigation, the Department of Interior had committed to propose amendments to Bureau of Land Management oil shale commercial leasing rules by May 15, said Ted Zukoski, an attorney with the nonprofit environmental law firm Earthjustice.

“We understand that the Interior Department continues to work on the draft rule, and look forward to seeing a published draft shortly,” Zukoski said by e-mail in late July.

The wait continues.

“We do not have any information on BLM’s delay and are curious ourselves as to when it will be released,” Reid Porter, a spokesman for the American Petroleum Institute, said Wednesday.

Under the agreement, the government also is required to “use best efforts” to issue a final rules decision by Nov. 18.

The agreement covered two lawsuits by conservation groups, the second challenging the BLM’s designation of 2 million acres for possible commercial oil shale development in Colorado, Wyoming and Utah. The BLM’s revived look at the land allocations under the agreement has led it to propose a sharp cutback in the acreage that would be available.

At issue with the current rules, adopted during the Bush administration, are royalty rates and environmental protection requirements. The royalty rate starts out at 5 percent and rises eventually to 12.5 percent. The lower initial rate was adopted as a way to help oil shale projects get off the ground, but conservation groups say it is too low.

API contends the prior rulemaking process was “fair and open,” and revisiting the rules and land allocations “creates uncertainty of process” for the industry, Porter said.

In a prepared statement, BLM spokesman Jeff Krauss said the agency continues to be in the process of updating rules “to ensure that BLM’s commercial oil shale regulations provide a fair return to the American taxpayer and adequate measures to protect the environment.”

Krauss didn’t address what’s behind the delay in the rules proposal.

Bobby McEnaney, public lands advocate with the Natural Resources Defense Council, one of the plaintiffs in the litigation, said plaintiffs could petition the court over the government’s tardiness. But he said there needs to be flexibility in the process.

“I think they’re trying to take their time, make sure their i’s are dotted and t’s crossed,” McEnaney said.

He said a lot of federal rulemaking is behind schedule right now, so he’s not too concerned about the delay with the oil shale rules.

The continuing delay raises the prospect the issue could drag into next year, when the Interior Department could be answering to a new president. But McElhaney said he doesn’t look at the situation from a political perspective.

“Ideally this decision is made without sort of considering extenuating political circumstances. What we want is a sound decision that’s consistent with the law,” he said.



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