Energy companies will get another crack at winning oil shale research and development leases on federal land, after an announcement by the Bureau of Land Management in the waning days of the Bush administration.

The BLM said Wednesday it will consider nominations for a second round of research, development and demonstration leases, following the earlier issuing of six such leases, five of them in northwest Colorado.

Wednesday’s announcement that the BLM may issue one or more new leases won general praise from the industry, while environmentalists questioned its timing just a week before President Bush leaves office.

Glenn Vawter, executive director of the National Oil Shale Association, welcomed the possibility of companies being able to try different development approaches.

“I think anything that provides an opportunity for people to improve the technology in oil shale and make it more economic and environmentally acceptable should be welcomed,” he said.

Elise Jones, executive director of the Colorado Environmental Coalition, characterized the BLM’s move as one more last-minute action by the Bush administration that will take time and political energy for the incoming Obama administration to undo.

“It seems really fishy to be doing this now, expanding it in this way,” she said.

Kirby Hughes, who works on energy issues for the Western Colorado Congress and the Sierra Club, called the decision “a last-ditch attempt to help the energy industry at the expense of the environment and wildlife.”

As in the first round, the new leases will target Colorado, Wyoming and Utah, where the BLM says there could be 800 billion barrels of recoverable oil from shale.

“Basically we were prompted by interest that we received from other proponents within the last couple years,” BLM spokesman Matt Spangler said.

To encourage the use of new technologies, the BLM will consider proposals for approaches not already being tested on existing leases. It will exclude existing leaseholders from applying and is limiting leases to one per entity. One company, Shell, holds three of the Colorado leases.

All of the existing leases are for 160 acres, with the right to expand them to leases of about eight square miles for commercial production upon meeting certain conditions.

The new ones will be larger initially, 640 acres, and can be converted to commercial production but will have no option for expansion. The BLM says it has determined 640 acres is ample for commercial development.

Vawter questions whether 640 acres is large enough for a commercial operation, particularly of the size that major companies might have in mind. He added, however, he knows of smaller companies that have been looking for an opportunity to try out new technologies but haven’t had a property on which to test it and might be interested in acquiring one of the new leases.

One major company that unsuccessfully sought one of the previous leases, ExxonMobil, said in a statement Wednesday it is pleased to learn of the second round.

“We are continuing our research on oil shale technologies and will study the potential for participating in the BLM program,” the company said.

In a statement, U.S. Sen. Mark Udall, D-Colo., voiced concern Wednesday that the planned leases are larger than the initial size of the existing ones and could be converted to commercial leases. He said not enough research has been done to know what the possible impacts of commercial development might be.

“Right now, knowledge is our best tool, and we need all of the information before moving forward,” he said.


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