Obama Administration Restarts Oil Shale Leasing in Colorado, Utah

WASHINGTON, DC, February 25, 2009 (ENS) – The Department of the Interior will offer a second round of research, development, and demonstration leases for oil shale in Colorado and Utah and withdraw the previous administration’s proposal for expanded research, development and demonstration leases, Interior Secretary Ken Salazar announced today.

“We need to push forward aggressively with research, development and demonstration of oil shale technologies to see if we can find a safe and economically viable way to unlock these resources on a commercial scale,” Salazar said.

“The research, development, and demonstration leases we will offer can help answer critical questions about oil shale, including about the viability of emerging technologies on a commercial scale, how much water and power would be required, and what impact commercial development would have on land, water, wildlife, and communities,” he said.

There has been opposition to the burning of oil extracted from shale, not least from the nation’s mayors. At their June 2008 meeting in Miami, the U.S. Conference of Mayors adopted a resolution aimed at avoiding the use of high carbon fuels such as tar sands, liquid coal, and oil shale. The resolution encourages fuel analyses that include emissions from production, not just from burning the fuel.

“We don’t want to spend taxpayer dollars on fuels that make global warming worse,” said Mayor Kitty Piercy, of Eugene, Oregon, who submitted the resolution.

In September 2008, the mayors of 11 mountain communities in the Colorado and Roaring Fork River Valleys posted on open letter on the Bush oil shale plan in the Blog section of the “Denver Post” expressing concern about “significant impacts on our community infrastructure, environment, and quality of life” from the development of oil shale.

“We fully recognize the critical role liquid fuels place in the national economy and its important role in the nation’s overall security. We also all recognize and appreciate the economic advantages of a strong energy sector,” the mountain mayors wrote.

But they called for oil shale development to be only one component of a long-term, comprehensive energy plan that considers the costs and benefits of non-renewable fossil fuel energy production to the benefit of citizens beyond a short-term production boom. “Such a plan would place equal, if not more, importance and investment in the development of renewable energy (solar, wind, hydro, biofuels) production and energy efficiency programs as fossil fuels,” they wrote.

“The oil industry has been developing technologies to convert oil shale into liquid fuel for decades, but has yet to develop a commercially viable process,” the mountain mayors wrote. “There has also been little evaluation of the impact these technologies and processes will have on local communities or the regional air and water resources.”

“The people most affected by Oil Shale Development, the residents of Western Colorado communities, should have an ongoing and meaningful role in the decisionmaking on how and when oil shale is developed,” wrote the mayors.

Land in Colorado where oil shale may be developed (Photo by Amy Mall courtesy NRDC)

Environmentalists praised the mayors’ challenge to fuel derived from oil shale. “In the last few years, U.S. mayors have come out as leaders on environmental initiatives, specifically in the fight to stop global warming,” said Susan Casey-Lefkowitz a senior attorney at the Natural Resources Defense Council.

Secretary Salazar says he has started a process that will solicit public opinion from many sectors.

The Interior Department has submitted a notice that will appear in the Federal Register on Friday that will ask industry, local communities, states, and stakeholders for their advice on what the terms and conditions of the second round of research, development and demonstration leases should be. That comment period will be open for 90 days.

“Following that, the department will move ahead with a solicitation for RD&D leases, based on sound policy and public input,” Salazar said today.

“This will help us restore order to a process that, under the previous administration, was turned upside down,” he said. “We look forward to hearing from the public, industry, and local communities as we move toward offering a second round of research, development, and demonstration leases.”

Salazar said he was withdrawing the previous administration’s solicitation on RD&D leases because it included several flaws, including locking in low royalty rates that would shortchange taxpayers.

“The previous administration offered their RD&D oil shale leases just days before leaving office, made the parcels four times the size of the current six RD&D leases, and then locked in low royalty rates and a premature regulatory framework for those leases,” the secretary said. “If oil shale technology proves to be viable on a commercial scale, taxpayers should get a fair rate of return from their resource.”

As a U.S. Senator representing Colorado, Salazar helped author the provision in the 2005 Energy Policy Act that created the current RD&D leasing program, under which Interior’s Bureau of Land Management offered six 160 acre parcels for companies to do research and development of oil shale technologies.

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