BLM leases to test heat extraction

MEEKER I The Bureau of Land Management (BLM) has approved two new Research, Development and Demonstration (RD&D) leases to encourage industry to develop and test technologies aimed at developing oil shale resources on a commercial scale.
“Oil shale is a significant resource that could hold great potential, which is why we continue to support industry’s efforts to conduct the research, development, and demonstration that’s needed to develop technologies that are commercially and economically viable,” said Kent Walter, BLM field manager for the White River Field Office. “These leases will not only help test and advance critical technologies, but will also help answer important questions regarding water use, energy use and impacts to land and wildlife.”
The United States holds more than half the world’s oil shale, a fine-grained sedimentary rock containing organic matter from which petroleum products may be distilled. The largest known deposits of oil shale are in a 16,000-square mile area of the Green River Formation in Colorado, Utah and Wyoming. To date, technological and economic conditions have not combined to support a sustained commercial oil shale industry in the United States.
The proposed leases for ExxonMobil Exploration Company and Natural Soda Holdings, Inc., will allow the companies to test underground, or in situ, technologies that heat solid oil shale to convert it into recoverable liquid petroleum. The 160-acre leases are located in Rio Blanco County, approximately 35 miles southwest of Meeker.
The leases will be issued for 10-year terms and include provisions in each for a five-year extension. Each lease also allows for an additional 480 acres to be converted to a 20-year commercial lease, pending the results of the companies’ work, additional BLM review and meeting all requirements.
Natural Soda Holdings mines sodium bicarbonate by injecting hot water underground to dissolve the baking soda in a solution that is brought to the surface. Its research proposal calls for using this solution mining technique to remove the sodium bicarbonate found with the oil shale and then injecting a heater into the ground to unlock the liquid petroleum from the oil shale. The Exxon Mobil Exploration Company proposes to fracture horizontally drilled wells, fill the fractures with an electrically conductive material and then use electricity in the fractures to heat the oil shale into recoverable liquid petroleum.
The proposals stem from the November 2009 call for nominations for oil shale RD&D leases. This 2009 “second” call followed an initial round of nominations in 2007 in which six RD&D leases were issued.
In this current round of RD&D leases, the BLM considered applications that demonstrated new technologies not currently being tested as part of the initial round of RD&D leases.
The two proposals were analyzed in an environmental assessment. The leases will not be issued until BLM completes a 30-day review period that follows today’s decision. Before beginning work on the ground, leaseholders would have nine months to submit for BLM approval a Plan of Development (POD), which details the proposed development operations. Leaseholders will also be required to obtain the necessary permits from State of Colorado, Rio Blanco County and other federal agencies within 18 months of the BLM-approved POD and begin deployment of necessary infrastructure within 24 months of approval.
The Decision Record, Environmental Assessment, plan of operations, map and other related details can be viewed on the White River Field Office website by going to http://www.blm.gov/co/st/en/fo /wrfo/Oil_Shale_-_Round_2.html.