BLM proposes setting aside oil shale land

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RBC (AP) — Federal land managers have proposed setting aside nearly 2 million acres of public land in Colorado, Utah and Wyoming for potential commercial oil shale development.
The draft plan released Thursday by the Bureau of Land Management is meant to provide a framework for developing the region’s large reserves of oil shale and tar sands. Except for experimental projects, there is no current program for commercial oil shale development on federal land.
Most of the nation’s oil shale reserves are in western Colorado, southwestern Wyoming and eastern Utah. The draft plan also covers development of the tar sands in Utah.
The development scenario recommended by the BLM would make 359,798 acres of federal land in Colorado available; 630,971 acres in Utah; and about 1 million acres in Wyoming.
A provision in an omnibus spending bill passed this week by Congress prohibits the BLM from issuing final regulations for commercial oil shale development and offering any commercial leases in the 2008 budget year.
BLM spokeswoman Heather Feeney in Washington said the agency will comply with the provision. She said the environmental impact statement under- way doesn’t involve writing regulations.
The BLM will take public comments on the draft plan for the next 90 days and release a final plan later.
BLM officials have said more thorough analyses will be done as specific projects are proposed.
Federal officials and industry experts estimate that up to 1.8 trillion barrels of oil is trapped in the region’s oil shale, or three times the proven reserves of Saudi Arabia. Of that, roughly 800 billion barrels is considered recoverable.
“The potential of America’s oil shale resources to meet future U.S. demand for fuel is significant,’’ said BLM Director Jim Caswell.
The “catch” is extracting the oil from the rock, something that’s been tried on and off for nearly a century. The shale, or kerogen, is a petroleum precursor that wasn’t buried deeply enough or naturally processed long enough to complete the transformation to oil.
Turning the shale to oil requires heating it: above ground after mining or in the ground, a process called in situ — “in place.’’
Companies working on oil-shale technology have said commercial development is likely years off. Shell Frontier Oil and Gas has been researching ways to tap oil shale for more than a quarter century, and has been running tests since 1996 on private land in northwestern Colorado.
The BLM has awarded 160-acre leases for research and development projects to Shell, Chevron USA and Midland, Texas-based EGL Resources Inc. in Colorado. Alabama-based Oil Shale Exploration Co. received one of the 10-year leases on federal land in Utah.
The research leases could lead to larger ones for commercial production.
In western Colorado, some elected officials and residents are urging the federal government to move cautiously on oil shale. The last major push to develop oil shale collapsed in 1982 when Exxon closed its $5 billion project near Parachute amid plummeting oil prices and government subsidies. About 2,200 people lost their jobs on what’s still referred to in the area as “Black Sunday.’’