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The Grand Junction Sentinel (Colorado): Club 20 oil-shale debate mines the good, the bad

Friday, January 12, 2007

Club 20’s Oil Shale Task Force met earlier this week to hammer out a few policy recommendations on Western Slope oil shale development for ultimate debate and consideration by Club 20’s full board. And, per usual in any working group attempting to forge rough general consensus on a policy position, there were good ideas under discussion during Wednesday’s task force meeting while other policy suggestions were substantially less so.

The Club 20 task force made an eminently sensible decision by agreeing to support congressional legislation that would allow 75 percent of all federal oil shale research lease conversion fees to be returned to the state where the oil shale lease operations are located.

Royal Dutch Shell, operators of the closely watched Mahogany Project in the Piceance Basin, is among the industry vanguard that supports a change in federal law that currently provides for a 50-50 split between the federal government and the states. If legislation were to be passed that increases to 75 percent the states’ share of future lease conversions fees, as much as an additional $64 million could be returned to Colorado to help mitigate the impacts of a burgeoning regional oil shale industry.

Among the substantially less compelling ideas batted about during Wednesday’s task force meeting was a pitch by former Utah Congressman James Hansen, whose rhetorical enthusiasm for oil shale development is about as overdone as a carnival barker’s. Hansen sought to convince the task force to support federal legislation providing for expansive tax credits and sundry other subsidies for the industry.

To its great credit, the Club 20 task force responded skeptically to Hansen’s sales pitch.

In a Democratic-controlled Congress, invariably there will be legislation introduced to impose a so-called windfall profits on Big Oil. Heading off such non-sensical and punitive tax policy against the very industries that the nation’s domestic energy security is dependent upon is much more sensible for all concerned than a passel of new tax subsidies for commercial oil shale development.

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