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Summit Daily News: House passes amendment to restrict federal oil shale

BY THE ASSOCIATED PRESS
June 27, 2007

DENVER – A measure intended to force the government to move slowly on efforts toward commercial production of oil shale on federal land won approval Wednesday in the U.S. House.

The proposal by Rep. Mark Udall, D-Colo., to amend the 2008 Interior Department’s appropriations bill, would prohibit the use of federal funds to prepare final regulations for a commercial leasing program or to conduct commercial lease sales.

The Interior bill, passed by the House, now goes to the Senate.

A proposal by Rep. Chris Cannon, R-Utah, designed to exempt Utah and Wyoming from the funding restrictions failed.

Udall and Rep. John Salazar, D-Colo., withdrew a separate amendment to prevent new oil and gas leases on top of the Roan Plateau in western Colorado after the Congressional Budget Office said it would have cost the government money and needed to be offset.

Udall and Salazar said they were disappointed by the last-minute, “highly speculative” cost estimate, but would continue fighting to delay new energy development to allow more public discussion.

Salazar said members of Congress weren’t notified of the projected fiscal impact of not issuing leases until Tuesday night even though the amendment was submitted three weeks ago. He said there was no explanation except that the numbers came from the Interior Department.

“I blame this on strong-arming by the administration,” Salazar said.

The U.S. Bureau of Land Management in Washington didn’t return an after-hours call for comment.

In June, the BLM released a final management plan for the federal land on the Roan Plateau that authorizes up to 1,570 new gas wells on the landmark that’s prized for its energy reserves and its wildland qualities.

For the past few years, the Bush administration’s push for more domestic energy production has run into opposition from people and communities concerned about potential environmental and health impacts. The debate has been especially intense in western Colorado and parts of western Wyoming, which are seeing record gas production rates.

Cannon said Udall’s amendment is a major step back in the development of the country’s oil resources.

“Cowed by the environmental lobby, the majority today voted to put the plug back into one of the most promising and viable new sources of oil we have in the entire nation – the oil shale we have right here in Utah,” Cannon said.

Shale reserves in Colorado, Utah and southwest Wyoming are believed to contain at least 1 trillion barrels of oil – three times the proven reserves of Saudi Arabia, or enough to theoretically supply the United States for a century.

But the oil, or kerogen, is locked in layers of hard rock, and the technology for affordably heating and extracting the liquid is still evolving. In Colorado, state and local governments have urged federal officials to move cautiously because the impact on water and other resources isn’t clear.

“Oil shale has potential as an energy source, but Colorado’s Western Slope has had experience with a rush to development that ended up hurting our region’s economy,” Udall said. “My legislation will ensure that oil shale is developed in a responsible way.”

People still talk about “Black Sunday,” May 2, 1982, when falling oil prices and vanishing government subsidies moved Exxon to shut down its $5 billion project near Parachute.

The BLM is working on an environmental impact statement on commercial oil shale. The draft plan is expected later this summer.

BLM officials have said the 2005 energy bill directed them to prepare the document. They said additional, in-depth environmental analyses will be done as specific projects are proposed.

The agency has issued 160-acre leases on federal land in Colorado and Utah to four companies.

“This is a step backwards, not a step toward energy independence,” industry official Marc Smith said of the oil-shale amendment.

Smith, executive director of the Denver-based Independent Petroleum Association of the Mountain States, said in the case of the Roan Plateau, the BLM approved the final management plan after more than six years of study and taking public input.

Udall’s amendment doesn’t stop the research into oil shale, said Bob Randall, an attorney with Boulder-based Western Resource Advocates, an environmental law and policy group. He noted that Shell Frontier Oil and Gas Inc., considered the industry front-runner, is postponing work on its federal research site so it can refine its process.

“By holding off commercial lease sales, I don’t think it sets the industry back at all,” Randall said.

http://www.summitdaily.com/article/20070627/NEWS/106270080

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