BLM releases scaled-back Western oil shale, tar sands proposal

The US Bureau of Land Management proposed an oil shale and tar sands research, development, and demonstration (RD&D) plan for land it administers in Colorado, Utah, and Wyoming. The proposal involves less acreage than one developed in 2008, and represents a significant improvement, the Natural Resources Defense Council (NRDC) said in response.

The final programmatic environmental impact statement (PEIS) would make nearly 700,000 acres in Colorado, Utah, and Wyoming available for research and development of oil shale, and about 130,000 acres in Utah for activities related to tar sands, BLM said on Nov. 9, adding that comments will be accepted until Dec. 10.

It said the final PEIS amends 10 resource management plans and identifies areas that will be made available for potential leasing, exploration, and development of oil shale and tar sands resources, and applies criteria used in the draft PEIS to identify lands which would be made available.

Additional acreage in the final PEIS reflects BLM’s correction of acreage identified in the draft as lands with wilderness characteristics in Wyoming, reevaluation of some lands designated as Areas of Critical Environmental Concern, and refinements to management of Greater Sage-Grouse habitat to reflect information from state wildlife agencies, BLM said.

BLM’s latest proposal would open federal land for oil shale development first as RD&D leases, according to the agency. A commercial lease could be issued if the leaseholder satisfies the RD&D lease’s conditions and meets all federal regulations for conversion to a commercial lease, it indicated.

The final PEIS also includes wildlife conservation provisions, including several for Greater Sage-Grouse habitat, BLM said.

Reconsideration basis

BLM said it agreed to reconsider the land allocation decisions in the 2008 plan after some communities argued that it would have prematurely allowed commercial leasing without proven viable technologies and without a clear understanding of impacts on scarce western water supplies.

In response to those concerns and to settle litigation, the agency said it agreed to reconsider the earlier plan’s land allocation decisions.

NRDC applauded the proposal. “By significantly reducing the acreage of wilderness potentially available for leasing, [US Interior Secretary Ken] Salazar is laying out a creative, thoughtful, and more responsible approach in managing some of our most precious resources,” said Bobby McEnaney, the environmental organization’s senior lands analyst.

The new proposal effectively closes off 1.6 million acres of what he described as “wilderness quality lands” from oil shale and tar sands development, he added.

Glenn Vawter, executive director of the National Oil Shale Association in Glenwood Springs, Colo., said he was not surprised by BLM’s announcement. “It apparently pursued its preferred alternative,” he told OGJ. “I think the reduction in Colorado is the biggest concern because the area excluded in the middle of the Piceance basin is the area that is most amenable to development by the new in-situ technologies. There seems to be less exclusion in Utah.”

Unique requirement

Vawter noted that oil shale is the only federally controlled energy resource that requires research before leasing. “With conventional oil and gas, the producer decides which technology would be used and succeeds or fails on that basis,” he said. “Interestingly, most of the cooperating agencies told BLM to go back to the original 2008 PEIS. It obviously decided not to,” he added.

BLM also said its Colorado state office signed two leases for RD&D oil shale proposals to encourage industry to develop and test technologies aimed at developing oil shale resources on a commercial scale.

The approved leases were awarded to ExxonMobil Exploration Co. and Natural Soda Holdings Inc., each of which submitted proposals for in-situ development of oil shale on adjacent 160-acre parcels in Rio Blanco County near Meeker, Colo. The leases will go into effect on Dec. 1, BLM said.

“Today’s leases demonstrate our continued commitment to encouraging research and development that will help fill in some of the existing knowledge gaps when it comes to technology, water use, and potential impacts of commercial-scale oil shale development,” BLM Colorado State Director Helen Hankins said.

“To date, technological and economic conditions have not combined to support a sustained commercial oil shale industry, and this plan lays a strong foundation to explore oil shale’s potential,” she said.

Contact Nick Snow at nicks@pennwell.com.

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