Nick Snow
Washington Correspondent
WASHINGTON, DC, Dec. 19 -- The US Department of the Interior has issued research, development, and demonstration (RD&D) leases for five oil shale projects in Colorado's Piceance basin, the US Bureau of Land Management said Dec. 15.
C. Stephen Allred, assistant Interior secretary for land and minerals management, signed the RD&D leases for projects proposed by Chevron USA Inc., EGL Resources Inc., and Shell Frontier Oil & Gas Inc.
The leases grant rights to develop oil shale resources on tracts up to 160 acres for a 10-year initial term, with an extension option of up to 5 years with proof that diligent production levels have been pursued.
The leases also contain a preferential right to convert the RD&D acreage, plus up to 4,960 acres of adjacent land, to a 20-year commercial lease once commercial production levels are achieved and all requirements are met, it added.
The tracts were identified in proposals submitted by the companies in June 2005. The leases contain project-specific requirements for permitting, monitoring, and environmental mitigation.
Target shales are in the Eocene Green River formation, which lies under parts of Colorado, Utah, and Wyoming, and according to BLM might hold 800 billion bbl of recoverable shale oil. More than 70% of the formation lies under federal land.
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