BLM releases proposed oil shale development regs

The US Bureau of Land Management on July 22 published proposed regulations to establish a commercial oil shale development program, which it said could add as much as 800 billion bbl of oil to US reserves.

Nick Snow
Washington Editor

WASHINGTON, DC, July 22 -- The US Bureau of Land Management on July 22 published proposed regulations to establish a commercial oil shale development program, which it said could add as much as 800 billion bbl of oil to US reserves.

The US Department of the Interior agency is proposing regulations—required under the 2005 Energy Policy Act (EPACT)—that aim to provide critical information for investors considering financial commitments to prospective oil shale projects. But the regulations are only proposals because the fiscal 2008 DOI appropriation prohibits using funds to prepare or publish final regulations, BLM said.

"As Americans pay more than $4 for a gallon of gasoline and watch energy prices continue to climb higher and higher, we need to be doing more to develop our own energy here at home through resources such as oil shale. Instead, I find it ironic that we are asking countries halfway around the world to produce more for us," said US Interior Secretary Dirk A. Kempthorne.

US Sen. Ken Salazar (D-Colo.), Rep. Mark Udall (D-Colo.), Colorado Gov. Bill Ritter, and other state and local government officials have said that more time is needed to properly evaluate and find ways to mitigate economic and environmental impacts on communities near the deposits in that state. The largest known US oil shale deposits are in a 16,000-sq-mile area, the Green River Formation, in Colorado, Utah, and Wyoming.

BLM said that before any oil shale leases would be issued, a site-specific National Environmental Policy Act analysis would be conducted on a proposed development. A lessee would have to obtain all required permits from state and local authorities before operations could begin, the federal agency said.

It said the proposed leasing regulations incorporate provisions of EPACT and the Mineral Leasing Act relating to maximum oil shale lease size, maximum acreage limitations, and rental and lease diligence. The rule also will propose a range of royalty rate options and will ask for public input on the royalty provisions, BLM said.

The proposed regulations also would address the EPACT provision establishing work requirements and milestones to ensure diligent development of leases, it continued. Standard BLM leasing program components, including lease administration and operations, would be included along with additional NEPA documentation requirements for lease applicants, it said.

BLM will accept public comments on the proposed regulations for the next 60 days, it indicated.

The agency's announcement brings the US a step closer to developing an important energy resource, said the Institute for Energy Research on July 22. "The United States has more oil shale than the entire Middle East has crude, but we lack the governmental framework to lease those lands so the resource can be produced for our consumers. If politicians in Washington are looking for a way to revitalize our economy, they should look no further than oil shale," said Daniel Kish, IER's senior vice- president for policy.

Contact Nick Snow at nicks@pennwell.com.

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