DOI issues Utah oil shale lease to OSEC

The US DOI issued a research, development, and demonstration lease June 28 to Oil Shale Exploration Co. of Mobile, Ala., for 160 acres of public land in eastern Utah.

Nick Snow
Washington Correspondent

WASHINGTON, DC, July 3 -- The US Department of the Interior issued a research, development, and demonstration (RD&D) lease June 28 to Oil Shale Exploration Co. LLC of Mobile, Ala., for 160 acres of public land in eastern Utah. An analysis determined that the project would have no significant environmental impacts.

The action will allow oil shale development to continue on the site, which is administered by the Bureau of Land Management's eastern Utah office in Vernal. However, OSEC must submit a detailed operations plan for BLM's approval, and it also will be required to obtain all necessary federal, state, and local permits and make available to other companies researching oil shale development some shale from an existing supply at the site, BLM said.

It said OSEC plans to test an above-ground retorting process on shale from the White River Mine site south of Vernal. The company initially will conduct test retorts of existing shale stock at a facility in Canada to help determine the retorting process's feasibility, the chemical properties of synthetic crude products resulting from it, and whether spent shale will require isolation from the environment, according to BLM.

The lease has terms similar to five RD&D leases that DOI issued previously for acreage in western Colorado. It gives OSEC rights to develop oil shale on the tract for 10 years, with a possible extension of up to 5 years if the lessee shows diligent progress toward commercial production.

BLM said that RD&D lessees also may apply to convert each lease, plus 4,960 adjacent acres, to a 20-year commercial lease once commercial production levels are achieved and additional requirements are met. The agency said it would perform subsequent analyses under the National Environmental Policy Act on any proposed commercial operations on RD&D leases.

Selma Sierra, BLM's Utah state director, said the RD&D process benefits from support by the state government and local governments in Uintah and Duchesne counties. "The BLM will continue to facilitate communication and collaboration between local communities and companies working with shale from the White River Mine," she said.

BLM said that issuing the lease to OSEC completes action in its oil shale RD&D leasing program, which began in June 2005. The agency said it is continuing to lead development of a programmatic environmental impact statement supporting future commercial oil shale leasing on public land in Utah, Colorado, and Wyoming, as directed in the 2005 Energy Policy Act.

Contact Nick Snow at nsnow@cox.net.

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