BLM's second oil shale RD&D round will have slightly different terms

The US Bureau of Land Management announced on Jan. 14 that it will seek nominations for a second round of oil shale research, development and demonstration leases under somewhat different terms.

The US Bureau of Land Management announced on Jan. 14 that it will seek nominations for a second round of oil shale research, development and demonstration leases under somewhat different terms.

Tracts will be larger than those issued in the first round, it added. BLM also will consider applications using technologies not currently being tested on the six RD&D leases which have been issued already, the US Department of the Interior agency said.

Its notice in the Federal Register requesting nominations for parcels to be leased in Colorado, Utah and Wyoming follows a similar solicitation in June 2005. That solicitation resulted in six RD&D leases being issued in Colorado in 2006 and in Utah in 2007, BLM said.

It said that its oil shale program could result in the addition of up to 800 billion bbl of recoverable oil from federal lands in the Western United States. "Broadening the scope of research into oil shale technologies will help accelerate the development of these vast Western resources and as a result less our dependence on foreign sources of energy," BLM Director James L. Caswell said.

The oil shale RD&D leases in this round will be issued for 10-year terms and with maximum sizes of 640 acres, BLM said. The six leases issued in the first round were for 160 acres each, but they also contained an additional 4,960-acre preference right for conversion to a 20-year lease once commercial production levels had been achieved and all requirements had been met, it noted.

Since offering the original leases and completing an analysis of oil shale potential and availability on public lands, BLM determined that a 640-acre RD&D lease is likely to provide sufficient reserves to support a commercial operation, the agency said.

Leases issued under this second round will go to applicants using new technologies not being used on leases issued in the initial round, it added.

The announcement followed BLM's adopting final regulations in November which govern the commercial leasing of oil shale resources on federal lands and a programmatic environmental impact statement in September setting aside approximately 1.9 million acres of public land in the three Western states for potential commercial oil shale development.

Contact Nick Snow at nicks@pennwell.com

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