Secretary Salazar announces final oil shale plan

March 22, 2013

 On March 22, 2013, outgoing Department of Interior Secretary Ken Salazar announced BLM's final oil shale plan for research, demonstration and development, leading to potential conversion of leases for commercial development after specified conditions are met.  The public comment on the proposed final plan will be 60 days.  CWF is studying today's record of decision and will comment soon.  At first glance, it appears that the plan is very reasonable and balanced.

Here is the text of the DOI / BLM press release:

 

Date: March 22, 2013
Contact: Jessica Kershaw (DOI) 202-208-6416
Amy Krause (BLM) 202-912-7236
Secretary Salazar Finalizes Plan Promoting Responsible Oil Shale and Tar Sands
Research, Demonstration and Development
BLM proposes revisions to commercial oil shale regulations to ensure fair return to
taxpayer; will open 60-day public comment period

WASHINGTON – As part of President Obama’s strategy to continue to expand safe and
responsible development of the nation’s energy resources, Secretary of the Interior
Ken Salazar today announced the Department’s final plan for encouraging research,
development and demonstration (RD&D) of oil shale and tar sands resources on Bureau
of Land Management (BLM) lands in Colorado, Utah and Wyoming.

The Record of Decision and plan amendments make nearly 700,000 acres in Colorado,
Utah and Wyoming available for potential oil shale leasing and about 130,000 acres
available for potential tar sands leasing in Utah. In November 2012, the BLM signed
two additional 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.

“This plan maintains a strong focus on research and development to promote new
technologies that may eventually lead to safe and responsible commercial development
of these domestic energy resources,” Secretary Salazar said. “It will help ensure
that we acquire critically important information about these technologies and their
potential effects on the landscape, especially our scarce water resources in the
West.” 

As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil
and gas production has grown each year the President has been in office, with
domestic oil production currently higher than any time in two decades and natural
gas production at its highest level ever. Renewable electricity generation from
wind, solar, and geothermal sources has doubled and foreign oil imports now account
for less than 40 percent of the oil consumed in America – the lowest level since
1988.

Under the Record of Decision, the BLM-managed lands will be available for RD&D
leases of oil shale resources. Eligible companies could convert to a commercial
lease after satisfying the conditions of the RD&D lease and meeting basic due
diligence requirements and clean air and water requirements.  The plan issued today
will amend ten of the BLM’s land use plans. 

“The BLM recognizes the importance of taking a balanced approach to exploring the
potential of our oil shale resources,” said Neil Kornze, BLM’s Principal Deputy
Director. “This is a smart approach that will not only support companies as they
work to determine if development is commercially and technically viable, but also
yield the necessary information upon which broader scale commercial leasing could be
based.”

The BLM will also begin soliciting public comments on proposed revisions to the
commercial oil shale regulations.  The proposed revisions are designed to ensure a
fair return to the American taxpayer, encourage responsible development of federal
oil shale resources, and evaluate necessary safeguards to protect scarce water
resources and important wildlife habitat. The BLM is accepting public comments for
60 days following publication in the Federal Register, which is expected next week.

The proposed rule identifies several options for amending the royalty rates for
commercial oil shale production. The BLM will consider whether to retain some
flexibility to adjust royalty rates when more information is available about costs
of production, energy inputs, and impacts associated with various extraction
technologies.

The results of ongoing research and development activities combined with
administrative flexibility in setting royalty rates will allow BLM to determine
whether future applications to lease should include specified resource-protection
plans and whether other aspects of the regulations need to be clarified. 

Oil shale is a fine-grained sedimentary rock containing kerogen and is distinct from
“shale oil.”  The largest known domestic oil shale deposits are in a 16,000-square
mile area in the Green River formation in Colorado, Utah and Wyoming.  Oil shale can
be mined and heated to an extremely high temperature (retorting) in aboveground
facilities, and the oil can then be separated from the resulting liquid.  Oil shale
also can be subjected to extreme heat and pressure while in underground formations
(in situ retorting) andthe resulting liquid pumped to the surface.  The final oil
shale plan examines surface mining with surface retort, underground mining with
surface retort, and in situ retorting technologies.

Tar sands are sedimentary rocks containing a heavy hydrocarbon compound called
bitumen, which can be refined into oil.  Unlike the oil sands deposits in Canada,
oil is not currently produced from tar sands on a commercial scale in the United
States.  U.S. tar sands are hydrocarbon wet, whereas the Canadian oil sands are
water wet, meaning that U.S. tar sands would require different processing
techniques.  The final oil shale plan evaluates the potential impacts of various
extraction methods for tar sands, including surface mining with surface retort,
surface mining with solvent extraction, in situ steam injection, and in situ
combustion technologies.
 

 

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