WASHINGTON, D.C. -- The Department of the Interior’s Bureau of Land Management today published proposed regulations to establish a commercial oil shale program that could result in the addition of up to 800 billion barrels of recoverable oil from lands in the western United States.
In keeping with the Energy Policy Act of 2005 and the Mineral Leasing Act of 1920, the BLM is proposing regulations that would provide the critical “rules of the road” on which private investors will rely in determining whether to make future financial commitments to prospective oil shale projects.
“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,” said Secretary of the Interior Dirk Kempthorne. “Instead, I find it ironic that we are asking countries halfway around the world to produce more for us.”
Oil shale is a fine-grained sedimentary rock containing organic matter from which oil may be produced. The regulations would provide for a thoughtful, phased approach to oil shale development on public lands in the West. Commercial development of oil shale will not begin until it is technologically viable, which is not expected for several years.
The Bureau of Land Management (BLM) is only publishing proposed regulations at this time because the Consolidated Appropriations Act for Fiscal Year 2008 prohibits the agency from using FY2008 funds to prepare or publish final regulations. The President has called on Congress to remove the ban on finalizing oil shale program regulations.
Before any oil shale leases are issued, site-specific National Environmental Policy Act (NEPA) analysis would be completed on the proposed development. Once a lease is issued, the lessee will also have to obtain all required permits from state and local authorities, under their respective permitting processes, before any operations can begin.
The proposed leasing regulations incorporate provisions of the Energy Policy Act and the Mineral Leasing Act relating to: maximum oil shale lease size; maximum acreage limitations; rental; and lease diligence. The rule will also propose a range of royalty rate options, and will ask for public input on the royalty provisions. The public will have 60 days to comment on the proposed rules.
The regulations address provisions of the Energy Policy Act that establish work requirements and milestones to ensure diligent development of leases. Standard components of a BLM leasing program ─ including lease administration and operations ─ would be included, as well as additional NEPA documentation requirements for lease applicants.
In remarks last month calling on Congress to expand domestic energy production, President Bush noted the “extraordinary potential” of oil shale resources on public lands in the West. According to the U.S. Geological Survey, the U.S. holds more than half of the world’s oil shale resources.
The largest known deposits of oil shale are located in a 16,000-square mile area in the Green River formation in Colorado, Utah and Wyoming. Shale formations in that area hold the equivalent of up to 800 billion barrels of recoverable oil. Federal lands comprise 72 percent of the total surface of oil shale acreage in the Green River formation.
“Oil shale is a strategically important domestic energy source that should be developed to reduce the nation’s growing dependence on oil from politically and economically unstable foreign sources,” said BLM Director James Caswell.
Throughout the process, the BLM will collaborate and consult with affected states, tribes and local governments to ensure that their interests and concerns surrounding the oil shale program continue to be addressed. For instance, the site-specific NEPA analyses would include the same opportunities for public involvement and comment that are part of the Programmatic Environmental Impact Statement process.
The regulations are just one of several steps designed to harness these vast energy resources. The BLM has also issued research, development and demonstration (RD&D) leases for five oil shale projects in Colorado’s Piceance Basin and one in Utah. The BLM is also preparing a Programmatic Environmental Impact Statement that would amend several resource management plans to open lands for application for potential oil shale leasing in the future.
The Oil Shale Regulation on the electronic desk of the Federal Register today