BLM offering oil shale leases
In an historic step, the Bureau of Land Management offered its oil shale-rich lands in Colorado, Utah and Wyoming for lease for research development.The Federal Register published the leasing notice Thursday. The BLM will take applications through Sept. 7.Leases are 160 acres, in accordance with the BLMs aim to promote research and design projects by private companies, which the BLM hopes will come up with an economically viable technology for removing oil from shale. Applicants will also have an option to designate an additional 4,960 acres, which the BLM will reserve as a preference right if the companys oil shale extraction technology proves commercially viable.BLM intends to initiate a phased or staged approach to oil shale development, the notice said. The two-step plan will begin with leasing and will be followed by development of regulations for commercial leasing of oil shale on BLM lands.Weve tried to it keep small for a number reasons, said Jim Edwards, chief of the branch of solid minerals at the BLM state office in Lakewood. We want to give them a chance prove a technology before we expand the leases, unlike what we did back in the 70s when we leased 5,000 acres and having it end up creating a big expectation then falling flat on its face.According to the BLM, the United States holds more than 50 percent of the worlds oil shale resources the equivalent of 2.6 billion barrels of oil 20 times more than the total U.S. oil resources of 116.5 billion barrels.Jim Evans, director of Associated Governments of Northwestern Colorado, said he welcomed the news.We support (the BLM) going forward with the research and development leasing effort Because of the continuing higher prices of gas and oil it was very prudent of them start thinking about it as they did, he said.Evans also pointed out that U.S. Sen. Ken Salazar, D-Colo., included a provision in the Senate energy bill for leasing oil shale, and that its language is consistent with the BLMs leasing scheme.Theres been a lot of talk about oil production peaking. Virtually no one disputes it occurring sometime as early as 07 as one scientist predicted. But most think its 10 to 20 years away. Im hoping its 10 to 20, because they will need seven to 10 years to develop oil shale technology, he said.Shell Exploration and Production Co. is experimenting with what it calls an in-situ conversion process at its Mahogany Research Project, on about five acres of its 20,000-acre holdings in the northwestern Piceance Basin. The process involves heating oil-bearing shale underground until it liquifies, then pumping it to the surface.Its very exciting Were seeing this is as very positive since were doing our research efforts in Colorado, said Shell representative Jill Davis. Were going to need some time to look over the Federal Register notice to determine if we will make an application. We still have 90 days, plenty time to make a decision.Evans said he hopes the BLM leasing will be an orderly process. We also think (the federal government) needs to look energy conservation steps and alternative energy as well as developing oil shale. It will just be one of the many things they need to look at, it will not be the answer.Were very sensitive to the environmental and social impacts of the new oil shale leasing, Edwards said. We want to make sure that in order to proceed with commercial technology it must be demonstrated to the satisfaction of the BLM that they do have an economic technology.Were really trying to do this thing right this time, starting small and taking baby steps.
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