The U.S. Bureau of Land Management and Shell Oil are about to finalize a land exchange years in the making.
The deal began in the early 1900s, said Vern Rholl, supervisory natural resources specialist with the BLM field office in Meeker.
The deal would exchange 3,500 acres of BLM land for 5,800 acres of Shell property in the oil-shale-rich Cathedral Bluffs area on the western edge of the Piceance Basin.
With that property exchange, BLM will join two pieces of its Piceance-East Douglas Creek Wild Horse Management Area straddling the Cathedral Bluffs.
Once a vast area of public land, a court decision over contested mineral claims in 1986 put a portion of the management area into private hands.
Here’s how it unfolded.
In 1919, the Ertl family claimed land along the crest of the Cathedral Bluffs for the underlying oil shale, Rholl said.
“It never got developed,” he said.
In those days, oil shale was recognized as a valuable resource for asphalt production and for its petroleum content, although a process for extracting it was not yet developed.
Congress also recognized oil shale’s value as a potential energy resource, and reserved mineral rights by passing the Mineral Leasing Act of 1920, Rholl said.
Upon passage of that act, oil shale claims could not be patented and converted to private ownership. But the minerals could be leased from the government.
In the early 1980s, when oil shale development was booming in the Piceance Basin, the Ertl family sold its patented oil shale claims to Shell Oil, Rholl said.
The Department of the Interior, parent agency of BLM, in turn sued Shell and other energy companies for the oil shale claims, saying they were invalid under the 1920 act. In 1986, a federal court upheld the energy companies and ruled the oil shale claims valid, Rholl said.
Those lands lay in the southern end of BLM’s Wild Horse Management Area and essentially bisected it, Rholl said.
The land exchange “will create a land bridge” across approximately six miles of private land on the crest of the Cathedral Bluffs still owned by a energy development companies, he said.
Shell was willing to make the exchange because the BLM land it will get in exchange “is closer to developed roads and is flatter,” Rholl said.
The acreage to be traded isn’t equal, but the value of the underlying oil shale is, he said. And the mineral value is what the exchange is based on, he said.
BLM will prepare a mineral report on both parcels to measure the thickness of the oil shale reserves, measured in potential barrels of oil that could be extracted.
Shell held a public meeting last month in Rifle to outline its work on an experimental process for extracting and processing oil shale. The project does not depend on the land exchange, Rholl said.
“They’ve got a lot of questions they need to answer,” he said, before Shell can go into commercial processing of oil shale.
In preparation for the land exchange, Shell hired a consulting company to conduct an environmental assessment of both parcels, expected in about two months.
As for the land exchange, Rholl said, “I’d like to see it finalized by the end of the year. We’ll be weighing everything we’re getting versus everything we’re giving up.”
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