Garfield County commissioners question royalties in oil shale proposal
GLENWOOD SPRINGS — Higher royalty rates to be paid by energy companies as part of a proposed new set of commercial oil shale regulations for BLM lands are being targeted in the latest round of comments from Garfield County commissioners critical of the federal government’s revamped oil shale policies.
“Changing a well-thought-out and scientifically based royalty system based on nothing more than a settlement of a special interest lawsuit, is a terrible precedent to set,” states a letter that was ratified by the commissioners Monday.
The letter stating the county’s opposition to the rules changes is to be sent to the U.S. Bureau of Land Management within an extended 60-day comment period that was just recently approved by the agency before the new regulations are set to take effect later this year. The comment period was set to end May 28. It will now run through July 28.
“This tells the American people that important economic and energy policy is decided by well-compensated special interest lawyers in a back room, rather than in the open by duly elected officials and accountable public employees, based on objective analysis and expert input,” reads the letter put forward by Commissioner Tom Jankovsky for his fellow commissioners to consider.
The amended regulations come in follow-up to the new federal oil shale leasing policy announced by outgoing Secretary of the Interior Ken Salazar earlier this spring.
The revised policy and subsequent rule changes grew out of a lawsuit brought by a coalition of conservation groups challenging the former Bush administration-era rules that were adopted in 2008.
The new policy significantly reduces the amount of BLM land available to lease in Colorado, Wyoming and Utah for oil shale research, development and demonstration (RD&D) projects, including a decrease from 400,000 acres in northwest Colorado under the old policy to just 28,000 acres with the new plan.
Garfield County has been on record opposing the rules change since joining with other affected counties in the three states at a controversial closed-door meeting with industry representatives in Vernal, Utah, in March 2012.
The point remains, Jankovsky said Monday, that Colorado stands to lose out to Utah when it comes to oil shale research and development projects on federal lands.
“I see the entire industry moved to Utah with these rules, because there’s more land available there,” he said.
If a national emergency were to shut off the nation’s foreign energy supplies, “What I’m really concerned about is that, with 1 trillion barrels of oil in the ground … the floodgates open and we end up with all these companies in here” without adequate research and development, Jankovsky said.
Besides reducing the acreage available for leasing, the royalty options “fall short of the mandate expressed in the 2005 Energy Policy Act,” Jankovsky states in the letter approved by the commissioners on a 3-0 vote Monday.
Whether considered on a lease-by-lease basis, or in setting a minimum royalty rate of 12.5 percent subject to future increases, as one of the options suggests, he said the royalty proposals serve to further discourage rather than encourage oil shale development.
Citizens who spoke at the Monday meeting urged the commissioners to forego sending the comments to the BLM. They said oil shale has yet to prove to be commercially viable despite billions of dollars in federal subsidies over the years.
Carbondale resident and town trustee Allyn Harvey said the flexible royalty rates are necessary to help local communities adjust for the boom and bust cycles that typically accompany oil shale and other energy development.
“There are costs that can occur with these boom and bust cycles around oil shale,” Harvey said. “There are going to be infrastructure costs and environmental costs, and those ought to be born by those benefitting from it” through royalties paid to the federal government.
Harvey also urged the county not to get involved in litigation with the federal government over the oil shale issue. Jankovsky said that’s not his intention.
Former Garfield County commissioner Trési Houpt said the commissioners need to do more research into the royalty issue and other aspects of the amended regulations before commenting to the BLM on the rules changes.
“You need to start looking at both sides of the conversation … and thinking about your vision for Garfield County, which is one of the most pristine places in the world,” she said. “Instead, I’m seeing a lot of advocacy for heavy, extractive industry.”
Commissioners said they will take the time between now and the new comment deadline to look more closely at the royalty issue, among other things, and may provide follow-up comments to the BLM as well.
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