U.S. Senate blocks Allard amendment | PostIndependent.com

U.S. Senate blocks Allard amendment

Phillip YatesGlenwood Springs, CO Colorado

GLENWOOD SPRINGS, Colorado – Debate about whether the Bureau of Land Management should soon draft regulations for commercial oil shale leasing in the American West dominated the conversation during a U.S. Senate hearing Thursday.The Senate Committee on Energy and Natural Resources hearing about oil shale development in Colorado, Utah and Wyoming comes after both Sen. Ken Salazar, D-Colo., and Sen. Wayne Allard, R-Colo., have supported different legislative bills for possibly tapping the resource. “Today, with oil above $120 a barrel and gas over $4 a gallon, some people – including some of my colleagues – are once again looking to oil shale as the cure-all for our energy woes,” said Salazar, who chaired the committee hearing Thursday. “However, it is not clear why commercial leasing of federal lands is even necessary, since industry is not developing 200,000 acres of oil shale rich lands that they already own.”As the committee hearing went on, the Senate blocked an Allard amendment to lift a one-year moratorium on proceeding with final regulations for oil shale exploration – a measure Salazar has supported. The moratorium was in a $555-billion spending package Congress passed late last year. Testifying before the committee, Gov. Bill Ritter warned against establishing a commercial oil shale leasing program and finalizing regulations for it before research into the extraction of the resource is complete. He also cited concerns about the possible development of oil shale could have on the state’s water resources and its environment.”Establishing a leasing program prior to understanding what technologies are viable and the implications of these technologies would be a dangerous course, with enormous risk of unintended consequences,” Ritter said. “Such a course of action would not be in the best interest of the nation and certainly not in the interest of Colorado.”But Allard, citing the vast concentration of oil shale in Colorado, said during the hearing that it may take years for companies to establish viable technologies to extract the resource, but that commercial regulations for possible oil shale leasing was needed so companies can make “sound business decisions.” “(Businesses) cannot operate in an uncertain regulatory environment,” Allard said.Terry O’Connor, with Shell Exploration and Production, said regulations were needed and that the companies pursuing oil shale development “desperately need them now.”Colorado is oil shale countryIt is estimated that Colorado has 80 percent of the nation’s oil shale reserve, which some reports say has 500 billion barrels of proven oil shale reserves – or more than double the proven petroleum reserves of Saudi Arabia.The debate to issue commercial oil shale leasing regulations comes as the Bureau of Land Management continues to revise its Programmatic Draft Environmental Impact Statement (PEIS) on possible oil shale leasing in Wyoming, Colorado and Utah.That statement envisions three different scenarios for possible oil shale leasing in Colorado. One would be a no-action alternative, another would open 359,798 acres in the state, while a third would designate 40,325 acres to possible oil shale leasing.It is the BLM’s preferred alternative to open the greatest amount of lands to possible oil shale leasing.Currently, Shell Exploration and Production, Chevron and AMSO LLC currently have five 160-acre BLM oil shale research and development leases in the Piceance Basin. Those leases, which are located on some of the most prime shale deposits in Colorado, can be expanded to about 5,000 acres each “once commercial production levels have been achieved,” according to the BLM. Shell has also been buying up water rights in the area in anticipation of future oil shale development, according to several reports.Plans for the futureAll three companies said it could be sometime in the next decade before they would make a decision about possible commercial production of oil shale.Shell’s plan is to lower electrical heaters into the rock formation and heat it to 650 to 700 degrees over a period of three to four years. When the oil shale gets to a suitable temperature, the hydrocarbon material – called kerogen – becomes a vapor. When it is pulled to the surface, it cools and condenses to produce a liquid that is two-thirds oil and one-third natural gas.As the company develops its oil shale process, it is also developing a “freeze-wall” technology that is intended to build a frozen wall that protects the surrounding water-bearing formation from the hydrocarbon during the oil shale conversion process. O’Connor, the Shell representative, said that unless the company “can clearly demonstrate” that it can protect Colorado’s waters, it would not proceed to oil shale commercialization.Some have said Shell’s approach of heating the formation to extract the hydrocarbons from the shale deposits would consume massive amounts of energy and water. Ritter expressed concern that little is known about the power requirements to generate that development.”We do not know the amount of energy that will be needed to process oil, the sources or locations of necessary power plants, the impacts such energy production would have on regional air quality and visibility, or the greenhouse gas implications,” Ritter said. “We (also) do not know whether the cumulative environmental and economic carrying capacities of the region have been exceeded, in light of the current natural gas development boom.”Contact Phillip Yates: 384-9117pyates@postindependent.comPost Independent, Glenwood Springs, Colorado CO

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