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Utah on Verge of Big Oil Shale Development

Although already under environmental appeal, Utah state officials issued a permit the last week in March to a Delaware-based company to a begin a large oil shale extraction project that eventually could cover up to 1,500 acres in the Uintah Basin. It could end up being one of the largest oil shale mining operations in the state.

Red Leaf Resources plans to extract the oil and ship it to customers throughout Utah, Wyoming and the Gulf of Mexico coast. After the state Division of Oil, Gas and Mining agreed to permit the project, the decision was almost immediately appealed by the environmental group Living Rivers.

As part of the permit, Red Leaf had to develop an environmental mitigation plan, calling for revegetation of areas, and safeguards for wildlife, including nesting raptors and sage grouse.

In a separate action in Colorado last month, another environmental group, Western Resource Advocates (WRA), released a report casting doubts on oil shale, and emphasizing its distinct differences with shale gas and shale oil, citing commercial, environmental and technological uncertainties (see Shale Daily, March 14).

WRA contends is its report (Oil Shale 2050) the technologies necessary to develop oil shale are unproven and fundamentally different from shale oil and shale gas technologies.

The Utah Oil, Gas and Mining Board will take up the environmental appeal in June. The oversight board can affirm or deny the agency's granting of the permit.

Red Leaf holds oil shale mineral leases on nearly 17,000 acres of school trust lands. It basically applies an extraction process that removes kerogen, a solid, organic material, from the rock and transforms it into oil. For critics concerned about the water use in the extraction process, Red Leaf estimated that a half barrel of water is used for every barrel of oil produced.

According to its plans shared with the state, mining will take place in phases, beginning with 320 acres later this year. It will proceed with mining other chunks leading up to 1,500 acres in total. Red Leaf estimates production of 9,500 bbl/d. In Utah, as in Colorado, environmental groups contend that the oil shale extraction process is much too harsh on the land and water resources.

The federal Bureau of Land Management is in the midst of hosting a series of multi-state scoping meetings in three western states that include a potential 1.9 million acres of public land being opened for commercial development.

In Colorado, Boulder-based WRA, which has also published recent studies on water supply and demand in growing urban parts of Colorado, raised a number of red flags concerning the production of oil shale.

"We looked at this issue inside and out, and based on extensive research, we can't find a good reason why commercial oil shale development should be pursued in the West," said WRA oil shale policy advisor David Abelson. "Oil shale would foul our air and water, soak up enormous amounts of water and disrupt local economies."

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