Shale Daily / NGI All News Access

BLM Gives Initial OK to State Oil Shale Projects

The Bureau of Land Management (BLM) said Wednesday three nominations for oil shale research, development and demonstration (RD&D) leases have been approved for Colorado and Utah that would allow the proponents to test the feasibility of various oil shale recovery technologies on public lands.

The nominations were forwarded to BLM state offices in Colorado and Utah for the next phase in the review process, said BLM Director Bob Abbey.

"To determine whether oil shale will be a viable energy source on a commercial scale, we need to support critical research to answer fundamental questions about the feasibility of the technologies, their impacts on the environment and local communities, and their use of water," said Abbey. "This second round of leases will help us answer those critical questions so that we can chart a safe, orderly and responsible path for our energy future."

According to BLM, the U.S. Geological Survey estimates that the United States holds more than half of the world's oil shale resources. More than 70% of the U.S. supply is estimated to be on federal lands in Colorado, Utah and Wyoming.

Last November BLM published a notice in the Federal Register calling for nominations for a potential second round of oil shale RD&D leases; six leases were awarded in the initial round in 2007. BLM solicited nominations of parcels for up to 160 acres to conduct oil shale RD&D under a 10-year lease term. Applicants also were allowed to identify up to another 480 acres that would be reserved for potential commercial lease, for a total of 640 acres.

In its first round of nominations BLM had considered a lease size available for commercial development of up to 5,120 acres, but in the second round it said the "substantial reserves represented by 640 acres are more than adequate for a major oil shale production operation."

BLM received two nominations for Colorado from ExxonMobil Exploration Co. and Natural Soda Holdings Inc. AuraSource Inc. submitted a nomination for a Utah project. BLM's Interdisciplinary Review Team, composed of representatives of the governors of Colorado, Utah and Wyoming; the Department of Energy and the Colorado School of Mines, recommended that all three nominations be approved for advancement.

The new leases are to contain "substantial" diligence requirements, which would require the applicants to submit development plans within a specific time frame; obtain state and local permits; develop infrastructure; and submit quarterly reports. BLM's Colorado and Utah offices now plan to conduct National Environmental Policy Act reviews of the nominations, which may take up to 18 months to complete.

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