Interior Secretary Ken Salazar announced Tuesday a new set of experimental oil shale leases with stricter controls than Bush-era leases, and he’s calling for an investigation of an 11th-hour move by the previous administration that critics saw as a giveaway to energy companies.
Salazar said he had “serious questions” about whether the January 15 lease addenda, which opened up 50,000 additional acres to oil shale leasing for six companies, “are in fact legal or whether or not they should be rescinded.”
He asked for the department’s inspector general to launch a probe into the Bush move before his office would take action on it.
“Taxpayers deserve answers to serious questions about why these lease addenda were granted at the eleventh hour, under what circumstances, and at what potential expense to the federal treasury,” Salazar said. “We must reform our nation’s oil shale program and ensure that the American people have the promise of a fair return from their resources.”
Oil shale is a sedimentary rock that, when heated, releases petroleum-like liquids. More than 70 percent of American oil shale — including the thickest and richest deposits — lies on federal land, primarily in Colorado, Utah, and Wyoming.
Boosters see it as a Persian Gulf-sized fuel cache that, if tapped successfully, could curb America’s dependence on foreign oil. Critics question the viability of the energy source, and worry about impacts to land and water that could come with developing it. At an annual oil shale conference at the Colorado School of Mines on Monday, Colorado officials voiced skepticism, while Utah officials were more enthusiastic.
“I want to let you know that you’re very welcome in Utah,” Alan Walker, with the governor’s economic development office of Utah told the crowd, according to the Associated Press.
Salazar’s action Tuesday tacked between those two sides, issuing a new round of research and development leases for energy companies interested in exploring oil shale, but with stricter controls. Companies may nominate up to 160 acres of federal land for their projects. Up to 480 additional acres could be added for commercial development if the research is successful. That’s down from some 5,000 acres before. Leases would be subject to a review by an interdisciplinary team including BLM and state officials who would weigh its potential against impacts to land, water and communities.
The new round asks companies to address how their projects will impact water and energy uses and socio-economic impacts on communities that could be inundated by a rush of energy workers. It also sets a series of milestones that didn’t exist in the previous round, including a development plan with nine months and quarterly reports detailing progress. Companies must have state and local permits within 18 months and and infrastructure in place within two years.
“This is definitely a step in the right direction,” said Frank Smith, energy organizer for the environmental group Western Colorado Congress, but he said he would have preferred no further leases. “It all comes back to environmental risk and taxpayer liabilities.”
The BLM issued six experimental oil shale leases in Colorado and Utah in 2007 of up to 160 acres, with an additional offering of up to 5,120 acres if it proves commercially viable.
On Jan. 15, in the Bush administration’s waning days, the BLM granted those lease holders a set of conditions Salazar said may have been unduly favorable to the industry, including a 5 percent royalty rate he has criticized as being too low. They amounted to “lucrative benefits” to the industry, he wrote in a letter to the inspector general, and were given without a chance for public comment.