Critics blast 11th-hour oil shale changes
DENVER Colorado officials and environmentalists are protesting last-minute amendments by the Bush administration that apparently insert controversial regulations into six oil shale research and development leases in Colorado and Utah.The changes, announced Jan. 16, affect leases on 160-acre parcels that eventually could be expanded under a plan opening nearly 2 million acres of federal land to development. The leases were granted in 2006 for research into tapping an estimated 100-year supply of oil locked in rock formations under Colorado, Utah and southwest Wyoming.The amended leases incorporate commercial oil shale regulations approved in November. A coalition of environmental groups has filed two lawsuits challenging the overall plan and regulations, including an initial 5 percent royalty rate they say is too low.”Talk about a sweetheart deal,” said David Abelson, a policy adviser for Boulder-based Western Resource Advocates. “They tried to lock in bargain-basement lease rates at a time when we’re suing over the regulations.”Colorado has questioned the impact on land use, air and water quality, wildlife and communities. State officials are trying to sort out the implications of embedding federal regulations into the lease contracts.”I don’t think any of us has ever seen anything like this before,” Mike King, deputy director of the Colorado Department of Natural Resources, said Thursday.”A fundamental question is what this means to judicial review” of oil shale regulations, King said. “It’s safe to say we will be fully exploring what our options are, either legally or working with our congressional delegation.”Celia Boddington, a U.S. Bureau of Land Management spokeswoman in Washington, said the agency is reviewing the lease changes.”It’s something we’re concerned about. We’re taking immediate steps to examine it,” Boddington said.The BLM and Interior Department issued the final plan and rules in November. The BLM said the rules were added to the research leases to ensure predictable “procedures and responsibilities” for the companies.Tracy Boyd, spokesman for Shell Exploration & Production, said the company was surprised when the BLM proposed changing the leases, but welcomed it as providing regulatory certainty.”I think what the BLM was doing was making sure that the companies that have the existing leases have the certainty they need to continue,” Boyd said.Shell, which received three of the six leases, is on the leading edge of research into extracting oil shale, a feat tried on and off for nearly a century. Industry officials acknowledge commercial production is at least a decade away.The four companies that won the leases will have a chance to expand onto more public land if they begin commercial production.Original contracts for the research parcels stated that any regulations in effect when commercial work starts would apply. Under the amended leases, the government will impose a 5 percent royalty rate during the first five years of production, compared with 12.5 percent to 18.8 percent for conventional oil and gas production on public lands.Chase Huntley, an energy policy adviser with The Wilderness Society in Washington, said environmentalists hope Interior Secretary Ken Salazar will review the amendments. He said the amended leases appear to allow the companies to choose which regulations they want to follow.Salazar resigned his Colorado U.S. Senate seat to head Interior, which oversees BLM.Speaking to department employees Thursday, Salazar said he wasn’t prepared to say which last-minute regulations by the Bush administration he might want to change. But as a senator he clashed with the Bush administration over oil shale, saying officials were rushing through a plan before the technology was proven and the potential impacts were addressed.A presidential order freezing all the Bush administration’s proposed rule changes and delaying rules recently published in the Federal Register won’t affect the oil shale plan and regulations because they were issued a couple months ago, Interior Department spokesman Frank Quimby said. That doesn’t mean that the Obama administration won’t review the oil shale rules, Quimby said.
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