Reps trying to free up oil shale mitigation cash

Two of Garfield County’s elected representatives are working on shaking loose what’s left of an old pot of federal “oil shale mitigation” cash that could partially benefit the counties of the Western Slope of Colorado.

State Rep. Randy Baumgardner, R-Hot Sulphur Springs, and U.S. Rep. Scott Tipton, R-Cortez, are continuing an effort that Baumgardner said began years ago. The aim is to pry loose anywhere from $13 million to about $48 million left over in the Naval Oil Shale Reserves Trust Fund.

Baumgardner, reached at his Denver office during a break in his legislative duties, said Tipton has introduced federal legislation that would release the money from the trust fund and send it to Colorado.

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The money was collected during the oil shale boom of the late 1970s and early 1980s.

Back then, Garfield, Mesa and Rio Blanco counties were the focal points of a push by giants of the energy industry – Exxon, Chevron, Union Oil and others – to find a way to extract a petroleum-like substance called kerogen from deeply buried shale formations in the Piceance Basin.

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The boom went bust on May 2, 1982, known locally as Black Sunday, when Exxon Corp. pulled the plug on its Colony Oil Shale Project. The entire industry soon collapsed, causing massive economic dislocation throughout the state.

Federal lands in Colorado and Utah were set aside in the early 1920s as the Naval Oil Shale Reserves as a way to guarantee fuel for military aircraft.

The move was based on expectations that commercial oil shale production would become a reality at some point, and the understanding that shale oil is more easily refined into aviation fuel than into gasoline for cars and trucks.

Baumgardner explained that a Naval Oil Shale Reserves Trust Fund was set up to help communities in the region deal with growth and other impacts anticipated with oil shale development.

This fund, he said, reached $120 million or so at one point, but has been depleted over the years by withdrawals to pay for energy-related mitigation projects.

Before the remaining money is released, Baumgardner said, he is working with state Sen. Steve King, R-Grand Junction, to pass state legislation to ensure the money will be used as it was intended – as mitigation money for counties and municipalities affected by the oil shale boom and subsequent bust.

The state bill is necessary, Baumgardner said, because of concern that the money might “get gobbled up by the state and end up in the general fund” as a way to ease Colorado’s ongoing budget crisis.

jcolson@postindependent.com