U.S. limits oil-shale development in Rocky Mountains

Paul FoyThe Associated PressAspen, CO Colorado

SALT LAKE CITY – The U.S. Department of the Interior scaled back a Bush administration plan Friday to lease Western range lands for development of oil shale and tar sands, the unconventional sources of oil found in pockets of the Rocky Mountains.Federal officials said they were set to authorize 1,250 square miles of public land for commercial leasing in Colorado, Utah and Wyoming. That’s a third of the range lands that President George W. Bush planned to offer, and the new administration said it was taking wilderness-quality lands off the table.On paper, the Rocky Mountain oil shale deposits could yield a great abundance of oil – more than 1 trillion barrels – but environmental groups say it would involve ripping up public lands and depleting scarce sources of water. Political leaders in Arizona and Nevada and farmers worry about a diversion of Colorado River water. Big-game hunters oppose the intrusion of mining. Thousands of pages of comments have been filed on the plans.The U.S. Bureau of Land Management said it selected the best reserves for oil shale, a rock that contains fossilized algae, a primitive form of oil that never received enough heat or pressure to produce liquid crude. It’s also a hard nut to crack – major oil companies are still experimenting with ways to make production economical, notably by baking rock in the ground to release fluids.The federal government is making about 200 square miles of the federal lands available for tar sands mining in Utah, similar to one project already under way on the state’s own trust lands. The BLM issued the decision Friday along with a 6,245-page environmental impact study.Environmental groups applauded Interior Secretary Ken Salazar’s caution. Utah politicians called it short-sighted.”Once again, despite President Obama’s calls for an ‘all of the above’ energy approach, his administration is moving to limit American energy production and the jobs that come with it,” said Sen. Orrin Hatch, R-Utah. “The West has the resources and the abilities to lower energy costs and create jobs but Washington continues to stand in the way. Today’s announcement just doesn’t make sense, and it needs to be reversed.”Sen. Mark Udall, D-Colo., struck a measured response, saying he was concerned about the use of limited water supplies.”Nonetheless, I look forward to seeing this technology explored further. We need an all-of-the-above energy policy,” Udall said Friday. “The Interior Department’s decision ensures that we will not be out over the front of our skis with untested technology.”The federal government has yet to authorize widespread development, instead leasing 160-acre research plots to a handful of companies testing extraction methods. Rifle, Colo.-based American Shale Oil LLC is heating an underground zone by pumping a pool of oil down a well and blasting it with hot fuel gas.The BLM said players must prove their research before winning larger commercial leases. It approved another two research leases Friday, to ExxonMobil Exploration Co. and Natural Soda Holdings Inc. for in-ground development in Colorado’s Piceance Basin.The Piceance Basin doubles as a “mule-deer factory,” said the National Wildlife Federation, warning widespread development could break up habitat there.In Wyoming, the BLM said it was putting limits on development in areas where sage grouse gather. That was small comfort to the Laramie-based Biodiversity Conservation Alliance, however. The group said any kind of development can chase off sage grouse, the birds that puff themselves up in mating dances.The U.S. Fish & Wildlife Agency is under court orders to determine by 2015 whether sage grouse deserve protection under the Endangered Species Act.Also in Wyoming, the BLM pulled the Red Desert’s Adobe Town from consideration, a 128-square-mile wilderness study area rich in fossils.A host of Republican politicians sounded off Friday.”The Obama Administration should cancel this plan and work with Congress and governors on solutions that will create jobs and strengthen our energy security,” said Sen. John Barrasso, R-Wyo.Rep. Ed Whitfield, R-Ky., chairman of the House Energy and Power Subcommittee, said the Obama administration was “locking up” as much potential oil “as the rest of the world’s proven reserves combined.”Skeptics point to failed oil-shale efforts since the 1920s. They expect newcomers to do no better.”We’ve seen small companies make big claims before going bust,” said Matthew Garrington of the industry watchdog group called the Checks and Balances Project, based in Denver and Washington, D.C. “This is the same empty promise.”