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The White House has finished reviewing an Interior Department proposal
for commercial oil shale leasing on public lands in Western states, and
the department expects to announce the measure tomorrow.
Oil shale is getting new attention amid high oil prices and concern
that heavy U.S. reliance on oil imports poses a threat to national
security. Oil shale is a massive but notoriously hard-to-develop source
of hydrocarbons bound up in underground rock formations.
But
while Interior is set to issue draft rules after the Office of
Management and Budget review, Congress has blocked the department from
finalizing the regulation due to environmental concerns about the
program moving forward too quickly.
Interior Secretary
Dirk Kempthorne is expected to unveil the proposal tomorrow, a
spokeswoman for the Bureau of Land Management said.
Oil
shale is found in abundance in the Green River formation, which spans
Colorado, Wyoming and Utah. Estimates of the oil resources in the
formation range from 1.2 trillion to 1.8 trillion barrels, of which an
estimated 800 billion barrels is considered recoverable, according to
BLM.
The last major effort to develop oil shale went
famously bust in the early 1980s when oil prices tumbled, prompting
major job losses when Exxon pulled up stakes on a Colorado project.
But
companies -- notably Shell Oil Co. -- have continued to explore the
idea. Shell has long been experimenting with an underground approach
for heating and separating the hydrocarbons from the rocks, as opposed
to a surface mining operation. It has not made a decision about whether
to pursue commercial-scale development, and any potential large-scale
commercial oil shale development in the United States is considered
years and years away.
Also, BLM has been granting leases
on small tracts for research, development and demonstration of
extraction technologies. The agency has said it eventually envisions
making 1.9 million acres of public lands available for commercial
leasing, holding an estimated 61 billion barrels, according to the
agency's announcement of a draft environmental study late last year.
Concerns raised
Environmentalists and some lawmakers
fear ecological harm from oil shale development. Colorado Gov. Bill
Ritter (D), for instance, has expressed concern about water quality,
air quality and wildlife effects of large-scale development, and has
urged a go-slow approach.
Congress has blocked final
leasing rules that are a precursor to commercial lease sales. A
catch-all federal spending bill late last year bars Interior from
issuing final commercial leasing rules during this fiscal year, which
ends Sept. 30.
That moratorium would likely be extended if
-- as expected -- Congress enacts a continuing resolution to extend
current spending, which pushes action on fiscal 2009 spending bills
into the next Congress and a new administration.
However,
the oil shale moratorium is wrapped up in the current congressional
energy debate. An energy bill that Senate GOP leaders are promoting
includes repeal of the ban on commercial leasing rules.
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