Oil shale proposal stirs lawmakers' anger
Ritter, Sen. Salazar oppose Bush effort to issue leases
Gargi Chakrabarty
Published July 22, 2008 at 9:05 p.m.
Do you support further development of Colorado's shale oil deposits?
Photo by Dennis Schroeder / The Rocky/2005
Terry O'Connor, an executive with Shell Exploration and Production, examines shale in 2005 at the company's Mahogany Research project near Rifle. Oil shale is rock from which oil may be produced either through heat or a chemical process.
Gov. Bill Ritter and Sen. Ken Salazar blasted the Bush administration's latest move Tuesday to ease the way for commercial development of oil shale.
Ritter called the Interior Department's proposed rules for oil shale development "premature, unnecessary and irresponsible."
"This is a last-ditch, irresponsible attempt by the White House to issue commercial oil-shale leases, at Colorado's expense, and will do nothing to help hard-working Americans or family-owned businesses struggling today with $4-a-gallon gas," Ritter said. "These regulations would set bargain basement royalty rates that could cost Coloradans billions of dollars."
Oil shale is a fine-grained sedimentary rock containing organic matter from which oil may be produced either through heat or a chemical process.
There are an estimated 800 billion barrels of oil in shale formations under Colorado, Utah and Wyoming, according to the Interior Department, or three times the proven reserves of Saudi Arabia. Companies, including Royal Dutch Shell Plc, are exploring ways of getting oil products from the rock formations.
The Interior Department's proposed rules include maximum lease size and acreage limitations, as well as royalty rate options.
Salazar, a Democrat, said the "administration is trying to set the stage for a last-minute fire sale of commercial oil shale leases in western Colorado, despite the fact that we are still years away from knowing if the technologies for developing oil shale on a commercial scale are even viable."
Salazar promised to find a way to extend a congressional moratorium, which expires Sept. 30 at the end of the current fiscal year.
Announcing the rules, Interior Secretary Dirk Kempthorne suggested it was imperative to develop domestic energy sources such as oil shale in the face of rising energy prices.
President Bush and congressional Republicans say lawmakers should lift a measure that blocks final rules that would govern commercial development of oil shale.
Republican Sen. Wayne Allard said: "You've heard false claims that the department is under a 'frenzied rush' to 'organize a fire sale' of development leases. It is ridiculous to consider the multiyear effort, started in 2004 that included congressional debate and the passage of a proposal, years of planning, studies, R&D and a draft environmental impact statement issued last December, as 'frenzied.' "
"It's flat wrong to claim that western communities are being asked to stand aside to accommodate this 'fire sale,' " he added. "The truth is western communities understand both the potential and the realities of the oil shale resource in their backyard."
Environmental groups oppose efforts to develop oil shale, saying it would use too much water.
Shell and other companies already have rights to large amounts of water in the Colorado River Basin and other areas as well.
Chris Trees, director of external affairs for the Colorado River Water Conservation District in Glenwood Springs, said any oil shale development is likely decades away, despite the proposed rules. He said he hopes that if the oil companies move forward with oil shale production, they can work with the state to ensure that its remaining water supplies are developed responsibly and in a way that would benefit people, the environment and industry.
"Oil shale represents a risk and an opportunity," Trees said. "It's not just industry that will need that new water. But it could present an opportunity to develop water for municipal and environmental uses as well."
chakrabartyg@RockyMountainNews.com or 303-954-2976 Jerd Smith and wire reports contributed to this report.
For and against Officials split on proposed rules
U.S. Rep. Mark Udall, D-Eldorado Springs
* From the beginning, I have always supported responsible development of our natural resources like oil and gas drilling. But when it comes to the development of oil shale, the research and technology isn't complete.
Until the technology is up to speed, I will continue working with Sen. Ken Salazar and Rep. John Salazar to push for a one-year timeout that will allow us to complete the research and technology needed before large-scale development moves forward."
Britt Weygandt, executive director, Western Business Roundtable
* This proposed commercial leasing program is a critical step toward fostering the technological advances that will be needed to pursue oil shale resources in an environmentally and economically responsible manner. It is unreasonable to think that companies will be able to bear the huge capital expense involved in developing this technology to responsibly pursue oil shale resources without a viable commercial leasing program in place to justify the investment.
Keith Hay, energy advocate at Environment Colorado
* The president is again holding out a false promise of lower gasoline prices to Coloradans. Oil shale is years from providing gasoline, meaning that reaching for those resources won't help lower prices or the pain at the pump today.
Frank Smith, organizer with Western Colorado Congress
* This is very concerning for many reasons. The extraction technologies are far from being ready to go. In order to develop a responsible regulatory framework we would have to determine what they are going to use. Shell and other corporations are pursuing technologies that would have a smaller ecological footprint. But the older technologies that exist are, frankly, like strip mining. If there is an acceleration (in development) that's what we'll have.
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July 23, 2008
8:10 a.m.
Suggest removal
windbourne writes:
This will almost certainly happen. The next president should declare these illegal and roll it back. Developing oil shale is fine. But lets wait until the ability is better researched. One of the problems is that these companies turn around and convert these leases into housing development or what ever makes them money, which should earn a WHOLE lot more.
July 23, 2008
8:20 a.m.
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jjfjules writes:
I can't see that it would make a lot of sense for companies to spend a great deal of money to develop a technology only to find that the government won't allow its use. Everyone knows one must buy the land before one can build the house. Wake up and lets get going on this, something never started never gets accomplished. Each day of delay means more lost US$ to forieng governments and companies that could be kept at home to accomplish so many other things.
July 23, 2008
8:27 a.m.
Suggest removal
An_Engineer writes:
Once again Ritter and Salazar demonstrate that they have absolutely no intention to provide any leadership in the area of ensuring that both Colorado and the U.S. access energy supplies within our borders. Ritter is quoted in the article: “and will do nothing to help hard-working Americans or family-owned businesses struggling today with $4-a-gallon gas” . The question to ask Ritter is what has he done that will increase supplies of domestically produced oil that will help bring the price of gasoline down??? So far, the answer is simple...
NOTHING.
As for Salazar. As usual, his response to developing energy supplies located in the U.S. is: “Salazar promised to find a way to extend a congressional moratorium, which expires Sept. 30 at the end of the current fiscal year.” Salazar’s efforts are merely delaying tactics designed to ensure that the oil shale is never developed hidden behind the excuse of “despite the fact that we are still years away from knowing if the technologies for developing oil shale on a commercial scale are even viable." Quite frankly, we will never know if oil shale can be become commercially viable if we do not try. Is it not about time that we start???
The next time you are filling your tank with $4 per gallon or more gas, remember who is trying to find the oil supplies necessary to stop or reverse the increases in the price of gas. It sure as hell is not Ritter and Salazar...
July 23, 2008
9:21 a.m.
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an3378 writes:
I don't think people understand here that we are already drilling more than ever before in Colorado and Wyoming and Utah. The oil shale again is not a solution to getting lower gas or oil. The sell the oil and gas to the highest buyer which includes outside of the Untied States. The energy prices are not going to be helped by using oil shale. There is the consideration of other species on the planet that yes do help us human beings. I know that the environment means nothing to people who are fixated on decreasing the price of energy. But the environment does effect us too. I think it is time for a cleaner alternative energy resource. I know it is easier to blame and point fingers and such but it will not help the fact there needs to be another way to get energy and keep a balance for the environmentalist and the energy industry to be some what happy. I hope it is soon.
July 23, 2008
9:25 a.m.
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Brockage writes:
You big shots can afford energy prices as they are (have another Dilly bar at your own Dairy Queen whenever you feel like it) but us regular people need the lower price that more supply will give us.....and we need it pronto.
July 23, 2008
10:08 a.m.
Suggest removal
mmannino writes:
Ritter, Salazar, Udall, and most Democrats are pursuing an immoral and elitist policy. The technology is here now for responsible oil shale development. Without leases and sensible rules, additional research and development cannot occur. The Democrats did not cause global demand for fossil fuels but they are doing everything they can to stop domestic supplies from increasing. The current energy situation is causing thousands of layoffs in the travel, manufacturing, and transportation industries. Everyone in these industries should complain to the Democrats about their immoral and elitist policies.
The Democrats should consider the flip side of their obstructionism. With the economy slipping, the increased economic activity from domestic energy exploration will provide a huge boost in tax revenues to fund all of the Democrat socialist programs.
The choice is simple: drill here, drill now, pay less (Republican) versus not here, not now, pay much more and feel good (Democrat).
July 23, 2008
10:15 a.m.
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jbowen43 writes:
Bush and Cheney are only trying to set up their friends and cronies with sweetheart deals now while they are still in office. Wait until you see what they have planned for the last sixty days of their administration.
July 23, 2008
10:25 a.m.
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mmannino writes:
jbowen43,
Please tell us what sweetheart deals you anticipate. You have it backwards. The Democrats are the party of corporate welfare and bribery. The new energy economy is a just an alliance between favored businesses, Democrat politicians, and labor unions. The wind and solar industries would not exist in their current form without mandates. Democrats are punishing their enemies (oil, natural gas, and coal industries) and rewarding their friends (renewable energy companies). The conventional energy industry just wants freedom to operate in a responsible manner. The Democrats want to shut down competition for their favored industries. Democrat energy policies are elitist and immoral. The results of their elitist and immoral policies will be thousands of layoffs, high energy prices, and drastic reductions in consumption. The Utopian Democrats will sure feel good however.
July 23, 2008
11:14 a.m.
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mmannino writes:
an3378,
You are mistaken about global energy markets. More oil produced in Colorado will be added to the world supply, effectively lowering the price to all oil users. Much of the oil extracted in Colorado will probably be used in the United States because it may be easier to transport it to refineries here. Regardless of where the oil is used, it will lower world oil prices.
Exploring for oil and natural gas is a bridge to a future energy policy. Economically viable alternative energy is decades away. Even as these alternative energy technologies become viable, we will still need lots of oil and natural gas. Commitment to non viable alternative energy will result in boondoggles such as corn based ethanol. Without lower energy prices, investments in alternative energy will be lower because the high energy prices will strangle the economy. We need all kinds of energy investments both in conventional and renewable energy technologies.
July 23, 2008
11:39 a.m.
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windbourne writes:
Brockage,
Give us a break. You are not an average. More important, this crunch hurts all. But the argument that this will help is a total joke. Gore is telling you that we can not drill our way out of this. Pickens and others oil men are tellign you that we can not drill our way out. How many more intelligent ppl do you need to have info from before you accept that this garbage is not going to happen? The simple fact is, that our ONLY way out is to move off oil for transportation needs. Natural Gas will help for a bit, but I believe that it will be a moot point in under a year.
July 23, 2008
11:51 a.m.
Suggest removal
spud66 writes:
Politicians on the left keep criticizing attempts to open up areas for oil and gas drilling, saying it won't do anything to relieve his prices today. No kidding. But in 10 or 15 years, when it will have an impact, wouldn't it be nice if we started now? How about dropping the knee-jerk, reactionary, short-term thinking that got us into this mess in the first place?
And leasing to energy companies won't cost Colorado, it will cost the energy companies and benefit the federal and state governments in the form of leasing fees collected. If the technology isn't economic yet, the leases will expire and companies will have to bid and pay for leases again. HOW IS THIS COSTING COLORADANS BILLIONS OF DOLLARS, GOVERNOR RITTER?!?
July 23, 2008
12:13 p.m.
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MrBrightSide writes:
This is about land grabbing only, they can't even develop the shale on their existing land, how about they figure that out, tell us how and where they're going to process and with how much water, and then we'll talk about the fair market value of the land at that time instead of giving it to them for almost free now?
July 23, 2008
12:55 p.m.
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jerseycorn writes:
Doesn't anybody remember the oil shale bust of 1982? Does anybody remember how long it took our economy to recover from that fiasco? Can't we find a better solution? Hello?
July 23, 2008
2:32 p.m.
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MrBrightSide writes:
bobojake, are you even familiar with the discussion here?
July 23, 2008
2:35 p.m.
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MrBrightSide writes:
They have enough acres to develop the oil shale process as it stands, they don't need more for their R&D, this is more posturing to get cheap leases from the BLM before the FMV is increased due to the realized oil shale prices and potential.
July 23, 2008
2:51 p.m.
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mountainguy writes:
So the party of the poor American worker continues to block something that will help those they purport to support. New Democrats are nothing more then dyed in the wool liberals that lie about who they are until elected. There motto should just be "Why do today what we can put off until tomorrow...or ten years from now." When will the left quit with their "this will have no effect for 10 years or more." We've got to due today in order to prepare for tomorrow. If today's politicians were around back in Teddy Roosevelt's day we wouldn't have the Panama Canal an ships would still be sailing around South America. If they were around during FDR, England would be speaking German. If they were around during JFK we'd still be looking up at the moon. If they were around when Clinton was President we wouldn't be drilling in ANWAR...Oh year they were around and we're reaping none of those benefits. This is America and there is nothing we CAN't accomplish...unless of course there's a NEW DEMOCRAT/PROGRESSIVE/LIBERAL blocking progress for our country and its citizens.
July 23, 2008
3:40 p.m.
Suggest removal
MrBrightSide writes:
What are you babbling about here?! They have the land that they need, they can develop their process NOW if they desire, they don't NEED THE LAND that they request from the BLM to develop and perfect the extraction process.
They can't get any oil out until 2015 at the earliest, and that BLM land will have sat there in THEIR HANDS. Oil companies have 68 million acres of federal land under lease which they haven't explored, don't be a tool of theirs, but at the same time, don't let facts get in the way of a good anti DEM rant.
July 24, 2008
8:46 a.m.
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Coloradomama writes:
Instead of drilling and mining more of our precious land we should be looking at efficiency standards. Why don't we have a car that can go 100mpg???? Why aren't our appliances more efficient??? Economically it would be cheaper then fighting wars to get our gas or drilling and mining in the Western States.
By the way, the oil and gas companies don't use all the leases they currently have! Lets think progressively here folks! Efficiency is the most economical solution a free market economy (not gov't subsidies for drilling.)