Washington – The sweeping energy legislation passed by the U.S. House on Thursday would accelerate oil-shale development in northwest Colorado.
Page 904 of the thousand- page bill contains a provision that orders the Interior Department to start leasing its oil- shale reserves by the middle of 2007. The federal government owns 80 percent of the lands containing oil-shale reserves.
Republicans backing the accelerated program say there’s no reason to wait to reduce dependence on foreign oil.
“If you don’t give the federal government a deadline, we feel it never will happen,’ said Rep. Marilyn Musgrave, R-Fort Morgan.
But Democrats, harkening back to the devastating boom- bust of Colorado’s oil-shale economy of the 1980s, continue to argue that the federal government should take a slower approach.
“Oil-shale fever is like a ride on a roller coaster,’ said Rep. Mark Udall, a Democrat from Eldorado Springs. “On the way up, it’s exciting, and you start feeling like you’re on top of the world – but all at once there’s a steep drop, and suddenly you don’t feel so good.’
Calling the GOP plan a “crash program,’ Udall tried and failed to change the oil-shale provision to ensure that a full environmental study was done before leasing of oil shale begins.
Rep. John Salazar, D-Manassa, whose Western Slope district includes Colorado’s oil- shale reserves, says he opposes the fast-track approach. “That’s not nearly enough time to bring together the community and the oil companies,’ he said.
Colorado has the country’s mother lode of oil shale. It’s part of a 1.8-trillion-barrel reserve in the Green River formation. In that, there’s as much recoverable oil as in all the proven conventional reserves in the world right now.
But development of those reserves is always shadowed by the memory of “Black Sunday’ – May 2, 1982 – when Exxon shut down its $5 billion shale project and Colorado’s oil boom went bust.
Interest in shale has been re-ignited by Shell’s testing project in Rio Blanco County. The company has developed a new process for extracting oil by cooking it out of the rock with long electrical heaters.
Shell officials say they won’t decide whether the process is commercially viable until the end of the decade. But they want the federal leasing program expedited so development won’t be bogged down by endless studies.
“Is an environmental impact statement going to be needed for every stage of development?’ said Terry O’Connor, vice president for external and regulatory affairs for Shell’s unconventional resource unit.
Environmental groups, careful to point out they don’t oppose shale development, say they worry that environmental impacts will be overlooked. For example, Shell’s process uses huge amounts of electricity, which could mean more coal- fired electric plants.
“That’s one aspect that really ought to be looked at,’ said Dave Alberswerth of The Wilderness Society.
Shell has brought significant political firepower to the shale debate. It hired former Louisiana congressman Bob Livingston in August to lobby for federal funding and support of its oil-shale conversion process.
Currently, Shell’s project is on private land. The company has told congressional staffers it would like legislation ordering government officials to help oil companies acquire more public lands for their energy projects through land exchanges.
The land-exchange program is included in the bill. But the bill does not include some of Shell’s other stated goals, like removing a cap on the size of oil leases.
The bill now goes to the Senate, where even Republican supporters of shale, such as Colorado Sen. Wayne Allard, have said “there’s no rush to development at this time.’
The House bill also includes an amendment that encourages development of wind energy on federally owned land. The amendment, sponsored by Rep. Jay Inslee, D-Wash., would cut in half rental fees charged by the Bureau of Land Management for private companies to place wind turbines on BLM sites.
Staff writer Mike Soraghan can be reached at 202-662-8730 or msoraghan@denverpost.com.
