The 1.8 trillion barrels of oil shale that may lie beneath Colorado, Utah and Wyoming should be developed with care for the environment and nearby communities. But such balance would be sacrificed under a new plan pushed by U.S. House Republicans, shredding a compromise reached just two months ago.
In last summer’s energy legislation, Congress told the U.S. Bureau of Land Management, which will handle oil shale leases and permits, to do a comprehensive environmental study, intensively consult with state and local governments and seek public comment before issuing leases. The compromise, championed by U.S. Sen. Ken Salazar, D-Colo., wasn’t ideal, as it gave the BLM just 18 months for the study, but it was reasonable. It could let Colorado pursue a balanced oil shale program.
But last Wednesday, the House Resources Committee voted to torpedo the essence of the compromise it had earlier approved. Most troubling, the committee’s plan would seriously reduce the level of input from citizens and state and local governments far below what last summer’s bill envisioned. It orders the BLM to lease 2.5 million acres of public lands (about 4,000 square miles) for oil shale in just one year, although the technology for production is many years away. It further says the BLM’s environmental study will be accepted on its face even if it contains errors and bars new studies for a decade, and even if additional data or concerns arise.
Normally, oil companies pay 12.5 percent in federal royalties in exchange for extracting the public’s irreplaceable mineral resources, but oil shale companies are in line for a sweetheart deal. Last summer’s bill lets the U.S. Interior secretary exempt oil shale projects from paying any federal royalties for the first five years of production. The new provisions would further cap oil shale royalties at 3 percent for another decade. At a time when Congress may squeeze student loans and health care for the poor, letting some of the world’s biggest, richest energy companies pay a discount royalty rate is unconscionable.
In committee, U.S. Rep. Mark Udall, D-Colo., tried unsuccessfully to strike the plan’s worrisome provisions. Unfortunately, another Coloradan on the committee, Republican Tom Tancredo from the 6th District, voted against Udall’s amendment. Tancredo’s explanation, that the public still can comment on the pending BLM study and the measure at least makes oil shale projects pay some royalties, doesn’t excuse his vote against our state’s real interests.
Colorado doesn’t want Western Slope communities to repeat the painful experience of the last oil shale boom in the 1980s, when communities underwent such rapid growth their basic services couldn’t keep pace – then saw thousands of jobs vanish overnight when energy companies unplugged the money-losing projects.
Backers of the oil shale giveaways, Republicans Richard Pombo of California and Jim Gibbons of Nevada, want to jump-start oil shale development, but their plan doesn’t fix what really confronts the industry: the technology can’t yet make liquid fuels at a reasonable price.
Shell Oil is experimenting with a new process in northwestern Colorado that could reduce both costs and environmental impacts. But Shell won’t decide whether to pursue commercial development until about 2010. Meanwhile, Shell promises to consult with the state and heed community concerns – which is more than congressional Republicans would guarantee.
