Federal land managers have rejected ExxonMobil’s application for an oil-shale research project in western Colorado, citing concerns about another mineral on the site and about the economic viability of the proposal.
Four other companies are still in the running for the Bureau of Land Management program, which is offering leases on federal land in Colorado and Utah to test technologies to extract oil from shale.
Geologists estimate that a trillion barrels of oil may be locked in shale across the West.
Heather Feeney, the BLM spokeswoman in Washington, said Thursday that ExxonMobil had not said what it planned to do with deposits of nahcolite, a mineral similar to baking soda, on its proposed site.
Nahcolite is sometimes used in the production of food, cleaning products, fire extinguishers and pharmaceuticals.
Because nahcolite is marketable, BLM rules do not allow it to be destroyed in the pursuit of another mineral.
Feeney said the BLM also questioned the economics of ExxonMobil’s project because the company did not project oil production until the eighth year of a proposed 10-year lease.
“Part of the concept of the RD&D (research, development and demonstration) leases is not only to prove the technology but also the economic viability of the technology,” Feeney said.
ExxonMobil did not immediately return a call Thursday.
The decision, first reported by The Daily Sentinel in Grand Junction, was released last week. Feeney said ExxonMobil would not be allowed to revise and resubmit its proposal for a research lease but could compete for a commercial lease when that process begins.
Feeney said the BLM expects to make decisions on the remaining shale research proposals by this summer, though the reviews may not be finished simultaneously. She said three of the proposals are for land in Colorado and one for land in Utah.
