US proposes scaling back onshore leasing for oil shale, oil sands
Washington (Platts)--
3 Feb 2012
The US is proposing to dramatically scale back the acreage set aside for oil shale and oil sands development in three western states, the Interior Department's Bureau of Land Management said Friday.
The BLM said it had reconsidered a Bush-era plan that made 2 million acres available for commercial leasing for the still experimental techniques for extracting kerogen, a precursor to crude oil, and to develop oil sands containing bitumen.
The new BLM proposal limits leasing to less than 830,000 acres in Colorado, Utah and Wyoming for shale oil development, but only for research and development projects, not commercial leases. The proposal would also designate less than 229,000 acres in the three states for commercial oil sands leasing.
"The preferred alternative continues our commitment to encouraging research, development, and demonstration projects so that companies can develop technologies that can lead to economic and commercial viability," BLM Director Bob Abbey said in a statement. "Because there are still many unanswered questions about the technology, water use, and impacts of potential commercial-scale oil shale development, we are proposing a prudent and orderly approach that could facilitate significant improvements to technology needed for commercial-scale activity."
The BLM announced last year that it would take another look at the Bush-era decision, especially in light of a settlement the government reached with environmental groups that had filed a legal challenge to the 2008 leasing decision.
The agency, in its statement Friday, drew a distinction between US and Canadian oil sands formations.
"Tar sands are sedimentary rocks containing a heavy hydrocarbon compound called bitumen. They can be mined and processed to extract the oil-rich bitumen, which is then refined into oil. However, unlike the oil sands deposits in Canada, oil is not currently produced from tar sands on a significant commercial level in the United States," BLM said. "Additionally, the U.S. tar sands are hydrocarbon wet, whereas the Canadian oil sands are water wet. This difference means that U.S. tar sands will require different processing techniques."
The draft programmatic Environmental Impact Statement released Friday comes two days after Republicans on a key House committee passed a bill that would force Interior to expand oil shale and oil sands lease sales.
The bill, which passed the House Natural Resources Committee, directs Interior to hold a lease sale on an additional 10 parcels for research, development and demonstration of oil shale resources. The bill would also direct Interior to hold five commercial lease sales in areas determined to have the most potential for oil shale development by 2016.
The BLM decision to shrink oil shale and oil sands development drew a sharp response from the American Petroleum institute.
"Within a week of encouraging an 'all of the above' energy strategy, the administration continues to introduce actions that delay and restrict development," the API, which represents oil and natural gas exploration and production companies, said in a statement.
"There has to be certainty, and the BLM draft plan is not conducive to an operating environment that encourages investment," the API said. "The Administration is continuing actions that send negative signals to industry and capital markets at exactly the wrong time for the American public."
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