For Immediate Release: December 15, 2006
Contacts: Celia Boddington BLM 202-239-3671

Interior Department Issues Oil Shale Research, Development and Demonstration Leases for Public Lands in Colorado

WASHINGTON – In the next step advancing the Bush Administration’s efforts to develop the world’s largest oil shale resource, the Department of the Interior has issued research, development and demonstration (RD&D) leases for five oil shale projects on public lands in Colorado’s Piceance Basin managed by the Bureau of Land Management. These are the first-ever RD&D leases issued for public lands and the first federal oil shale leases issued in more than 30 years.

C. Stephen Allred, Assistant Secretary of the Interior for Land and Minerals Management, signed the RD&D leases for projects proposed by Chevron USA, Inc.; EGL Resources, Inc.; and Shell Frontier Oil & Gas, Inc.

“These oil shale RD&D leases will help us determine how industry might develop this tremendous resource effectively and economically,” Allred said. “But important issues remain to be addressed, including how to ensure appropriate environmental protections are achieved. We’ll be working closely with local communities and others on answers as we move forward.”

RD&D leases grant rights to develop oil shale resources on tracts not to exceed 160 acres of public land for lease. These tracts were identified in proposals submitted by the companies in June 2005. The initial term of the leases is 10 years with the option of extending the leases up to five years with proof of diligent pursuit of commercial production levels. The leases also contain a preferential right to convert the RD&D acreage plus adjacent acreage up to 4,960 acres to a 20-year commercial lease once commercial production levels have been achieved and all requirements have been met.

As outlined in the Environmental Assessments and Decision Records signed by Allred last month, the RD&D leases include a number of project-specific requirements for permitting, monitoring and mitigation to reduce possible impacts to the environment.

The Green River Formation, covering portions of Colorado, Utah and Wyoming, may hold the equivalent of 800 billion barrels of shale oil that is potentially recoverable. More than 70 percent of the Formation, including the richest and thickest oil shale deposits, lies under federally managed lands, giving the Interior Department a key role in determining how the resource is developed.

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