August 8, 2008

Contacts: Frank Quimby, DOI (202) 208-6416
Angela Hill, DOE (202) 586-4940
Jeff Krauss, BLM (202) 452-5128

Secretaries Kempthorne and Bodman Clear the Way for State
 of Colorado to Receive Oil and Natural Gas Leasing Revenue

State to Receive 49 Percent of Current and Future Mineral Revenue Payments from Roan Plateau Area Formerly Occupied by Naval Oil Shale Reserves

WASHINGTON, D.C. – Secretary of the Interior Dirk Kempthorne and Secretary of Energy Samuel W. Bodman today notified Congress that funds have been obligated and a contract has been let for the Anvil Points clean-up project, clearing the way for the State of Colorado to begin receiving mineral revenue from an area of the Roan Plateau known as Naval Oil Shale Reserves Number 1 and 3.

“Our notification certifies that we have met the legal requirements for allowing the State of Colorado to begin receiving its share of current and future oil and natural gas revenue from a major section of the Roan Plateau,” Secretary Kempthorne said.  “Currently, about $2.7 million is generated each month from leases in this area and the State will now receive 49 percent of these payments as well as its 49 percent share of all future bonus bids, rents and royalties on oil and gas leases in the area.”
"Today's certification marks a day of progress for the Department of Energy, the Department of the Interior, and the State of Colorado," U.S. Secretary of Energy Samuel W. Bodman said.  “Getting to this point has involved the hard work of many dedicated government employees, and it has required a great deal of coordination."

The Anvil Points Fund specifically provides financial resources for the environmental remediation, waste management, and environmental compliance activities associated with the clean-up of spent shale at Anvil Points, a former oil shale research area in Naval Oil Shale Reserves 1 and 3 on the Roan Plateau, near Rifle, Colorado.  By law, all revenue from oil and natural gas development in this area of the plateau was diverted to the fund.

The money will be used to cover project costs, which include $15.4 million for environmental remediation; $39.4 million to reimburse the U.S. Treasury for the Department of Energy’s past activities at the site; and about $10 million for monitoring and compliance activities. 

The clean-up contract, let by Interior’s Bureau of Land Management, will remove about 300,000 cubic yards of spent shale and safely store the material in a newly constructed repository.  The State of Colorado’s Department of Health and Environment concurred in the design and location of the proposed repository for the spent shale. The Department of Energy’s past activities at the site, for which the U.S. Treasury is reimbursed, include the installation of wells and related infrastructure.

Management of the Naval Oil Shale Reserves 1 and 3 was transferred from the Department of Energy to the Department of the Interior in 1997 by Public Law 105-85.  Known as the Transfer Act, the legislation provided for the clean-up and remediation of a small area of contaminated lands associated with a residual pile of spent oil shale.  Funding was mandated by establishing a special account in the U.S. Treasury – the Anvil Points Fund – consisting of all receipts from mineral leasing and development authorized by the Transfer Act in the area of the Roan Plateau known as Naval Oil Shale Reserves 1 and 3.  The fund also was created to reimburse the U.S. Treasury for the Department of Energy’s past activities at the oil shale research site.

The Transfer Act’s provisions, however, have prevented the State of Colorado from receiving its share of lease revenue in this area of the Roan Plateau – from bonus bids, royalties and rentals – that the State would normally receive under the Mineral Leasing Act until the Secretaries of the Interior and Energy jointly certified that provisions in the law had been met.  With that certification completed by today’s action, the State of Colorado can begin to received is 49 percent share of oil and natural gas revenues from leases on the Roan Plateau in the area known as Naval Oil Shale Reserves 1 and 3.

(See detailed map of oil and gas lease parcels locations on the Roan.)

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