Oil shale is actually the rock marlstone, which contains kerogen, a precursor to oil. The kerogen must be heated to more than 750 degrees F to convert it into oil because it was never buried deeply enough for nature to convert the kerogen to oil.
Oil shale is a domestic energy source with the potential to provide Americans with secure, reliable and affordable energy sources. Section 21 of the Mineral Leasing Act of 1920 (30 U.S.C. 241), authorizes the leasing of federal lands for the development of oil shale.
The oil shale lands managed by BLM Colorado are part of the largest known concentration of oil shale in the world – the Green River Formation. More than 70 percent of the Formation is on public lands in Colorado, Wyoming and Utah. In Colorado, the oil shale is found in the Piceance Basin located in western Colorado. The U.S. Geological Survey recently (2011) completed an assessment of in-place oil shale resources, regardless of grade, in the Green River Formation. The USGS did not attempt to estimate the amount of oil that is economically recoverable because there has not yet been an economic method developed to recover the oil from Green River Formation oil shale. Total in-place resources for southwestern Wyoming, northwestern Colorado, and northeastern Utah are 4.3 trillion barrels.
Research, Demonstration and Development (RD&D) Leases
Following direction in the National Energy Policy Act of 2005, the Colorado BLM has approved seven Research, Development and Demonstration (RD&D) leases. Two separate solicitations for nomination of RD&D parcels have occurred. One was announced on June 9, 2005 and the second solicitation for RD&D parcels was announced November 3, 2009. Five projects were selected as part of the first round nomination process: three for Shell Frontier Oil and Gas Inc., and one each for Chevron USA and American Shale Oil, LLC (formerly EGL Resources Inc.) Two additional leases were selected as part of the second round of solicitations of interest in RD&D leases: Exxon-Mobil Exploration Company and Natural Soda Holdings, Inc. The RD&D leases grant rights to develop oil shale on 160-acre tracts of public land for lease. The initial term of the leases is 10 years. For the first round RD&D leases, there is an option of extending up to five years with proof of diligent pursuit of commercial production. The first round 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. The second round leases contain a preferential right to convert the RD&D acreage plus adjacent acreage up to 480 acres, to a 20-year commercial lease once commercial production levels have been achieved and all requirements have been met.
Oil Shale and Tar Sands Programmatic Environmental Impact Statement
Nationally, the BLM completed work on a Programmatic Environmental Impact Statement (PEIS) March 22, 2013, amending 10 land use plans in Colorado, Utah, and Wyoming to make approximately 678,000 acres available for potential development of oil shale, and approximately 132,000 acres available for development of tar sands. In Colorado, the plans that have been amended are the Grand Junction Resource Management Plan, the White River Resource Management Plan, and the Colorado River Valley (formerly Glenwood Springs) Resource Management Plan. In September 2008, pursuant to Section 369 of the Energy Policy Act of 2005, FLPMA, and NEPA, the BLM issued a Proposed Plan Amendments/Final Oil Shale and Tar Sands (OSTS) Programmatic EIS analyzing the environmental and socioeconomic impacts of amending 12 land use plans to designate public lands administered by the BLM as available for commercial leasing for oil shale or tar sands development. The November 17, 2008, ROD that followed this Programmatic EIS adopted the proposed land use amendments reflecting the allocation decisions analyzed in the 2008 OSTS Programmatic EIS. These land allocation decisions, which are currently in effect, were challenged in a lawsuit brought by a coalition of environmental organizations in January 2009. As part of a settlement agreement entered into by the United States to resolve the lawsuit and in light of new information that has emerged since the 2008 OSTS Programmatic EIS was prepared, the BLM and the Department made the decision to take a hard look at whether the acreage opened in the 2008 PEIS should remain available for potential development of oil shale and tar sands resources in the future.
Under the 2013 Approved Plan/Final PEIS, the BLM has amended the applicable RMPs to decrease the acreage in Colorado, Utah, and Wyoming currently open for application for future leasing and development of oil shale or tar sands. Individuals interested in viewing the Approved Plan/Final PEIS can visit the ostseis.anl.gov website.
The BLM is taking a measured approach by requiring, in the case of oil shale, that those potential commercial developers of this resource first prove the commercial viability of the technologies they intend to use. This approach is intended to ensure that commercial viability is proven, and the environmental consequences of these technologies known before any commitment to broad-scale development.
Oil Shale Regulations
The regulations establish an oil shale commercial leasing system and regulate oil shale mining operations. The BLM, under the direction of the Energy Policy Act of 2005, completed regulations that would be used to authorize commercial oil shale leasing. The BLM published a final rule for the management of a commercial oil shale leasing program in the Federal Register on November 18, 2008. In 2009, a consortium of plaintiffs filed two lawsuits in the federal District of Colorado, each now captioned CEC v. Salazar, against the BLM and the Department of the Interior. The first suit challenged the BLM’s 2008 oil shale regulations. This suit was settled. Under the settlement agreement filed with the U.S. District Court in Colorado, the BLM agreed to propose changes to the rule and to publish a final rule by November 18, 2012. The BLM is in the process of considering an amendment to the oil shale rule and the proposed rule was published in the Federal Register on March 27, 2013. Comments on the proposed rule are due by May 28, 2013.