Oil shale is a fine-grained sedimentary rock containing organic matter from which petroleum products may be distilled with the potential to provide Americans with secure, reliable and affordable energy. Section 21 of the Mineral Leasing Act of 1920 (30 U.S.C. 241), authorizes the BLM to lease federal lands for oil shale development.
The United States holds more than half the world’s oil shale. The largest known deposits of oil shale are in a 16,000-square mile area of the Green River Formation in Colorado, Utah and Wyoming. To date, technological advances have not proven that oil shale can be produced economically enough to support a sustained commercial oil shale industry in the United States. Total in-place oil shale resources for southwestern Wyoming, northwestern Colorado and northeastern Utah are estimated at 4.3 trillion barrels.
Research, Demonstration and Development Leases
Following direction in the National Energy Policy Act of 2005, BLM Colorado approved seven Research, Development and Demonstration (RD&D) leases via two separate solicitations for lease nominations. The first solicitation was announced on June 9, 2005, and the second was announced Nov. 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.). In November 2012, BLM Colorado signed the remaining two RD&D leases to ExxonMobil Exploration Company and Natural Soda Holdings, Inc. All of the RD&D leases were let to encourage industry to develop and test technologies aimed at developing oil shale resources on a commercial scale. The initial term of the leases is 10 years.
For the first round RD&D leases, the companies have the option to extend their lease for up to five years if they can sufficiently prove that their research is indicating progress toward a process that can achieve commercial production. The first round leases also contain a preferential right to convert the RD&D acreage, plus any adjacent acreage up to 4,960 acres, to a 20-year commercial lease if they can prove that their process can be scaled up to achieve economic and environmentally sound production levels. The second round leases contain a preferential right to convert the RD&D acreage, plus any adjacent acreage up to 480 acres, to a 20-year commercial lease if they can prove that their process can be scaled up to achieve economic and environmentally sound production levels.
Oil Shale and Tar Sands Programmatic Environmental Impact Statement
In November 2012, the BLM published a plan to promote oil shale and tar sand resources on BLM-administered land in Colorado, Utah and Wyoming. The final programmatic environmental impact statement (PEIS) and plan amendments would make nearly 700,000 acres in Colorado, Utah and Wyoming available for research and development of oil shale, and about 130,000 acres in Utah for activities related to tar sands. The final PEIS amends 10 resource management plans and identifies areas that will be made available for potential leasing, exploration, and development of oil shale and tar sands resources. Areas that are made available to oil shale development would first be offered as an RD&D lease. The BLM could issue a commercial lease after a lessee satisfies the conditions of its RD&D lease and meets all federal regulations for conversion to a commercial lease. The final PEIS also includes provisions for wildlife habitat conservation including Greater Sage-grouse habitat. 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. Individuals interested in viewing the Approved Plan/Final PEIS can visit the http://ostseis.anl.gov website.