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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