Utah BLM News Release

Interior Department Issues Oil Shale Research, Development and Demonstration Lease for Public Lands in Utah

Contact: Mary Wilson, 801-539-4020

Salt Lake City, Utah—June 28, 2007—The Department of the Interior today issued a research development and demonstration (RD&D) lease that will allow oil shale development to resume on a 160-acre tract of public land in Uintah County, Utah administered by the Bureau of Land Management’s Vernal Field Office.  The lease was issued to Oil Shale Exploration Co., LLC (OSEC) after environmental analysis determined that the company’s RD&D project would have no significant impacts.

“The terms and conditions of this lease reflect our commitment to advancing development of the substantial oil shale resource found in Utah while also safeguarding the environment,” said C. Stephen Allred, Assistant Secretary for Land and Minerals Management.  “We look forward to continuing to cooperate closely with the State of Utah and local governments as development of these unconventional energy resources moves forward.”

OSEC must submit a detailed plan of operations for approval by the BLM.  The company will test an above-ground retorting process on shale from the White River Mine site south of Vernal.  Initial test-retorting of existing shale stock will take place at a facility in Canada and will help determine the feasibility of the retorting process, the chemical properties of the syncrude products, and whether spent shale would have to be isolated from the environment.  In addition to requiring the company to obtain all appropriate local, state and federal permits to safeguard resources such as air and water quality, the lease specifies that shale from an existing supply at the site will be made available to other companies researching oil shale development.

“The RD&D process benefited greatly from the support of the State of Utah and local governments in Uintah and Duchesne Counties,” said BLM Utah State Director Selma Sierra.  “The BLM will continue to facilitate communication and collaboration between local communities and companies working with shale from the White River Mine.”

Issuing the lease for the OSEC project completes action in the BLM’s oil shale RD&D leasing program, which began in June 2005.  The BLM continues to lead development of a Programmatic Environmental Impact Statement (PEIS) supporting future commercial oil shale leasing on public lands in Utah, Colorado and Wyoming, as directed in the Energy Policy Act of 2005. 

Like the five RD&D leases issued earlier for lands in Colorado, the lease issued today grants OSEC rights to develop oil shale resources on a 160-acre tract of public land, with an initial term of 10 years and the possibility of up to a five-year extension upon proof of diligent progress toward commercial production.  RD&D lessees may also apply to convert the leases plus 4,960 adjacent acres to a 20-year commercial lease once commercial production levels have been achieved and additional requirements are met. The BLM will perform subsequent NEPA analysis on any proposed commercial operations on RD&D leases.

The Green River Formation – which covers portions of Utah, Colorado and Wyoming – may hold the equivalent of 800 billion barrels of shale oil that is potentially recoverable, enough to meet U.S. demand for oil at current levels for 110 years.  More than 70 percent of U.S. oil shale, including the richest and thickest deposits, lies under federally managed lands.  The Interior Department is working closely with state and local governments in the three States in determining how development of the resource proceeds. 

Details about all phases of oil shale development on federal lands are available on the BLM website: http://www.blm.gov/wo/st/en/prog/energy/oil_shale.html.