Salazar requests investigation, sites new oil shale terms
In a telephone press conference called specifically to address the situation in Utah, Colorado and Wyoming concerning oil shale, and presumably tar sands as well, Secretary of the Interior Ken Salazar said that the way the federal government passes out leases for oil shale on the land involved is going to change, and in quite a large way.
"These lands have long offered great promise for energy production," he said. "But we want that promise and the research and development done towards achieving that promise to done in a responsible way that can avoid a boom and bust situation and will give the public a good return for the leases."
Tacked into the press conference about the new policy on shale lands, Salazar also said he has formally (through a letter) asked the inspector general to look closely as to what happened with lease addendas approved late in the Bush adminstration last year that gave lease holders of those particular lands advantages. Salazar said he wasn't sure if it was fair and just.
"The addenda added 30,000 additional acres to those lands which included significantly value lands," he said of the action which he halted earlier this year. "I want to have the facts investigated. We are not prejudging these actions but want them investigated."
He said he had serious questions about whether the action was illegal or whether it should be recinded.
The environmental community cried foul when the extra lands and stipulations were approved and it appears they may not be happy with the new policy of granting new lands on leases for oil shale either. This is despite the fact for research and development the most land a company can get initially to test systems is going to be 640 acres verses almost 5,000 before.
The new rules for leases will include some stiff timelines and reporting that has not been in place before. In the past many lease parcels could be held by the company that is planning to utilize them for years. Now companies must act or they will lose their rights.
Previously the questions about the process and what it will take to squeeze oil from rock were not asked; now once R&D processses begin those questions will be part of the process.
"It will be important we have an orderly process for an oil shale removal program," said Salazar.
Salazar said their will be four main questions the Department of the Interior wants answered. First they will want to see that the technology being used can be developed into a commercially sound program, second they will want to know exactly how much water it will take to get a certain amount of oil (or actually kerogen which can be made into fuels) out of the rocks, third, how much electrical power it will take to get the process to work and fourth what the impacts will be on the land, wildlife and the communities surrounding any operation that comes into operation.
"We need answers to those questions as the process of developing the process comes along," said the secretary.
Salazar pointed out that most of the processes that have been proposed use a lot of water and some use a great deal of electric power to generate the product.
"We know about the stresses on water in Utah, Colorado and Wyoming already," he said. "And I have seen proposals for power use that would use 1.5 gigawatts of power to produce 100,000 barrels of Kerogen."
New lands leased for oil shale development and research will come in much smaller parts and at a higher expense with application fees basically trippling over what they have been. Initially applications for those lands, once approved will allow an operator 160 acres of land to do their initial work. Once they have proven their process can be commerically feasible, they can get up to another 480 acres, which between the two would allow them one square mile of land to work on. This is considerably less than the nearly 5000 acres leases afforded before.
Time tables for the leases will also be much tighter. Development plans would have to be in the hands of the interior department within nine months and regular reports on the progress of the project would have to be submitted quarterly,.
"We wanted to have some diligence milestones for these leases," said Salazar. "We don't want them hanging out there forever."