WASHINGTON – A decision by the Obama administration to pursue oil shale will instead vastly reduce by 66 percent the available acreage to develop it and creates onerous new bureaucratic red tape that will discourage production, House Republicans said.
As one of the final acts by Interior Secretary Ken Salazar, the decision affects the Green River formation in Colorado, Utah and Wyoming that the U.S. Geological Service predicts holds more than 1.5 trillion barrels of oil – more than half of the world’s oil shale resources.
Republican lawmakers say the policy would discourage the research and creation of the technology needed to extract the oil and blocks the creation of thousands of new jobs.
“Yet again, the Obama administration talks as if they are fostering American-made energy when their actions actually block new production and drive new jobs away from federal lands,” said Rep. Doc Hastings (R-Wash.), chairman of the House Resources Committee.
“The Obama administration took another giant step backwards with new regulations that discourage production of the available oil shale, sends oil shale jobs overseas and prolongs our dependence on Middle Eastern oil,” Hastings said.
The communities where the reserves are located stand to benefit economically from the eventual production, but the water likely needed are a concern for some on the Western Slope.
Rep. Scott Tipton (R-Colo.) said that the environment and infrastructure requirements must be taken into consideration as well as the fiscal benefits for the communities as incoming Secretary Sally Jewell moves forward with the plan.
“It is imperative that we establish a framework to take full advantage of our domestic oil shale resources that can be responsibly developed to put our people back to work, and equally important that the small towns which contribute so much to this production effort are not unfairly burdened by it,” Tipton said. “During the announced comment period, I encourage the secretary to listen to the feedback of all stakeholders on this issue and strive to implement a plan that provides regulatory certainty and encourages responsible development.”
Of the two million acres available, only 680,000 will be allowed for eventual development once the technology created is proven to the federal government’s satisfaction, but the acreage is subject to change. Certain lands were excluded because of concern for the sage grouse, or because they have wilderness potential.
Rep. Doug Lamborn (R-Colo.), who authored legislation that passed the House last year setting new rules for oil shale research and development, said he was disappointed with the administration’s announcement, but was not surprised.
The industry has been working for decades to create a commercially viable technique to extract the resource, but with no success.
Under Salazar’s plan, eligible companies could apply for a commercial lease only if they satisfy a number of government requirements including clean air and water regulations.
“This plan will only lead to more uncertainty and discourage companies from investing in American energy production,” said Sen. John Barrasso (R-Wyo.).
The proposed revisions are designed to ensure a fair return to taxpayers, encourage responsible development of federal oil shale resources, and evaluate necessary safeguards to protect scarce water resources and important wildlife habitat, said the Interior Department announcement.
Dan Kish, senior vice president for policy at the Institute for Energy Research, said the U.S. West has the largest supply of oil shale in the world, but that China is being more proactive in encouraging development and will likely lead unless the Obama administration makes it a priority.
“Salazar has constructed regulations that leave open the question of whether they will actually be able to produce the oil with the technology they develop,” Kish said. “What’s so twisted about this, you can climb to the top of the mountain, but you don’t get to look.”
“We have so much oil shale — if we can ever get it to flow — we’re talking about something that can change the world,” Kish said.