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Show i Western Koovixim DOI resumption of oil shale leasing i hington The Interior Depart-: Depart-: '' ouiet announcement on May 27 resume its prototype lease '-am and start work on a perma-' perma-' asing program for oil shale was a e move to keep the Depart- ; shand in oil shale development. j iS what the working papers show ' iei up to the announcement by 'or Under Secretary James A. in late May. i jer legislation now being ited in Congress, via the synthetic i'fast track" legislation, the new 1 security Corp. and the Energy 'iiation Board will soon be in 'ess. Interior is concerned that its fl-pe leasing program, to date at p'has been only "a qualified suc-, suc-, as Joseph put it, and that it is 'i t0 be pushed by the new agencies 've ahead on leasing. ,e felt that we had to be a step cd of these new agencies," Craig P. assistant chief of the Bureau of t Management Division on On-k On-k Energy Resources at Interior, ibereon May 30. One of the working -j prepared by Interior itself dubb-;el974 dubb-;el974 prototype leasing program, 3 which the Department leased jacts, two in Colorado and two in "a new failure," : a barrel of shale oil has been program pro-gram any of the four leased tracts lit The President's goal is to pro-j pro-j ao,000 barrels of shale oil a day by , I Interior did not move ahead i leasing, the working papers id out, a failure to meet this pro-:j pro-:j goal might be viewed "as the irtment's responsibility," and m quo" as "contrary to the spirit President's energy initiatives." Sire is major interest, across the : in multi-mineral development of mixed oil shale-sodium deposits in Piceance Creek Basin in Colorado, Here appears to be strong opposi-ilyallgovernmenagencies opposi-ilyallgovernmenagencies to land tangesas a means of putting an ef filming fi-lming unit together. So tentative jions have been made at Interior to : down the long-standing exchange (.cation of Superior Oil Co. and per exchange application by Exx-flSA. Exx-flSA. "Because the vast majority of tiihich is suitable for multi-mineral lapment is public land in Colorado, tetvould be little opportunity for i development" without further I'&VtawVung papers stated. -Ihermore, the Department has a :tial leasee in the Multi-Mineral . , which wants to try mining and loping both the oil shale and :im minerals thru a Piceance Creek i lease. (Superior hoped to develop mineral tracts by exchanges of :) There is unusual industry, "Omental and environmental p support for such a lease, ft told the Department if it would toad with a multi-mineral lease, we -d look the other way," David slli of Friends of the Earth (FOE) ; Western Resources Wrap-up '') here on June 3. As FOE has a critic of more leasing of public jale lands, Masselli was asked why -was so interested in multi-mineral lopment. ' a small amount of land is :fd," he replied. Interior favors ti-mineral development thru leas-Itecause leas-Itecause it can't control private 'lopment once a land exchange is to and because state and local laments as well as the "feds" get 'Payments when federal tracts are ted. . "THER DEVELOPMENT ' are indications that if Interior s not move ahead on leasing public ina'e lands, oil shale development ieon other oil shale lands, both and private. e Department of Energy (DOE) 1985 as a target date to lease a nof one of its U.S. Naval Oil Shale in Garfield County, Colo. With "s strong commitment to syn-fuels Pment, it is likely to meet this setdate. ( Uintah and Ouray Ute tribes in ' Utah have just received a grant 0E this past month to prepare a !,6llty study preliminary to Pment of their oil shale lands. " be a five-year study which :Jst up to $5 million, with DOE "ng uP initially $50,000 on May 13 to the ground. These two bands of I P'an to form their own company , tope to develop their own j7gy," Ed Gabriel, executive ;10r of the Council of Energy jWce Tribes (CERT), told WRW on are indications that DOE of- who work on syn-fuels programs ; ready given up on Interior's pro- basing program. ,.rlhe working papers used by In- as a memo from Paul A. Pet-r Pet-r tps Dobie Langenkamp and .0se- Mclsaac, all of DOE stating: ; J'der it important that we (DOE) tj gate having the Energy Security i--: s"PPort production on more t'"81 Private properties in the 4) n Piceance Basin (in Col- and Utah... I believe we should immediately evaluate the economics and incentives necessary lnitiale production from eastern 'shales in the event that the opponents of Western Shale oil development are somehow abletokill us in the West." Commercial production from oil shale has not begun on private oil shale ventures either, just as it has not occurred occur-red on the public tracts under lease Former Assistant Interior Secretary Harrison Loesch, a native of western Colorado, recently told WRW "It always seems that development 'of oil shale is five years away." While the working papers used by Interior in making its decision to resume oil shale leasing indicated the President's goal of 400,000 barrels of shale oil by 1990 was a reachable goal on private lands alone, a recent Library of Congress study requested by Sen. Orrin G. Hatch, R-Utah, stated, "Under current economic and policy conditions, shale oil production may reach - 20.000 to 57,000 barrels per day by 1987. Even if substantial federal incentives for commercialization com-mercialization were offered, production produc-tion levels by 1995 are projected to be roughly less than 200,000 to 350,000 barrels bar-rels of oil equivalent per day." The Library of Congress study was dated May 15, 1980. With the two private land developments planned by Superior and Exxon dropped out because they involve in-volve land exchanges that Interior plans to deny, there are only a half dozen commercial oil shale projects on private or state lands in Utah which have any prospect for production in the next 10 years. Most of these projects are in the planning stage or are small demonstrations. Most are in Utah where the state generally welcomes development but the oil shale deposits are not as rich as in Western Colorado. Geokinetics, Inc., is working on a true in-situ process on state lands and some private lands in the Uintah, Basin in Eastern Utah. DOE projects its production produc-tion will be only 20,000 barrels a day by 1990 even if it is able to line up the required re-quired lands. The problems with oil shale development develop-ment are and always have been economic. This might be overcome by the $88 billion which will be available thru federal loans and federal loan quarantees over a 12-year period under the Energy" Security Act tentatively agreed on by the House-Senate conference con-ference committee on May 21 . Shale oil will be costly to produce, and it is likely to sell at or near the price of imported oil, according to Interior's working papers. Insofar as output is concerned, this country will get more production from domestic oil and gas development in the near-term and medium-term, the working papers observed, than it will from oil shale development. REACTION TO I INTERIOR LEASING STATEMENT Western Resources Wrap-up found much skepticism about Interior's plans to resume leasing up to four more oil shale tracts under its prototype program pro-gram and its plans to gear up for a permanent per-manent leasing program. This is due to a number of factors : Interior's historic coolness toward oil shale leasing in the past, the fact that this is election year for the Carter Administration, Ad-ministration, and a new Administration might be elected in November; and the" fact that the cast of characters at the highest , levels in Interior will change next year in any event, even if Mr. Carter is re-elected, because Cecil D. Andrus has publibly announced he will not be in the Carter Cabinet as Secretary of Interior next term. A new Secretary will bring in a new team. Utah's Hatch called the May 27 Interior In-terior oil shale leasing announcement "eye-wash." He said, "We see a lot of that sort of activity in election years. I'll believe the federal government is moving on oil shale when I see notice of intent to lease in the Federal Register. " Chairman Jim Santini, D-Nev., of the House Mining Subcommittee, commented, com-mented, "The proof of the pudding is in the leasing." The same day that Interior In-terior made its announcement, Santini wrote to the General Accounting Office asking for its assistance "in the preparation of legislation to reduce regulatory impediments to the develo-ment develo-ment of leasable federal energy minerals. The hard reality of our precarious energy and mineral dependency may require vastly streamlined leasing procedures in the near future," by eliminating doens e. unnecessary regulations, lie said. All Congressional reaction w as no! so rough. Sen. Gary Hart. D-C'oie,. and Rep James P. Johnson. K l elo generally felt that, the Department, plan, as outlined by Joseph, was reasonable. But the reaction of industry and environmental en-vironmental groups paral'eled that o! Hatch and Santini. David B.anand o! the American Mining Congress, and an old Interior hand, told V, KW on jure "I don't thing the announcement m a thing. We'll soon know whetm-r to-lease to-lease program is tanswpi we see what kind of poope int. t. or assigns to do the em n onmen.tal w.ip."-' statements (EIS).Unlos it puts.isoost people on them and closets them off someplace to get the statements done, the announcement on May 27 will be just rhetoric," Branand stated. Masselli of Friends of the Earth called call-ed the Interior move "a craven political sell-out. I think they (Interior top brass) lose both ways. They want to look good in oil shale country. But they have already lost the West, and now they are in the process of losing us (environmentalists). (en-vironmentalists). It's reprehensible that Interior would issue new leases when it has no results in from the Colorado Col-orado leases or from the Utah leases entered into in 1974," Masselli told WRW on June 3. He said environmentalists were particularly par-ticularly concerned about the schedule that Joseph seemed to announce on May 27 indicating that renewed leasing is imminent, altho Interior officials later indicated there was no chance that leasing could resume until 1981, at the earliest. "If Interior does not properly prepare the NEPA statement (EIS), it will become the most litigated statement in history," Masselli t-ild WRW. He said FOE has seen the working papers from which Interior made its decision to resume leasing, and the papers were "a very amateurish effort,' Masselli maintained. Assistant Interior Secretary Guy Martin, who will be in charge of the oil shale task force at Interior on oil shale leasing, told WRW on June 2 he anticipates an-ticipates the oil shale leasing program would be patterned after the federal coal leasing program. It was announc-. announc-. ed in June 1979, and coal leasing is expected ex-pected to resume in selected Western coal areas and in Alabama in mid-1981. The working papers indicated it would take from 2-3 years to resume prototype leasing and provide for permanent leasing of oil shale. |