Interior proposal would limit commercial oil shale development on federal lands

Daily News Article — Posted on November 14, 2012

(by Zack Colman, The Hill) – The U.S. Department of the Interior on Friday [Nov. 9] issued a final plan to close 1.6 million acres of federal land in the West originally slated for oil shale development.

The proposed plan would [close] off a majority of the initial blueprint laid out in the final days of the George W. Bush administration. It faces a 30-day protest period and a 60-day process to ensure it is consistent with local and state policies. After that, the department would make a decision for implementation.

The move is sure to [concern] Republicans, who say President Obama’s grip on fossil fuel drilling in federal lands is too tight.

The Interior Department’s Bureau of Land Management cited environmental concerns for the proposed changes. Among other things, it [removed] lands with “wilderness characteristics” and areas that conflicted with sage grouse [bird] habitats from the land that was originally opened up to oil exploration.

Under the plan, [more than half of the 1.6 million acres of federal land in the West originally slated for oil shale development will be closed to exploration]; 677,000 acres in Colorado, Utah and Wyoming would be open for oil shale exploration. Another 130,000 acres in Utah would be set aside for tar sands production.

The administration and Democrats said that while the plan would curtail [cut back the amount of land that] was originally [allocated] for oil shale development, it still opens up a significant amount of land that was previously unavailable for the energy production method.

The administration noted the plan pushed forward Friday also included two research, development and demonstration (RD&D) leases for oil shale development.

“The proposed plan supports the Administration’s all-of-the-above approach to explore the full potential our nation’s domestic energy resources and to develop innovative technology and techniques that will lead to safe and responsible production of resources, including oil shale and tar sands, which industry recognizes are years from being commercially viable, but require RD&D today,” Interior spokesman Blake Androff said. …

Oil shale development is not to be confused with drilling into shale formations for oil and natural gas. The practice, which involves separating hydrocarbons bound up in rocks, has not been widely executed since Exxon’s failed Colorado venture in the 1980s. …

GOP lawmakers, along with some Democrats, have pushed for more fossil fuel production in the West. [They say] Obama’s policies on fossil fuel drilling on federal lands are too restrictive.

While Obama [says that] domestic oil-and-gas production has increased during his administration, Republicans contend that it is activity on private and state land that is driving the boost. They point to this year’s dip in oil-and-gas production on federal land – though levels are still higher than they were during the Bush administration [probably due to fracking, a new method which extracts more oil].

The Congressional Western Caucus released a report in August to deliver that message.

“This proposal will place further limitations on the exploration and development of our country’s natural resources and is yet another example of how this administration continues to stand in the way of North American energy independence,” Rep. Ed Whitfield (R-Ky.), the chairman of House Energy and Commerce’s subcommittee on Energy and Power, said in a statement to The Hill. …

Jack Gerard, head of the American Petroleum Institute, said Thursday he would take a “wait-and-see” approach to Obama’s second term to gauge whether he would live up to campaign rhetoric in which he praised the domestic oil-and-gas industry.

Reid Porter, the Institute’s spokesman, said Friday’s news was a disappointing sign from the administration. “This is another step in the wrong direction that limits development and investment in one of the nation’s most energy-rich areas and goes against a prior government decision that would allow for research and development over a much wider geographical area. Just days after the election this decision by the administration sends negative signals to industry and capital markets at a time when we need to encourage growth and innovation in the U.S.,” Porter said in a statement to The Hill.

Reprinted here for educational purposes only. May not be reproduced on other websites without permission from The Hill. Visit the website at thehill.com.

Questions

1. a) What is the Department of the Interior - what is its role?
b) Why does the Interior Department implement the policies of the president who is in office?

2. What plan has the Interior Department announced it will pursue regarding the planned development of federal land for energy?

3. a) What is the Bureau of Land Management? How many employees does it have? What is its annual budget? How much of the land in the U.S. is "public" land, controlled by the BLM?
b) What reason did the Bureau of Land Management give for closing off over half of the federal land originally opened up for oil development?

4. How does the Obama administration defend its choice to close off half of the land which was to be used for oil development?

5. Rep. Ed Whitfield (R-Ky.), the chairman of House Energy and Commerce's subcommittee on Energy and Power, opposed the Obama administration's plan, saying: “This proposal will place further limitations on the exploration and development of our country’s natural resources and is yet another example of how this administration continues to stand in the way of North American energy independence."
A spokesman for the American Petroleum Institute said Friday's news was a disappointing sign from the administration. “This is another step in the wrong direction that limits development and investment in one of the nation’s most energy-rich areas and goes against a prior government decision that would allow for research and development over a much wider geographical area. Just days after the election this decision by the administration sends negative signals to industry and capital markets at a time when we need to encourage growth and innovation in the U.S."
The International Energy Agency reported on Nov. 12 that by about 2020 the U.S. will overtake Saudi Arabia as the world's largest oil producer, and that the U.S. is in a position to become energy independent by 2030. (Read the article here.)

a) Do you think the Obama "administration continues to stand in the way of North American energy independence"?
b) Should the federal government ease its control and regulations on this federal land? Explain your answer.

Background

From an Investors Business Daily article:

In February, energy executives and others in the energy industry [met] in Houston [challenged Obama] administration assertions that it is opening up areas for oil and gas exploration and that its policies are responsible for increased oil and gas production on President Obama's watch.
"These have been the most difficult three years from a policy standpoint that I've ever seen in my career," Bruce Vincent, president of Houston oil and natural gas producer Swift Energy, told the Houston Chronicle. "They've done nothing but restrict access and delay permitting," he added. "The Obama administration, unfortunately, has threatened this industry at every turn."
Vincent led the voices exposing White House press secretary Jay Carney's phony assertion Wednesday when asked about gas prices soaring above $4 per gallon. Carney said President Obama had "put in place policies that will dramatically expand the amount of exploration in the Gulf of Mexico, will expand the amount of exploration in Alaska, will expand the amount of natural gas production here in the U.S."
Really? "The administration has done everything BUT support drilling," said NAPE attendee and former Shell executive John Hofmeister. "We are on the verge of slipping into an energy abyss." Shell has fought the administration to begin drilling in the Chukchi Sea off Alaska.
The federal government estimates there are 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas in the Arctic Ocean's Outer Continental Shelf but repeated safety reviews and designation of much of the region as critical polar bear habitat has slowed development to a crawl.
Only 2.2% of federal offshore land is currently being leased for production.
Then there are the 10 billion barrels locked up in the Arctic National Wildlife Reserve, which would require drilling in just 2,000 acres out of 19 million.
The Obama administration recently rescinded 77 oil and gas leases in Utah and stalled oil shale research and development in Utah, Colorado and Wyoming, where the federal government owns most of the world's oil shale reserves.
Out West, we may have a "Persia on the Plains." A Rand Corp. study says the Green River Formation, which covers parts of Colorado, Utah and Wyoming, has the largest known oil shale deposits in the world, holding from 1.5 trillion to 1.8 trillion barrels of crude - most of it locked up by federal edict.