bureau of land management oil shale development
TRANSCRIPT
Bureau of Land Management
Oil Shale Development
Unconventional Fuels Conference
University of Utah
May 17, 2011
Domestic Oil Shale Resources
Primary oil shale resources in the U.S. are in the Green River Formation in Wyoming, Utah, and Colorado.
72 % of this oil shale resource is on Federal lands.
U.S. oil shale resources total 2.6 trillion barrels of oil (> 50% of world resources).
Green River Formation is estimated to contain 75% of total U.S. in-place resources.
Remaining technically recoverable onshore and offshore crude oil resources in the U.S. are estimated at 289 billion barrels.
Energy Policy Act of 2005
Section 369
Oil Shale, Tar Sands and Other Strategic Unconventional Fuels
Sec 369(c) Leasing program for Research and Development of Oil Shale and Tar Sands
Sec 369(d) Programmatic Environmental Impact Statement and Commercial Leasing Program for Oil Shale and Tar Sands
Sec 369(e) Commencement of Commercial Leasing
Overall Goals of Oil Shale Program
Create a program that:
A hybrid of existing Fluid and Solid minerals programs
Adopts best aspects of these programs
Easy to understand, administer and monitor
Flexible enough to adjust to new technology and issues as
they emerge
Provides adequate protection to the environment and other
the resources
Not subject to land speculation exercise
First Round R, D and D Program
Royalty: waived for the duration of the R, D and D
Rental: $.50 per acre ($2 per acre under EPAct) as required under the Mineral Leasing Act (MLA)
Diligence: require diligent development based on the Plan of Operations to be submitted by the lessee and approved by BLM
NEPA Compliance: Completed EAs
Lease term: 10 years with potential for extension for up to 5 years
Lease size: 160 acres with preference rights for an additional 4960 acres upon demonstration of commercial production
Six R, D and D Leases Issued
Shell Frontier Oil & Gas
State: Colorado
Date issued:12/151/06
Shell Frontier Oil & Gas
State: Colorado
Date issued:12/15/06
Shell Frontier Oil & Gas
State: Colorado
Date issued:12/15/06
Chevron Shale Oil Co.
State: Colorado
Date issued:12/15/06
EGL Resources, Inc. now American
Shale Oil, LLC
State: Colorado Date issued:12/15/06
Oil Shale Exploration, LLC
State: Utah
Date issued: 06/21/07
Second Round of Oil Shale R, D&D
Why a Second Round?
Secretarial decision and multiple requests from industry
Nov. 3, 2009: BLM published a 60-day Federal Register Notice calling for nominations.
Three nominations received
Exxon-Mobil (CO) Natural Soda and (CO) AuraSource (UT)
All nominations are moving forward and are currently working on NEPA analysis.
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Oil Shale RD&D Provisions
1st Round RD&D
160 acre lease with a Preference Right to an additional 4,960 acres
$2,000 application fee
10 year term with a potential 5 year extension
Lease addendums-allow choice of which regulations conversion will occur under if new regulations published
2nd Round RD&D
160 acre lease with a Preference Right to an additional 480 acres
$6,500 application fee
10 year term with a potential 5 year extension
Rents and royalties will be paid in accordance with regulations in effect at the time of conversion.
One application per entity
Additional environmental study and diligence requirements
Energy Policy Act of 2005 Requirements
Sec 369
Interior must prepare a programmatic EIS for a commercial leasing program for oil shale, and tar sands within18 months of EPAct
Oil Shale and Tar Sands Programmatic EIS
November 17, 2008 – Final Programmatic EIS Record of Decision (ROD)
The PEIS identified about 2 million acres of oil shale and tar sands
resources that will be open for potential future leasing, exploration,
and development and the constraints under which leasing will be
allowed.
The PEIS amended 10 land use plans in those areas where oil shale
and tar sands resources are present.
Land Use Plans Amended By the PEIS Field Office Existing Land Use Plan
Colorado
Glenwood Springs
Glenwood Springs RMP (1988, as amended by the Roan Plateau Plan Amendment, 2006)
Grand Junction
Grand Junction RMP (1987)
White River White River RMP (1997, as amended by the Roan Plateau Plan Amendment, 2006)
Utah
Monticello San Juan Resource Area RMP (1991)
Price Price Field Office RMP (2006)
Richfield Henry Mountain MFP (as amended 1997)
Vernal Vernal Field Office RMP (2006)
Wyoming
Kemmerer Kemmerer RMP (1986)
Rawlins Rawlins RMP (2006)
Rock Springs Green River RMP (1997, as amended by the Jack Morrow Hills Coordinated Activity Plan, 2006)
Oil Shale Regulations
Section 369
The Secretary of the Interior must establish
royalties, fees, rentals, bonus, or other payments
for leases under the Act that shall:
Encourage development of oil shale and tar
sands, and
Ensure fair return to the United States
Regulations
Leasing
NEPA
Bonding
Royalties, Bonus Bids, Fair Market
Value
Diligent Development Milestones
Lease Conversion
Lawsuits filed in 2010 on PEIS and Regulations
13 Environmental organizations
2 organizations were granted intervener status
Settlement Agreement finalized February 2011
Lawsuit and Settlement Agreement
BLM agrees to undertake and complete planning to analyze amending plans to exclude oil shale/tar sands leasing in the original 12 plans (CO, UT, WY). ROD to be signed by 12/31/12, subject to available appropriations.
Areas that would be considered for exclusion from commercial oil shale/tar ands leasing are identified in the settlement agreement. They are: areas BLM identifies or may identify in the
planning process that contain wilderness characteristics; the whole of Adobe Town “Very Rare or Uncommon” area; core or priority sage grouse habitat as defined by BLM; all
ACECs located within the areas analyzed in the original 2008 OSTS programmatic EIS for oil
shale/tar sands; and all areas identified as excluded from commercial oil sale/tar sands leasing in Alternative C of the 2008 OSTS programmatic EIS.
As part of the NEPA, BLM will analyze the effects of at least the following three alternatives: one that analyzes removing all of the above lands from application for OSTS leasing; one
alternative that removes some, but not all, of the lands described above; and a no action alternative.
During the planning process BLM commits to not issue a call for expression of leasing interest
for commercial OSTS leases.
Settlement Agreement (EIS)
BLM will publish a notice of proposed rulemaking to address the royalty rate and environmental protection requirements applicable to oil shale leasing.
The proposed rule will propose to remove the royalty rate for oil shale production pending development by BLM of additional information concerning the costs and profitability of oil shale operations.
The proposed rule will propose several changes to the environmental protection requirements applicable to oil shale commercial leasing. These changes are listed in the proposed settlement agreement.
A final rule will be published no later than 11/18/12.
Settlement Agreement (Regs)