BLM to winnow oil-shale applicants

The Bureau of Land Management today will narrow a field of applicants seeking leases for experimental oil-shale development in Colorado and Utah.

BLM Director Kathleen Clarke will set aside eight of 20 applications for "further consideration" of their technical and financial qualifications for work on 160-acre parcels of land, the agency said Friday.

The decisions already have been made but won't be announced until Clarke briefs reporters on a conference call today and the agency posts a list on its Web site. BLM officials did say they rejected as incomplete an application filed by Anadarko Petroleum in Wyoming, leaving a field of 16 contenders for parcels in Colorado and Utah.

But BLM spokeswoman Heather Feeney said the bureau has launched an environmental study for larger-scale oil-shale operations that will cover known oil-shale deposits in Wyoming. That study is expected to be done by mid-2007.

The bureau in the meantime plans to open 160-acre parcels in Utah and Colorado for experimental works, but only after operators pay for environmental assessments that could run $200,000 each, said James F. Kohler, chief of the BLM's solid minerals branch.

In Colorado, Shell Frontier Oil & Gas Co. submitted applications to work three separate BLM parcels. It could get all or none or some of them. Those parcels contain oil shale deposits that are richer than on the company's own extensive land holdings in western Colorado, Shell spokeswoman Jill Davis said.

On its own lands, Shell has been experimenting with technology that heats oil shale in the ground in lieu of mining. It takes four to five years and a lot of power to roast the ground to temperatures around 650 degrees, when a primitive form of oil can be pumped to the surface from conventional wells.

Other Colorado nominees are Chevron Shale Oil Co.; EGL Resources Inc.; Exxon Mobil Corp.; Kennecott Exploration Co.; Natural Soda Inc.; and groups going by the names Independent Energy Partners and Phoenix Wyoming.

In eastern Utah, senior BLM officials said there was competition for the same 160-acre parcel that contains the abandoned White River mine, where more than 30,000 tons of oil shale were left unearthed decades ago, ready to be processed.

Applications were filed in Utah by Brent C. Fryer, a retired mechanical engineer who worked with Exxon on the last major U.S. effort to extract shale oil, abandoned in 1982 in western Colorado. Fryer said he filed applications for the White River mine and an alternate Utah parcel.

Other Utah nominees are Argyll Energy; Great Western Energy; Mountain West Energy; Oil Shale Exploration Co.; Oil-Tech Inc.; Syntec Energy; and Western Energy Partners.