$3.3 million set aside for oil extraction

WASHINGTON — Efforts to extract oil from rock under federal lands received a $3.3 million boost in President Bush's budget, signaling a continued push toward using better technology.

That is good news for two Utah companies, Oil-Tech and Oil Shale Exploration, LLC, which are working with the Bureau of Land Management to obtain a lease for research and demonstration projects on federal land.

The two companies were among eight applicants the bureau selected to continue forward in the leasing process last month.

Oil-Tech CEO Romit Bhattacharya said he will turn in required environmental reports by Friday, which allows the process to move ahead. A company's plan needs to be determined environmentally acceptable before it can proceed, according to the BLM. Companies that win approval for their proposals will get first crack at leasing an additional 4,960 acres surrounding the 160-acre parcels marked for oil shale.

The $3.3 million increase for the Bureau of Land Management's oil shale research and development leasing program is on top of the $1 million in base funding.

Mike Ferguson, a budget officer for the BLM, said two-thirds of the president's request will go toward the research and demonstration projects while the remaining portion will go for a programmatic environmental impact statement. The environmental study, which will help set policies for oil shale extraction on all federal lands, will be done sometime in late 2007.

The BLM estimates there are oil shale resources under 16,000 square miles that hold about 800 billion barrels of recoverable oil. About 70 percent of that is on federal land in Colorado, Wyoming and the Uinta Basin in Utah.

Bhattacharya said the additional money for shale research is a "harbinger for very good things to happen with regards to our country's need to be less dependent on unstable sources of fossil fuel."

He said beyond Canada, where the United States gets some oil imports, "few regions would be considered to be stable regions" and domestic production would help alleviate problems.

But environmental groups are wary at the need for another drilling technology to continue America's addiction to oil that even Bush acknowledged in the State of the Union address last month.

"There is a lot of talk and maybe even hype that this will be the second coming of energy in the West," said Pete Downing, legislative director for the Southern Utah Wilderness Alliance.

He said there should be no rush to develop oil shale, especially because a lot of companies do not know exactly where it is. He said the smart approach would be to proceed carefully and cautiously to preserve the environment and ensure maximum public benefits.

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