GOP, Big Oil push shale in Utah

Republican Sens. Orrin Hatch and Bob Bennett of Utah locked arms with Big Oil and its smaller cousins at the state Capitol on Tuesday to showcase who would develop vast amounts of oil locked in shale and tar sands throughout the state, as petroleum prices reach record highs.

The oil executives said they are ready to begin producing commercial barrels this year, if a moratorium is lifted on using federal land for shale development. But critics say the technology needed to get oil from shale and sands would be too costly, and would damage the environment and drain the West's precious water supplies.

Hatch, flanked by industry officials on his left and right gathered inside the Capitol rotunda, said oil-shale development should proceed. The companies represented at the gathering included Shell Exploration and Production Co., a division of Royal Dutch Shell PLC; CRE Energy Inc.; Temple Mountain Energy; and Oil Shale Exploration Co., which the Bureau of Land Management chose in 2006 for a research and development project in Utah.

"Can they bring down the price of oil today?" Hatch said of the oil-company leaders. "Probably not. Not today. But they are doing what it takes today to get our nation this energy in the future."

Terry O'Connor, a Shell vice president for external and regulatory affairs, said his company may be ready for a large-scale commercial commitment in five or 10 years if a couple of pilot programs, including one in Utah, pan out.

But Bennett said no one will make the billions of dollars in investments in producing oil from shale and sands if they can't get access to it. The federal moratorium now prevents the Interior Department from letting prospectors onto federal land to draw out oil from tar sands and shale. Bennett said the moratorium prevents rules from being drawn up that would help regulate unconventional oil development in Utah and neighboring states.

"We have to get the federal government to repeal that moratorium," he said. Both senators blamed Democrats for holding up the oil-shale train.

President Bush recently called for expanding offshore drilling and opening oil-shale and tar-sands development in the West. A bill introduced in Congress last week seeks to free up the Department of the Interior to allow for oil-shale development on public lands. The "sweet spots" are under federal lands located mostly in Colorado, Utah and Wyoming, which are home to about 70 percent of the country's oil-shale deposits that contain about 1.23 trillion barrels of oil, according to the Bureau of Land Management.

The BLM estimates that Utah's tar-sands deposits contain between 12 billion and 19 billion barrels of oil.