From Deseret News archives:
Oil-shale decision sensible
With gasoline selling for less than $2 a gallon, there would appear to be little incentive for investors to back unproven oil-shale extraction activities.
Yet, after Interior Secretary Ken Salazar scrapped federal leases that would have fast-tracked oil-shale development in Utah, Colorado and Wyoming, industry officials and Reps. Jim Matheson, D-Utah, and Rob Bishop, R-Utah, decried the decision, calling it shortsighted and unwise.
Salazar hasn't shut the door on oil-shale exploration and development. But he was troubled by the last-minute nature of the oil-shale research and development leases approved in the waning days of the Bush administration. Some of the leases were located in close proximity to many Utah landmarks, such as Canyonlands and Arches national parks.
Salazar also scrapped an initial 5 percent royalty rate on oil-shale production, which he said sold taxpayers short. In comparison, oil and gas production on public lands produces royalties of up to 18.8 percent.
Salazar, a former U.S. senator representing Colorado, and prior to that the state's attorney general, remembers well Colorado's shale boom and bust of the late 1970s and early 1980s. Nagging questions remain about the water and energy impacts of oil-shale extraction as well as the economic feasibility of extraction technology. Also, it is not known where shale oil could be refined.
Shell Exploration and Production Co. is continuing research and development work on its privately owned lands in western Colorado. Shell officials say the company will not know whether oil-shale development is feasible until the middle of the next decade.
Meanwhile, research activities are ongoing on 160-acre public parcels leased several years ago.
Given current market conditions and the many unanswered questions about the impacts of extracting this resource, shelving research and development leases of substantially larger public parcels provides time to conduct a "thoughtful and deliberate" study of these issues, to use Salazar's words. It's just common sense.
