US Interior Dept. to Open Up States to Oil Shale Research

SAN FRANCISCO (Dow Jones), Oct. 20, 2009

U.S. Interior Secretary Ken Salazar said Tuesday the federal government will open up public lands in Colorado, Utah and Wyoming to new oil shale research and development, although the agency plans to investigate last-minute changes to existing leases issued by the Bush administration.

Energy companies can submit applications for a second round of oil-shale research and development leases within 60 days after the Interior Department publishes a notice in the Federal Register, Salazar said in a telephone call with reporters.

Meanwhile, the department plans to investigate a set of modifications made Jan. 15 by outgoing Bush administration employees to six existing oil-shale leases. Those modifications locked in a royalty rate of 5%, among other changes, Salazar said.

"There are questions about the lease addenda that I want the (Interior Department's) Inspector General to look into," Salazar said. He added that if the "facts and law" indicate the changed leases are appropriate, the department will defend them, but if not, they could be tossed.

As for the new applications, the Interior Department's Bureau of Land Management will review them, with an eye toward whether proposals could advance knowledge of "effective technology, economic viability and the impacts of oil shale development," Salazar said.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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