Oil shale gets green light because Congress didn't act

Published September 25, 2008 3:18 am
Moratorium to expire, so the Interior is free to push through its own energy-from-rock rules
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WASHINGTON - Oil shale production on federal lands in the West will be allowed to move forward starting Monday after Congress failed to re-enact a ban on finalizing a leasing program.

But some Democrats warned Wednesday they may replace moratoriums as soon as Congress reconvenes in January.

Congress' decision to let the moratorium lapse brought cheers from companies seeking to turn the rock deposits in Utah, Colorado and Wyoming into synthetic fuel.

"It's good for the industry," says Jeff Hartley, a consultant to several Utah-based energy companies. "It's really good for the state of Utah."

But Hartley argued that if the ban resumes in three months the American people would suffer.

"Obviously that would be to the detriment of the American energy consumer and the federal and state treasuries," Hartley said, referencing the royalties.

The Democratic-controlled Congress backed down from efforts to push through its own package allowing some oil drilling off American coasts and allowing states to choose whether to pursue oil shale extraction in the face of a threatened White House veto.

The current ban on finalizing an oil shale leasing program for federal lands ends Sunday night, allowing the Interior Department to push through draft rules already in the pipeline.

Rep. Jim Matheson, D-Utah, who had pushed for a relaxation of moratoriums on off-shore drilling and oil shale development, hailed the expected outcome.

"We need to find more oil in our country and Utah's resources are a key part of that effort," he said.

Sen. Bob Bennett, R-Utah, called the expiration a victory for Utah and the West.

"I've always said [to oil shale critics], 'What are you afraid of?' " Bennett said. "You're afraid it might work. And it's very clear, given the price of $4 a gallon gas, that people want to find out."

But three Colorado Democrats claimed the Bush administration threatened a veto of an omnibus spending bill, and they vowed to try to re-enact the moratorium on an oil shale leasing program as soon as Congress returns in January. The White House actually has not taken a position on the budget bill, though it did threaten to veto a House-passed energy package.

Oil shale critics, including major environmental groups, charge that no company has shown it has the technology to be commercially viable, that such a process is still more than a decade away and that the production of oil shale might soak up much-needed water in the arid West.



* MATT CANHAM contributed to this story.

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