Oil Shale Exploration Co., LLC, and Oil Tech Inc. will join four other businesses in Colorado in receiving research and development leases from the BLM. They were selected out of a group of 20 applicants, eight from Utah.
"Oil shale is a domestic resource with staggering potential," BLM Director Kathleen Clarke, former director of the Utah Department of Natural Resources, said during a teleconference in Washington, D.C. "There are 1.2 trillion barrels of oil in potential reserves. That's enough to meet our [energy] demand for over 100 years."
It is also still a question mark as a reliable, long-term energy source. Oil shale and tar sands development went bust in the 1980s because it never showed it could be economically viable. Technology improvements since then have helped close the economic gap. But the tremendous amount of water needed to produce oil shale - and the potential impacts of oil shale production on water quality - continue to present obstacles to economic and environmental viability.
Given that, the challenge ahead for the six companies selected is "not just to improve our technical ability, but how to manage the environmental issues associated with it," said Tom Lonnie, the BLM's assistant director for minerals, realty and resource protection.
Each oil shale research and development nomination includes a 160-acre tract of land and rights to an additional 4,960 acres reserved for future commercial leasing if the proposals are cleared through BLM reviews and meet the requirements of the National Environmental Policy Act.
The two Utah companies will operate on parcels located in Uintah County, about 50 miles south of Vernal, in an area administered by the BLM's Vernal Field Office.
The Colorado research and development leases are all located in Rio Blanco County, which abuts Uintah County. Those six parcels were awarded to Chevron, EGL, Exxon Mobil and Shell.
Environmental assessments on all eight sites will begin immediately and are expected to be completed by late spring, Lonnie said. If the eight nominees pass review, research and development leases will be issued in the early summer. Congress has directed the BLM to have a commercial leasing program in place by August 2007, he added.
