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Colorado urges federal review of oil shale leases

Colorado urges federal review of oil shale leases

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DENVER (AP) -- State officials want the federal government to determine what's happening with existing oil shale research and development leases in Colorado before offering any more.

The state's comments released Thursday were in response to a request from federal officials about a second round of leases on public land in Colorado, Wyoming and Utah. Interior Secretary Ken Salazar in February rescinded an offer of a second round of leases started under the outgoing Bush administration.

The Bureau of Land Management issued a total of six, 160-acre leases in 2006 and 2007. Five are in northwest Colorado.

Officials say none of the leases in Colorado has mining permits, no construction has started and they don't know what's happening on the parcels. Without that information, federal officials can't make informed decisions about the need for more leases, including their appropriate scope, terms and focus.

Shale deposits in northwest Colorado, Wyoming and Utah are thought to hold more than 1 trillion barrels of oil. At least 800 billion barrels of that are believed to be recoverable.

Last year, the Bush administration approved a plan that could open nearly 2 million acres of public land in the region to development and regulations for commercial development. The plan also covers development of tar sands in Utah.

The technology to tap the shale, though, is still being tested and commercial production is believed to be at least a decade away.

Colorado state officials contend the BLM's plan doesn't adequately address potential environmental and economic impacts. Environmental groups have filed lawsuits challenging the commercial oil shale regulations and plan.

Several environmental groups also object to issuing more research and development leases. Sixteen groups said in comments this week to the BLM that energy companies aren't using the land they've already leased.

"They shouldn't ask for a second helping when they haven't even touched what's on their plate," said Steve Torbit, executive director of the regional office of the National Wildlife Federation.

Shell Exploration & Production has three of the five oil shale leases in northwest Colorado. Spokesman Tracy Boyd said Friday that the information Colorado officials want is likely available in quarterly reports the company submits to the BLM.

Shell applied for a mining permit for a lease but withdrew it to do more work at its private test site near Meeker. Boyd said the company expects to reapply early next year.

"We want to do it right when we do it," Boyd said. "We're taking a planned and careful, methodical approach to the development."

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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