The Grand Junction Daily Sentinel
May 28, 2009, Dennis Webb

The state of Colorado has told the federal government it should conduct a
"midterm review" of oil shale research, development and demonstration leases
before it considers issuing more of them.

The state based its comments on a lack of action on the lease parcels by the
companies holding leases. It submitted its letter Thursday, the deadline set
by the Department of Interior for comments regarding a possible second round
of leases.

Also Thursday, 16 conservation groups told the Interior Department they
opposed more leases.

"Oil companies already own extensive oil shale lands, so it is not necessary
to open new federal lands to research," Karin P. Sheldon, executive director
of Western Resource Advocates, said in a news release from the groups.

In its own submitted comments, the American Petroleum Institute voiced
support for expanding the Bureau of Land Management's RD&D program "to
enhance competition and technological innovation."

In its initial round, the BLM issued six of the leases - five in Colorado
and one in Utah. They granted the right to test and develop technologies on
160-acre tracts of public land, and if the technologies are successful, to
seek conversion to a commercial lease on the 160 acres and a contiguous
4,960 acres.

During the last days of the Bush administration in January, the government
decided to issue a new round of RD&D leases.

But in February, new Interior Secretary Ken Salazar delayed action on the
leases, instead providing for a public comment period.

The first leases were for an initial 10-year period. In its letter, the
state said that nearly a quarter of the lease period has passed, and none of
the tracts has been permitted for active mining, and construction activities
haven't begun on them.

It recommended an assessment "to determine their technology status, the
relevant economics, the resource demands, and the obstacles preventing more
substantial progress."

Shell holds three of the Colorado leases. The company previously has
indicated it is moving deliberatively on its oil shale project but plans to
make use of its federal leases.

Last year, the BLM identified land for potential commercial oil shale
development and adopted development rules. Conservation groups sued the
government to challenge those actions.

Earlier this month, over the objections of the groups and the government, a
federal judge agreed to let the American Petroleum Institute intervene as a
defendant in one of the cases and to let Shell intervene in both cases.