Tuesday, November 18, 2008

Bush Administration Fortifies Oil Shale Industry

Firing off another decision that is angering environmental groups, the Bush administration has issued new regulations to develop oil shale deposits straddling almost two million acres of public lands in Colorado, Utah and Wyoming.

The rules lay out the framework to develop these deposits over the next decade, including royalty rates, how to evaluate bids for leases, mitigation requirements and other procedural elements.

The announcement follows last September’s decision by Congress to allow the moratorium freezing the development of oil shale and offshore drilling to lapse.

But most experts had expected the rules on how to develop the deposits to be left to the next administration. They claim the Bush administration is fast-tracking a program that could damage the environment and emit much more heat-trapping carbon emissions without proper consultations.

The Bush administration, said Kevin Book, an analyst at FBR Capital Markets, seems intent on taking full advantage of a regulatory window that is about to close at the end of the week.

In 1996, the Republican-controlled Congress passed the “Congressional Review Act,” which gives lawmakers a 60-day window to repeal new rules issued by executive agencies. The law was intended to prevent outgoing administrations from passing “midnight” rules in their waning hours. In practice, Mr. Book says, this means the Bush administration has until Thursday, Nov. 20, to issue regulations.

“The Bush administration’s last, best chance for contentious executive branch policies arrives this week,” Mr. Book said.

Critics of the oil shale development plan, which was issued by the Bureau of Land Management, did not provide the public with a chance to protest the decision, and said the rules would also waive royalties for oil companies under certain circumstances.

“The Bush administration is maintaining an unlawful position by amending these resource management plans without providing the public with an opportunity to have their decisions administratively appealed,” said Melissa Thrailkill, a staff attorney for the Center for Biological Diversity. “We are considering all our options. That includes legal action in federal court.”

The administration said the decision would ultimately help develop more domestic sources of energy. The ban on oil shale development has been in effect for two years.

“Oil shale is a strategically important domestic energy source that should be developed to reduce the nation’s growing dependence on oil from politically and economically unstable foreign sources,” said James Caswell, the director of the B.L.M.

The agency, Mr. Caswell continued, “is taking extraordinary steps to improve our domestic energy security, including the establishment of regulatory regimes designed to boost geothermal, solar and wind development and protect our public land resources.”

The B.L.M. said the program could add up to 800 billion barrels of recoverable oil from lands in the Western United States. That figure is highly theoretical.

Oil shale is a controversial and environmentally damaging source of hydrocarbons since it requires vast amounts of energy and water to squeeze oil out of sedimentary rocks. The process emits far more carbon dioxide, which is responsible for global warming, than ordinary refining operations.

Plus, it would still be up to the next administration to decide whether to lease lands to develop the deposits, or to simply ignore the new rules.

“How can the administration write regulations for an industry that does not exist yet, using unknown technologies? They can’t,” said Amy Mall, a senior policy analyst for the National Resources Defense Council. “This is just a giveaway to special interests that will leave states to clean up the mess.”

It is not the first time this month that the Bush administration has sought to make the best of its last days in office. Earlier this month, the Bureau of Land Management expanded its oil and gas lease program in eastern Utah to include tens of thousands of acres on or near the boundaries of three national parks.

The decision angered environmental groups, who feared it would lead to industrial activity in some of the state’s renowned empty regions, like Desolation Canyon.

According to a report from Felicity Barringer in The Times earlier this month, officials with the National Park Service said that the decision to open lands close to Arches National Park and Dinosaur National Monument — and within sight of Canyonlands National Park — had been made without the kind of consultation that had previously been routine.

-- By Jad Mouawad (NY Times)


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