Interior proposes lower royalties on oil shale

[DogPoundPup]

Source: Yahoo News

WASHINGTON - The Bush administration on Tuesday proposed charging energy companies wanting to squeeze oil out of vast shale deposits in the West lower royalties than they pay for drilling on other federal lands, including offshore in the Gulf of Mexico and Alaska.
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In draft rules issued Tuesday, the Interior Department recommended a range of royalty rates for the extraction of oil from shale on 2 million acres of public property in Colorado, Utah and Wyoming. All would be less — at least for a time — than the 12.5 percent to 18.8 percent the government currently collects from companies producing oil on and offshore.

Interior officials said the discounted rate, which would be fixed at 5 percent in one proposal, would offer an incentive for companies to develop oil shale, which can cost up to three times more to produce than traditional oil. Shale oil also contains less energy than oil, coal and wood, the Interior Department said.

Read more: http://news.yahoo.com/s/ap/20080723/ap_on_go_ot/oil_shale

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Oil shale is one of the largest untapped sources of energy in the U.S. An estimated 800 billion barrels is locked up in rock in the West beneath land that is more than 70 percent publicly owned.

Environmentalists, along with Colorado's Democratic governor, Bill Ritter, accused the Bush administration of rushing to develop oil shale at "bargain basement" rates, without accounting for its various impacts. High oil and natural gas prices have already caused a black gold rush in the West, with more than 100,000 traditional oil and gas wells approved in recent years.

Ritter said Tuesday that oil shale, which would not be produce oil until 2015 or 2016, would do nothing to help with high gasoline prices.

"This is a last-ditch, irresponsible attempt by the White House to issue commercial oil-shale leases, at Colorado's expense," Ritter said. "These regulations would send bargain basement royalty rates that could cost Coloradans billions of dollars."

Kate Zimmerman, a senior policy specialist with the National Wildlife Federation, said Interior's proposal did not represent a fair market value to the public.

"It's a lowball number in terms of the potential profits these guys are going to reap from oil shale," she said.

[crimsonblue]

1. all this increased oil explo will do

is increase the price of oil, because it will increase the concentration of oil in fewer hands, and give greater leverage to the big players. They can then dictate at will the price of oil.

[Psephos]

4. You mean like OPEC?

Might as well keep the dollars here instead of send them to all the polluting, colluding nasties we currently send them to. Not only helps the balance of payments, but it supports the strength of the dollar, and fattens the US Treasury rather than Prince Saud's or Putin's.

Not that shale oil is actually going to pan out on a large scale anyway....

[crimsonblue]

5. there is no reason to expand drilling

especially when less than 20% of leases are being utilized. Companies that do not use the leases they have should lose those leases.

[Psephos]

7. There is no drilling involved in shale oil extraction n/t

[daleo]

2. Oil shale is a pipe dream

The government would have to charge negative royalties (i.e. pay the companies money) before it would ever work financially. In terms of physics, I don't see it ever working.

[HCE SuiGeneris]

3. Yes, let's give the resources away, seeing as our Treasury is in such great shape!

:sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm:

[Gabi Hayes]

6. simple solution to all energy needs:

Spanish flywheels