In a news media teleconference held Tuesday, Interior Secretary Ken Salazar and Bureau of Land Management Director Robert Abbey pledged to take a “fresh look” at oil shale development in western states, and indicated that future considerations would likely involve less land than previously considered by the recent Bush administration. Both men encouraged ongoing research and development on oil shale technologies, but emphasized the importance of developing oil shale resources in a way that protects water supplies in the arid West. Secretary Salazar added that “now is the time to ensure that our rules and plans reflect the latest information and will deliver a fair return to the American taxpayer.”

This major policy review occurs as the Interior Department settled two lawsuits filed against the BLM by 13 conservation organizations represented by Earthjustice.

“We applaud Secretary Salazar’s decision to take a hard look before rushing forward with oil shale development in the West,” said Earthjustice attorney Ted Zukoski. “The settlements give the Interior Department the chance to better balance oil shale development against what is most valuable here in the West—our water, our communities, our wildlife, and scenic landscapes found nowhere else.”

The settlements do not specifically set new leasing policies, but conservation groups are encouraged that reopening the rules at least gives the Interior Department the opportunity to adopt rules different than those established by the Bush administration. With just a few months left in office, the Bush administration opened two million acres of public land to oil shale leasing, and set a bargain-basement rate on royalties in order to subsidize development. Conservation groups filed two suits in January 2009 challenging these hasty decisions.

Salazar’s announcement and the settlements mean that the Department of the Interior will assess how to ensure a fair return for taxpayers from oil shale leases, and how to balance oil shale development with protection of scarce water supplies, wildlife and recreational values on public lands and water in Colorado, Utah and Wyoming.

Commercial oil shale development threatens to cause grave environmental damage. To turn oil shale into a usable fuel source, the rock, or shale, must be strip-mined and baked off-site or cooked in place underground to release a substance that can be turned into oil.

Fuel production from oil shale will require huge amounts of electricity, including the construction of as many as 10 new polluting power plants in the three states, leading to dramatic increases in emissions of greenhouse pollutants that cause global warming.

Oil-shale production will also likely require vast amounts of water from the already overtaxed Colorado River basin; federal agencies estimate it may require as many as three barrels of water to produce one barrel of oil in one of the driest parts of the country. This would strain the Colorado River basin, threatening wildlife, as well as the water supply on which residents and agriculture depend.

Background on the lawsuit and settlements can be found on a fact sheet. The basics are:

1. In 2008, the Colorado Environmental Coalition, Western Colorado Congress, Wilderness Workshop, Biodiversity Conservation Alliance, Southern Utah Wilderness Alliance, Red Rock Forests, Western Resource Advocates, National Wildlife Federation, Center for Biological Diversity, The Wilderness Society, Natural Resources Defense Council, Defenders of Wildlife and the Sierra Club, with representation by Earthjustice, sued the BLM for adopting regulations that failed to analyze or protect against negative impacts on the public lands and water of the three states with largest oil shale deposits and did not set fair rates for oil shale lease royalties.
2. Under the settlements, BLM will initiate two public processes that will allow the public to weigh in on
   1. the right royalty rate and environmental protection provisions for oil shale leases
   2. which public lands should be open to commercial oil shale leasing and development.
   These settlement do not affect any company’s ability to secure a federal research and development lease.
3. Oil shale companies including Shell and Exxon already have full access to hundreds of thousands of acres of private lands on which to test and develop their technologies. These settlements do not affect those plans.
4. Industry leaders such as Shell, Exxon and AMSO, have repeatedly stated that commercial oil shale development is years into the future. The settlements include a timeline that ensures decisions will be finalized no later than January 15, 2013.