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Associated Press: BLM: oil shale projects will have no significant impact

Associated Press Writer

DENVER (AP) — A federal agency believes there would be no significant environmental impacts from two experimental oil shale projects in northwestern Colorado that could lead to the commercial mining of oil from rocks.

The Bureau of Land Management released environmental assessments this week of projects by Shell Frontier Oil and Gas Inc. and Chevron USA in Rio Blanco County. The assessments, open to public comment until Sept. 18, said a potential drop in groundwater levels on the test sites proposed by Shell could adversely affect four endangered Colorado River fish.

The BLM and U.S. Fish and Wildlife Service would consult on reducing the effects on the fish: the bonytail, Colorado pikeminnow, humpback chub and razorback sucker.

“We want to make sure the public is part of the environmental review process for these oil shale proposals,” said Kent Walter, field manager in the BLM office in Meeker.

The BLM concluded earlier this month that an experimental project by EGL Resources Inc. about 20 miles west of Rio Blanco would have no appreciable environmental impact.

The three companies and Oil Shale Exploration Co., which has proposed a project near Vernal, Utah, are in the running for permits on federal land to operate experimental oil shale projects. Approval of the test projects will put the companies in line for leasing larger federal tracts for commercial operations starting as early as mid-2007.

Oil shale reserves in Colorado, Utah and southwest Wyoming are believed to contain a 100-year domestic supply of oil, although it’s locked in layers of hard rock and the technology for economically recovering it is still evolving.

Steve Smith, assistant regional director for The Wilderness Society, said he believes the experimental programs will be worthwhile because they’ll show whether the technology is workable and what the impacts might be. He said, though, that the BLM’s conclusion that a project will have no significant impact “always makes me nervous.”

Smith noted the potential effects on the endangered fish.

The experimental projects are proposed on 160-acre parcels. Shell wants to conduct research and development on three parcels southeast of Rangely.

Some area residents and government leaders are urging the federal government to proceed carefully on oil shale. Western Colorado’s economy was sent reeling for years after falling oil prices led Exxon to shut down its $5 billion Colony oil-shale project and lay off 2,200 workers.

But oil prices of $70-plus a barrel have government and industry leaders looking for ways to tap the deposits. Shell has been experimenting with a process to bake shale oil right from the ground rather than bringing rock to the surface to cook in a furnace.

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