Posts Tagged ‘Tresi Houpt’

Garfield County Commissioners Argue That Increased Royalty Rates Will Stifle Oil Shale Development

Politics, Regulations | Posted by rebhan
Jun 04 2013

Garfield County commissioners expressed “deep reservations” about the Bureau of Land Management’s proposed oil shale regulation amendments in a letter sent to the BLM Monday. The letter, approved by a unanimous 3-0 vote by the commissioners, requests a 60 day extension of the public comment period on the proposed amendments to allow the commissioners more time to “comment more specifically on the details” of the amendments. The Glenwood Springs Post Independent reports that the comment period was set to end May 28 but will now run through July 28.

The new oil shale regulations, which grew from a lawsuit settlement with a coalition of environmental groups, will increase the royalty rates the oil shale industry must pay to develop the resource. The current royalty rates are set at 5 percent for the first year and then steadily increase to 12.5 percent by the 13th year. The BLM’s amendments propose either a sliding-scale system determined by the Secretary of the Interior, or a minimum 12.5 percent rate subject to increase at any time. The 12.5 percent rate is in line with other oil and gas industries, both on and off-shore.

The commissioner’s letter argues that “the higher initial costs of oil shale recovery mean that setting the rate at the same level as the easier-to-produce conventional oils” place oil shale at a “competitive disadvantage.” The 5 percent rate is essentially a subsidy for the oil shale industry, a point that former Garfield County commissioner Tresi Houpt and several other local citizens objected to.

The commissioners argue that the 2005 Energy Policy Act requires rates should be set in a way that “encourage development” of oil shale resources. The letter states that all four options presented by the BLM “fall short” of the Energy Policy Act mandate.

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