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[Federal Register: November 18, 2008 (Volume 73, Number 223)] [Rules and Regulations] [Page 69413-69487] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr18no08-30] ----------------------------------------------------------------------- Part IV Department of the Interior ----------------------------------------------------------------------- Bureau of Land Management 43 CFR Parts 3900, 3910, et al. ----------------------------------------------------------------------- Oil Shale Management--General; Final Rules [[Page 69414]] ----------------------------------------------------------------------- DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Parts 3900, 3910, 3920, and 3930 [LLWO-3200000 L13100000.PP0000 L.X.EM OSHL000.241A] RIN 1004-AD90 Oil Shale Management--General AGENCY: Bureau of Land Management, Interior. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Bureau of Land Management (BLM) is finalizing regulations to set out the policies and procedures for the implementation of a commercial leasing program for the management of federally-owned oil shale and any associated minerals located on Federal lands. The Energy Policy Act of 2005 (EP Act) directs the Secretary of the Interior (Secretary) to: Make public lands available for conducting oil shale research and development activities; Complete a Programmatic Environmental Impact Statement (PEIS) for a commercial leasing program for both oil shale and tar sands resources on the BLM-administered lands in Colorado, Utah, and Wyoming; and Issue regulations establishing a commercial oil shale leasing program. These final regulations incorporate specific provisions of the Mineral Leasing Act of 1920 (MLA) and the EP Act relating to: Oil shale lease size; Acreage limitations; Rental; and Lease diligence. These regulations also address the diligent development requirements of the EP Act by establishing work requirements and milestones to ensure diligent development of leases. The rule also provides for other standard components of a BLM mineral leasing program, including lease administration and operations. DATES: This rule is effective on January 17, 2009. ADDRESSES: You may send inquiries or suggestions to Director (320), Bureau of Land Management, 1620 L Street, NW., Room 501, Washington, DC 20036, Attention: RIN-AD90. FOR FURTHER INFORMATION CONTACT: Mitchell Leverette, Chief, Division of Solid Minerals at (202) 452-5088 for issues related to the BLM's commercial oil shale leasing program or Kelly Odom at (202) 452-5028 for regulatory process issues. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339, 24 hours a day, 7 days a week, to leave a message or question with the above individuals. You will receive a reply during normal business hours. SUPPLEMENTARY INFORMATION: I. Background II. Final Rule as Adopted and Response to Comments III. Procedural Matters I. Background These regulations implement the EP Act (42 U.S.C. 15927), which became law on August 8, 2005. Section 369 of the EP Act addresses oil shale development and authorizes the Secretary to establish regulations for a commercial leasing program. The MLA of 1920 (30 U.S.C. 241(a)) provides the authority for the BLM to allow for the exploration, development, and utilization of oil shale resources on the BLM-managed public lands. Additional statutory authorities for these regulations are: (1) The Mineral Leasing Act for Acquired Lands of 1947 (30 U.S.C. 351-359); and (2) The Federal Land Policy and Management Act (FLPMA) of 1976 (43 U.S.C. 1701 et seq., including 43 U.S.C. 1732). \ Oil shale is a fine-grained sedimentary rock containing organic matter from which shale oil may be produced. Oil shale is a marlstone and contains no oil; rather, it contains un-decayed algae called kerogen (not oil). In fact, the word kerogen is a Greek word interpreted to mean ``to produce wax''--``kero'' (wax), ``gen'' to produce. The waxy substance produced from oil shale rock is not the same as conventional crude oil. The kerogen only has a market value as an energy source after it has been refined and converted to synthetic crude oil. Oil shale is a solid rock and must be mined or treated in place to release the kerogen from the rock. Energy companies and petroleum researchers have, over the past 60 years, developed and tested a variety of technologies on a small scale for recovering shale oil from oil shale and processing it to produce fuels and by-products. Both surface processing and in-situ technologies have been examined. Generally, surface processing consists of three major steps: (1) Oil shale mining and ore preparation; (2) processing of oil shale to produce kerogen oil; and (3) processing kerogen oil to produce refinery feedstock and high-value chemicals. This sequence is illustrated below. Conversion of Oil Shale to Products (Surface Process) Resource >< Ore Mining > < Retorting > < Oil Upgrading > < Fuel and Chemical Markets For deeper, thicker deposits, not as amenable to surface- or deep- mining methods, the shale oil can be produced by in-situ technology. In-situ processes minimize or, in the case of true in-situ, eliminate the need for mining and surface processes by heating the resource in its natural depositional setting. This sequence is illustrated below. Conversion of Oil Shale to Products (True In-Situ Process) Resource > < In-Situ Processing > < Oil Upgrading > < Fuel and Chemical Markets The American Association of Petroleum Geologists estimates that the total world oil shale resources contain the equivalent of 2.6 trillion barrels of oil. According to estimates by the U.S. Geological Survey, the United States holds more than 50 percent of the world's oil shale resources. The largest known deposits of oil shale in the world are located in a 16,000 square mile area in the Green River formation in Colorado, Utah, and Wyoming (underlying the Piceance, Uinta, Green River, and Washakie Basins), which is estimated to contain the equivalent of between 1.5 and 1.8 trillion barrels of oil. Federal lands comprise 72 percent of the total surface of oil shale acreage and 82 percent of the oil shale resources in the Green River formation. BLM Oil Shale Initiatives Since 1973 In 1973, four leases were issued in the oil shale prototype leasing program. During the 1973-74 oil shale prototype program there were expectations of an economic boom in western Colorado which never materialized. The oil shale industry collapsed on May 2, 1982, commonly referred to as Black Sunday. In 1983, the BLM established an Oil Shale Task Force to address: (1) Access to unconventional energy resources (such as oil shale) on public lands;