Tuesday, the Interior Secretary, Ken Salazar, said he will be reviewing a "midnight rule" implemented by the Bush Administration, that gave oil-shale leases to oil companies operating in the Rocky Mountain region.
It seems that the terms seem way too friendly, and some Environmentalists are calling this just a scratch on the surface of Bush-era "Cronyism", that gave favorable terms for oil companies that supported the Bush Administration.
More after the fold:
Done in the last 5 days of the previous Administration, without any public notice:
"The fact that this occurred with very little scrutiny or analysis to me was one of the most unfortunate midnight rules that occurred in the last weeks of the Bush administration," said Bobby McEnaney of the Natural Resources Defence Council.
These changes, and allowance of more land, where done without any public notice, and were done at prices unheard of in reasonable negotiations for oil-shale property.
According to guardian.co.uk and bloomberg.com, the initial royalty rates were set at 5%, a rate that is causing some concern for Salazar.
"There are serious questions about whether these leases are in fact legal or whether or not they should be rescinded," Salazar said.
This is all revolving around 30,000 acres, that several companies, in a joint venture, bought into. The companies included in the venture are, according to bloomberg.com: Royal Dutch Shell Plc, Chevron Corp., Total SA.
The point of the venture is to research the oil-shale stored away in the Rockies, to see whether or not a cheap, feasible means to extract the oil from the shale formation is possible.
These process can leave this area destroyed, while using huge amounts of scarce water:
Some estimate that there is as high as 1.5 Trillion Barrels of oil, and at the minimum, 800 Billion barrels of oil reserve, locked away in the shale.
So as you can imagine, the oil companies are clamoring to get their share in this huge amount of oil reserves, and are willing to destroy the land in the process.
This process takes a huge amount of water and energy, and is damming to the environment, not even to include the effects in the long run of the higher use of oil, instead of using a feasible means to move ourselves away from non-renewable sources.
And these processes were not only allowed to go, unrestricted (Or at least, very close to) under the Bush Admin, it was even given a too fair of a shake when it came to use of this valuable land.
Salazar, a former Colorado senator, announced in February that he was rejecting a Bush administration plan to expand leases for production of oil shale in Colorado and Utah. The secretary criticized the leases because they covered larger areas than prior leases and locked in low royalty rates.
Not only this, but the technology to retrieve the oil from the Oil-Shale Formation, is not even proven yet to be cheap, and relatively safe for the environment.
"It is questionable about how those royalty rates could actually be set," Salazar told reporters on the conference call today. The leases mean the government still doesn’t know "what kind of technology is going to be used" and the water and power needs for the process, he said.
Even with all that, the Bush Administration was still pushing for more land to be given to oil companies, and to be given at an initial royalty rate, that is unheard of for commerial oil and gas exploration.
Salazar says that companies will given a chance for another round of oil-shale leases for around 160 acres of land, and the possible expansion up to 460 acres, but at the relatively normal royalty rate of 12.5%. This amount of land is way lower than what the Bush Administration had hoped to lease out to these companies, and at a rate that is far higher.
The investigations will hopefully shine a light on the possibly illegal maneuvers taken under the Bush Administration, that were constantly attacking our environment, for the gain of only the oil companies.
Some pro-oil critics say that use of this oil will reduce costs, and will push us further away from the predominant Saudi rule on the price of oil. But we all have to remember, that was the same argument for the benefits of Saddam-less Iraq. Although it would be great to have our own oil source, where we can dip into, until we can move to a completely renewable source, the damage this will cause on the environment is unknown, and it will be permanent. Some temporary benefits can never replace the destruction of land.