[Congressional Record Volume 154, Number 85 (Thursday, May 22, 2008)]
[Senate]
[Pages S4801-S4803]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD:
  S. 3062. A bill to amend the Energy Policy Act of 2005 to modify 
certain provisions relating to oil shale leasing; to the Committee on 
Energy and Natural Resources.
  Mr. ALLARD. Mr. President, this weekend is the unofficial beginning 
of summer and the start of the summer driving season. This is as oil 
hits $135 per barrel and more and more cities and towns all over the 
country are seeing gasoline prices over $4 per gallon. In the face of 
these challenges to the American economy and consumer, we have failed 
to take the steps that are necessary to address this problem either in 
the short term or the long term.
  Last week, the House and Senate voted to suspend filling the 
Strategic Petroleum Reserve. I voted against that effort as many on the 
other side hailed it as a major move that would help to alleviate 
``pain at the pump.'' Instead, oil prices have continued to increase 
every day since that measure passed. I think this demonstrates that 
adding a mere 70,000 barrels a day to the marketplace means little when 
we consume 21 million barrels of oil per day in this country alone.
  Oil shale can be a major part of addressing rising oil prices by 
potentially bringing over 1 trillion barrels of oil to the domestic 
market. There are enormous oil shale reserves located in Colorado, 
Wyoming, and Utah. Oil shale is energy we can develop here at home to 
lower gas prices, increase our Nation's security, and improve our 
balance of trade by keeping money and investment in the United States 
rather than sending hundreds of billions of dollars overseas--
frequently to governments, I might add, that are unstable or whose 
interests are counter to those of this country. It will also bring in 
billions of dollars to the States and the Federal Treasury in the form 
of future royalties.
  This bill is necessary because the fiscal year 2008 Interior, 
Environment, and Related Agencies bill has language prohibiting funds 
from being used by the Department of the Interior to prepare final 
regulations and will set forth the requirements for a commercial 
leasing program for oil shale resources or to conduct an oil shale 
lease sale as provided in the Energy Policy Act of 2005. Without 
removing this moratorium--and it is a moratorium--companies will not 
know the rules of the road so they can make investment decisions, 
things such as what the length of the oil shale leases will be, the 
royalty rate, and reclamation and bonding requirements.
  I have a letter from the Assistant Secretary for Lands and Minerals 
at the Department of the Interior, Stephen Allred, dated May 14 in 
support of removing the prohibition contained in last year's Interior 
bill on the Department of the Interior issuing oil shale regulations. I 
ask unanimous consent at this time to have the letter printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                       Department of the Interior,


                                      Office of the Secretary,

                                                   Washington, DC.
     Hon. Wayne Allard,
     Ranking Minority, Subcommittee on Interior, Environment and 
         Related Agencies, Committee on Appropriations, U.S. 
         Senate, Washington, DC.
       Dear Senator Allard: Section 433 of the FY 2008 Interior, 
     Environment and Related Agencies Appropriations Act prohibits 
     our Department from issuing regulations related to oil shale 
     leasing. This letter is to communicate our opposition to this 
     prohibition and to urge its removal, so that the 
     Administration can move forward and issue regulations.
       As you know, in Section 369 of the Energy Policy Act of 
     2005, the Congress directed the Department to take the steps 
     necessary to meet future requests for a commercial oil shale 
     leasing program on Federal lands. In 2007, the Bureau of Land 
     Management authorized six oil shale research, development, 
     and demonstration projects on public lands in northwestern 
     Colorado and northeastern Utah. These projects provide 
     industry access to oil shale resources to further their 
     development of oil shale technologies.
       This type of research will require significant private 
     capital, with an uncertain return on this investment in the 
     immediate future. Part of the wisdom of Section 369 is that 
     it envisions the private sector will lead this investment--
     not the American taxpayer. However, for these projects to be 
     successful, companies will require a level playing field and 
     a clear set of regulations or ``rules of the road.'' 
     Developing a regulatory framework now will aid in 
     facilitating a producing program in the future should oil 
     shale development prove to be economic. Impeding the Federal 
     Government's efforts at this stage could have serious 
     consequences.
       Moving forward with these regulations does not mean 
     commercial oil shale production will take place immediately. 
     To the contrary, with thoughtfully developed regulations, 
     thoroughly vetted through a public process, we have only set 
     the groundwork for the future commercial development of this 
     resource in an environmentally sound manner. With the 
     administrative and regulatory certainty that regulations will 
     provide, energy companies will be encouraged to commit the 
     financial resources needed to fund their RD&D projects, and 
     the development of viable technology will continue to 
     advance. Actual commercial development and production will be 
     dependent upon the results of the RD&D efforts and more site-
     specific environmental evaluations.
       Consistent with the language in the Consolidated 
     Appropriations Act for FY 2008, the BLM is not spending FY 
     2008 funds to develop and publish final oil shale 
     regulations; however, the agency is moving forward in a 
     thoughtful, deliberative manner to publish proposed 
     regulations on oil shale. These proposed regulations will 
     reflect input already received from our partners in the 
     states. The publication of the draft regulations will provide 
     an opportunity for the public and interested parties to 
     remain engaged on this important issue.
       Given the Nation's projected future energy needs, it is 
     incumbent on us to promote the development of oil shale for 
     our national security and energy security. Declining domestic 
     oil production and rising U.S. demand for oil increase the 
     Nation's dependence on imports, and leave us vulnerable to 
     rising energy costs. Households across America are struggling 
     to deal with these additional costs and experts predict that 
     the trend is

[[Page S4802]]

     set to continue. In looking beyond traditional energy 
     resources to unconventional and alternative fuels, the 
     Department of the Interior has a key role to play in the 
     development of oil shale.
       I ask for your support for removal of the prohibition on 
     issuing oil shale regulations in order that we may move 
     forward with the public process of finalizing regulations for 
     commercial oil shale development on Federal lands. I commit 
     to working closely with the Congress throughout the 
     development of this program.
       A similar letter has been sent to the Honorable Dianne 
     Feinstein, Chairman, Subcommittee on Interior, Environment, 
     and Related Agencies, Committee on Appropriations, United 
     States Senate, the Honorable Norman D. Dicks, Chairman, 
     Subcommittee on Interior, Environment, and Related Agencies, 
     Committee on Appropriations, House of Representatives, and 
     the Honorable Todd Tiahrt, Ranking Minority Member, 
     Subcommittee on Interior, Environment, and Related Agencies, 
     Committee on Appropriations, House of Representatives.
           Sincerely,

                                            C. Stephen Allred,

                                              Assistant Secretary,
                                     Land and Minerals Management.

  Mr. ALLARD. Mr. President, Allred points out that issuing these 
regulations is critical to providing regulatory certainty for these oil 
shale projects to go forward. With the regulatory certainty these 
regulations will provide, companies will have an incentive to commit 
the resources necessary to develop this technology.
  I also have a letter from Secretary of the Interior Dirk Kempthorne 
dated December 12, 2007, objecting to the inclusion of this moratorium 
that was in the House version of the fiscal year 2008 Interior 
appropriations. I ask unanimous consent to have this letter printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                The Secretary of the Interior,

                                Washington, DC, December 12, 2007.
     Hon. Wayne Allard,
     Ranking Member, Subcommittee on Interior, Environment and 
         Related Agencies, Committee on Appropriations, U.S. 
         Senate, Washington, DC.
       Dear Senator Allard: As the House and Senate consider the 
     Fiscal Year 2008 Interior, Environment and Related Agencies 
     Appropriations bill, I would like to voice my concern 
     regarding efforts to prohibit our Department from issuing 
     regulations related to oil shale leasing.
       Section 606 of the House-passed Interior appropriations 
     bill would prohibit the use of funds to prepare or publish 
     final regulations regarding a commercial leasing program for 
     oil shale resources on public lands. The Energy Policy Act of 
     2005 (EPAct) was enacted with broad bipartisan support. The 
     EPAct included substantive and significant authorities for 
     the development of alternative and emerging energy sources.
       Oil shale is one important potential energy source. The 
     United States holds significant oil shale resources, the 
     largest known concentration of oil shale in the world, and 
     the energy equivalent of 2.6 trillion barrels of oil. Even if 
     only a portion were recoverable, that source could be 
     important in the future as energy demands increase worldwide 
     and the competition for energy resources increases.
       The Energy Policy Act sets the timeframe for program 
     development, including the completion of final regulations. 
     The Department must be able to prepare final regulations in 
     FY 2008 in order to meet the statutorily-imposed schedule.
       The Bureau of Land Management (BLM) issued a draft 
     Environmental Impact Statement (EIS) in August 2007. The 
     final EIS is scheduled for release in May 2008 and the 
     effective date of the final rule is anticipated in November 
     2008. The final regulations will consider all pertinent 
     components of the final EIS. Throughout this process BLM will 
     seek public input and work closely with the States and other 
     stakeholders to ensure that concerns are adequately 
     addressed. The Department is willing to consider an extended 
     comment period after the publication of the draft regulations 
     in order to assure that all of the stakeholders have adequate 
     time and opportunity to review and comment before publication 
     of the final regulations.
       The successful development of economically viable and 
     environmentally responsible oil shale extraction technology 
     requires significant capital investments and substantial 
     commitments of time and expertise by those undertaking this 
     important research. Our Nation relies on private investment 
     to develop new energy technologies such as this one. Even 
     though commercial leasing is not anticipated until after 
     2010, it is vitally important that private investors know 
     what will be expected of them regarding the development of 
     this resource. The regulations that Section 606 would 
     disallow represent the critical ``rules of the road'' upon 
     which private investors will rely in determining whether to 
     make future financial commitments. Accordingly, any delay or 
     failure to publish these regulations in a timely manner is 
     likely to discourage continued private investment in these 
     vital research and development efforts.
       The Administration opposes the House provision that would 
     prohibit the Department from completing its oil shale 
     regulations. I would urge the Congress to let the 
     administrative process work. It is premature to impose 
     restrictions on the development of oil shale regulations 
     before the public has had an opportunity to provide input.
       Identical letters are being sent to Congressman Norm Dicks, 
     Chairman, Subcommittee on Interior, Environment, and Related 
     Agencies, Committee on Appropriations, House of 
     Representatives; Congressman Todd Tiahrt, Subcommittee on 
     Interior, Environment, and Related Agencies, Committee on 
     Appropriations, House of Representatives; and Senator Dianne 
     Feinstein, Chairman, Subcommittee on Interior, Environment, 
     and Related Agencies, Committee on Appropriations, United 
     States Senate.
           Sincerely,
                                                  Dirk Kempthorne.

  Mr. ALLARD. Mr. President, Secretary Kempthorne also indicates the 
critical nature of allowing the Department to issue these regulations 
in order to attract the private investment necessary to develop the oil 
shale resource.
  Let me emphasize that this is not an environmental issue. No 
commercial lease sales are permitted under the provisions of this bill. 
In fact, commercial oil shale leases are banned for 2\1/2\ years 
because the technology for oil shale extraction is not yet economically 
viable on a wide scale. But, as I have said, the companies that 
invested tens of millions of dollars in this technology already need to 
have the Department of Interior issue the leasing ground rules so that 
they know what their costs will be for taking part in the Federal 
commercial leasing program when the time for leasing comes.
  My bill also makes sure there is adequate public comment by requiring 
that final regulations not be issued for at least 90 days after they 
have been published in draft form.
  When I offered this as an amendment in the Appropriations Committee, 
it was defeated by one vote and strictly along party lines. I heard 
from the other side of the aisle that because the Governor of Colorado 
and the junior Senator from Colorado opposed lifting this moratorium, 
Congress should not do so. I find this curious and incredibly 
inconsistent with prior debates over public lands policy. When we have 
debated drilling in the section 1002 area of ANWR, the other side seems 
to have little or no regard for the desires of Alaska's Governor, the 
people of the State of Alaska, or the entire congressional delegation 
about how they want their public lands managed.
  On this side of the aisle--that is, the Republican side of the 
aisle--we have offered proposals to bring to market billions of barrels 
of domestic supply that are continually blocked. If we don't begin to 
put in place policies to enhance our domestic production, prices are 
only going to go higher and the American people are going to pay the 
price at the pump as well as suffer the consequences of a further drag 
on the economy.
  In closing, I wish to state that increasing domestic energy 
production, including from oil shale, will strengthen this country's 
national security, lower gas prices, keep jobs and investments right 
here at home, and, in these tight budgetary times, bring in hundreds of 
billions of dollars to the States and the Federal Treasury through 
royalty collections.
  Congress needs to take a good, hard look at what it has done as far 
as encouraging further supply of energy for this country. As was 
mentioned in a number of editorials that have shown up in the papers, 
it is easy to blame companies and the stock market, and it is easy to 
blame the futures market, but really the problem starts right here in 
the Congress. The Congress needs to come up with a solution to relieve 
the inadequate supply of oil and gas. If that solution is not arrived 
at soon, Americans are going to be put out of business. We already hear 
about airlines having to cut back on the number of employees they have 
because of the high cost of gasoline. So it is going to have a dramatic 
impact on the economy of this country.
  Just think about how much land we have tied up because of previous 
action by this Congress--the billions of barrels of oil that 
potentially would be available in ANWR; the huge amount of reserves 
that we think is in the deep-sea portions that would be available off 
the coast of this country. We

[[Page S4803]]

are the only country in the world that restricts drilling out in the 
deep sea. There are potential reserves that would be available for 
consumers of this country with oil shale in Utah and Colorado and 
Wyoming. Now we have that tied up with a strict moratorium that tells 
the oil producers of this country: We want you to shut down. We don't 
want you to be able to move forward.
  I think these are huge reserves, and if we had acted, actually, 10 
years ago, we wouldn't now have a problem. We are going to have a 
problem for the next 10 years unless we do something quickly and 
drastically, and we need to do something more than just saying that the 
Strategic Oil Reserve can't purchase oil for 6 months or we wait until 
it drops to less than $75 a barrel.
  I am calling on my colleagues to join us because this is a serious 
problem we are facing in this country, and the Congress needs to do 
something about it.
                                 ______