March 22, 2008

It Begins Again, This Time Oil Shale

Bill Ritter doesn't want BLM to approve oil shale leases. The Grand Junction Sentinel reports:
Gov. Bill Ritter encouraged the Bureau of Land Management on Thursday to hold off on allowing commercial oil shale development in northwest Colorado, citing the “serious risk” of “tremendous adverse impacts” on the state’s water, wildlife and public lands.

In a letter to the BLM, Ritter said the federal government should wait until private companies can develop safe and efficient ways to develop commercial oil shale prior to permitting commercial development on federal land.

“It is premature for the BLM to make any decisions that allocate federal land to a commercial leasing program through its resource management plans or otherwise,” Ritter said...

Ritter called the BLM’s preferred scenario “misguided and unacceptable.”

It is estimated that each acre of oil shale land will produce one million barrels of oil or oil equivalent. At current prices of $110/barrel, that is $110 million that doesn't have to be sent to Iran and Venezuela. It is also about $5 million in severance taxes, and perhaps $11 million if the taxes are raised to 10% as some are proposing.

More to the point, the development of these lands will slow the rise in the price of oil and the rise of the price of gas at the pump.

What Bill Ritter is promoting is probably great short term politics, but it is terrible policy. It is bad for the taxpayer because he will want to replace those taxes. It is bad for the consumer because it helps create and prolong a shortage. It is bad for the economy. It is bad for Colorado.

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