BLM OKs 2 more Colo. oil shale research leases

The Bureau of Land Management on Thursday approved oil shale research, development and demonstration 160-acre tract leases for Natural Soda Holdings Inc. and ExxonMobil Exploration Co. in the Piceance Basin in northwestern Colorado. The decision is subject to a 30-day appeal period before the leases are issued.

Both companies had applied for leases after the BLM announced in 2009 that it was awarding a second round. The agency awarded six research leases in Utah and Colorado in 2007 to Chevron USA Inc., Shell Frontier Oil and Gas Inc., and E.G.L. Resources Inc. to test ways to develop oil shale. Chevron said this year it was divesting its lease and reassigning workers to other projects.

AuraSource Inc., of Scottsdale, Ariz., had applied for a lease in Utah in the second round, but the BLM is awaiting documents from the company before a lease can be approved. A company representative didn't return messages seeking comment Friday.

Since 2009, the BLM has proposed shrinking how much public land in Colorado, Wyoming and Utah would be available for research leases. A final decision isn't expected for a few more months.

Oil shale deposits in the three states represent a potentially huge, unconventional energy resource, but the trick is turning it into oil. Oil shale is rock that contains kerogen, which must be subjected to high heat before it produces liquid. Companies are still figuring out how to do that commercially in the U.S. with limited environmental impacts.

The Green River Formation underlying parts of Colorado, Utah and Wyoming is estimated to have 1.2 trillion to 1.8 trillion barrels of oil reserves, and about 800 billion barrels may be recoverable, according to U.S. government estimates.

Both Natural Soda and the Exxon Mobil Corp. subsidiary and exploring "in situ" technologies to heat kerogen underground rather than bringing it to the surface first.