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US limits oil-shale development in Rocky Mountains

Associated Press Modified: November 9, 2012 at 7:00 pm •  Published: November 9, 2012

The federal government has yet to authorize widespread development, instead leasing 160-acre research plots to a handful of companies testing extraction methods. Rifle, Colo.-based American Shale Oil LLC is heating an underground zone by pumping a pool of oil down a well and blasting it with hot fuel gas.

The BLM said players must prove their research before winning larger commercial leases. It approved another two research leases Friday, to ExxonMobil Exploration Co. and Natural Soda Holdings Inc. for in-ground development in Colorado's Piceance Basin.

The Piceance Basin doubles as a "mule-deer factory," said the National Wildlife Federation, warning widespread development could break up habitat there.

In Wyoming, the BLM said it was putting limits on development in areas where sage grouse gather. That was small comfort to the Laramie-based Biodiversity Conservation Alliance, however. The group said any kind of development can chase off sage grouse, the birds that puff themselves up in mating dances.

The U.S. Fish & Wildlife Agency is under court orders to determine by 2015 whether sage grouse deserve protection under the Endangered Species Act.

Also in Wyoming, the BLM pulled the Red Desert's Adobe Town from consideration, a 128-square-mile wilderness study area rich in fossils.

A host of Republican politicians sounded off Friday.

"The Obama Administration should cancel this plan and work with Congress and governors on solutions that will create jobs and strengthen our energy security," said Sen. John Barrasso, R-Wyo.

Rep. Ed Whitfield, R-Ky., chairman of the House Energy and Power Subcommittee, said the Obama administration was "locking up" as much potential oil "as the rest of the world's proven reserves combined."

Skeptics point to failed oil-shale efforts since the 1920s. They expect newcomers to do no better.

"We've seen small companies make big claims before going bust," said Matthew Garrington of the industry watchdog group called the Checks and Balances Project, based in Denver and Washington, D.C. "This is the same empty promise."