Hearings and Business Meetings

Jun 01 2006

09:30 AM

Full Committee Hearing- Oil Shale

250 North Street Grand Junction, CO Grand Junction City Hall Auditorium 09:30 AM

The Honorable Gary Herbert

Lieutenant Governor, State of Utah

Mr. Chairman, members of the committee:

For the record, my name is Gary R. Herbert, Lieutenant Governor of the State of Utah.

I would first like extend my appreciation to Senator Domenici for the opportunity to address this committee and to Senator Ken Salazar for welcoming me to the beautiful State of Colorado.

On behalf of Governor Jon M. Huntsman, Jr., I am honored to represent the Great State of Utah this morning regarding an issue we feel is an important component of our public policy agenda.

The primary purpose of my visit today is to ensure this body that the state of Utah is supportive of sustainable development of the oil shale and tar sand resources within Utah. 

The Governor and I recognize that the guiding principles for such sustainable development align well with the objectives that we hope to achieve for the state, namely to: 1) promote economic prosperity, 2) encourage responsible environmental protection and 3) enhance the quality of life by addressing the social and cultural needs of the people of Utah.

We applaud the work of the United States Congress for the passage of the Energy Policy Act of 2005 and for specifically addressing oil shale leasing in Section 346 of the Act.
I am here today to indicate to this committee that the state of Utah stands ready to support, coordinate and collaborate with the federal government in carrying out the provisions section 346. 

Estimates of Utah oil shale resource potential by the Utah Geological Survey (UGS) exceed 300 billion barrels of oil in the ground and possibly over 20 billion barrels of recoverable oil.  Development of these resources could represent substantial economic benefit to the state, and it is of keen interest to the government of Utah and its people.  Also, because over two-thirds of the land area of Utah is owned and managed by the federal government, federal land management policy for oil shale development will significantly influence both the methods and timing for development. 

In support of federal responsibilities for oil shale development, there are several organizations within our state government that can play various and important roles.  As I previously mentioned, the Utah Geological Survey performs research and analysis of the state’s mineral resources, and the technical professionals of the UGS will be particularly helpful for assisting with the National Oil Shale Assessment described in Section 346.

Also within Utah’s Department of Natural Resources are the Division of Water Resources and the Division of Water Rights that manage the water resources of the state and adjudicate in matters of water use. 

These agencies will also be able to provide information pertaining to the demand for and availability of water with respect to the development of oil shale. 

From what we understand of current oil shale extraction technology, water resources will play a big part in making such mineral extraction feasible.  The state of Utah has recognized this for many years, and plans were made over 20 years ago to consider potential water needs for oil shale development and how those needs might be addressed.  These plans will be addressed anew and updated as future proposals for oil shale development are considered.

Another important agency within the Department of Natural Resources is the Division of Oil, Gas and Mining (DOGM).  This agency conducts the permitting and monitoring of oil shale development as it relates to mining and extraction operations regulated by the Utah Mined Land Reclamation Act.  It is likely that initial efforts to develop Utah’s oil shale resources will be mining activities, and DOGM will oversee both exploration and developmental operations to ensure appropriate accountability, bonding, environmentally sound operations, and final land reclamation once extraction has ceased. 

There currently are no existing or pending oil shale operations permitted of record in Utah; however, there are 13 existing and new permits on file with DOGM for tar sand exploration and for tar sand mining operations, and several industrial representatives have contacted DOGM expressing interest in future oil shale development operations.

Of particular interest to our local governments and communities in Utah are the impacts that oil shale development will have on local infrastructure, community services, water resources and other multiple uses of the land.  We encourage federal land managers to be contemplative and cautious in their planning for oil shale development to ensure that such impacts will be addressed.  At the same time, we recognize the need of the private sector to proceed expeditiously with business plans and development activities, and we, therefore, urge the federal government to timely process leasing and operational applications as they are received. 

One proposal has been recently accepted for a research, development and demonstration project for oil shale development in Utah and should contribute significantly to the body of oil shale knowledge for many companies developing oil shale. 

This proposal would allow the winning bidder to re-establish operations at the inactive White River Oil Shale Mine in Uintah County, Utah.  I look forward to consultation with the federal government, state agencies and local governments in Utah on this environmental document and on the ultimate consideration of project approval.

In order to continue to support the efforts of the U.S. Bureau of Land Management (BLM), the State of Utah seeks, through a Memorandum of Agreement, “Cooperating Agency” status on the preparation of their Programmatic Environmental Impact Statement that they are conducting for larger scale oil shale leasing.

We are anxious for the prospect that these resources may be responsibly developed in the near future for the benefit of Utah and its citizens.  

Our guardedly optimistic view is that many bridges must be crossed prior to full development, and that we will assist companies accomplish those crossings of the environmental, technological, and political divides consistent with existing law.

Clearly, there is significant potential for oil shale and tar sands resources to become one of several alternatives for addressing future energy demands in the United States.  Along with the many other mineral and energy commodities that Utah provides for America, oil shale will be needed at some point in the future in order to ensure economic prosperity and domestic self-sufficiency of energy resources. 

Finally, I would be remiss if I did not point out that the Governor and I also believe that development of these resources can be performed with due protection of our environment while enhancing the quality of life for all Americans.

I thank you again for the opportunity to address the committee and will answer any questions you may have at this time.