The federal government’s new oil shale leasing royalty structure and the downward-spiraling economy apparently aren’t having an impact the plans of three major oil companies conducting research in Colorado’s Piceance Basin.
According to the Glenwood Post Independent, royalty rates of 5 percent announced in November have not dampened the enthusiasm of Shell, Chevron and American Shale Oil to find a way to squeeze black gold from the rocks and sand of the Western Slope.
The companies are moving forward with research and exploration despite not getting their wish of lower royalties “that would be more conducive to get a start-up industry off the ground.”
On the other hand, Sen. Ken Salazar, who previously helped legislate a one-year ban on commercial oil-shale leasing that expired in September, said the Bureau of Land Management’s new royalty rates and leasing regs “sell Colorado short.”
That could be bad news for the nascent and highly speculative industry, because Salazar has reportedly accepted an offer from President-elect Barack Obama to serve as the next secretary of the interior.