Feds approve utility access for shale oil project

By John Rogers

The U.S. Bureau of Land Management announced in late September that it has approved a utility right of way for a major Utah oil shale project near Vernal. Enefit American Oil, a subsidiary of Estonia-based petroleum giant Eesti Energia, has been waiting for approval of the corridor during a six-year environmental review process. The BLM issued its final environmental impact study in July ahead of last month’s approval.{mprestriction ids="1,3"}

The approval makes way for the delivery of utilities to Enefit’s South Project and the transport of oil produced from the project. Enefit said it wants to produce 50,000 barrels of crude oil daily from shale on private land the company owns. Enefit proposes mining and retorting the shale to produce oil.

The BLM has agreed to let Enefit build 14 miles of water pipeline, 5.6 miles of natural gas supply pipeline and two 138-kilovolt electric power lines to the oil shale project in addition to a 7-mile oil pipeline away from it. The 15-mile utility corridor project is about 40 miles south of Vernal and 25 miles southwest of Rangely, Colorado.

The approval also facilitates project access through the upgrading of about five miles of the Dragon Road on federal land in Uintah County.

The access corridor — as well as the Enefit project in general — has been actively opposed by environmental groups. Enefit advertises its oil extraction process as stable and efficient, but environmentalists argue it’s similar to strip mining and is extremely water-intensive. “We’re taking a very close look at this,” the Center for Biological Diversity’s Michael Saul told Politico in response to the September ruling. “This project in particular is a terrible idea. We’re evaluating our options.”

Enefit said in a news release that the BLM’s environmental review found that the utility corridor would have less environmental impact than other alternatives such as trucking commodities into and out of the remote project site. The company said that if it can’t connect to a nearby power line, it likely would need to build its own power plant.

Ted Zukoski, an attorney with the conservation group Earthjustice, told the Grand Junction Daily Sentinel, “BLM has chosen to pave the way for a project that will strip mine up to 9,000 acres and consume thousands of acre-feet of water in the arid Book Cliffs in order to create more fossil fuel at a time when America is so awash with oil we’re exporting it. And they did this without bothering to disclose to the public the impacts of mining and processing millions of tons of oil shale per year. We’ll be taking a hard look at challenging this decision.”

Interested groups and individuals have 30 days from the decision date (Sept. 26) to file appeals of the BLM decision. Enefit, though, is not anticipating any problems. The company said on its website that “all concerns raised by third parties throughout the EIS process have been resolved to the BLM’s satisfaction. What’s more, the agency has been very mindful of closely following all process rules and requirements in anticipation of a legal challenge, so we’re optimistic that any appeals will not be successful.”

“This is a tremendous milestone for our future project and for energy development in Utah and the Mountain West region,” Enefit CEO Rikki Hrenko-Browning said in the company’s release.

The BLM said in a news release that the corridor project approval is consistent with the Trump administration’s goal of American energy independence “and supports the creation of jobs that help local communities grow.”

BLM Deputy Director Brian Steed said in the release, “Right-of-way projects are tremendous economic drivers that involve critical coordination with our neighbors and stakeholders. We are proud to do our part to move this important energy project forward.”

“We have worked closely and cooperated fully with the BLM and other federal, state and local agencies since the environmental review process began in late 2012,” Hrenko-Browning said. “Many potential concerns were identified by agencies, interest groups and the public during the process and we appreciate the BLM’s diligence in determining that these issues can be adequately addressed to allow a right-of-way easement across this federal property.”

The BLM decision doesn’t cover the actual oil shale mining and retorting project. It said in its decision that it has no jurisdiction over that project and the project “could be built and operated regardless” of its right-of-way decision. The BLM said that to its knowledge, no mine plans for the project currently are filed with the state of Utah, which would review and decide on any mine proposal.

The BLM said construction of the pipelines, power lines and road would generate about 85 to 110 jobs over several years.{/mprestriction}