Colorado, Wyoming battle Bush over oil shale

Elcan said Oil Shale Exploration Corp. is ready to go, and that the whole industry was being held back by Congress. Companies need certainty on whether and how they will be allowed to work larger tracts of federal land, he said.

Sen. Orrin Hatch, R-Utah, said the country has to do everything it can to boost energy production.

"We have as much oil in oil shale in Utah, Wyoming and Colorado as the rest of the world combined," he said.

Shell Exploration & Production Co. is working on its own lands in western Colorado but has permission to work three 160-acre parcels of federal land on an experimental basis. It wants the federal government to set a firm date when development of larger and more productive oil shale fields will be allowed. Shell says it needs the certainty to pace its capital and research investments.

"Oil prices do not drive the pace of our research and development. Instead, Shell continues a cautious, steady approach," said Darci Sinclair, a Shell Oil Co. spokesman in Houston.

"While we are interested in reaching commercial development as soon as feasible, it must be done in a way that is economically viable, environmentally responsible and socially sustainable," she said.

Shell is working to melt oil out of rock by heating up the ground using oven-like elements. The company says it's about two years away from proving it can accomplish this without polluting groundwater.

Environmental groups have been watching Shell's experiment with interest, but they doubt oil shale will solve anything.

"Today's high gasoline prices are the result of a host of economic conditions that have little to do with how much drilling is or is not taking place on federal lands," said David Alberswerth, an energy policy adviser for the Wilderness Society. He said the weak dollar, market speculation and demand in China and India are making oil more expensive.

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