US may exploit Navy shale oil

Quietly, federal energy officials have been exploring the possibility of opening US Navy oil shale reserves in Colorado to development. With an estimated production capacity of 200,000 barrels of oil a day, the two naval tracts in the Piceance Basin of southwest Colorado are being looked at as part of President Carter's synthetic-fuels program -- in addition to oil shale tracts leased by the US Department of the Interior.

The 200,000 barrels a day are equivalent to 3 percent of current US imports and 8 percent of the stated 2.5 billion-barrels-a-day goal of the synfuels plan. The reserve could sustain this production level for 20 years, and, at the discretion of Congress, the oild could be used either for military or civilian purposes.

The US Department of Energy (DOE), in a preliminary stage of preparing a recommendation to congress about the disposition of this resource, recently held "scoping hearings" here in Denver. These hearings were to help DOE in its preparation of an environmental-impact statement and to decide the best method of development: leasing, joint government-industry operations, government-owned/contractor-operated, or adopting a quasi-utility model.

The major environmental concerns associated with oil shale development are air and water quality. A decision to develop this area rapidly would run contrary to Colorado state policy, which favors the gradual development of shale reserves to minimize local social and environmental impacts.