Nation/World

Bush shale-oil leases probed

Interior Department investigating royalty rates

WASHINGTON – Interior Secretary Ken Salazar asked the Interior Department’s inspector general Tuesday to investigate a controversial, last-minute move by the Bush administration to lock in favorable royalty rates and environmental regulations for a series of oil-shale leases on federal land in Colorado and Utah.

The investigation represents a significant expansion of the department’s probe of Bush-era oil-shale policy – and the oil industry’s role in shaping it.

Investigators are expected to examine whether Interior officials followed department protocol when pushing through an unusual set of lease amendments, and whether those officials bowed to pressure from industry or other outside groups.

Salazar said on Tuesday that the investigation could result in a “range of options,” including leaving the amendments in place or canceling them.

“There are serious questions about whether those lease addenda are in fact legal,” he said in a conference call with reporters, “and in fact whether or not they should be rescinded.”

In a news release, Salazar added:

“Taxpayers deserve answers to serious questions about why these lease addenda were granted at the eleventh hour, under what circumstances, and at what potential expense to the federal treasury.”

The Tribune Washington Bureau reported last week that Interior officials were reviewing the highly unusual amendments, which could be worth billions to shale leaseholders, including Royal Dutch Shell, which holds three of the six leases.

A Shell spokeswoman said it would be inappropriate for the company to comment on an investigation “that was just requested today.”

Also on Tuesday, Salazar acknowledged publicly for the first time that the department’s inspector general – and the Justice Department – are engaged in a broader oil-shale probe that has centered on former Interior Secretary Gale Norton and whether she negotiated for a future Shell job while overseeing the government’s oil-shale leasing process.

Norton went to work for Shell nine months after resigning from Interior in 2006.

Salazar criticized Bush-administration shale policy as a U.S. senator and distanced himself from it on Tuesday.



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