Washington (Platts)--19Jun2008

Colorado Governor Bill Ritter Wednesday hit back against President George
Bush, who on Wednesday proposed that federal controls on oil shale development
be removed.

The reaction of Ritter, a Democrat, was in sharp contrast to the response
of Florida Governor Charlie Crist, a Republican, who came out cautiously in
support of another Bush call, for an end to the federal moratoria over
drilling offshore the East and West Coasts, leaving the decision on whether to
drill to the discretion of coastal states.

Bush said in a speech on energy Wednesday that rising costs of gasoline
made oil shale development economical, and that the resource could yield 800
billion barrels of oil. He blamed Democrats for having "slipped" the shale
development moratorium provision into the fiscal 2008 appropriations omnibus
bill. The fiscal year ends on September 30. A similar moratorium has been
proposed for the 2009 fiscal year, but has not yet passed.

Ritter said in his statement, issued Wednesday night, that before a
federal leasing program on oil shale could be established, "key threshold
questions" about where resources for oil shale production would come from must
be answered. Oil shale production requires substantially more water and energy
than conventional petroleum production, and releases more CO2 into the
atmosphere.

"No one -- not even the companies working on oil shale development -- can
tell us with any certainty how much energy it will take to develop this
resource, where that energy would come from, what the impacts on Colorado's
water supplies or quality would be, and what housing, transportation and other
infrastructure needs will be," said Ritter.

Colorado Representative Mark Udall also rapped Bush's proposal, saying
the president "should listen to the people on Colorado's West Slope who
have lived with the consequences of irresponsible oil shale development... The
question has never been whether or not to develop oil shale, but whether the
development makes economic sense and can be done in a way that helps, rather
than hurts the Western Slope's economy."

Udall, who is running for a Senate seat in this year's election, was
instrumental in gaining passage of the current moratorium.

The oil shale issue has surfaced in another US Senate race. Republican
Representative Steve Pearce, who is running in New Mexico against Mark Udall's
cousin, Representative Tom Udall, for a Senate seat, wrote a letter to the
Independent Petroleum Association of America, a producers' organization,
complaining that the Democrat had acted to block oil shale development. Pearce
apparently mistakenly believed that Tom Udall, rather than Mark Udall, was
responsible for the 2008 bill moratorium language.

--Jean Chemnick, jean_chemnick@platts.com