Gov. Bill Ritter and Sen. Ken Salazar blasted the Bush administration's latest move Tuesday to ease the way for commercial development of oil shale.

Ritter called the Interior Department's proposed rules for oil shale development "premature, unnecessary and irresponsible."

"This is a last-ditch, irresponsible attempt by the White House to issue commercial oil-shale leases, at Colorado's expense, and will do nothing to help hard-working Americans or family-owned businesses struggling today with $4-a-gallon gas," Ritter said. "These regulations would set bargain basement royalty rates that could cost Coloradans billions of dollars."

Oil shale is a fine-grained sedimentary rock containing organic matter from which oil may be produced either through heat or a chemical process.

There are an estimated 800 billion barrels of oil in shale formations under Colorado, Utah and Wyoming, according to the Interior Department, or three times the proven reserves of Saudi Arabia. Companies, including Royal Dutch Shell Plc, are exploring ways of getting oil products from the rock formations.

The Interior Department's proposed rules include maximum lease size and acreage limitations, as well as royalty rate options.

Salazar, a Democrat, said the "administration is trying to set the stage for a last-minute fire sale of commercial oil shale leases in western Colorado, despite the fact that we are still years away from knowing if the technologies for developing oil shale on a commercial scale are even viable."

Salazar promised to find a way to extend a congressional moratorium, which expires Sept. 30 at the end of the current fiscal year.

Announcing the rules, Interior Secretary Dirk Kempthorne suggested it was imperative to develop domestic energy sources such as oil shale in the face of rising energy prices.

President Bush and congressional Republicans say lawmakers should lift a measure that blocks final rules that would govern commercial development of oil shale.

Republican Sen. Wayne Allard said: "You've heard false claims that the department is under a 'frenzied rush' to 'organize a fire sale' of development leases. It is ridiculous to consider the multiyear effort, started in 2004 that included congressional debate and the passage of a proposal, years of planning, studies, R&D and a draft environmental impact statement issued last December, as 'frenzied.' "

"It's flat wrong to claim that western communities are being asked to stand aside to accommodate this 'fire sale,' " he added. "The truth is western communities understand both the potential and the realities of the oil shale resource in their backyard."

Environmental groups oppose efforts to develop oil shale, saying it would use too much water.

Shell and other companies already have rights to large amounts of water in the Colorado River Basin and other areas as well.

Chris Trees, director of external affairs for the Colorado River Water Conservation District in Glenwood Springs, said any oil shale development is likely decades away, despite the proposed rules. He said he hopes that if the oil companies move forward with oil shale production, they can work with the state to ensure that its remaining water supplies are developed responsibly and in a way that would benefit people, the environment and industry.

"Oil shale represents a risk and an opportunity," Trees said. "It's not just industry that will need that new water. But it could present an opportunity to develop water for municipal and environmental uses as well."

chakrabartyg@RockyMountainNews.com or 303-954-2976 Jerd Smith and wire reports contributed to this report.

For and against Officials split on proposed rules

U.S. Rep. Mark Udall, D-Eldorado Springs

* From the beginning, I have always supported responsible development of our natural resources like oil and gas drilling. But when it comes to the development of oil shale, the research and technology isn't complete.

Until the technology is up to speed, I will continue working with Sen. Ken Salazar and Rep. John Salazar to push for a one-year timeout that will allow us to complete the research and technology needed before large-scale development moves forward."

Britt Weygandt, executive director, Western Business Roundtable

* This proposed commercial leasing program is a critical step toward fostering the technological advances that will be needed to pursue oil shale resources in an environmentally and economically responsible manner. It is unreasonable to think that companies will be able to bear the huge capital expense involved in developing this technology to responsibly pursue oil shale resources without a viable commercial leasing program in place to justify the investment.

Keith Hay, energy advocate at Environment Colorado

* The president is again holding out a false promise of lower gasoline prices to Coloradans. Oil shale is years from providing gasoline, meaning that reaching for those resources won't help lower prices or the pain at the pump today.

Frank Smith, organizer with Western Colorado Congress

* This is very concerning for many reasons. The extraction technologies are far from being ready to go. In order to develop a responsible regulatory framework we would have to determine what they are going to use. Shell and other corporations are pursuing technologies that would have a smaller ecological footprint. But the older technologies that exist are, frankly, like strip mining. If there is an acceleration (in development) that's what we'll have.