U.S. Water News Online
MEEKER, Colo. -- No one has ever rowed a boat across Stillwater Reservoir. Or caught a fish at Fourteenmile Reservoir. Or stood on the beach of Roan Creek Reservoir.
These are all imaginary lakes. They exist only in the minds of oil company executives and attorneys.
But the oil companies own legal rights to build and fill these reservoirs, which would be in Garfield and Rio Blanco counties. And as the companies take another look at Colorado's oil-shale deposits, which would require vast amounts of water to develop, they might make those imaginary lakes a reality.
Their water rights are huge, and getting bigger. Shell has been buying large water rights on the Western Slope for the last five years and just completed a major purchase in July.
"I've seen estimates that oil shale, if it is developed, would consume 100 percent of the remaining water in the Colorado River system," said U.S. Sen. Ken Salazar.
Harris Sherman, director of the state's Department of Natural Resources, has seen the draft of an upcoming federal study on oil shale, although he can't divulge its details because of a confidentiality agreement. But he let something slip to members of the Water Conservation Board in Craig this summer.
"I assure you there will be numbers associated with water for oil-shale development that will gain our attention," Sherman said.
But no one has an answer to the big question: How much water will the oil industry take?
International oil companies own some of the largest private water rights on the Western Slope. If they used all the rights they own, they might force Colorado to violate the Colorado River Compact of 1922, and then water users around the state would have to cut back.
"The difficulty and the problem is everybody's playing their cards pretty close to their vest. Or they don't have a good idea what their water needs will be," said Dan Birch, who is leading a study into the question for the local river basins.
"I think on the low end, we're talking about 10,000 acre-feet a year. On the upper end, we're talking about hundreds of thousands of acre-feet a year, maybe 500,000, which by all estimates is everything Colorado has left to develop," Birch said.
Colorado uses about 2.1 million acre-feet a year from the Colorado River Basin, which includes southwestern rivers like the Animas and Dolores, according to the U.S. Bureau of Reclamation.
On paper, Colorado gets 3.8 million acre-feet a year under the 1922 compact and subsequent agreements. But few water experts believe Colorado will get anything close to that much, because of climate change and natural dry cycles. Birch's boss at the river district, Eric Kuhn, thinks Colorado already might be using all the water to which it is legally entitled.
Birch thinks it will take a year to finish the study, which will look at the water needs of many forms of energy, not just shale mining.
Birch has a frustrating task. Most of the studies on oil shale and water are at least 20 years old, and they are maddeningly vague.
A U.S. Bureau of Mines report from the late '70s said the industry would need two to five barrels of water per barrel of oil. A 1981 blue-ribbon panel for then-Gov. Richard Lamm said the industry would need anywhere from 81,000 acre feet to 868,000 acre feet, depending on how much oil it was producing.
But both of those studies were done when oil companies planned to build the world's largest strip mines to get the shale. Today's "in-situ," or underground methods, might take less water. Three companies -- Shell, Chevron and EGL -- have won federal leases to demonstrate their in-situ methods on 160-acre parcels in Colorado.
The companies plan to melt the rocks 2,000 feet below the surface. They would need water to process the shale oil in a plant that resembles a refinery, to spray on the ground for dust control and, in some methods, to wash the underground rock formations of leftover oil.
Shell believes its whole process, from construction to processing on the surface, would take two or three barrels of water per barrel of oil produced, said company spokeswoman Jill Davis. But Shell's prediction does not include water for the extra work force that would move to area towns, she said.
And Shell does not yet know how much oil, if any, it expects to produce and sell.
Chevron does not have an estimate on how much water its process will use, said spokesman Dan Johnson.
Chevron owns the biggest water rights of the oil companies, but Shell has been the most aggressive in snapping up new water for its research project.
In 2002, it bought Exxon's old rights from a ranch in Northwest Colorado. That purchase forms the core of Shell's future water system. It includes three large reservoirs.
This year, Shell bought Piceance State Wildlife Area, which sits on the creek bottom near its research project. The land came with several small water rights, some of which are from the late 19th century. In return, Shell gave the state land to expand a different wildlife refuge plus $444,000 cash.
And in July, Shell closed the books on a purchase of land and water rights west of Grand Junction.
Davis, the Shell spokeswoman, said she's not at liberty to say why the company bought those water rights. It may or may not be for the oil-shale project, she said.
But an oil-shale critic, Cathy Kay with the Western Colorado Congress, said the land is next to a coal mine. Shell will need electricity to run its oil-shale project, and Kay worries the area could be used for a coal power plant.
Altogether, it's just too much water for an industry that hasn't proven itself, Kay said.
"Surely, the lawmakers cannot allow one industry to chew up the rest of the compact for something that's so elusive," she said.
Davis takes issue with environmental groups that criticize the oil industry's water plans. "The whole implication is that the industry is going to be so big and bad that it's going to dry up the rivers," Davis said.
In fact, the industry's size will be limited by the water supply, the work force, air quality and the oil market, she said.
By 2009 or 2010, Shell will have to decide whether its technology is ready to be used at a larger scale, Davis said. Johnson said his company, Chevron, needs another three to seven years to work on its research and development project.
The federal government will play a crucial role in oil shale.
Three companies have won federal research and development leases on 160-acre tracts west of Meeker. As many as 23 companies might be interested in oil-shale development, according to the state Department of Natural Resources.
The federal government itself holds water rights for oil shale. It has the right to use 49,000 acre-feet a year for the oil-shale reserve it set aside in 1916. At least some of those rights, however, are for national defense purposes and not for commercial oil-shale development, said Roy Smith with the Bureau of Land Management.
The Department of Energy's 2004 Oil Shale Development Roadmap says water availability might be a significant problem for a large shale industry -- one that satisfied 10 percent to 20 percent of U.S. oil demand.
"Alternate water sources, including interbasin transfers and new gathering and storage projects, need to be identified," the report says.
It does not specify a source for the interbasin transfers, but such a project would make history. The rivers surrounding the Colorado Basin are small, and water has always been transferred out of the Colorado to cities from Denver to Los Angeles.
Large volumes of water never have been imported into the Colorado Basin.
Even though the shale industry might not get going for 10 years, water projects take 10 or 20 years to build. The critical time to examine oil shale is now, said Birch, who is leading the energy and water study.
"Who knows if it's going to happen? But it seems to me the prudent thing to do is for state and local interests to do the planning right now as if it's going to happen at some level," Birch said.
Return to the U.S. Water News Archives page Or Return to the U.S. Water News Homepage
Editor@uswaternews.com
*Your Name:
*Your Email:
*Friend's Email:
Use a comma to separate e-mail addresses:
*Your Comments:
Hi, I thought you might like to read this article.
*Required Fields