Future oil, water needs might not mix

By Jerd Smith, Rocky Mountain News

Published October 21, 2008 at 4 p.m.
Updated October 21, 2008 at 4 p.m.

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In 40 years, will Colorado have a greater need for oil or for water? The state may not be able to have both, a draft of a new study suggests.

An analysis of the water needed to produce oil shale indicates that most of the remaining flows in the Colorado River and two of its tributaries, widely viewed as the state's last source of new water supplies, would need to be tapped to mine the energy-rich shale.

According to the assessment, as much as 410,000 acre-feet of water would be required to produce 1.5 million barrels of oil from shale annually by 2050.

That's enough H20 for about 820,000 households.

Most of the water would be used to cool coal-fired power plants that supply the electricity needed to extract oil from shale.

"Oil shale is the real 800- pound gorilla out there," said Jim Pokrandt, a spokesman for the Colorado River District and member of the panel that commissioned the study. "We're not advocates for or against oil shale. But if its requirements are as large as it looks like they're going to be, we ought to be looking at it now. We can't just say we're going to have oil shale tomorrow."

The study, funded by the state, was undertaken to see how much water will be needed to continue developing energy. It examines energy production scenarios that also include natural gas, uranium and coal, as well as oil shale.

The study concludes that most energy-related water needs, such as those for coal and natural gas, could be accommodated without major new water development. But oil shale, because it requires vast amounts of electricity to extract, likely will require vast amounts of water as well.

But the study notes that if natural gas electric plants were used to power shale extraction, the amount of water needed could be reduced by as much as two-thirds. If nuclear power were used, the water needed would be twice that of the coal-powered scenarios.

Rich with possibilities

The water would come from a set of water rights on the Colorado, Yampa and White rivers already owned by oil companies such as Shell, Exxon and Encana.

Tracy Boyd, a Denver-based spokesman for Shell, said that the study's water estimates and production scenarios are aggressive "but conceivable."

Still, he said, the kind of power that eventually would be used is an open question.

"I would not want to rule out other sources such as wind power," Boyd said. "Fifteen years from now (when shale production is expected to ramp up), there might be a lot of things driving the electrical piece."

Shell already owns five wind farms, including one in Colorado.

"If you have one wind project and the wind isn't blowing, then you're in trouble," Boyd said. "But if you have 10 wind plants, then wind is going to be blowing somewhere. The answer here is a diversity of supply, not a dependence on the thing that uses the most water and produces the most CO2."

Much of the fascination with oil shale lies in the sheer volume of Colorado's reserves. Some 800 billion barrels of oil are contained in the Green River Formation, which spans Utah, Wyoming and Colorado. About three-fourths of that shale lies in northwestern Colorado.

That is enough oil to supply the nation for 110 years, Boyd said, an amount about three times the size of Saudi Arabia's reserves.

"The richest, most prolific resource on Earth is in the Piceance Basin in Colorado," Boyd said. "That's why there is so much focus on this resource."

But the giant water diversions would put the water supplies of Denver, Aurora, Colorado Springs and Fort Collins, among others, at risk because they, too, rely on the Colorado River and they're counting on its remaining supplies to stave off future water shortages.

Groups seek slowdown

Earlier this year, the Front Range Water Users Council asked the U.S. Bureau of Land Management, on whose property much of the oil shale development would occur, to forecast specific effects to the rivers as part of an environmental impact statement that identified lands available for oil shale production. But the bureau declined, saying that such detailed analysis would come later.

"If we tie up all the available water on the river for oil shale, that's going to be problematic for the state," said Dave Little, director of planning for Denver Water, the state's largest water utility. "It's a policy call. Do we want to spend the last of our water resources doing that?"

The Colorado Department of Natural Resources and several environmental groups are pushing for a slowdown in shale development, in part to answer such hard questions as how the water-intense process might be changed to make remaining water supplies stretch farther.

"So many of the important questions can't be answered because we haven't completed the research and development process," said Mike King, deputy director of the Colorado Department of Natural Resources.

"Industry hasn't even demonstrated to itself yet that they can do this in an environmentally sound way that makes money," King said.

With federal lands in Colorado identified for development, the BLM is close to finalizing regulations for commercial development, something oil companies favor, although they acknowledge they are three to four years away from determining if they have the right technology in hand.

Still, Boyd said, Colorado has been hostile even to the idea of oil shale.

"Lacking good data, one assumes the worst," he said. "That's the tendency of the political and environmental climate we're working in here. No one gives the benefit of the doubt to industry."

A different rush

What everyone seems to agree on, however, is that unlike the first rush to develop shale in the 1970s and 1980s, this one isn't likely to be derailed. Parachute boomed three decades ago when it looked as if oil shale were ready for market. But the town almost was wiped out when oil companies moved out after oil prices collapsed.

Today, the demand for new oil is simply too great.

"This won't go away," King said. "If their technology proves out, it will move forward. You simply can't turn your back on a resource like this. But we didn't plan well the last time this happened, and it resulted in 2,100 jobs being lost overnight. If we mess this up, the impacts will last for generations."

A second study is in the works to examine how development of the oil companies' water rights will change river operations and affect other users, such as ranchers and Front Range cities, Pokrandt said.

"The deal could be, is there going to be water for oil shale or more Colorado River for the Front Range?" he asked.

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