Rant of the Week: Shell Oil Applies for Massive Water Right in Moffat County

So last week my boss at the BLM gets a call from Shell, saying the want to meet with him. My boss asked what it was concerning, and they wouldn’t tell him. Apparently, they felt comfortable telling enough other people that it leaked to the press and this front page article appeared in the Denver Post. Water news is big news in the west, and this was no exception. This story got national coverage in USA Today, as well as articles in Craig Daily Press and the Steamboat Pilot. Shell had tried to keep this news on the DL until they met with all the interested parties. Nothing pisses off locals like hearing about how their land or water would be affected from the media before hearing it from the project proponents.

To sum it up, Shell needs a whole lot of water for their oil shale operations in Rio Blanco County. Some of the highest quality oil shale in the world is there in the Piceance Basin near Meeker and Rifle Colorado. Some sources say that for every one barrel of oil produced, Shell will need 3 barrels of water for operations. (Water needs are the tip of the iceberg when it comes to resource requirements for oil shale. They also need a ton of power and upwards of 30,000 employees, probably 3 times the population of Meeker and Rifle now.) So they are proposing to 375 cfs of water from the Yampa River into a reservoir just south of the Yampa. The reservoir would hold 45,000 acre feet of water, more than any other reservoir in the area. The water would then be piped from Moffat County down to the oil shale operations to the south. The pumping stations and reservoir will lie on both private and BLM land.

I joined my boss with a few other employees in an informal meeting with Shell. The rep from Houston (dressed in jeans and a flannel shirt) first talked about their prospects for oil shale. He said that some days, he just thinks they should give up. Huge production costs and questionable profits might lead the companies to abandon oil shale altogether. They’re working on a new way to get the oil out of the shale. Unlike the old method where oil shale is mined in an open pit, then processed, this is an in situ method, where oil and natural gas is pumped out as a liquid out with wells, just like conventional oil. First, they seal off an area under ground by freezing it. This creates an impermeable barrier, so water is not contaminated and won’t interfere in the process. After a zone is frozen off, Shell places huge electric heaters in the ground to melt the oil shale. A well is then drilled and a liquid is extracted. It is then processed into oil and natural gas. The majority of the water is used to dump down in the hole to cool the rock that was heated. So much of the viability of oil shale depends on how well this technology is perfected. Optimistically, Shell says they could produce 3 parts energy for every 1 part energy invested in the process.

Shell already bought up most of the water rights on the White River, closer to the oil shale operations. However, this wasn’t enough, and didn’t allow enough flexibility if one basin were to have abnormally low flows any certain year. Nothing will be happening any time soon on this project. Shell estimates it will take around 5 years to get the water rights, and including other permitting, no dirt would move until at least 2018.

The Yampa River is one of the only unallocated rivers in the west. That would change if Shell’s conditional water right is granted. However, I can’t see how the Yampa is not going to lose some water one way or another. There have been several “proposals” (too early to be called concrete proposals) to pipe Yampa River water the Front Range to build new homes and resorts from Aspen to Denver. I’m on the fence as to which use is worse. Given the fact that even the industry leaders aren’t ready to develop oil shale, the BLM has been much too hasty to develop oil shale. In the past few years. I believe oil shale development poses great risks to local communities and natural resources, and is counter to the important goal of helping our nation transition from fossil fuels. However, in 10 years when the technology has improved, I might support development if these risks and high resource needs are reduced. I’m not sure what all the impacts to the Yampa would be from this reservoir, but I tend to think that we should do all we can to leave the Yampa alone.

Wild and Scenic Rivers might rear its head as a real issue here. Our BLM office in Moffat County is currently revising its Resource Management Plan (RMP), and look at which river segments are suitable for Wild and Scenic River. In the Draft RMP we determined that three segments of the Yampa are suitable for Wild and Scenic River. Of course, this is a very controversial issue in the region. The county government and other local industry interests (the biggest coal mines and power plant in the state) strongly oppose anything to do with Wild and Scenic Rivers, as a suitability determination or a Congressional Designation could affect future water rights, conditional water rights, and future water projects on the Yampa. Shell’s new conditional water right could bring this issue to the forefront. This one should be very interesting to watch. I’m attending another public meeting about this issue tomorrow night. I will be interesting to see what the locals think about this proposal. My guess would be that they favor water going to develop oil shale than to support all those yuppies on the Front Range. I’ll keep you all in the loop.