A recent study, Energy Development Water Needs Assessment, was commissioned by the Colorado, Yampa and White River Basin Roundtables to “estimate the water demands needed to support the extraction and production of energy in four sectors in Northwest Colorado, including natural gas, coal, uranium and oil shale.” The major conclusions are:
• The maximum, long-term water and energy demands of oil shale development dwarfed the comparably minimal costs of natural gas, coal and uranium development.
• The estimated annual water demands for oil shale development range from 720 acre-feet in the near-term (2007-2017) to approximately 378,000 acre-feet in the long-term (2036-2050), assuming coal-fired electricity is used to power the process (the most water-intensive method). The water demands could be reduced by two-thirds if natural gas-fired generating faculties are used.
• Most of the water needed for oil shale would come from the Colorado and White river basins and could have a significant impact on existing water rights and historic river call regimes.
The following is a brief summary of the Energy Development Water Needs Assessment.
There is an estimated 1.5-1.8 trillion barrels of recoverable oil from shale in the Green River Formation, which covers parts of Colorado, Utah and Wyoming. Oil shale recovery has been compared to the Alberta tar sand industry that began in the early 1960’s. Alberta tar sand extraction has become a viable enterprise with production topping one million barrels per day in 2004. Energy interests hope that the same can be done for oil shale in the western U.S.
The oil shale extraction technology has been maturing since the 1950’s with two prevalent methods emerging: surface retort and in-situ retort.
Surface retort involves mining the sedimentary rock, pulverizing it, and then heating it to approximately 1,100o Fahrenheit in a large vertical kiln. This allows for the distillation, or retort, of the rock to oil. This process is most often used in situations where the oil shale is close to the surface or where the resource outcrops in areas of steep erosion.
In-situ processing involves heating the resource in-place, without using conventional mining techniques. The shale is fractured, air is injected, and the shale oil is ignited to heat the formation. The fire is fed with oxygen through bore holes, and the oil then moves through the fractures to extraction wells.
Shell Oil has been developing the In-Situ Conversion Process (ICP), a true in-situ retort process that does not require combustion. Electric downhole heaters are installed within the formation and the oil is slowly heated over the course of two to three years. This process produces the highest grade oil and is the best documented technology. For this reason it is used as the basis for estimating in-situ water and energy demands.
The following tables provide the total water demands of the four resources for the three general production scenarios in the three time horizons. The production scenarios are bounded on one end by limited production, using all current available information, and on the other end by forecasted maximum development. The water demands for resource extraction are not substantial until the long and mid-term, medium and high scenarios. These demand increases are primarily driven by oil shale development.
Most oil shale development in Colorado will occur in Garfield County. The water needed for oil shale development will come from the Colorado and White rivers. Energy interests have an extensive portfolio of conditional and absolute water rights in the region. Many of the conditional water rights are senior to significant absolute water rights. Oil interests own 56% of the total absolute storage volume within the Water Districts of Division 5. In the high production, long-term scenario, the water demands of oil shale development could exceed the remaining unallocated Compact water.
The oil shale industry in Colorado faces a myriad of limiting factors. These factors include, but are not limited to, technology, environmental and other regulations, economics, development of other energy resources, water availability and politics. Under the current conditions, the potential for high growth in the oil shale extraction industry is decades away.
Regulatory Update: The U.S. Bureau of Land Management recently issued a Record of Decision on their Programmatic Environmental Impact Statement on the Proposed Oil Shale and Tar Sands Resource Management Plan Amendments. The ROD allows for eight land use plans in Colorado, Utah and Wyoming to be amended to designate 1,991,222 acres as available for application for commercial oil shale leasing and 431,224 acres for commercial tar sands leasing. The plan amendments do not authorize ground-disturbing activities or immediate leasing. Additional National Environmental Policy Act analyses would be required by the BLM of site-specific and project-specific plans of development.