Oil Cos. Buy Rights to Access Water Before Communities & Farmers

By Rachel Cernansky | March 20, 2009 4:34 pm

glencanyon1.jpgIn preparation for future oil shale mining projects near the Rocky Mountains, six oil companies have gained rights to billions of gallons of water in the American West, potentially jeopardizing water supplies throughout the region, according to a new report by Western Resource Advocates [pdf], an environmental group. It is still preliminary to speculate on the implications of the findings, but many are concerned that if the companies put their rights to use, water will be shifted away from agriculture and community use.

Using public records, the report examines more than 200 water rights held by six energy companies, including Shell and ExxonMobil, which, it is estimated, are collectively entitled to divert at least 6.5 billion gallons of water from rivers in western Colorado, as well as almost 2 million acre-feet of water from the state’s reservoirs, which is enough to supply the Denver metro area for six years. Shale oil production is a water-intensive process: up to five barrels of water are consumed for every barrel of oil produced. This means that projects producing 1.55 million barrels of oil per day would require 378,000 acre-feet of water each year, compared to the Denver metro area’s consumption, which is less than 300,000 acre feet. Should oil shale production hit full stride in the next 15 to 20 years — something the White House under President George W. Bush tried to accelerate by opening up 2 million acres controlled by the Bureau of Land Management to leasing and approving royalty rates and leasing rules — there will be a major political battle over water rights [Colorado Independent].

Extracting oil from shale is still an experimental process, facing major technological, environmental and regulatory hurdles, and is considerably more expensive than conventional drilling [Wall Street Journal], and the report has reignited an ongoing public debate over what the impacts of oil shale mining will be on nearby communities and the environment. Last September, the mayors of 11 mountain communities in Colorado wrote a joint letter to publicly express concern about “significant impacts on our community infrastructure, environment, and quality of life” from the development of oil shale…. “There has also been little evaluation of the impact these technologies and processes will have on local communities or the regional air and water resources” [Environment News Service], they wrote.

Shell spokesman Tracy Boyd defended the industry’s strategy of preemptively buying up water rights, saying, “The rights that we have, for the most part, are conditional. The water has to be there legally and physically” [AP], adding that, “We’re picking up properties as they become available or look strategic” [Wall Street Journal]. He tried to minimize cause for concern by saying that Shell expects not to need all that water for another 15 years, by which time it may have developed oil extraction methods that require less water.

Colorado law allows river water to be used, at no cost, by any entity that can show the water will be put to a “beneficial” use. Extracting oil fits into that category, as does, for example, growing alfalfa, providing household drinking water and making snow at ski resorts. Oil companies can get water rights in two ways…. For a minimal filing fee, the companies have claimed scores of “junior” rights that allow them to draw water from a particular river after other users have satisfied their needs. The companies have also purchased dozens of “senior” rights from old-time farming families; those rights give them priority access to water, even in dry years [Wall Street Journal].

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80beats: California’s Water Management Threatens Salmon With Extinction 
DISCOVER: Anything Into Oil

Image: Flickr / mandj98

  • http://www.rancholosmalulos.com elizabeth

    I live on a 30,000 acre south texas lease operated by ExxonMobil. It’s so much fun that I made a website with a blog, youtube page, etc so everyone can see what it’s really like in the oil business today. I take 1000’s of photos and videos of day to day life on an oil lease. Our groundwater has a massive amount of BTEX and polycyclic hydrocarbons. There are clusters of kids with leukemia across the area. It’s just so lovely. If drilling is coming to your area, its best to just give up and move.

  • http://personal.inet.fi/private/walkabout Gregory Greene

    Here’s a scenario for how it’ll be when there just isn’t enough water for everyone. A lot of other things can go wrong, as well. Read my free e-book, Walkabout: The History of a Brief Century

  • http://www.open-eye-consulting.com Wyn Williams

    This has to be one of the dumbest quotes I have ever read “The rights that we have, for the most part, are conditional. The water has to be there legally and physically” that’s like saying we did buy the warehouse full of food over there but we can’t actually use it unless the food is there, you know, the one we are looking at now…

    God help you all, unfortunately the rest of the world is following the example of your decaying society but we wish you luck and peace.

  • ErnestPayne

    Well it looks as though the anti big government pro free enterprise denizens of the west are about to discover what their beliefs hath wrought. Stand by for them to come whining expecting sympathy and help for their plight.

  • Sean P.

    ErnestPayne Says:
    March 23rd, 2009 at 3:45 am
    Well it looks as though the anti big government pro free enterprise denizens of the west are about to discover what their beliefs hath wrought. Stand by for them to come whining expecting sympathy and help for their plight.

    Well it also looks like the anti-free trade pro-socialist denziens of Detroit have discovered what their beliefs have wrought…

    How IS that working out for you?

  • Uncle B

    Mother Nature is watching – She figures when you have no more water, the people will die off, then you won’t need oil , and you will leave her alone! Big Oil has all the money, the money politicians crave, and buying them out is democracies weakest link, the source of its cancer, the reason it really is a farce. We are doomed to lining up at the pumps in GM built, taxpayer financed SUV’s and paying whatever the pump reads – forget about inter-city high speed rail and efficient Euro-Diesels, Solar wind, wave, hydro, tidal, biomass, geothermal, all workable, but without the “Capital” behind it to amount to a peck of coon-shit, all lost in a corporate whirl to a dividend paying stock! America due to corporate law and embedded propaganda is doomed to “stay the course”, in fact bound by it’s own laws, to reward the bottom line and reject all other notions, sane or otherwise in it’s singular profit -making motive. The “tainted milk” executives in China were blood typed for organ transplantation, shot in the head, in public, and gave their organs to deserving humans, without choice in the matter, for having hurt the public interest. The shysters, swindlers, shylocks, and banksters of Wall Street were given “Golden Parachutes” to a lifestyle far beyond the lifestyle of the common man they stole from, for having recked the American economy! China is now demanding the “Yuan”, their currency, be used for world trade, in place of the untrusted American Dollar – and it is going to happen because the rest of the world hates the U.S. capitalist and doesn’t trust him with their money. Right now, the American capitalist is in control of your water, and will have his way, to meet ends that are best for his shareholders – not best for America, not best for Americans, best for shareholders, in Israel, Saudi Arabia, OPEC countries, Britain, Europe, Monaco, wherever they want to live, but be damned certain, far from the mayhem their servants, the capitalists that run the “business machine” that eats your land work and destroy for capital gain! Be a good little capitalist – buy shares and move to the Bahamas and collect dividends – don’t whine, this is the system you love, live and die for in your wars. It is working well, it just happens to be in your neighborhood right now, thats all.

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    America is a Republic ruled by law. Unfortunately the people who write the law are in the pockets of Corporate America. The people of any country always get the government they deserve.

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  • Chris

    We all know these companies are corrupt and dishonest. We cannot believe this crap. They are buying water rights so when we overpopulate and have no clean water they will sell us water and stay in control of the most important commodity. They will not care if it is clean or if you can afford it. They will turn America into a third world country for a profit. T. Boone Pickens has been buying water rights for over five years. He is a disgusting heartless individual, but at least he is honest. Here is what he says:

    “Pickens wants to take the water from the Ogallala Aquifer and pump about 200,000 acre feet of groundwater annually to El Paso, Lubbock, San Antonio, or Dallas-Fort Worth – for a price, of course.

    This price would depend on how far the water needs to go. El Paso would pay around $1,400 per acre foot, while Dallas would pay $800 and San Antonio more than $1,000.
    Pickens has no qualms about charging people for water and has a ready quip for those who think it wrong to do so. “I know what people say – water’s a lot like air. Do you charge for air? ’Course not; you shouldn’t charge for water,” says he. “Well, OK, watch what happens. You won’t have any water.” “


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