Shell seeks Yampa River water for oil-shale plans

Grand Junction Sentinel, COLORADO

By GARY HARMON

Tuesday, January 06, 2009

Shell Oil has filed for an industrial water right on the Yampa River for use in development of oil shale, should the company decide to move forward with the idea.

Shell holds three research-and-development leases in northwest Colorado, where it is testing its method of heating shale to release petroleum distillates that can be refined into products such as jet fuel and gasoline.

Shell’s filing seeks 375 cubic feet per second from the Yampa to fill a 45,000-acre-foot reservoir in Moffat County in an area known as Cedar Springs Draw, said Tracy Boyd, communications and sustainability manager for the Shell Mahogany Research Project.

The company will need to divert only spring runoff water to fill the reservoir, Boyd said.

The filing is intended to increase the diversity of water rights the company owns for the eventual development of oil shale, Boyd said.

The company is working to reduce the amount of water it will use if it proceeds with development and will “apply best water-management practices to treatment, storage and reuse,” he said.

Shell made the filing Thursday in the water court in Steamboat Springs.

Once the filing is published, interested parties can file statements of opposition to the water right, even though they might not necessarily oppose it.

Among them will be the Colorado River Water Conservation District, which will enter the case as an opposer, but not an opponent, spokesman Chris Treese said.

“We have told Shell we want to be working with them” on the proposal for the reservoir to accommodate municipal, environmental, recreational and other uses, as well as Shell’s planned industrial use.

There is the possibility of competition for the water from the Northern Water Conservancy District, based in Berthoud, which has floated the idea of diverting Yampa River water to the Front Range. A Colorado man, Aaron Million, also is seeking to divert water from Flaming Gorge Reservoir to the Front Range, claiming that water in the river is subject to use by Colorado under the compact that governs the Colorado River and its tributaries.

A budding oil shale industry has just as much right to the Yampa River’s unallocated flows as anyone else, Treese said.

Shell’s industrial water right wouldn’t interfere with agricultural rights, and the company is interested in working with other water users, Boyd said.

“We clearly recognize at least a potential for some mutual benefit” with other users, he said.

The reservoir would be a couple miles long and about one-third of a mile wide at the widest point, near a dam in Cedar Springs Draw, Boyd said.

Water would be pumped out of the Yampa and into the reservoir, he said.

Runoff could fill the reservoir in about two months, he said.

Shell has yet to decide how much water it will need for oil shale development, and Boyd emphasized the company has yet to decide to seek commercial production. Company officials have said that decision is years away.

The industrial right Shell is seeking is among the largest of the water rights the company has accumulated over decades, Boyd said.

If Shell moves forward with production from oil shale, company officials want to be ready with plenty of water and “minimize impacts rather than doing some things at the last minute,” he said.

The company hasn’t settled on the amount of water it will need for a producing oil shale venture, but it won’t put any of the water to which it has rights to use in its freezewall technology, Boyd said.

To prevent contaminants from escaping into the groundwater, Shell is experimenting with freezing the ground that surrounds the areas to be heated.

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