Editor’s Note: Tom Ross of the Steamboat Pilot & Today wrote this comprehensive follow-up article on Shell’s Yampa River water rights filing, which we first covered in Colorado Energy News last week.  

STEAMBOAT SPRINGS - When Shell Oil revealed last week it had filed for substantial water rights in the Yampa River west of Craig, the news marked another milestone on the road to fulfilling a prophecy made 2 1/2 years ago:

Powerful interests are coming after the water that originates from melting snow in the mountains of Northwest Colorado.

That was the message that Russell George, then executive director of the Colorado Department of Natural Resources, brought to a water symposium at Hayden High School on June 1, 2006.

George, a former state legislator from Rifle, said it was inevitable that unappropriated water in the Yampa would be called upon to balance the entire state’s needs and obligations. The announcement by Shell this week underscores the likelihood that the Yampa also will be called upon to help meet the nation’s needs for energy.

Shell’s interest in the Yampa stems from the need to amass enough water rights to support a future oil shale industry. It’s a process the company has been engaged in for decades, according to company spokesman Tracy Boyd. Shell’s water rights, if granted, are initially likely to be conditional — any decision to develop a reservoir on a tributary of the Yampa, for example, is at least a decade away. And the day when water would actually be pumped out of the river is several more years further out.

However, Routt County Co­mmissioner Doug Monger said if
Shell succeeds in obtaining the rights, the water picture in
Northwest Colorado will change forever.

“We now have just joined the rest of the world and the rest of
the state in having our river over-appropriated,” Monger said.
“For us in the valley, to further develop any water, it makes it
that much more complicated.”

Monger is chairman of the Upper Yampa Water Con­servancy
District’s board of directors and sits on the Yampa River Basin
Roundtable. The latter is part of a statewide effort to
determine how Colorado will meet its water needs for years to
come.

A Big Gulp

Shell Frontier Oil and Gas filed in water court in Steamboat
Springs in late December to stake its claim to skim 375 cubic
feet per second from the Yampa during high flows fed by snowmelt
in the spring and early summer.

That amount represents a minority of the Yampa’s peak spring
flows, which commonly exceed 11,000 cf/s west of Maybell, where
the river is about to reach its confluence with the Green River
on its way to merging with the Colorado River in Utah.

However, Shell officials anticipate that amount of in-stream
flow would be sufficient to fill a 45,000-acre-foot reservoir
Shell proposes to build off the main stem of the Yampa in Cedar
Springs Draw.

To put that volume of water in perspective, the Yampa River
system yields about 1.2 million acre-feet annually. Communities
in Northwest Colorado consume just 10 percent of that amount
before it flows out of the state.

So, it’s easy to see why Shell Oil would look to the Yampa as it
attempts to stockpile water rights in anticipation of commercial
production of petroleum products that would be cooked out of the
oil-rich shale of the Green River Formation.

But Eric Kuhn, general manager of the Colorado River Water
Conservation District, is worried that Colorado’s margin for
providing water to growing communities already is thin.

Kuhn told the Steamboat Pilot & Today in the summer of 2006 that
under the Colorado River Compact, he estimated that as little as
250,000 acre-feet remains to be stored behind new dams. His
estimate took into account another 250,000 acre-feet of water
from the larger Colorado River system already tied up in planned
water projects.

Other water experts contend the amount of available water is
greater. Still others think water demands for oil shale
development could gobble it all up — the water needs of energy
development haven’t escaped Western Slope water interests.

Concerned about the challenge of meeting statewide water needs,
the state Legislature passed the Colorado Water for the
Twenty-first Century Act in 2003. The result was the Statewide
Water Supply Initiative that created diverse panels of citizens
to take a close look at water in each of the state’s major
drainages.

One result, in late August 2008, was the release of a
preliminary report about how energy development, from oil shale
to the mining of coal and uranium, would impact Northwest
Colorado.

The results of the study led Dan Birch, deputy general man­­ager
of the Colorado River Water Conservation District, to call the
oil shale industry an “800-pound gorilla.” Based on estimated
oil shale reserves of 1 trillion barrels of oil, Birch told an
audience in Grand Junc­tion in September 2008 that the industry
again could require half as many barrels of water. That’s enough
to swallow all of Colorado’s remaining undeveloped water under
the Colorado river Compact of 1922, he estimated.

Energy to Make Energy

The study finds that oil shale could demand water on several
levels. The first is in the recovery of petroleum products from
the rock.

Boyd said his company is studying a process that would use a
freeze wall — essentially freezing ground water in an area
surrounding oil shale deposits to isolate them, and then
de-watering the earth inside that boundary.

Water would be consumed in the process of separating petroleum
products as they come out of the ground.

Later, water would be pumped back into the area to replace what
had been previously pumped out.

However, large amounts of water would be consumed by new power
plants needed to supply the energy the oil shale process
requires. And additional water would be consumed by the growing
legion of energy workers.

Greg Trainor, who participated in the report on the water needs
of energy development in western Colorado, said it concluded
that at full production, it could take as many as 14 new power
plants — the size of the existing coal-fired plant in Craig — to
meet oil shale’s demands.

Trainor is the utilities and street system director for the city
of Grand Junction.

Oil shale development would require “a huge effort just in terms
of construction of power plants,” Trainor said. “Think of the
energy that would go into building the power plants.”

Respecting Elder Rghts

Monger said the fact that Shell is seeking water rights in the
Yampa River will have profound implications for water users in
the valley. To begin with, any new water right would be junior
to Shell’s. The water likely would remain in the river for 15
years to come, but the date when it becomes activated would hang
over the valley’s future.

Shell’s filing is based on speculation attached to an unproven
technology for energy extraction, he observed. However,
businesses that need new sources of water, including
agriculturalists, will find it harder to acquire capital because
of the difficulty of demonstrating clear title to water, Monger
said.

And the cost of filing for new water rights, previously a
relatively uncomplicated process, is sure to become a more
complex legal process requiring the expenditure of thousands of
dollars in fees.

Monger is an irrigator on his own ranch in addition to his role
on water boards. He can see the day coming when other interests
seeking water could pursue the leasing or purchase of historical
agricultural rights.

“That will be the next thing,” Monger said. “Because in order to
ensure firm yields and consistent water supplies, you need to be
higher in the seniority rankings.”