Update: From the Associated Press via Steamboat Today (Mike Lawrence):
The water would have been taken out of the river at one or two pumping stations about 75 miles west of Steamboat. It would have been stored in a reservoir capable of holding 45,000 acre-feet of water in Cedar Springs Draw, off the main stem of the Yampa. That potential reservoir’s size could have exceeded the more than 33,000 acre-feet of storage in Stagecoach Reservoir near Oak Creek and the 25,450 acre-feet in Elkhead Reservoir near Craig. Within three months after Shell’s application, 25 local groups and municipalities — including Routt County, Oak Creek, Yampa and the Upper Yampa Water Conservancy District — filed opposition to the application.
The city of Steamboat Springs argued that its water rights in the Yampa River Basin “may be adversely impacted if the subject application is granted without adequate protective terms and conditions.” Shell representatives met with local officials in Steamboat last year to discuss the application and its potential impacts. Litigation was possible.
From The Denver Post (Mark Jaffe):
Shell said in a statement it has decided not to pursue the Yampa water right at this time “in light of the overall global economic downturn that has affected our project’s pace.”
The controversial proposal — seeking about 8 percent of the Yampa’s average spring flow — drew opposition letters from 27 businesses, environmental groups and federal, state and local agencies. “The Yampa is the last river in Colorado with natural peak and low flows,” said Kent Ventrees, who teaches river recreation at Colorado Mountain College. “This is outstanding news for the Yampa.” The natural river sustains endangered fish species and flows through Dinosaur National Monument, where National Park Service officials worried that Shell’s plan would hurt the park.
Shell was seeking a water right to pump water into a new reservoir covering 1,000 acres and 15 billion gallons. The water — taken from a point west of Craig — would have been shipped to the White River basin for use in Shell’s oil-shale program…
Shell’s water-right application was vulnerable to challenges because the water could not be directly put to use, said Drew Peternell, Colorado water- project manager for Trout Unlimited. “They don’t even know how much water they need,” Peternell said. “It was very close to speculation, which is not allowed in Colorado water law.”
More coverage from Dennis Webb writing for The Grand Junction Daily Sentinel. From the article:
Shell spokeswoman Carolyn Tucker said that doesn’t mean the pace of the project has slowed. Rather, it is just maintaining its research focus while adjusting to economic realities. “The global downturn has effects on Shell just like it does on any other company. Some of the resources and some of the plans we’ve made early on don’t ring as true. We have to be more flexible as a company, and some of the research dollars have to be doled out more sparingly,” she said. Tucker added, “We’re not pulling out, we’re not shutting down. We’re just being as flexible as we can with the economic times.”[…]
Shell said it plans to submit permit applications for its first research and development pilot project late this year or early in 2011. “We hold a variety of water rights in northwest Colorado and we have for many years, so we do have water,” Tucker said. Shell had set out to diversify its water rights by seeking 375 cubic feet per second from the Yampa to fill a 45,000-acre-foot reservoir in Moffat County…
David Abelson, oil shale policy advisor for the Western Resource Advocates environmental group, said the WRA opposed the water right application on behalf of four environmental groups. Altogether, he said, 28 statements of opposition were filed against the application, from water districts, local governments, the Colorado Division of Wildlife, several federal agencies and other interests. The Yampa is the state’s only major river with water left to appropriate, Abelson said. “We’re extremely pleased about the decision to save the Yampa for another day,” he said. He said he believes Shell’s decision also supports his organization’s long-held view that oil shale development is not ready for prime time. “The technology is not developed, oil shale has never been economically competitive, and there’s nothing to suggest that either of those hurdles are about to be overcome,” he said…
Theo Stein, spokesman for the state Department of Natural Resources, said of the Shell announcement, “I think that this is an illustration of how complex the interweaving of oil shale issues and water issues is, and the need for a careful and thoughtful (oil shale leasing) process that the Interior Department is managing.”