From the Grand Junction Free Press (Sharon Sullivan):
At Wednesday hearing in Grand Junction, Congressmen Scott Tipton (R-CO) and Doug Lamborn (R-CO) repeatedly criticized the Obama administration, claiming the administration is hindering the domestic development of oil shale…
The few non-industry witnesses allowed to testify at the hearing mentioned other factors hampering oil shale development: Technological challenges, low oil prices discouraging investment, and concerns about environmental impacts…
“Oil shale has relatively low energy content and companies have yet to demonstrate net gains in energy production. In essence, commercial oil shale production could use more energy than it would produce,” Frank Smith, of Western Colorado Congress, said.
[Anu Mittal director of Natural Resources and Environment Division at the U.S. Government Accountability Office presented a] report [that] focused on impacts of potential oil shale development on water resources. “Oil shale will require large amounts of water — a resource that is already in scarce supply in the arid West where an expanding population is placing additional demands on water,” Mittal said.
Some analysts project that large scale oil shale development in Colorado would divert water away from agricultural and urban development. Companies have acquired significant water rights within the Colorado and White River Basins of Colorado, and may apply for additional water rights in the future.
Another panelist attending the hearing, Jennifer Spinti, a research associate professor at the University of Utah’s Department of Chemical Engineering and Institute for Clean and Secure Energy, mentioned that the public also needs to be aware of “ancillary water use” of oil shale development. Construction and operation of a nearby power plant to provide energy for an oil shale project would consume significant amounts of water, as well as would water needed to control dust, she said. Potential water contamination is also a concern, Spinti said…
Tipton questioned Helen Hankins, Colorado State Director of the BLM, about the need for another PEIS.
Hankins replied: “The industry is in its infancy. Water, sage grouse, and plants are potentially threatened. There was litigation in 2009 challenging the PEIS — that’s why the (Interior) Secretary is taking a fresh look. It does not affect the six existing (research and development) leases.”
Tipton repeated “regulatory uncertainty is a factor in delaying oil shale research.”
Hankins responded again that a new PEIS will not affect companies’ research and development on private lands, or on the existing leases. “We’re yet many years away from environmental approval and commercially viable oil shale development,” Hankins said. “It gives us time to review the rules.”[…]
“Energy development is one of the key priorities of Secretary Salazar,” Hankins said. “Oil shale is one component of energy development. When it is commercially viable, and environmentally proven, it will be a source.
“However, the BLM’s mission is ‘multiple use.’ Land use plans consider a variety of factors — watershed health, wildlife habitat, as well as energy.”
More coverage from Meghan Gordon writing for Platts. From the article:
Representatives Doug Lamborn and Scott Tipton, both Colorado Republicans, criticized the Department of Interior’s February decision to take a new look at a November 2008 federal rule for commercial development of oil shale. At a field hearing of the House Energy and Minerals Resources Subcommittee in Grand Junction, Colorado, the pair couched the oil shale policy in the same terms House Republicans have approached other energy issues this session, saying federal regulations should not stand in the way of industry creating jobs, reducing oil imports and increasing national security…
“The road to viability for the oil shale industry is reliant on a predictable regulatory structure and an environment in which companies can invest in research and development and create jobs,” Tipton said. “The proper implementation of our environmental and safety regulations already on the books is a far better strategy than adding additional layers of bureaucracy to the process.”[…]
Dan Whitney, Shell’s upstream manager for heavy oil development in the Americas, said the producer understands the importance of water to western states and is committed to using it responsibly. He said the company would address the issue by maintaining a diversity of water rights to give operations the flexibility of multiple sources, developing extraction and processing technologies that need less water and to honing water-management practices such as recycling and storage.
Shell holds three “research, development and demonstration” leases for oil shale development in Colorado.
More coverage from the Associated Press (Catharine Tsai) via The Denver Post. From the article:
Dan Whitney of Shell Exploration and Production Co. said his industry needs a stable regulatory environment and one in which numerous companies can lease public land for research projects.
Researchers noted their need for funding and suggested a specific program focused on Western oil shale.
And Anu Mittal of the GAO said the U.S. Interior Department should be responsible for gathering data on water conditions now, so any potential effects of oil-shale activity can be detected years in the future. Her agency in October had recommended collecting baseline data.
They were among 10 speakers at the Grand Junction field hearing of the House Energy and Mineral Resources Subcommittee. Rep. Scott Tipton and subcommittee chairman Doug Lamborn, both Colorado Republicans, conducted the hearing.
The Denver Business Journal (Cathy Proctor) is running profiles of 5 Denver area companies that are involved in the design and construction of the project. She lists Reynolds, Inc., Garney Construction Company, CH2M Hill, Northwest Pipe Company and MWH Global.
More Southern Delivery System coverage here and here.
I’ve thought for a long time that Aaron Million’s proposal is akin to him driving a tanker truck across the Colorado/Wyoming border — not subject to Colorado water law — and that any water moved would count against the Upper Colorado River Compact. That’s the way the deputy state engineer sees it as well. Here’s a report from Chris Woodka writing for The Pueblo Chieftain. From the article:
“The state engineer cannot curtail diversions from another state,” Deputy State Engineer Mike Sullivan told the Legislature’s water resources review committee Tuesday. “We can’t go into Wyoming and padlock a headgate.” Sullivan and State Engineer Dick Wolfe told the committee they have concerns about proposals to take water from Flaming Gorge Reservoir and the Green River in Wyoming and send it through a pipeline to Colorado’s Front Range.
Wolfe explained that such plans could interfere with water rights administration in Colorado, particularly if lower basin states in the Colorado River Compact were to put a call on the river. Flaming Gorge Reservoir and the Green River are both part of the Colorado River basin, which supplies 80 percent of Colorado’s water. Under the compact, Colorado, New Mexico, Wyoming and Utah are required to deliver 75 million acre-feet of water over a 10-year period at Lake Powell. If they fail to do so, Arizona, California and Nevada could demand water, calling out junior rights in Colorado [ed. the compact has a 1922 priority, senior, for example, to the Colorado-Big Thompson Project]…
Fort Collins entrepreneur Aaron Million is claiming a Wyoming water right as the basis for his Flaming Gorge project, which would make enforcing it difficult under Colorado’s priority system. The Colorado-Wyoming coalition, led by Frank Jaeger of Parker Water and Sanitation, plans to work with the Bureau of Reclamation, and could claim the Flaming Gorge priority date. “There’s no authority in place for dealing with Flaming Gorge,” Wolfe told the committee.
Meanwhile, meeting attendees were treated to a discussion of population estimates yesterday. Here’s a report from Chris Woodka writing for The Pueblo Chieftain. From the article:
The state population grew to more than 5 million in 2010, from 4.3 million in 2000. Colorado grew at a 17 percent rate over the decade, compared with 9 percent for the nation as a whole…
[Elizabeth Garner, state demographer] gave a detailed analysis of counties, showing that the Eastern Plains and San Luis Valley were flat or lost population in the past decade, while the Front Range and Western Slope were the fastest growing parts of the state…
But the picture gets more complicated because baby boomers are getting older. Colorado’s population over age 65 is expected to grow by 150 percent in the next 20 years, which could also contribute to smaller household sizes, changes in water consumption patterns and the tax base. “We are becoming very different,” Garner said. “For the last decade, the largest part of our population has been the most productive . . . In the next 10 years, 1 million people will be leaving the labor force.”
“Our project will continue to move forward, the service plan amendment would have allowed Elbert County to participate in the benefits,” said Karl Nyquist, a partner in GP Water. “The service plan amendment was certainly not necessary for the project as proposed and we will move forward as planned.”[…]
Bill Long, president of the Southeastern Colorado Water Conservancy District, doubts the cost figures that GP has shared so far, and said the pipeline would do little to meet the state’s municipal water gap. “I’m not at all surprised they pulled the Elbert County proposal,” Long said. “My hope is they could get behind a better long-term solution than one which has such a detrimental impact to one small area in a basin that is already water-short. In my mind, they aren’t even close to being a part of the solution.”[…]
The expansion of the authority of the Elbert County and Highway 86 Commercial District, which was formed by the GP partners to provide area water service, would have expedited both water plans and provided additional revenue to Elbert County, but Nyquist said there are other ways to pursue the project.
Hundreds who attended a Wednesday Elbert County commissioners meeting cheered when it was announced that the proposal to expand the district was withdrawn. GP Water hosted two public meetings in the county, but apparently did not convince enough people it was good for the county…
The pipeline would be designed to pump up to 12,000 acre-feet annually, but GP estimates its yield from water rights it owns would be an average of 8,000-10,000 acre-feet annually. Nyquist says treated water will sell for $6-$7 per 1,000 gallons, a competitive rate. Negotiations with several potential end users are under way, including the Cherokee Water District near Colorado Springs. Nyquist said other negotiations are confidential, but focus on El Paso County.