Between a Rock and a Dry Place - The Potential Impacts of Oil Shale Development on Colorado River Water Supplies

The Colorado River flows as a slender thread through one of the driest regions in America.   In addition to supporting natural beauty, recreation and critical ecosystems, the river provides precious water supplies for 30 million residents and four million acres of farmland in seven Western States.   These states strive today to manage the Colorado’s limited waters.  A new NRDC report called Between a Rock and a Dry Place reveals that Basin States could face increased challenges in meeting their water needs if proposed oil shale development moves forward in Colorado and Utah. 

The potential water supply impacts of oil shale development are best understood by starting with the challenges facing Colorado River water users today.    

During the past decade, the river has hit a tipping point.  The massive dams on the Colorado capture the river’s entire flow.  The river no longer flows through its Delta to the Sea of Cortez.  We now know that the period before the 1922 Colorado River Compact was anomalously wet.  As a result, the agreements and decisions that make up the Law of the River have divvied up more water than the river provides on average.  According to the Bureau of Reclamation, the average natural flow of the Colorado is 14.7 million acre-feet – far less than believed ninety years ago. As a result of increasing water use, demand now exceeds average supplies available from the river.  (See the graphic below.)  This imbalance is the cause of falling storage in Lake Mead – which reached a record low last fall.  One more year of drought would have triggered reductions in water deliveries to Lower Basin states.

Scientists agree that climate change will increase the water challenges facing the region.  In June, the Bureau of Reclamation concluded, in a landmark interim report from its Colorado River Basin Water Supply and Demand Study, that the river’s flow will likely decline by nine percent over the next 50 years.  The U.S. Climate Change Science Program (see figure 4.10 in this document) anticipates even greater impacts on river flows  – a future that is 10-25 percent drier.   In short, the cities, Native American tribes and farms that depend on the river today face an overtapped river and a drier future.  

Should proposed oil shale development move forward, the effects could ripple across the Basin, making life more difficult for water managers in seven Western states, reaching from Wyoming and Denver to San Diego. 

The first and most direct water supply impact of oil shale development is documented in this report by Western Resource Advocates - the reallocation of water from farms and ranches to industrial use.  Water use estimates for oil shale development include a significant range.  However, according to the Government Accountability Office, a mid-range oil shale industry could use 360,000 acre-feet of water annually in Colorado and Utah.   If all of this water were reallocated from agriculture, based on senior water rights held by energy companies, it would be equivalent to nearly one quarter of the agricultural water used from the Colorado River in the State of Colorado.   This is the mid-point.  The upper end of estimates of oil shale water use is well over one million acre-feet of demand.   

Oil shale development could also increase the challenges facing Colorado’s cities.  In extended droughts, cities with junior water rights could face reduced supplies.  Today, agriculture can provide a buffer during droughts.  Agricultural water use is relatively flexible.  In dry years, farmers and ranchers can reduce water use and sell to water short cities.  However, this ability could be reduced by oil shale development.  Industrial water use is far less flexible than agricultural use.  Water managers call this “hard” or "hardened" demand.  Oil shale refineries would be unlikely to sell to cities.  And with significantly less water remaining in agriculture, the flexibility in that sector would be reduced as well.  

If water used for oil shale did not result in a 1-1 reduction in agricultural water use, then it would further increase water use in river system in which demand already exceeds supply.  This would increase the challenges that Upper Basin states face in maintaining water deliveries required under the Law of the River to Lower Basin states, Mexico and to offset reservoir evaporation.   If these required flows are not provided, a “call” on the river could reduce water supplies for all Upper Basin states. 

Finally, given the status of Colorado River supplies today and the drying impacts of climate change, Basin States and water users will need to work together to bring supply and demand into balance.  By increasing demand and decreasing flexibility, oil shale development would increase this challenge, making life more difficult for water managers in Lower Basin states, as well as in the Upper Basin.   In the Lower Basin, Arizona, Mexico and Nevada would be the first to feel the impact of shortages.   However, if shortages continued, California could be affected as well. 

NRDC’s new report contains recommendations to tackle the potential impacts of oil shale.  In the water management arena, the keys are to understand potential impacts before they happen and to work to manage the river’s flows sustainably to meet the needs of future generations.  Specifically, we recommend the following:

• The Bureau of Reclamation’s Colorado River Basin Water Supply and Demand Study is beginning to tackle these tough issues.  At the moment, the study is developing several scenarios for future demand.  These scenarios should paint a clear picture of the challenges facing water managers today without oil shale development -- as well as in a future with no, mid-range and large-scale oilshale development .  The study should then methodically investigate all of the potential water management impacts summarized above. 
• Individual states and the Basin states together should prepare comprehensive water management strategies, with an emphasis on a full range of options to increase water use efficiency across the basin in the agricultural, residential, commercial, industrial and institutional sectors.   In some regions, water recycling, and urban stormwater capture could help stretch Colorado River supplies further. 
• And finally, water users across the Basin should ask tough questions about the potential supply impacts of oil shale development. 

Obviously, the best outcome for water managers will come if oil shale development does not take place in this arid region.  Across the West, tens of millions of residents, businesses, ranchers and farmers have a great deal at stake.  When it comes to Colorado River water management, oil shale could be the last straw in the river and the last straw on the camel’s back.