Oil, Water Are Volatile Mix in West

Energy Firms Buying River Rights Add to Competition for Scarce Resource

By STEPHANIE SIMON
Wall Street Journal

DENVER -- Oil companies have gained control over billions of gallons of water from Western rivers in preparation for future efforts to extract oil from shale deposits under the Rocky Mountains, according to a new report by an environmental group that opposes such projects.

The group, Western Resource Advocates, used public records to conclude that energy companies are collectively entitled to divert more than 6.5 billion gallons of water a day during peak river flows. The companies also hold rights to store, in dozens of reservoirs, 1.7 million acre feet of water, enough to supply metro Denver for six years.

Industry representatives said they have substantial holdings of water rights for future use in producing oil from shale, though they could not confirm the precise numbers in the report.

Before any move into full-scale oil shale production, the energy industry plans a close study of water issues, including the impact its operations would have on ranchers, farmers and communities that all rely on the same limited sources of water, said Richard Ranger, a senior policy adviser for the American Petroleum Institute. "It's among the most important questions to be examined," he said.

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