Energy Development and Water Use
Impacts of Potential Oil Shale Development on Water Resources Gao ID: GAO-11-929T August 24, 2011This testimony discusses oil shale development. Being able to tap the vast amounts of oil locked within U.S. oil shale could go a long way toward satisfying our nation's future oil demands. The Green River Formation--an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming--contains the world's largest deposits of oil shale. The U.S. Geological Survey (USGS) estimates that the Green River Formation contains about 3 trillion barrels of oil and that about half of this may be recoverable, depending on available technology and economic conditions. This is an amount about equal to the entire world's proven oil reserves. The thickest and richest oil shale within the Green River Formation exists in the Piceance Basin of northwest Colorado and the Uintah Basin of northeast Utah. The federal government is in a unique position to influence the development of oil shale because 72 percent of the oil shale within the Green River Formation is beneath federal lands managed by the Department of the Interior's (Interior) Bureau of Land Management (BLM). The Department of Energy (DOE) has provided technological and financial support for oil shale development through its research and development efforts, but oil shale development has been hampered by technological challenges, average oil prices that have been too low to consistently justify investment, and concerns over potential impacts on the environment. One area of particular concern is that developing 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. Some analysts project that large scale oil shale development within Colorado could require more water than is currently supplied to over 1 million residents of the Denver metro area and that water diverted for oil shale operations would restrict agricultural and urban development. The potential demand for water is further complicated by the past decade of drought in the West and projections of a warming climate in the future. In October 2010, we issued a report that examined the nexus between oil shale development and water impacts. The testimony summarizes the findings of that report. Specifically, (1) what is known about the potential impacts of oil shale development on surface water and groundwater, (2) what is known about the amount of water that may be needed for the commercial development of oil shale, (3) the extent to which water will likely be available for commercial oil shale development and its source, and (4) federal research efforts to address impacts on water resources from commercial oil shale development.
In our October report, we found that oil shale development could have significant impacts on the quantity and quality of surface and groundwater resources, but the magnitude of these impacts is unknown. For example, it is not possible to quantify impacts on water resources with reasonable certainty because it is not yet possible to predict how large an oil shale industry may develop. The size of the industry would have a direct relationship to water impacts. According to BLM, the level and degree of the potential impacts of oil shale development cannot be quantified because this would require making many speculative assumptions regarding the potential of the oil shale, unproven technologies, project size, and production levels. Commercial oil shale development requires water for numerous activities throughout its life cycle; however, we found that estimates vary widely for the amount of water needed to produce oil shale. These variations stem primarily from the uncertainty associated with reclamation technologies for in-situ oil shale development and because of the various ways to generate power for oil shale operations, which use different amounts of water. We calculated estimates of the minimum, maximum, and average amounts of water that could be needed for each of the five groups of activities that comprise the life cycle of oil shale development. Based on our calculations, we estimated that about 1 to 12 barrels of water could be needed for each barrel of oil produced from in-situ operations, with an average of about 5 barrels; and about 2 to 4 barrels of water could be needed for each barrel of oil produced from mining operations with a surface retort operation, with an average of about 3 barrels. In October 2010, we reported that water is likely to be available for the initial development of an oil shale industry, but the eventual size of the industry may be limited by the availability of water and demands for water to meet other needs. Since 2006, the federal government has sponsored over $22 million of research on oil shale development and of this amount about $5 million was spent on research related to the nexus between oil shale development and water. Even with this research, we reported that there is a lack of comprehensive data on the condition of surface water and groundwater and their interaction, which limits efforts to monitor and mitigate the future impacts of oil shale development. Currently DOE funds most of the research related to oil shale and water resources, including research on water rights, water needs, and the impacts of oil shale development on water quality. Interior also performs limited research on characterizing surface and groundwater resources in oil shale areas and is planning some limited monitoring of water resources.
GAO-11-929T, Energy Development and Water Use: Impacts of Potential Oil Shale Development on Water Resources
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Energy and Mineral Resources, Committee on
Natural Resources, House of Representatives:
For Release on Delivery:
Expected at 9:00 a.m. MDT:
Wednesday, August 24, 2011:
Energy Development And Water Use:
Impacts of Potential Oil Shale Development on Water Resources:
Statement of Anu K. Mittal, Director:
Natural Resources and Environment Team:
GAO-11-929T:
Chairman Lamborn, Ranking Member Holt, and Members of the Subcommittee:
I am pleased to be here today to participate in your field hearing on
oil shale development. As you know, being able to tap the vast amounts
of oil locked within U.S. oil shale could go a long way toward
satisfying our nation's future oil demands. The Green River Formation--
an assemblage of over 1,000 feet of sedimentary rocks that lie beneath
parts of Colorado, Utah, and Wyoming--contains the world's largest
deposits of oil shale. The U.S. Geological Survey (USGS) estimates
that the Green River Formation contains about 3 trillion barrels of
oil and that about half of this may be recoverable, depending on
available technology and economic conditions. This is an amount about
equal to the entire world's proven oil reserves. The thickest and
richest oil shale within the Green River Formation exists in the
Piceance Basin of northwest Colorado and the Uintah Basin of northeast
Utah (see appendix I). The federal government is in a unique position
to influence the development of oil shale because 72 percent of the
oil shale within the Green River Formation is beneath federal lands
managed by the Department of the Interior's (Interior) Bureau of Land
Management (BLM). The Department of Energy (DOE) has provided
technological and financial support for oil shale development through
its research and development efforts, but oil shale development has
been hampered by technological challenges, average oil prices that
have been too low to consistently justify investment, and concerns
over potential impacts on the environment.
One area of particular concern is that developing 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. Some analysts project that large scale
oil shale development within Colorado could require more water than is
currently supplied to over 1 million residents of the Denver metro
area and that water diverted for oil shale operations would restrict
agricultural and urban development. The potential demand for water is
further complicated by the past decade of drought in the West and
projections of a warming climate in the future. In October 2010, we
issued a report that examined the nexus between oil shale development
and water impacts.[Footnote 1]
My testimony today will summarize the findings of that report.
Specifically, I will discuss (1) what is known about the potential
impacts of oil shale development on surface water and groundwater, (2)
what is known about the amount of water that may be needed for the
commercial development of oil shale, (3) the extent to which water
will likely be available for commercial oil shale development and its
source, and (4) federal research efforts to address impacts on water
resources from commercial oil shale development. To perform this work
we, among other things, reviewed an environmental impact statement on
oil shale development prepared by BLM and various studies from private
and public groups; we also interviewed officials at DOE, USGS, BLM;
state regulatory agencies in Colorado and Utah; oil shale industry
representatives; water experts; and organizations performing research,
including universities and national laboratories, and reviewed
relevant documents describing their research. We conducted this work
in accordance with generally accepted government auditing standards.
Background:
Interest in oil shale as a domestic energy source has waxed and waned
since the early 1900s. More recently, the Energy Policy Act of 2005
directed BLM to lease its lands for oil shale research and
development. In June 2005, BLM initiated a leasing program for
research, development, and demonstration (RD&D) of oil shale recovery
technologies. By early 2007, it granted six small RD&D leases: five in
the Piceance Basin of northwest Colorado and one in Uintah Basin of
northeast Utah. The leases are for a 10-year period, and if the
technologies are proven commercially viable, the lessees can
significantly expand the size of the leases for commercial production
into adjacent areas known as preference right lease areas. The Energy
Policy Act of 2005 also directed BLM to develop a programmatic
environmental impact statement (PEIS) for a commercial oil shale
leasing program. During the drafting of the PEIS, however, BLM
realized that, without proven commercial technologies, it could not
adequately assess the environmental impacts of oil shale development
and dropped from consideration the decision to offer additional
specific parcels for lease. Instead, the PEIS analyzed making lands
available for potential leasing and allowing industry to express
interest in lands to be leased. Environmental groups then filed
lawsuits, challenging various aspects of the PEIS and the RD&D
program. Since then, BLM has initiated another round of oil shale RD&D
leasing.
Stakeholders in the future development of oil shale are numerous and
include the federal government, state government agencies, the oil
shale industry, academic institutions, environmental groups, and
private citizens. Among federal agencies, BLM manages the land and the
oil shale beneath it and develops regulations for its development.
USGS describes the nature and extent of oil shale deposits and
collects and disseminates information on the nation's water resources.
DOE, through its various offices, national laboratories, and
arrangements with universities, advances energy technologies,
including oil shale technology. The Environmental Protection Agency
(EPA) sets standards for pollutants that could be released by oil
shale development and reviews environmental impact statements, such as
the PEIS. Interior's Bureau of Reclamation (BOR) manages federally
built water projects that store and distribute water in 17 western
states and provides this water to users. BOR monitors the amount of
water in storage and the amount of water flowing in the major streams
and rivers, including the Colorado River, which flows through oil
shale country and feeds these projects. BOR provides its monitoring
data to federal and state agencies that are parties to three major
federal, state, and international agreements that together with other
federal laws, court decisions, and agreements, govern how water within
the Colorado River and its tributaries is to be shared with Mexico and
among the states in which the river or its tributaries are located.
[Footnote 2]
The states of Colorado and Utah have regulatory responsibilities over
various activities that occur during oil shale development, including
activities that impact water. Through authority delegated by EPA under
the Clean Water Act, Colorado and Utah regulate discharges into
surface waters. Colorado and Utah also have authority over the use of
most water resources within their respective state boundaries. They
have established extensive legal and administrative systems for the
orderly use of water resources, granting water rights to individuals
and groups. Water rights in these states are not automatically
attached to the land upon which the water is located. Instead,
companies or individuals must apply to the state for a water right and
specify the amount of water to be used, its intended use, and the
specific point from where the water will be diverted for use, such as
a specific point on a river or stream. Utah approves the application
for a water right through an administrative process, and Colorado
approves the application for a water right through a court proceeding.
The date of the application establishes its priority--earlier
applicants have preferential entitlement to water over later
applicants if water availability decreases during a drought. These
earlier applicants are said to have senior water rights. When an
applicant puts a water right to beneficial use, it is referred to as
an absolute water right. Until the water is used, however, the
applicant is said to have a conditional water right. Even if the
applicant has not yet put the water to use, such as when the applicant
is waiting on the construction of a reservoir, the date of the
application still establishes priority. Water rights in both Colorado
and Utah can be bought and sold, and strong demand for water in these
western states facilitates their sale.
A significant challenge to the development of oil shale lies in the
current technology to economically extract oil from oil shale. To
extract the oil, the rock needs to be heated to very high
temperatures--ranging from about 650 to 1,000 degrees Fahrenheit--in a
process known as retorting. Retorting can be accomplished primarily by
two methods. One method involves mining the oil shale, bringing it to
the surface, and heating it in a vessel known as a retort. Mining oil
shale and retorting it has been demonstrated in the United States and
is currently done to a limited extent in Estonia, China, and Brazil.
However, a commercial mining operation with surface retorts has never
been developed in the United States because the oil it produces
competes directly with conventional crude oil, which historically has
been less expensive to produce. The other method, known as an in-situ
process, involves drilling holes into the oil shale, inserting heaters
to heat the rock, and then collecting the oil as it is freed from the
rock. Some in-situ technologies have been demonstrated on very small
scales, but other technologies have yet to be proven, and none has
been shown to be economically or environmentally viable.
Nevertheless, according to some energy experts, the key to developing
our country's oil shale is the development of an in-situ process
because most of the richest oil shale is buried beneath hundreds to
thousands of feet of rock, making mining difficult or impossible.
Additional economic challenges include transporting the oil produced
from oil shale to refineries because pipelines and major highways are
not prolific in the remote areas where the oil shale is located, and
the large-scale infrastructure that would be needed to supply power to
heat oil shale is lacking. In addition, average crude oil prices have
been lower than the threshold necessary to make oil shale development
profitable over time.
Large-scale oil shale development also brings socioeconomic impacts.
There are obvious positive impacts such as the creation of jobs,
increase in wealth, and tax and royalty payments to governments, but
there are also negative impacts to local communities. Oil shale
development can bring a sizeable influx of workers, who along with
their families, put additional stress on local infrastructure such as
roads, housing, municipal water systems, and schools. Development from
expansion of extractive industries, such as oil shale or oil and gas,
has typically followed a "boom and bust" cycle in the West, making
planning for growth difficult. Furthermore, traditional rural uses
could be replaced by the industrial development of the landscape, and
tourism that relies on natural resources, such as hunting, fishing,
and wildlife viewing, could be negatively impacted.
Developing oil shale resources also faces significant environmental
challenges. For example, construction and mining activities can
temporarily degrade air quality in local areas. There can also be long-
term regional increases in air pollutants from oil shale processing,
upgrading, pipelines, and the generation of additional electricity.
Pollutants, such as dust, nitrogen oxides, and sulfur dioxide, can
contribute to the formation of regional haze that can affect adjacent
wilderness areas, national parks, and national monuments, which can
have very strict air quality standards. Because oil shale operations
clear large surface areas of topsoil and vegetation, some wildlife
habitat will be lost. Important species likely to be negatively
impacted from loss of wildlife habitat include mule deer, elk, sage
grouse, and raptors. Noise from oil shale operations, access roads,
transmission lines, and pipelines can further disturb wildlife and
fragment their habitat. Environmental impacts could be compounded by
the impacts of coal mining, construction, and extensive oil and gas
development in the area. Air quality and wildlife habitat appear to be
particularly susceptible to the cumulative effect of these impacts,
and according to some environmental experts, air quality impacts may
be the limiting factor for the development of a large oil shale
industry in the future. Lastly, the withdrawal of large quantities of
surface water for oil shale operations could negatively impact aquatic
life downstream of the oil shale development. My testimony today will
discuss impacts to water resources in more detail.
Oil Shale Development Could Adversely Impact Water Resources, but the
Magnitude of These Impacts Is Unknown:
In our October report, we found that oil shale development could have
significant impacts on the quantity and quality of surface and
groundwater resources, but the magnitude of these impacts is unknown.
For example, we found that it is not possible to quantify impacts on
water resources with reasonable certainty because it is not yet
possible to predict how large an oil shale industry may develop. The
size of the industry would have a direct relationship to water
impacts. We noted that, according to BLM, the level and degree of the
potential impacts of oil shale development cannot be quantified
because this would require making many speculative assumptions
regarding the potential of the oil shale, unproven technologies,
project size, and production levels.
Hydrologists and engineers, while not able to quantify the impacts
from oil shale development, have been able to determine the
qualitative nature of its impacts because other types of mining,
construction, and oil and gas development cause disturbances similar
to impacts that would be expected from oil shale development.
According to these experts, in the absence of effective mitigation
measures, impacts from oil shale development to water resources could
result from disturbing the ground surface during the construction of
roads and production facilities, withdrawing water from streams and
aquifers for oil shale operations, underground mining and extraction,
and discharging waste waters from oil shale operations. For example,
we reported that oil shale operations need water for a number of
activities, including mining, constructing facilities, drilling wells,
generating electricity for operations, and reclamation of disturbed
sites. Water for most of these activities is likely to come from
nearby streams and rivers because it is more easily accessible and
less costly to obtain than groundwater. Withdrawing water from streams
and rivers would decrease flows downstream and could temporarily
degrade downstream water quality by depositing sediment within the
stream channels as flows decrease. The resulting decrease in water
would also make the stream or river more susceptible to temperature
changes--increases in the summer and decreases in the winter. These
elevated temperatures could have adverse impacts on aquatic life,
which need specific temperatures for proper reproduction and
development and could also decrease dissolved oxygen, which is needed
by aquatic animals.
We also reported that both underground mining and in-situ operations
would permanently impact aquifers. For example, underground mining
would permanently alter the properties of the zones that are mined,
thereby affecting groundwater flow through these zones. The process of
removing oil shale from underground mines would create large tunnels
from which water would need to be removed during mining operations.
The removal of this water through pumping would decrease water levels
in shallow aquifers and decrease flows to streams and springs that are
connected. When mining operations cease, the tunnels would most likely
be filled with waste rock, which would have a higher degree of
porosity and permeability than the original oil shale that was
removed. Groundwater flow through this material would increase
permanently, and the direction and pattern of flows could change
permanently. Similarly, in-situ extraction would also permanently
alter aquifers because it would heat the rock to temperatures that
transform the solid organic compounds within the rock into liquid
hydrocarbons and gas that would fracture the rock upon escape. The
long-term effects of groundwater flows through these retorted zones
are unknown. Some in-situ operations envision using a barrier to
isolate thick zones of oil shale with intervening aquifers from any
adjacent aquifers and pumping out all the groundwater from this
isolated area before retorting.
The discharge of waste waters from operations would also temporarily
increase water flows in receiving streams. These discharges could also
decrease the quality of downstream water if the discharged water is of
lower quality, has a higher temperature, or contains less oxygen.
Lower-quality water containing toxic substances could increase fish
and invertebrate mortality. Also, increased flow into receiving
streams could cause downstream erosion. However, if companies recycle
waste water and water produced during operations, these discharges and
their impacts could be substantially reduced.
Estimates of Water Needs for Commercial Oil Shale Development Vary
Widely:
Commercial oil shale development requires water for numerous
activities throughout its life cycle; however, we found that estimates
vary widely for the amount of water needed to produce oil shale. These
variations stem primarily from the uncertainty associated with
reclamation technologies for in-situ oil shale development and because
of the various ways to generate power for oil shale operations, which
use different amounts of water.
In our October report, we stated that water is needed for five
distinct groups of activities that occur during the life cycle of oil
shale development: (1) extraction and retorting, (2) upgrading of
shale oil, (3) reclamation, (4) power generation, and (5) population
growth associated with oil shale development. However, we found that
few studies that we examined included estimates for the amount of
water used by each of these activities. Consequently, we calculated
estimates of the minimum, maximum, and average amounts of water that
could be needed for each of the five groups of activities that
comprise the life cycle of oil shale development. Based on our
calculations, we estimated that about 1 to 12 barrels of water could
be needed for each barrel of oil produced from in-situ operations,
with an average of about 5 barrels (see table 1); and about 2 to 4
barrels of water could be needed for each barrel of oil produced from
mining operations with a surface retort operation, with an average of
about 3 barrels (see table 2).
Table 1: Estimated Barrels of Water Needed for Various Activities per
Barrel of Shale Oil Produced by In-Situ Operations:
Activity: Extraction/retorting;
Minimum estimate: 0;
Average estimate: 0.7;
Maximum estimate: 1.0.
Activity: Upgrading liquids;
Minimum estimate: 0.6;
Average estimate: 0.9;
Maximum estimate: 1.6.
Activity: Power generation;
Minimum estimate: 0.1;
Average estimate: 1.5;
Maximum estimate: 3.4.
Activity: Reclamation;
Minimum estimate: 0;
Average estimate: 1.4;
Maximum estimate: 5.5.
Activity: Population growth;
Minimum estimate: 0.1;
Average estimate: 0.3;
Maximum estimate: 0.3.
Activity: Total;
Minimum estimate: 0.8;
Average estimate: 4.8;
Maximum estimate: 11.8.
Source: GAO analysis of selected studies.
Notes: GAO used from four to six studies to obtain the numbers for
each group of activities. See GAO-11-35 to identify the specific
studies. The average for reclamation may be less useful because
estimates are either at the bottom or the top of this range.
[End of table]
Table 2: Estimated Barrels of Water Needed for Various Activities per
Barrel of Shale Oil Produced by Mining and Surface Retorting:
Activity: Extraction/retorting and upgrading liquids;
Minimum estimate: 0.9;
Average estimate: 1.5;
Maximum estimate: 1.9.
Activity: Power generation;
Minimum estimate: 0;
Average estimate: 0.3;
Maximum estimate: 0.9.
Activity: Reclamation;
Minimum estimate: 0.6;
Average estimate: 0.7;
Maximum estimate: 0.8.
Activity: Population growth;
Minimum estimate: 0.3;
Average estimate: 0.3;
Maximum estimate: 0.4.
Activity: Total;
Minimum estimate: 1.8;
Average estimate: 2.8;
Maximum estimate: 4.0.
Source: GAO analysis of selected studies.
Note: GAO used from three to six studies to obtain the numbers for
each group of activities. See [hyperlink,
http://www.gao.gov/products/GAO-11-35] to identify the specific
studies.
[End of table]
Water Is Likely to Be Available Initially from Local Sources, but the
Size of an Oil Shale Industry May Eventually Be Limited by Water
Availability:
In October 2010, we reported that water is likely to be available for
the initial development of an oil shale industry, but the eventual
size of the industry may be limited by the availability of water and
demands for water to meet other needs. Oil shale companies operating
in Colorado and Utah will need to have water rights to develop oil
shale, and representatives from all of the companies with whom we
spoke were confident that they held at least enough water rights for
their initial projects and will likely be able to purchase more rights
in the future. According to a study by the Western Resource Advocates,
a nonprofit environmental law and policy organization, of water rights
ownership in the Colorado and White River Basins of Colorado companies
have significant water rights in the area. For example, the study
found that Shell owns three conditional water rights for a combined
diversion of about 600 cubic feet per second from the White River and
one of its tributaries and has conditional rights for the combined
storage of about 145,000 acre-feet in two proposed nearby reservoirs.
In addition to exercising existing water rights and agreements, there
are other options for companies to obtain more water rights in the
future, according to state officials in Colorado and Utah. In
Colorado, companies can apply for additional water rights in the
Piceance Basin on the Yampa and White Rivers. For example, Shell
recently applied--but subsequently withdrew the application--for
conditional rights to divert up to 375 cubic feet per second from the
Yampa River for storage in a proposed reservoir that would hold up to
45,000 acre-feet for future oil shale development. In Utah, however,
officials with the State Engineer's office said that additional water
rights are not available, but that if companies want additional
rights, they could purchase them from other owners.
Most of the water needed for oil shale development is likely to come
first from surface flows, as groundwater is more costly to extract and
generally of poorer quality in the Piceance and Uintah Basins.
However, companies may use groundwater in the future should they
experience difficulties in obtaining rights to surface water.
Furthermore, water is likely to come initially from surface sources
immediately adjacent to development, such as the White River and its
tributaries that flow through the heart of oil shale country in
Colorado and Utah, because the cost of pumping water over long
distances and rugged terrain would be high, according to water experts.
Developing a sizable oil shale industry may take many years--perhaps
15 or 20 years by some industry and government estimates--and such an
industry may have to contend with increased demands for water to meet
other needs. For example, substantial population growth and its
correlative demand for water are expected in the oil shale regions of
Colorado and Utah. State officials expect that the population within
the region surrounding the Yampa, White, and Green Rivers in Colorado
will triple between 2005 and 2050. These officials expect that this
added population and corresponding economic growth by 2030 will
increase municipal and industrial demands for water, exclusive of oil
shale development, by about 22,000 acre-feet per year, or a 76 percent
increase from 2000. Similarly in Utah, state officials expect the
population of the Uintah Basin to more than double its 1998 size by
2050 and that correlative municipal and industrial water demands will
increase by 7,000 acre-feet per year, or an increase of about 30
percent since the mid-1990s. Municipal officials in two communities
adjacent to proposed oil shale development in Colorado said that they
were confident of meeting their future municipal and industrial
demands from their existing senior water rights and as such will
probably not be affected by the water needs of a future oil shale
industry. However, large withdrawals could impact agricultural
interests and other downstream water users in both states, as oil
shale companies may purchase existing irrigation and agricultural
rights for their oil shale operations. State water officials in
Colorado told us that some holders of senior agricultural rights have
already sold their rights to oil shale companies. A future oil shale
industry may also need to contend with a general decreased physical
supply of water regionwide due to climate change; Colorado's and
Utah's obligations under interstate compacts that could further reduce
the amount of water available for development; and limitations on
withdrawals from the Colorado River system to meet the requirements to
protect certain fish species under the Endangered Species Act.
Oil shale companies own rights to a large amount of water in the oil
shale regions of Colorado and Utah, but we concluded that there are
physical and legal limits on how much water they can ultimately
withdraw from the region's waterways, which will limit the eventual
size of the overall industry. Physical limits are set by the amount of
water that is present in the river, and the legal limit is the sum of
the water that can be legally withdrawn from the river as specified in
the water rights held by downstream users. Our analysis of the
development of an oil shale industry at Meeker, Colorado, based on the
water available in the White River, suggests that there is much more
water than is needed to support the water needs for all the sizes of
an industry that would rely on mining and surface retorting that we
considered. However, if an industry that uses in-situ extraction
develops, water could be a limiting factor just by the amount of water
physically available in the White River.
Federal Research Efforts on the Impacts of Oil Shale Development on
Water Resources Do Not Provide Sufficient Data for Future Monitoring:
Since 2006, the federal government has sponsored over $22 million of
research on oil shale development and of this amount about $5 million
was spent on research related to the nexus between oil shale
development and water. Even with this research, we reported that there
is a lack of comprehensive data on the condition of surface water and
groundwater and their interaction, which limits efforts to monitor and
mitigate the future impacts of oil shale development. Currently DOE
funds most of the research related to oil shale and water resources,
including research on water rights, water needs, and the impacts of
oil shale development on water quality. Interior also performs limited
research on characterizing surface and groundwater resources in oil
shale areas and is planning some limited monitoring of water
resources. However, there is general agreement among those we
contacted--including state personnel who regulate water resources,
federal agency officials responsible for studying water, water
researchers, and water experts--that this ongoing research is
insufficient to monitor and then subsequently mitigate the potential
impacts of oil shale development on water resources. Specifically,
they identified the need for additional research in the following
areas:
* Comprehensive baseline conditions for surface water and groundwater
quality and quantity. Experts we spoke with said that more data are
needed on the chemistry of surface water and groundwater, properties
of aquifers, age of groundwater, flow rates and patterns of
groundwater, and groundwater levels in wells.
* Groundwater movement and its interaction with surface water. Experts
we spoke with said that additional research is needed to develop a
better understanding of the interactions between groundwater and
surface water and of groundwater movement for modeling possible
transport of contaminants. In this context, more subsurface imaging
and visualization are needed to build geologic and hydrologic models
and to study how quickly groundwater migrates. Such tools will aid in
monitoring and providing data that does not currently exist.
In addition, we found that DOE and Interior officials seldom formally
share the information on their water-related research with each other.
USGS officials who conduct water-related research at Interior and DOE
officials at the National Energy Technology Laboratory (NETL), which
sponsors the majority of the water and oil shale research at DOE,
stated they have not talked with each other about such research in
almost 3 years. USGS staff noted that although DOE is currently
sponsoring most of the water-related research, USGS researchers were
unaware of most of these projects. In addition, staff at DOE's Los
Alamos National Laboratory who are conducting some water-related
research for DOE noted that various researchers are not always aware
of studies conducted by others and stated that there needs to be a
better mechanism for sharing this research. Based on our review, we
found there does not appear to be any formal mechanism for sharing
water-related research activities and results among Interior, DOE, and
state regulatory agencies in Colorado and Utah. The last general
meeting to discuss oil shale research among these agencies was in
October 2007, but there have been opportunities to informally share
research at the annual Oil Shale Symposium, such as the one that was
conducted at the Colorado School of Mines in October 2010. Of the
various officials with the federal and state agencies, representatives
from research organizations, and water experts we contacted, many
noted that federal and state agencies could benefit from collaboration
with each other on water-related research involving oil shale.
Representatives from NETL stated that collaboration should occur at
least every 6 months.
As a result of our findings, we made three recommendations in our
October 2010 report to the Secretary of the Interior. Specifically, we
stated that to prepare for possible impacts from the future
development of oil shale, the Secretary should direct the appropriate
managers in the Bureau of Land Management and the U.S. Geological
Survey to:
* establish comprehensive baseline conditions for groundwater and
surface water quality, including their chemistry, and quantity in the
Piceance and Uintah Basins to aid in the future monitoring of impacts
from oil shale development in the Green River Formation;
* model regional groundwater movement and the interaction between
groundwater and surface water, in light of aquifer properties and the
age of groundwater, so as to help in understanding the transport of
possible contaminants derived from the development of oil shale; and:
* coordinate with the Department of Energy and state agencies with
regulatory authority over water resources in implementing these
recommendations, and to provide a mechanism for water-related research
collaboration and sharing of results.
Interior generally concurred with our recommendations. In response to
our first recommendation, Interior commented that there are ongoing
USGS efforts to analyze existing water quality data in the Piceance
Basin and to monitor surface water quality and quantity in both basins
but that it also plans to conduct more comprehensive assessments in
the future. With regard to our second recommendation, Interior stated
that BLM and USGS are working on identifying shared needs for
modeling. Interior underscored the importance of modeling prior to the
approval of large-scale oil shale development and cited the importance
of the industry's testing of various technologies on federal RD&D
leases to determine if production can occur in commercial quantities
and to develop an accurate determination of potential water uses for
each technology. In support of our third recommendation to coordinate
with DOE and state agencies with regulatory authority over water
resources, Interior stated that BLM and USGS are working to improve
such coordination and noted current ongoing efforts with state and
local authorities.
In conclusion, Mr. Chairman, attempts to commercially develop oil
shale in the United States have spanned nearly a century. During this
time, the industry has focused primarily on overcoming technological
challenges and trying to develop a commercially viable operation.
However, there are a number of uncertainties associated with the
impacts that a commercially viable oil shale industry could have on
water availability and quality that should be an important focus for
federal agencies and policymakers going forward.
Chairman Lamborn, Ranking Member Holt, and Members of the Committee,
this completes my prepared statement. I would be pleased to respond to
any questions that you may have at this time.
Contact and Staff Acknowledgments:
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this testimony. For further
information about this testimony, please contact Anu K. Mittal,
Director, Natural Resources and Environment team, (202) 512-3841 or
mittala@gao.gov. In addition to the individual named above, key
contributors to this testimony were Dan Haas (Assistant Director),
Quindi Franco, Alison O'Neill, Barbara Timmerman, and Lisa Vojta.
[End of section]
Appendix I: Location of Oil Shale Resources in Colorado and Utah:
Figure: Location of Oil Shale Resources in Colorado and Utah:
[Refer to PDF for image: map of Colorado and Utah]
The following are depicted on the map:
Extent of Green River Formation;
Most geologically prospective oil shale resource;
BLM preference right lease area;
BLM RD&D leases:
* OSEC (in Utah);
* AMSO (in Colorado);
* Chevron (in Colorado);
* Shell #1 (in Colorado);
* Shell #2 (in Colorado);
* Shell #3 (in Colorado).
Source: Adopted from BLM.
[End of figure]
[End of section]
Footnotes:
[1] GAO, Energy-Water Nexus: A Better and Coordinated Understanding of
Water Resources Could Help Mitigate the Impacts of Potential Oil Shale
Development, [hyperlink, http://www.gao.gov/products/GAO-11-35]
(Washington, D.C.: Oct. 29, 2010).
[2] These three major agreements are the Colorado River Compact of
1922, the Upper Colorado River Basin Compact of 1948, and the Mexican
Water Treaty of 1944.
[End of section]
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