Extracting oil from rocky seams of underground shale is not only expensive, but also requires massive amounts of water, a precious resource critical to continued development in the nation’s fastest-growing region.

The conflict between oil and water interests has now come to a head. On Oct. 31, Congress allowed a moratorium on oil-shale leasing to expire. That paved the way for the Bush administration to finalize leasing rules in November that opened 2 million acres of federal land to exploration.

Oil companies say that at a time of increasing foreign oil dependence it would be unconscionable to forgo exploiting oil shale’s potential. “Considering the magnitude of this resource – it is so huge relative to other hydrocarbon resource around the world – it merits taking a look at trying any method we can, safely and responsibly, to get at it,” said Tracy C. Boyd, communications and sustainability manager for Shell Oil Co.

Oil shale companies acknowledge that the technology required to superheat shale to extract oil is unproven. They also concede that they are uncertain how much water would be needed in the process, although some experts calculate it would take 10 barrels of water to get one barrel of oil from shale.

That water-to-oil equation has inflamed officials in the upper Rockies, who are raising the alarm about the cumulative effect of energy projects on the region’s water supplies, which ultimately feed Southern California reservoirs via the Colorado River.

“There are estimates that oil shale could use all of the remaining water in upper Colorado River Basin,” said Susan Daggett, a commissioner on the Denver Water Board. “That essentially pits oil shale against people’s needs.”

Prospectors have known about the oil shale deposits in the Rockies for more than a century, but the technology to extract it has remained imperfect, expensive and polluting.

But for all the years of research into oil shale extraction, there is little hard information on exactly how much water would be drained from the region. In its recent environmental review of proposed oil shale projects, the federal Bureau of Land Management, which oversees energy leasing on public lands, was unable to estimate the industry’s region-wide water use.

“Can groundwater be protected?” asked Harris Sherman, executive director of the Colorado Department of Natural Resources. “Areas where this technology will be used are all tributaries for the headwaters for all of the seven Colorado Basin states.”

Despite the objections, oil shale development has been pushed forward. In an effort to encourage the fledgling industry, officials said, new regulations allow oil shale operators to pay unusually low royalty rates. The system calls for producers to pay 5 percent for the first five years, increasing 1 percent each year until reaching 12.5 percent, the standard federal oil and gas royalty rate.

In recent weeks, the industry was included in the $700-billion government bailout package with investment and tax incentives to help oil shale producers build refineries and other expensive infrastructure.

While the region’s elected officials support efforts to discover new sources of domestic oil, they say that with so many unanswered water questions, public land managers should be slowing the pace of development, not speeding it up.

The renewed push for oil shale development comes at time when conventional energy companies are being blamed for squandering and fouling water across the West.

Wyoming and Montana are squabbling over water quality concerns about coal bed methane drilling. Colorado and New Mexico towns have discovered benzene and other dangerous chemicals in their wells, with energy projects the suspected culprits. Ranchers in the region say their crops and livestock suffer as oil and gas production drains underground aquifers. Sportsmen complain that rivers and streams are being compromised by the energy industry.

The Environmental Protection Agency, in official comments to the BLM, expressed concerns about the possibility that oil shale production would deposit, “salts, selenium, arsenic and polynuclear aromatic hydrocarbons in groundwater.”

Craig Thompson found many of the same compounds when he studied groundwater pollution from an abandoned oil shale project in western Wyoming that began during the last oil shale boom in the 1970s. Despite 30 years of cleanup efforts, he said, the aquifer is still not free of chemicals. “Development of oil shale is a groundwater nightmare,” said Thompson, a chemist. “Oil shale serves as the floor for the aquifer. When you heat up the aquifer, it dissolves nasty stuff like fluoride and arsenic and selenium and cyanide . . . the list goes on.”

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Source: Nashua Telegraph