Summary: This 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.
