Oil Firms Buy Water Rights In Anticipation Of Shale Oil Development

Oil companies have acquired the rights to divert billions of gallons of scarce water a day in the western United States as they prepare to extract massive quantities of oil from shale deposits under the Rocky Mountains. The Wall Street Journal reported that in addition to obtaining the rights to divert 6.5 billion gallons of water a day from rivers during peak flow periods, oil companies also have acquired the rights to store, in dozens of reservoirs, 1.7 million acre feet of water — enough to supply the Denver metropolitan area for six years. Geologists have estimated that shale deposits in the Rocky Mountain region contain 800 billion barrels of oil, triple the reserves of Saudi Arabia. But separating the oil from the shale is an expensive process that is not economical at today’s low oil prices. The extraction process also uses large volumes of water, and environmental groups contend that development of the deposits could deplete, and pollute, scarce water reserves in the region.