Water Rights in Colorado: Big Stakes for Big Oil


Can water rights in Colorado affect gasoline prices? With gas prices on the rise, oil and energy issues seem to be all the rage as the 2008 elections approach. But what on earth does that have to do with Colorado’s water rights?


According to an article written in 2008 by Joe Hanel of the Durango Herald, Royal Dutch Shell has been buying up Colorado water rights for the past five years; as a significant amount of water is needed in order to extract oil from shale.


  • In 2002 Shell bought water rights from Exxon – 670 cubic feet per second flow rights and 183 acre-feet reservoir rights. (Appropriation dates: 1955, 1964)


  • In 2007, Shell swapped land with the Colorado Division of Wildlife giving Shell Colorado water rights totaling 19 cubic feet per second from various ditches and wells associated with Piceance Creek. For the land, the Colorado Division of Wildlife was given land elsewhere and $444,000 cash. (Appropriation dates: dating back from the late 1800s)


  • Another 2007 water rights purchase from Mack property gave Shell 30,000 acre-feet reservoir rights on a tributary west of Grand Junction and the Colorado River, flowing at a rate of 116 cubic feet per second. (Appropriation dates: 1980)


  • In 2007 Shell purchased the Wyatt property that has water rights appropriations dating back to the late 1800s. Shell paid a reported $2 million for a land purchase that had unspecified water rights.


  • Stillwater Reservoir, Fourteenmile Reservoir, and Roan Creek Reservoir are all possible lakes that oil company executives and their attorneys would like to develop in Rio Blanco and Garfield counties.


Hanel references Division 5 water court, Office of the State Engineer, Mesa County Clerk and Recorder, Rio Blanco County Clerk and Recorder, and Capital Development Committee of the state Legislature as being the sources of his information on Shells water rights purchases.


As for the question of how much water rights does Shell own? They aren’t saying and public records aren’t able to give an accurate estimate. Shell does not comment on whether or not their Colorado water rights are for the oil-shale project, or what they will be used for either.


Many Coloradoans, including state leaders and conservationists, are concerned that the water that Shell intends to use is far greater than what is available in the region.


The federal government will definitely shape the development of oil shale and water rights in Colorado. It is projected that the industry will not pick up for at least another ten years.


This may be an issue that continues to grow as time moves on. But as it looks right now, black gold is starting to turn blue.


Click here to read Hanel’s full article “Big oil casts big shadow over Colorado’s water future”.





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