Concerns over the price of oil and supply of petroleum have revived interest in alternative energy supplies, including the development of oil shale to help address energy needs in the United States. The process used to develop oil shale resources requires a plentiful water supply. According to news reports, oil companies currently hold senior water rights in the states where oil shale reserves are located. These senior rights reportedly have not been exercised for decades, allowing junior water rights holders to use the water. Because of the nature of the water rights systems in the relevant states, junior water rights holders might face significant limitations on their future use of water from the Colorado River Basin if the oil companies exercise their rights. This report will provide a brief overview of water rights in Colorado, Utah, and Wyoming; changes that may be made to currently held water rights; and the possibility for abandonment of unused water rights.
Concerns over fluctuating oil prices and declining petroleum production worldwide have revived interest in oil shale as a potential resource. The Energy Policy Act of 2005 (EPAct; P.L. 109-58) identified oil shale as a strategically important domestic resource and directed the Department of the Interior to promote commercial development. Oil shale development would require significant amounts of water, however, and water supply in the Colorado River Basin, where several oil shale reserves are located, is limited. According to news reports, oil companies holding water rights in the region have not exercised those rights in decades, which has allowed other water rights holders to use the water for agricultural and municipal needs. Because of the nature of the water rights systems in the relevant states, these users might face significant limitations in their future use of water from the Colorado River Basin if the oil companies exercise their rights. This report will provide a brief overview of water rights in Colorado, Utah, and Wyoming, including changes that may be made to currently held water rights and the possibility for abandonment of unused water rights.