US Oil Sands, whose name could be taken as a misrepresentation of their Canadian origins, recently faced a challenge from environmental groups claiming that the company’s water-intensive oil sands mining operations in Utah, requiring up to 84,000 gallons of water daily, would be too environmentally disruptive. Western Resource Advocates, a nonprofit environmental law and policy organization, appealed US Oil Sands’ mining permit, citing state regulators did not assess threats to groundwater when granting the approval. US Oil Sands has leased nearly 6,000 acres, of which 213 acres representing 189.9 million barrels will be initially mined, and targets production of 2,000 barrels per day by 2014. The Utah operation, using proven surface mining techniques deployed in Canada’s oil sands for the past three decades, will use as much as 636,000 liters of water each day in a desert that is already suffering the driest summer since 2002. Although US Oil Sands says 85% of the water can be recycled, an administrative law judge will rule on the company’s mining permit later this month.
Utah is the second driest state in the U.S., getting only 10 to 12 inches of rain every year, and has seen very little commercial development in its oil sands reserves due to water availability. Geological surveys of Utah’s oil sands reserves show that the state holds 25 billion barrels of “mineral matter consolidated” bitumen, in which the sand grains are cemented together with the oil and require the use of a citrus-based solvent, d-Limonene, along with hot water. US Oil Sands, however, struggle to even find adequate water sources to utilize in mining operations. They have drilled 108 holes, at depths of a few hundred feet, and four deeper wells, which all came up dry. Other oil sands reserves, such as those in Canada and Venezuela, are known as “water-wet” deposits, where a thin layer of water surrounds the sand grain, allowing for cost-effective and less water-intensive separation of sand from the oil. US Oil Sands’ second quarter statements identify the need to “source optimal water well locations for the Project’s future processing facilities.”
Potential exists to withdraw from the Colorado River, where Utah has not fully utilized its apportionment, but state regulators facing a growing population and recurring drought are not likely to grant oil sands producers these water rights. US Oil Sands may have two remaining options: the Ute Tribe of American Indians holds a significant quantity of water; and produced water from surrounding oil and gas producers, approximately 46.5 million barrels annually, could be used in the oil mining operation with significant treatment. US Oil Sands’ success hinges on their ability to secure water rights and prove that they are able to extract from Utah’s bitumen deposits.
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