Monday, July 27, 2009

Canada is dry...

When I was in Alberta recently, farmers from several areas were talking drought.  You know how hard it is to get your mind around that problem when you can't drain water off fast enough - or get much sunshine and degree-days.

But, the problem may actually just be starting.

A huge swathe of farmland spanning central Saskatchewan and Alberta, and angling northwest into British Columbia’s Peace River valley has suffered its driest winter and spring in at least 50 years (and 70 in some districts). Rainfall has been less than 40% of its normal level. Ranchers are staring at dry water holes and desiccated pasture, forcing them either to sell cattle or buy feed. Farmers are kicking at shrivelled crops. Heavy rains in late June and early July may make some fields worth harvesting but many are already lost. Some 900 farmers around Kindersley, south-west of Saskatoon, have ploughed their crops under and claimed insurance, according to Stewart Wells, the president of Canada’s National Farmers Union. He foresees losses of up to 30% in wheat, barley, rapeseed and hay, and more if the drought continues.
Worse, such conditions may become the norm. David Schindler, an ecologist at the University of Alberta, says that evidence from tree rings and ancient algae suggests that the prairies were drought-prone in the past and that the 20th century was unusually wet. The prairies lie in the eastern rain shadow of the Rocky Mountains. Almost all their rivers flow eastward from the Rockies. As global warming melts mountain glaciers, the rivers’ summer flow has dwindled by up to 60% (more in one case) of their historical average. But more water is being drawn from them for cities, irrigation and the processing of oil from tar sands. Mr Schindler fears that unless these trends are reversed, the prairies risk becoming semi-desert.[More] 
While I resist pointing to this as evidence of climate change, since I refute contrary claims of the same sort, the oil-shale-water linkage is a known issue in the Canadian water management problem.

Development of oil shale resources will require significant quantities of water for mine and plant operations, reclamation, supporting infrastructure, and associated economic growth. In 1980, the US Office of strategic assessment estimated water requirements of 2.3 to 5.7 barrels of water per barrel of oil.[21] More current estimates based on updated oil shale industry water budgets suggest that requirements for new retorting methods will be 1 to 3 barrels of water per barrel of oil.[22] For an oil shale industry producing 2.5 million barrels per day, this equates to between 105 and 315 million US gallons of water per day. These numbers include water requirements for power generation for in-situ heating processes, retorting, refining, reclamation, dust control and on-site worker demands. Municipal and other water requirements related to population growth associated with industry development will require an additional 58 million gallons per day. Hence, a 2.5 MMBbl/d oil shale industry would require 180,000 acre feet (220,000,000 m3) to 420,000 acre feet (520,000,000 m3) of water per year, depending on location and processes used. [23]
The largest deposit of oil shale in the United States is in the Green River basin. Though scarce, water in the western United States is treated as a commodity which can be bought and sold in a competitive market.[23] Royal Dutch Shell has been reported to be buying groundwater rights in Colorado as it prepares to drill for oil in the shale deposits there.[24] In the Colorado Big-Thompson project, average prices per share (0.7 acre feet/share) increased from some $2,000 in 1990 to more than $12,000 in mid-2003 (constant 2001 dollars).[25] CBT Prices from 2001 to 2006 has had a range of $10,000 to $14,000 per share, or $14,000 to $20,000 per acre foot. [26] In August 2009 asking prices in Utah (ex-salt lake city) ranged from $8,000-$15,000/AF.[27] At $10,000 per acre foot, capital costs for water rights to produce 2.5m bbls/day would range between $1.8 bn-$4.2 bn. [More]

Complicating this whole economic analysis is the fact mineral rights are retained by the provinces, not the property of private owners.  Consequently, some very peculiar business decisions could be made under political pressure, I would hazard.

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