Oil Companies Control Billions Of Gallons Of Colorado Water Rights

f?id=49c2340c14b9b9bc006d72d6

Oil companies now control billions of gallons of water in the Rocky Mountain west, reports the Wall Street Journal.

Western Resource Advocates, used public records to conclude that energy companies are collectively entitled to divert more than 6.5 billion gallons of water a day during peak river flows. The companies also hold rights to store, in dozens of reservoirs, 1.7 million acre feet of water, enough to supply metro Denver for six years.

They gained priority access to the water supply by purchasing water rights from many older farming families, which means the oil companies have access to water even during drier times. Water is free of charge in Colorado as long as it’s being put to a “beneficial” use. The companies want access to the water supply because, they think they can yank oil from shale. That is considered a beneficial use.

The federal government estimates that there is 800 billion gallons of oil sitting below the Rocky Mountains. Getting at that oil is an unproven experiment, though. But if oil ever races up to $150 or more in the future, then suddenly it’s economically viable to pull the oil from the shale. And when that happens, oil companies like Exxon and Shell are ready.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.