Denver is a vital and politically volatile ingredient in the synthetic-fuel formula for American energy independence. Most of the effort to turn coal and oil shale into gaseous and liquid fuels to displace petroleum imports is coming along in the arid, intermountain West.
But water supplies are scarce, episodic, and the center of an elaborate institutional system tying Western water users into a veritable Gordian Knot of legal arrangements. Yet here too is an estimated 44 percent of the nation's recoverable coal and all of the oil shale.
"It's one of nature's ironies that these rich coal deposits are in areas that are water-deficient," Hugh Hudson of the US Geological Survey has observed.
"Water availability and quality will be among the most critical problems associated with expanded Western energy development," begins a draft report on this issue done by University of Oklahoma researchers for the Environmental Protection Agency.
"It's a sleeper, a real sleeper," agrees David Peebles, a water expert for the Western Governor's Policy Office. "It's like five people with a hamburger. Peter asks, 'Is there enough hamburger for me?' and the answer is, 'Yes.' Ruth asks, 'Is there enough hamburger for me?' and again the answer is 'Yes.' But when they all sit down at the table, they realize, 'Uh-oh. There's not enough to go around.'"
The fact is that synthetic fuels represent a substantial new water demand that will beadded onto a number of other, growing demands in this region. Rapidly growing populations, other energy and industrial water requirements, demands for maintenance of minimum stream flows for maintenance of minimum stream flows for environmental reasons, and Indian water claims are the backdrop against which synthetic-fuel requirements must be judged.
In the state of Colorado, for instance, the US Water Resources Council has estimated that water consumption in the year 2000 will have grown 5 percent for agriculture, 852 percent for electricity generation, 136 percent for manufacturing, 28 percent for domestic use, 20 percent for commercial use, 80 percent for nonenergy mineral production, and 44 percent for fossil fuel production.
Mr. Peeble's office has identified 42 potential synthetic-fuel projects which have been proposed for the Rocky Mountain West. If there are constructed over the next 15 years, as has been proposed, they would have a cumulative water demand of 600,000 to 740,000 acre-feet per year. The bulk of this activity would be in two river basins, the Upper Colorado and the Upper Missouri. And the Colorado River water is already overappropriated.
According to the University of Oklahoma researchers and other experts contacted, there is probably enough water available to support this activity: "Physical availability of water should not be a proble for energy development on a regionwide basis."
Yet there is general agreement that water availability will be a problem in certain areas: namely, central and northern Wyoming, southeastern Montana, western Colorado, and the Four Corners areas of New Mexico.
The water itself is just part of the picture, however. "Any analysis based strictly on the physical availability of water is seriously misleading," the Oklahoma study warns. "Water use in the Western US is a sensitive political and social issue, not simply a technical or economic one. Important issues concern the conflict between agricultural and industrial water use, Indian water rights, water quality, such as salinity levels, and environmental uses of water, such as maintaining minimum instream flows. Any of these issues can affect the future use of water, including that for energy development . . . ," the report continues.
An example of water's political potency here is the controversy that has held up proposals to ship coal by means of slurry pipelines from this area to the Midwest. Montana has declared that water used to slurry coal out of the state is not a "beneficial use" and so not deserving of water. Wyoming has passed a law requiring approval of the LEgislature before water can be exported out of state. And Colorado has agreed to allow such a pipeline to cross its boundaries , but only if it does not use any Colorado water.
"Because of water's scarcity and importance in this region, an elaborate legal system has grown up to allocate it. This is based on seniority -- the older the claim, the higher its priority -- and "appropriative rights" -- the water must be put to beneficial use for the right to remain valid. also, water rights are property rights: They can be bought and sold.
As a result, energy companies have already begun buying options on water rights, primarily those of farmers who use 80 to 90 percent of the water in this region. However, these transfers can be held up by extended litigation on the part of other water users in the area. In some states, industrial water rights are ranked at a lower priority than municipal and agricultural rights.
Thus, during time of drought, industrial users are cut off first. And there is a growing political sentiment in a number of states that the region's agriculture must be protected by restricting transfers of water rights to energy use.
One way to limit direct conflict between energy and other uses is to build more dams on the rivers in the area. However, President Carter's 1977 hit list of water projects, many in the Rocky Mountain West, and details of his national water policy have put a damper on development in this region.
This has led local representatives like US Sen. Gary Hart (D) of Colorado to argue that federal support for local water projects is a prerequisite for the level of energy development being promoted in Washington, D.C. Craig Bell, director of the Western States Water Council, believes the Reagan administration will prove more amenable to water development than its predecessor.
In some cases, the water projects being proposed would run afoul of enviromental considerations. For instance, parts of 12 rivers in the Colorado Basin are being considered for protection under the Wild and Scenic Rivers Act. Should these areas be included, water projects could not interfere with natural stream flows. Another potential problem is endangered species. One project in western Colorado, for instance, would destroy the habitat of one such species, the squaw fish.
Perhaps the most serious environmental consideration which the industry must face is the salinity of the Colorado River. The river's salt content is set by an international agreement with Mexico. Upper Basin states such as Colorado and Lower Basin states, namely California, are feuding over their relative contributions to the river's salt burden.
Irrigation is the major factor in increasing the Colorado's salt content. But the 2 to 3 percent increase in salinity predicted for synthetic-fuels development may require offsetting salt reductions, possibly by expensive desalination technology. However, there is also a possibility that synfuels plants could be used to reduce this problem.
"If you take a creative approach -- say, having the synfuels plants use salty return flows from agriculture -- they could actually help," Mr. Bell maintains.
Although they would not be needed until sometimes after the year 2000, ambitious proposals have been floated for interbasin and interstate transfers of water to meet the demands of a mature synfuels industry. Exxon, for example, has suggested piping water from the Missouri River in South Dakota to the oil shale fields in western Colorado.
A serious proposal of this sort would spark a bloody political battle, however, and Douglas Larson, executive director of the Western Interstate Energy Board, believes such projects are highly unlikely.
The various entangling factors centered on the use of the Rocky Mountain region's water for synthetic fuels will take some time to sort out. This has been a major factor behind the apprehension with which the area's leaders have viewed repeated federal efforts to develop domestic energy supplies in a precipitous fashion.
As a result, they perceive Mr. Reagan's recent proposals to scale down the activities of the Synthetic Fuels Corporation as a positive sign that the West's energy resources will be developed in the more deliberate and gradual fashion which they prefer.