ACQUISITION OF WATER FOR ENERGY AND MINERAL DEVELOPMENT IN THE EASTERN UNITED STATES
| Jurisdiction | United States |
(Sep 2012)
ACQUISITION OF WATER FOR ENERGY AND MINERAL DEVELOPMENT IN THE EASTERN UNITED STATES
Stephen J. Matzura 2
K&L Gates LLP
Harrisburg, Pennsylvania
R. TIMOTHY WESTON is a partner in the Harrisburg, Pennsylvania office of K&L Gates LLP, and practice group coordinator of K&L Gates' global energy practice group. With more than 40 years of experience in environmental and natural resources management, energy and infrastructure project development, and shale gas development, his practice includes representation of both private enterprise and public agencies in resource management, project development and regulatory matters. Mr. Weston previously served for eight years as Assistant Attorney General in the Pennsylvania Department of Environmental Resources, providing counsel for a wide range of natural resource and environmental protection programs, including the Pennsylvania State Water Plan and water resource management activities. From 1979 to 1987, Mr. Weston held the post of Associate Deputy Secretary for Resources Management in the Department of Environmental Resources, responsible for overseeing the water resources, engineering, and project development programs of the Commonwealth. During that same period, he was Pennsylvania's Commissioner on the Delaware, Susquehanna and Ohio River Basin Commissions, serving various terms as Chair of both DRBC and SRBC. Through the 1980's, Mr. Weston was a member of the International Joint Commission's Diversions and Consumptive Use Study Board, and later was a member of the drafting team that negotiated the terms of the Great Lakes Charter. He also served as a board member and Chair of the National Council on Water Policy, the association of state water resource administrators and managers. He was a member of the drafting and review group for the ASCE Regulated Riparian Model Water Code. A nationally recognized practitioner in the field of water law and natural resources management, Mr. Weston has published various articles in the field, including most recently: Water- Supply and Wastewater Challenges in Marcellus Shale Development, Energy and Mineral Law Foundation Conference Proceedings (May 2009); and Harmonizing Management of Ground and Surface Water Use Under Eastern Water Law Regimes, 11 U. Den. L. Rev. 239 (2008). Mr. Weston is 1972 cum laude graduate of the Harvard Law School, and received his B.A. in mathematics, with honors, from the University of California at Santa Barbara in 1969. He is admitted to the bars of Pennsylvania, the Third and Fourth Circuits and the U.S. Supreme Court.
I. WATER USE FOR ENERGY AND MINERAL DEVELOPMENT IN THE EASTERN UNITED STATES
The law governing the withdrawal and use of water in the eastern United States has evolved substantially from riparian-rights principles established under the common law of the individual states, transitioning (for the most part) to statute-based state and regional "regulated riparian" regimes. As judges and legislators benefitted from an increased understanding of hydrologic science, they adjusted legal principles in response to the pressures of rapid industrial development and population growth which characterized the 19th and 20th Centuries. That evolution continues as the 21st Century presents new challenges, whether related to increased water use for energy and mineral development or potential water scarcity induced by climatic conditions.3 In this changing landscape, perhaps the greatest challenge is to efficiently develop and utilize water for fuel extraction and energy production which, in turn, fuels society and the nation.
Large amounts of water are vital for many aspects of mineral extraction4 and energy production, from the hydraulic fracturing technique used to extract shale oil and gas to the
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cooling processes utilized at thermal power plants. It is difficult to obtain an accurate up-to-day estimate how much water is used for mineral extraction and energy production in the United States, which is a necessary predicate to quantifying water resources impacts.5 There is a growing consensus, however, that water withdrawals utilized to produce energy will impact water resources, even if no one can answer how significant the impact may be. The flip side of that coin is an increasing concern that unavailability of water may constrain future energy production, even in historically water-rich eastern states.6 Unlike the West, the eastern United States has historically enjoyed an abundant supply of water. Yet some eastern states have projected water shortages over the next several years at the local, state, and regional levels.7
Some federal studies provide a snapshot of water use in the United States by category. The United States Geological Survey ("USGS") conducts national water-use surveys every five years, with the results for use in 2010 due for release by 2014.8 Other groups, including the U.S. Department of Energy ("DOE"), have analyzed the impact of the so-called "energy-water nexus."9 In response to a mandate by the House and Senate Subcommittees on Energy and Water Development Appropriations, DOE reported to Congress in 2006 regarding the water demands of energy production.10
The DOE report recognizes that water is critical for power generation at fossil-fuel and nuclear thermoelectric power plants, among other sources of energy production. At thermoelectric plants, water is used to condense steam to turn turbines, scrub emissions, and wash and cool equipment.11 At nuclear power plants, water is also used for heating and cooling
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during the nuclear fission process.12 DOE's report indicates that, in the year 2000, 39 percent of all freshwater withdrawals in the U.S. were attributed to thermoelectric power generation, including nuclear plants.13 The latest USGS estimates indicate that in 2005 the quantity of water withdrawn for thermoelectric power totaled 201,000 million gallons per day ("MGD") (49 percent of the entire U.S. total), including 510 MGD from fresh groundwater and 142,000 MGD from fresh surface water.14 Eastern states accounted for 84 percent of all withdrawals,15 although many eastern power plants are built along rivers, streams, or the coast using oncethrough systems that typically consume less water than recirculating systems.16 The quantity of water actually consumed depends on the type of thermoelectric plant and the technologies used at a given plant.17 While some thermoelectric plants use once-through systems that return almost all of the withdrawn water to the source, most newer facilities consumptively use significant percentages of the withdrawal amounts through recirculating evaporative cooling processes.18 In 1995, total freshwater consumption by thermoelectric power plants totaled 3.3 billion gallons per day, or approximately 3.3 percent of the U.S. total (20 percent of all nonagricultural freshwater consumption).19 Assuming that use of recirculating evaporative techniques continues to expand (a trend driven by both thermal discharge concerns and Clean Water Act §316(b) entrainment/impingement avoidance standards), the DOE predicts that water consumption for electrical energy production could increase 7.3 billion gallons per day in 2030.20 This is problematic because, in the past, the energy-production industry has been constrained by droughts and other competing uses.21 Water availability issues have complicated construction and operation of power plants in the East and West alike.22
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The impacts of increased consumptive uses will be felt at the local, state, and regional levels. From a regional perspective, in 2008, the Susquehanna River Basin Commission ("SRBC") projected that consumptive uses of water in the Susquehanna River Basin would increase by 319.7 MGD by 2025, primarily because of power generation projects.23 Of this amount, approximately 134 MGD was attributed to power-generation facilities.24 Some of the highest consumptive uses in this watershed are for three nuclear power plants and a large coalfired power plant.25 In this watershed, the maximum SRBC-approved consumptive uses across all sectors totaled 563.1 MGD, with power generation accounting for 26.4 percent and mining accounting for 8.9 percent.26
In comparison to water use for power plants, withdrawals and use in the mineralextraction industry are relatively modest. Water is a major component of coal, oil-and-gas, and other mineral-extraction industries. For example, the coal industry uses water during deep and surface mining, transportation and storage of the coal, and the washing and refining processes, as well as to cool or lubricate equipment, suppress dust on access roads, and process fuel.27 USGS results for 2005 indicate that withdrawals for mining (including extracting solid minerals and oil and gas) totaled 4,020 MGD, representing about one percent of the U.S. total.28 Of this total, 1,020 MGD came from fresh groundwater, while 1,300 MGD were withdrawn from fresh surface water.29
In its 2006 report, DOE estimated that consumptive use from coal mining reaches 70 to 260 MFD (10 to 100 gallons per ton of coal mined).30 By 2000 standards, coal mining activities accounted for approximately three to 13 percent of freshwater withdrawals for all mining purposes.31 Ranges for conventional oil-and-gas operations vary from two to 350 gallons of water consumed per gallon of oil extracted.32 For oil shale, DOE estimated that recovery and
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processing consumes two to five gallons of water per gallon of refinery-ready oil.33 In contrast to conventional drilling, consumptive uses for extraction of shale gas are fairly significant. DOE's report did not analyze water uses from hydraulic fracturing in detail. Other estimates indicate that approximately one to five million gallons of water is required...
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