$10 for 3.2 billion gallons of water? A loophole in Utah law could enable the country’s first commercial oil mining operation.

Millions of years before dinosaurs went extinct, what is now Utah was submerged by a broad, shallow sea. Over millennia, as the water receded and tectonic plates shifted, rich organic marine material accumulated, forming thick layers of sediment that eventually became the fossil fuel deposits of the Uinta Basin in the northeastern part of the state. The formation is estimated to hold as many as 300 billion barrels of oil — more than the proven oil reserves of Saudi Arabia.

The basin’s immense oil-producing potential remains largely untapped. Drillers in the Uinta Basin extract about 65,000 barrels of oil per day, or just over 1 percent of the more than 5 million barrels drilled daily in the Permian Basin, which straddles West Texas and New Mexico and is the country’s most productive fossil fuel reserve. One of the biggest hurdles is the waxy and viscous quality of Uinta oil, which is so thick that it needs to be constantly heated to keep it liquid. The deposits are also trapped in tiny pores between rocks and more widely dispersed than other shale formations in the country. As a result, oil drillers have been tepid in exploring the basin, despite high gas prices and calls to boost American oil production. 

A state-owned company from the tiny Baltic nation of Estonia wants to change that. The company, Enefit American Oil, has proposed strip-mining 28 million tons of rock, heating them up to temperatures around 1,000 degrees Fahrenheit, and extracting a type of synthetic crude oil. Enefit plans to operate on about 7,000 acres of desert land just south of Dinosaur National Monument and produce 50,000 barrels of oil per day, almost doubling the entire basin’s production. Its novel oil extraction method is also reportedly up to 75 percent more carbon-intensive than traditional fossil fuel extraction. No operation of its kind currently exists in the United States.

But Enefit’s grand plans hinge on one crucial resource that’s in short supply all over the American West: water. The operation needs millions of gallons a day to break up the petroleum-carrying rock and extract oil. In 2011, the company purchased a water right for approximately 10,000 acre-feet — or 3.2 billion gallons — of water from the White River, a tributary of the Green River which flows into the beleaguered Colorado River.

https://grist.org/energy/enefi...

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