Sunday, November 25, 2007

Energy policy: Hydroelectric Here's a look at a shiny new micro-hydroelectric plant installation in Pitkin County from The Aspen Times (free registration required). They write: Rancher and local developer John McBride walked over to his electric meter Tuesday afternoon and pointed to the numbers ticking backward, as electricity was fed into the grid from his new micro-hydroelectric plant. The custom-built system works both as gravity-fed irrigation and as a power plant -- producing up to five kilowatts of electricity per hour. The idea behind it is simple, utilizing the gentle slope of McBride's Capitol Creek property in Old Snowmass, but revolutionary for rural properties in the West... McBride estimated that the hydro plant on his ranch will be a money maker in two to three years. Half of the $20,000 initial investment was repaid by McBride's energy company, Holy Cross, as a benefit for becoming a small power producer, and Holy Cross then buys excess energy from McBride... With rising energy prices, the idea has been gaining steam, and Pitkin County commissioners are pondering a code amendment that will make it easier to build micro-hydroelectric plants. For many spots in the valley, commissioners would have to pass an amendment to the land-use code that allows for building on steep slopes near water. Apart from some larger plants, the city of Aspen has a small hydroelectric facility at Maroon Creek, and plans are underway to revamp a 19th-century facility at the base of the Castle Creek Bridge. However, it's plants like the one proposed by Bruce FaBrizio on Brush Creek, that would spring up if Pitkin County passed the amendment. When running at full capacity, the plant will generate 32 kilowatts of electricity per hour, enough to light up 12 average-sized homes. The intake for McBride's micro-hydro plant is about 250 vertical feet above where the plant is situated. Every two and a half feet of vertical adds another pound per square inch. Hence, the power plant is basically a small turbine powered by water under pressure of 100 pounds per square inch. "There are a lot of people here who have the water to produce hydro-power," said Jose Miranda, a senior manager at Carbondale's InPower Systems. "For the people who have the water, you can produce a lot of energy." Miranda, a solar engineer by background, pointed out that solar can only collect sunlight for so many hours a day, while hydro provides output 24 hours a day. So a two-kilowatt solar system produces roughly half or less of the energy of a two kilowatt hydro system. As water goes down the valleys near Aspen, the vertical drop can be substantial, leading to the possibility of numerous small plants. If the county code passes, the code amendment could clear the way for dozens of hydroelectric plants in the area, and that doesn't even include folks like McBride. More Coyote Gulch coverage here. Category: 2008 Presidential Election 8:37:33 AM     Energy policy: Oil and gas Halliburton was on hand at a recent meeting of Bureau of Land Management's Southwest Colorado Resource Advisory Council to explain hydraulic fracturing (frac'ing) and hopefully allay some of the concerns for neighbors of oil and gas operations, according to The Telluride Watch. From the article: The Bureau of Land Management's Southwest Colorado Resource Advisory Council met Friday, Nov. 16, at the Devil's Thumb Golf Course in Delta. The RAC provides direction and support to the BLM and includes citizens and elected officials, as well industry representatives, environmentalists, OHV enthusiasts, and recreationists. The agenda included a presentation on hydraulic fracturing by Halliburton, Inc.; a presentation by the Tamarisk Coalition, and reports from field managers of various BLM districts in southwest Colorado. Halliburton Technical Manager Mike Eberhard presented the company's version of hydraulic fracturing, a process used in natural gas recovery throughout Colorado. The source of much controversy, frac'ing, as the process is commonly known, involves the injection of frac'ing compounds, usually water and friction-reducing additives, into gas-bearing layers of rock in order to fracture the rock. Fluidized sands are then pumped into the fractures in order to open them up, allowing trapped gas to escape. The controversy around frac'ing tends to involve the types of chemicals used by drilling companies (not usually disclosed due to proprietary concerns) and allegations of aquifer contamination by those chemicals. Eberhard explained that a drill bore -- the hole drilled to access gas-bearing formations, usually 13-5/8 inches at the surface -- is encased, or cemented, throughout its length to isolate the bore and its contents from aquifers. In addition, he said, gas-bearing formations are often much deeper than water-bearing formations, anywhere from several thousand to 30,000 feet deep in some regions. Eberhard took pains to explain that the chemicals used in frac'ing are nothing more than household chemicals such as you might find in laundry detergent, window cleaner, even ice cream. Guar, for example, used primarily by the food industry, is used to thicken the fluid so that the sands are carried farther over the horizontal distances used in modern directional drilling techniques. Other frac'ing chemicals include biocides (to eliminate guar-loving bacteria) and friction-reducers to make pumping easier at great depths... One audience member questioned the validity of reports that diesel fuel is one of the fluids used in frac'ing compounds. Eberhard replied that Halliburton prides itself on being "a zero-diesel company," but verified that diesel is used in some operations as a guar carrier. He also volunteered the information that Napalm was one of the first carriers used -- "but not any more," he said. When the fracturing and propping processes are completed and the pressure is released from above, frac'ing fluids return to the surface while sands remain in place. Eberhard stated that up to 50 percent of the frac'ing compound remains in the rock, usually trapped in its pores. Gas recovery declines sharply within the first year as pressure is released within the gas-bearing formation. Fluids that return to the surface are treated with biocides and reused. Recovered fluids are kept in lined surface pits or steel tanks and include naturally contaminated fossil waters released along with the gas. Category: 2008 Presidential Election 8:03:55 AM     Augmentation on the South Platte Here's a look at early work on an augmentation plan for 8 well owners on the Julesberg table hoping to pump next spring from The Sterling Journal Advocate. From the article: The owners of eight irrigation wells on the Julesburg table had their wells shut down in the spring of 2006. They are trying to find a way to get their wells operating again for the 2008 growing season. 0n Tuesday, two of the well owners, Dave Carlson and Ken Hodges, came to the work session before the meeting of the Lower South Platte Water Conservancy District seeking assistance. They hope to be able to use their wells by April or May, and need an augmentation plan for their eight wells. The LSPWCD has a decreed augmentation plan that has been approved in water court, and has also helped other well owner groups obtain their decrees. Jon Altenhofen from the Northern Colorado Water Conservancy District, who was instrumental in developing LSPWCD's Tamarack augmentation project near Crook, was at the meeting. He often serves as an advisor concerning well augmentation. Joe Frank, manager for the LSPWCD, said the well owners basically have two options. "They can get into an existing plan and pay back some of their past depletions, or start their own deal -- which would require specialty contracts," Frank said. There was general agreement that the specialty contracts would cost more money and take longer. "I think they need at least one aug well to make it work, for next summer at least, until the Hayborn project gets up and going," Altenhofen said. "You've got to show you've got your water supply," he told Carlson and Hodges. "Once that Hayborn project gets up and running, there will be plenty of water," Frank said. Category: Colorado Water 7:37:37 AM     More water storage for Colorado? Here's a look at the effects of the 2002-2005 drought in Colorado and water supplies with an eye towards future needs from The Colorado Springs Gazette. From the article: The drought, which lasted roughly from 2000 to 2005, drained reservoirs, fed the state's largest wildfire, stoked a devastating forest beetle infestation and wilted farms. For many Coloradans, it was their first true experience with what it means to live in a semiarid climate. For Front Range water providers, it was a stunning wake-up call that their water supplies were stretched perilously thin. As the sense of crisis ran high, the state, lawmakers and water providers began a series of studies and discussions. There was a lot of talk about how to capture more water coming off the mountains and where to store it. Eyes turned east toward irrigated farmland and west toward the state's headwaters in search of more water to support Front Range growth that even the drought couldn't slow. Water providers, including city-owned Colorado Springs Utilities, sought to spark conservation by imposing watering restrictions and tiered water pricing. Individual water users responded well to the crisis, a recent study found. Water providers and government officials? Less so, say some experts... A recent survey by Boulderbased Western Resource Advocates showed residents of the largest cities in Colorado cut their water use by an average of about 15 percent from 2000 to 2006. Colorado Springs residents, according to the survey, slashed their per-person, perday water use more than any other Front Range residents, a whopping 32 percent from 2000 to 2006. Ann Seymour, water conservation manager for Colorado Springs Utilities, thinks local residents have embraced the notion they must conserve water, drought or no. In fact, the utility recently released for public comment a more ambitious conservation plan for the years 2008 to 2012. It increases conservation education programs, focuses on water savings by commercial and industrial water savings and suggests some modest regulations. The proposal projects enhanced conservation efforts will save about 29.7 billion gallons by 2017, which would translate to 7.6 percent of the utility's annual water production... "Conservation is critical, but it is not the solution by any means," said hydrogeologist Julia Murphy, owner of Colorado Springs-based Groundwater Investigations. Murphy said large water providers who depend on surface water, those that supply water from aquifers under the Front Range and individual well users on the plains all face different challenges. But she said the drought should have sent a clear message to all of them: "Our reservoirs are inadequate to address the demands." Building new reservoirs or even expanding existing reservoirs is fraught with political, financial and legal hurdles. Many experts are toying with the idea of storing excess water in underground aquifers. Colorado Springs Utilities is experimenting with the concept in the Denver Basin. The caretakers of Upper Black Squirrel aquifer, which supplies water to much of eastern El Paso County, are interested in the Cherokee Water District recharging the dwindling aquifer with treated waste water. And promising underground storage sites have been identified elsewhere on the Front Range. Still, today the technology is more promise than reality... The drought and subsequent studies, Murphy said, highlighted the need to capture all the water the state is entitled to under compacts with other Western states and build the pipes and pumps needed to convey it to the Front Range, particularly to groundwater users now tapping the nonrenewable Denver Basin aquifer. So far, she said, there's been little progress beyond simply talking, with divisions still evident between various water users. Murphy has seen it first-hand as a member of the Metro Roundtable, one of nine groups established statewide and charged with finding solutions to Colorado's water problems... Although legislation enacted during the drought makes it easier for water providers to lease water from willing farmers, few are eager for the public reaction if the eastern third of the state was gutted to feed suburban sprawl. And neighbors to the west who have seen water diverted to the Front Range for years are reluctant to see more flow out of their basins unless they benefit from a project. Murphy, unlike some experts, thinks additional water will come from the west, not the east. She says it's crucial for Colorado's future to bridge the gap between those who have the water and those who need it... One question seldom asked is whether the state can sustain its rapid growth in the face of water problems. Neither the El Paso County Commission nor the Colorado Springs City Council has shown any desire to dampen the housing growth that has led, in part, to the proliferation of rural wells and the city's proposed $1 billion pipeline and reservoir project called the Southern Delivery System. Even if growth slows during the next two decades, Colorado is flirting with a water crisis should drought reappear, experts say. Category: Colorado Water 7:22:08 AM     Colorado to investigate conservation easement appraisers along with certain tax credit investment funds The Denver Post has dug a bit deeper into the investigations into conservation easements. From the article: A state investigation into possible abuses of the conservation easement program is focusing on deals involving five ranches and an Arvada land trust. The investigation aims to ensure that the federal government and cash-strapped Colorado aren't losing out on millions of dollars in tax revenue. Documents obtained by The Denver Post show the investigation involves transactions in which Noah Land Conservation, based in Arvada, and Denver tax attorney Rodney Atherton were participants. Of the five ranches, two are in Adams County, and the other three are in Arapahoe, Elbert and Huerfano counties... Abuse of the program can occur when landowners obtain excessively high appraisals for property they place in easements, allowing them to take higher tax deductions and obtain more tax credits than they would otherwise get... The Division of Real Estate also subpoenaed records from Noah Land Conservation, now called Colorado Natural Land Trust, which has about 200 parcels under easement, said Paul Geer, president of the trust's board. "We feel pretty comfortable with everything that is going on," Geer said. "We've got nothing to hide, so it's fine for someone to come in and look at our records." The people being subpoenaed include investors in the five ranches. Each investor bought a ranch parcel sized anywhere from 23 acres to 244 acres between 2005 and 2007. After their parcels were appraised, the investors put conservation easements on their land through Noah... Documents obtained by The Post include a list of transactions that are being investigated and a business plan for a company managed by Atherton. The business plan lays out how the investment process works -- and explains the potential for a big payoff. The document shows how the company is seeking investors for a sixth ranch in Adams County, and explains how investors can put land under conservation easements. Atherton said the previous five deals were structured in a similar way but with less valuable tax credits. In one case, the investment vehicle for an Adams County ranch was a hunting club established through the Bluffs Destination Resorts, Atherton said. The deal described in the business plan involves a company called Rural Broadband Solutions II LLC. The plan outlines how 16 investors in an Adams County ranch will realize a nearly 400 percent return on an $80,000 investment through the sale of wireless franchises, the sale of water, land development and the use of conservation easement state tax credits. The $80,000 investment gives each investor about 60 acres of property east of Brighton and north of Bennett. Rural Broadband, which purchased 1,280 acres in Adams County earlier this year, describes the property as "in the current path for development." Investors are encouraged in the document to donate conservation easements to Colorado Natural Land Trust. It also proposes to use a "conservative appraiser that has significant experience with appraising conservation easements and has had IRS scrutiny of its appraisals and appraisal process." By putting the easements on their land, investors are told they will receive an $850,000 federal tax deduction and a Colorado tax credit of about $375,000, the maximum allowed under the law, according to the document. The tax credit likely could be sold for about $300,000. The company says the figures used in its calculations are based on preliminary indications from an appraiser. So far, no conservation easements have been filed by the company or any of its members, and no appraisals have been done, Atherton said. "We came up with a development concept that was smart for the community," he said. "We're going to develop some ground and leave some as open space." In order for a member to receive the $850,000 tax deduction on the 60 acres, the land must be appraised at that amount, or about $14,167 an acre. But Jim Capecelatro, a land broker at Fuller Real Estate, said without unique amenities, it would be difficult to justify prices of more than $5,000 an acre. "It's definitely (agriculture) out there," he said. "That is not in the path of development." Colorado Natural Land Trust started in 2000 as Noah's Crib, a group that mentored children coming out of the juvenile prison system. It received two conservation easements in 2002 and another in 2003. Shortly thereafter, it split into two entities: Noah Land Conservation and Angel Spring Mission, which serves Ridge View Academy, a youth corrections facility near Denver, tax records show. Noah Land Conservation changed its name to Colorado Natural Land Trust earlier this year. The Division of Real Estate isn't the only agency investigating conservation easements. Of more than 400 tax returns involving conservation easements that the IRS is investigating nationwide, 290 are in Colorado. About 60 of those were initiated at the request of the Colorado Department of Revenue. More Coyote Gulch coverage here. Category: Colorado Water 7:03:11 AM

© Copyright 2007 John Orr. Last update: 12/1/07; 10:37:06 AM.