Coyote Gulch's Colorado Water
The health of our waters is the principal measure of how we live on the land. -- Luna Leopold



































































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Monday, December 10, 2007
 

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Here's the lowdown on the Pueblo Board of Water Works' offer for shares of the Bessemer Ditch, from The Pueblo Chieftain. They write:

Shareholders on the Bessemer Ditch met Saturday with representatives from the Pueblo Board of Water Works and Pueblo West to discuss details of an offer to buy shares on Pueblo County's largest ditch. About 200 people attended a two-hour meeting Saturday at the Pueblo Convention Center, which was closed to the press. There are about 900 shareholders on the ditch. "As far as the turnout, given the weather, it was what we'd hoped for, I think the information was well-received," said Alan Hamel, executive director of the water board, said later. "We're satisfied we got the information out."[...]

Questions at Saturday's meeting ranged from those who might sell water rights to those seeking to clarify points in the water board's solicitation, sent out last month to shareholders, to concerns by some shareholders who have no intention of selling. "There was some concern from those who don't want to sell about what happens as far as them getting their water," Hamel said. Meanwhile, a flow chart showing decision points was shown, helping to clarify when action was expected to take place. The formal 45-day period for purchase of shares or options has not yet started, and is still probably 30 to 45 days away, Hamel said. The water board also made a call-in phone line available to shareholders with questions and will set up personal appointments for any shareholder.

One of the big concerns about the water board's offer is the price. While shares on the Bessemer Ditch reportedly sell for $3,000 to $4,000 a share - the information is not publicly available - the water board and Pueblo West are offering $6,500 for immediate purchase and up to $8,500 over time. Some Bessemer shareholders believe the price should be $10,000 to $15,000 based on past speculation on the ditch and prices reported in other parts of the state. Each share of the Bessemer represents an average annual consumptive use of about 1.5 acre-feet (489,000 gallons), although the actual amount can vary from year to year. "There was some concern that the offer was not high enough," Hamel said. "I pointed out that we're looking at $750 to $1,000 per share in additional costs, and we're taking on all the additional risk." There also would be more risk to the sellers with selling to users outside Pueblo County, Hamel said. Moving the water outside the basin could create problems with the Arkansas River Compact between Colorado and Kansas. Moving water outside Pueblo County could mean problems with county land-use regulations under 1974's HB1041. Anyone moving the water also would have to look at the pumping and treatment costs associated with the transfer, Hamel said.

There are also problems with the existing bylaws of the Bessemer Ditch for sellers who are looking to cash in with a sale either to the water board or somebody else. A Nov. 16 letter from the Bessemer Ditch board of directors to shareholders noted that the board of directors must approve any change of point of diversion a year in advance, even if it's only between laterals on the ditch. Such a move could not injure other shareholders on the ditch and it would be up to the shareholder to pay in advance for legal costs and engineering showing no injury...

The Pueblo Board of Water Works and Pueblo West are offering Bessemer Ditch shareholders four different options in their attempt to purchase a controlling interest in the ditch. They are:

- $6,500 per share for an "outright" purchase. $8,000 per share for purchase in five years, with 20 percent paid at closing and 3.9 percent tax-free annual interest on four annual installments. Water could be leased back from a general pool for the Bessemer Ditch rate of assessment to allow continued farming.

- $8,500 per share for purchase in 20 years, with 10 percent paid at closing and 4.5 percent tax-free annual interest on 19 annual installments. Water could be leased back from a general pool.

- $8,500 per share for purchase in 20 years, with 10 percent paid at closing and 4.5 percent taxable annual interest on 19 annual installments. Under this arrangement, The farmer would be guaranteed a lease on the same shares sold, which requires tax payment on the interest.

More Coyote Gulch coverage here.

Category: Colorado Water
6:56:36 AM    


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Dirk Kempthorne is set to sign off this week on the drought management agreement the seven Colorado River Compact states have agreed to. Here's a look at droughts, past and future, from The Durango Herald. From the article:

The ashes from the last meal are still in the hearth some 700 years later. The menu was mostly wild plants and wild game - deer, pronghorn, a bighorn sheep. It was quite a change for these farmers who over the centuries had become experts at raising corn and turkeys on the dry mesas of Southwest Colorado. But in 1276, a drought hit. The crop failed. They ran out of turkey meat. Kristin Kuckelman has spent 19 years at the Crow Canyon Archaeological Center studying the ancestral Puebloan people. She has studied the desertion of Sand Canyon Pueblo, a village of 400 to 600, about the year 1280. She found that the pueblo lasted only about 25 years, but by the very end its residents had a change in their diet: from farming to hunting and gathering. It was an unusual shift. Times had been good. They had successful crops, and many babies. But as their civilization grew, they put themselves at risk by depending on one crop. Kuckelman thinks the village was abandoned by 1280, after attackers killed many of the inhabitants who tried to stick out the drought...

Seven centuries later, the climate seems to be changing again. The days are getting hotter, and the snow is melting faster. The North American growing season has extended an average of two days a decade since the 1950s, mostly because of springtime warming, according to the Intergovernmental Panel on Climate Change. The Southwest has been in a drought for seven years, and 2002 was one of the two or three driest years since the 1500s. That's not good news for the Colorado River Basin - which includes the Four Corners...

From Wolf Creek Pass in the southern part of the state to the Eisenhower Tunnel to Steamboat Springs in the north, all the water on the Western Slope eventually blends into the Colorado River. That water is governed by two forces: the Law of Nature and the Law of the River. Mother Nature decides how much water will be in the river every year. The Law of the River dictates who gets that water. The Law of the River dates to The Colorado River Compact of 1922, which divided the Colorado River into the Upper Basin - Colorado, Wyoming, Utah and New Mexico - and Lower Basin - California, Arizona and Nevada. The compact also governs southwestern rivers like the Animas and Dolores, which flow into the Colorado River...

On paper, Colorado should get 3.8 million acre-feet a year [From the compact] - giving the state more than 1 million acre-feet of surplus water. But the state's true share might be more like 2.6 million acre-feet, said Eric Kuhn, head of the Colorado River Water Conservation District, an organization set up by the Legislature to protect and develop the river basin. Once the Animas-La Plata project opens, Colorado will be using about 2.6 million acre-feet a year, Kuhn told Southwestern water experts in November. If he is right, then new water projects could push Colorado into violation of the 1922 compact, forcing people across the state to cut back on their water use. "If we want to have very low risk in our water supply, then there's none left," Kuhn said in an interview.

Amid talk of a shortage, some people are scrambling to get whatever is left. State demographers estimate 3 million people will move to Colorado within 30 years, mostly to the Front Range. To serve them, a Fort Collins man wants to build a 400-mile pipeline from Southwest Wyoming to the Front Range. A water district on the northern plains has plans for a 250-mile pipeline to send part of the Yampa River east across the mountains. International oil companies own massive rights in Western Colorado that they have never used, but could if they start mining for oil shale. If Colorado's share of the river is almost used up, any one of these projects could take the rest of the water legally available and limit the ability of people in Southwest Colorado to use more water...

The state engineer's office, which administers water rights, is studying ways to cut back water use in Colorado if the downstream states call for more. The Colorado Water Conservation Board has started a study, due by 2009, to figure out how much water we can expect from the Colorado River.

The debate gets at a fundamental question: Since water is the building block of any community, what kind of a civilization can we expect to have in this dry part of the world? Ken Wright, a renowned Denver water engineer, has studied the waterworks of ancient civilizations in Mesa Verde and South America. He discovered that once a reliable source of water disappears, civilizations tend to quickly fall apart. "I'm talking about empires that were prosperous and grew for 600, 800 years, and then collapsed overnight," he said. The South Americans were good engineers, like the ancestral Puebloans, but they were done in by long droughts and floods. "What happens is this: If you can't provide security and food for your citizens, they lose their loyalty to the central government," Wright said.

More Coyote Gulch coverage here.

Category: Colorado Water
6:43:00 AM    


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The Rocky Mountain News' series on the oil and gas industry in Colorado starts today. Be sure to read the whole thing. Here's a look at environmental concerns. From the article:

Inspector shortfalls: Activists and Western Slope residents have long complained that the state doesn't employ enough people to inspect oil and gas operations. Congressional investigators have criticized the Bureau of Land Management for a lack of personnel to ensure environmental protection. What's known: A 2005 report by the Western Organization of Resource Councils, a group that studies environmental policies, faulted Colorado and other Western states for having too few inspectors and weak enforcement of rules. It said the problem would only get worse as the gas boom continues unless personnel were added...

Cleanup money: Some critics question whether energy companies are required to set aside enough money to cover environmental messes in cases where a company skips out on cleanup work, does it poorly or goes out of business before it is completed. The concern is growing as the number of gas wells in Colorado skyrockets, possibly setting the stage for substantial cleanup work years and even decades from now...

Habitat fragmentation: Gas drilling has expanded into remote parts of the state, bringing with it roads, wells and other facilities that are fragmenting what have been wide-open regions where animals could migrate freely and gain access to winter nourishment...

Poaching/Roadkill: Oil and gas workers in remote locales have been caught poaching wildlife, and the building of new roads in once hard-to-reach areas has improved access for would-be poachers and joy-riders. Fast-growing and fast-moving truck traffic is leading to increases in roadkill...

Loosening rules: The Bureau of Land Management often grants exceptions to rules known as "stipulations," which are designed to protect wildlife from oil and gas development on public lands. The agency says it grants exemptions only when it won't harm wildlife, but wildlife advocates say the stipulations are routinely waived...

Ozone formation: Oil and gas production increases emissions of so-called volatile organic compounds, or VOCs. Those compounds, when exposed to sunshine and hot temperatures, form ground-level ozone, a pollutant that harms the lungs and makes breathing more difficult, particularly for those with existing respiratory conditions...

Hazy air: Heavy engines that run drill rigs and compress natural gas into pipelines, as well as engines associated with the heavy trucks that work the gas fields, generate nitrogen oxides and tiny particles, both of which can create hazy skies that affect views in wilderness areas, forests and national parks around drilling areas...

Toxic exposures: Chemical emissions from tank clusters, wells, leaks and other gas and oil facilities can become temporarily trapped in the rugged landscape of northwest Colorado, settling into troughs where rural homesites sit. Those chemicals could be responsible for a variety of ailments afflicting some residents of affected areas, from headaches to skin rashes to more serious issues...

Faulty wells: When wells are drilled to access gas deposits, poor construction, well blowouts and uncertain geological conditions can lead to contamination of aquifers, streams and water wells. Old, poorly plugged wells, or those with aging concrete, also can lead to contamination of water supplies...

Fracing fluids: Companies use secret chemical brews to fracture deep underground rock formations and liberate trapped natural gas, a process known as fracing (pronounced "frakking"). Critics, including some Environmental Protection Agency regulators, worry that the chemicals could escape the wells and underground formations and contaminate drinking water supplies. But industry officials and the Colorado Oil and Gas Conservation Commission maintain there is no evidence of a problem. A COGCC official said none of the 38 instances of known water well contamination associated with drilling involved fracing...

Stormwater runoff: Gas companies scrape off several acres of land to create sites for wells, roads and other facilities. The work exposes bare soil to wind and rainfall. Storms create flows that send dirt into waterways, degrading water supplies and threatening habitat and spawning areas for fish...

Water losses: When drillers pump out groundwater to free up methane gas, some farmers and ranchers say they are lowering the water table, threatening to dry up natural springs and drain aquifers. The water pumped out is sometimes reinjected into deep wells, cut off from drinking water supplies...

'Produced' water: Water pumped from underground during natural gas production can contain hazardous chemicals, including fracing fluids. If not properly disposed of or treated, the water can pollute streams, aquifers, soil and air. Water pumped to free coal-bed methane can be high in salts, which can harm soil and crops if used for irrigation...

Leasing public lands far ahead of production: The Bureau of Land Management is leasing public land in Colorado and the West for oil and gas development, even as millions of acres of already leased land sits idle, waiting for industry to drill. Advocacy groups say the BLM should slow down leasing, especially on more popular landscapes...

Sensitive lands: The BLM and U.S. Forest Service have proposed oil and gas leasing in scenic landscapes, including several that are in areas citizens have proposed be set aside as protected wilderness areas or are within roadless forest areas -- areas home to rare plants and animals and sites popular with hunters and hikers, such as the Roan Plateau, the Vermillion Basin and the HD Mountains...

Restoring the land: When lands are carved up for roads, well sites and other facilities, they aren't always properly restored. Sometimes companies don't properly recontour the site and native vegetation isn't restored. As a result, the site erodes and noxious weeds invade.

Raiding the oil and gas severance tax fund is a regular occurrence, according to The Rocky Mountain News. From the article:

In the early 1980s when legislators needed money to run the state, they borrowed millions of dollars in mining and energy tax money deposited in a newly formed trust fund. The money was never repaid. During two more recent recessions, in the late 1980s and early this decade, they again raided the funds to keep the state afloat. And when the state needed $35 million to settle a water dispute with Kansas, they used severance tax revenue. Now, while neighboring states have multibillion-dollar trust funds from energy taxes, Colorado has little socked away. "There's a hunger for money in this state and people are always going to go look at the easiest place they think they can get it from," said Stan Dempsey, president of the Colorado Petroleum Association. The severance tax on mining and energy exploration was passed in 1977, in part to raise money for a "perpetual fund" to help mitigate impacts when the minerals, oil and gas are gone. But the original legislation did not constitutionally protect it from raids by lawmakers and governors as it is in neighboring states. As a result, according to a Rocky Mountain News analysis of state spending, the fund is far from perpetual.

Here's an article focusing on oil and gas operations in La Plata County from The Rocky Mountain News. They write:

A methane gas explosion rocked a mountain outside Durango in June 1932, spewing rocks and causing landslides. In the mid-1990s, Amoco bought a half- dozen homes near Bayfield that had been infiltrated by methane gas. Methane gas continues to percolate in several creeks north of town. In 2005, Charles Yoakum turned on his gas stove and blew up his trailer south of Durango that had filled with methane gas leaking from an abandoned well. He spent six months in the hospital recuperating. Today, signs along the Animas River across from the new Wal-Mart in Durango warn pedestrians about a noxious gas byproduct of methane. In La Plata County in southwest Colorado, methane gas is both a source of wealth and an unpredictable environmental threat. "The horse is out of the barn. There is no way we know of right now to stop it," said Mike Matheson, the consulting geologist for the county. "They (methane gas seeps) will continue for at least 300 years." Because of its unique geology, La Plata County has a long history of energy exploration. Most of the southern half of the county is astride the San Juan Basin, where coal seams and methane gas deposits are joined.

Great job Rocky. More Coyote Gulch coverage here, here, here and here.

Category: 2008 Presidential Election
6:12:59 AM    


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Here's an article that attempts to look into the future of Summit and Grand Counties with respect to Denver Water's deal a couple of weeks ago to forego developing water rights on the Eagle River, from The Summit Daily News. From the article:

A recent deal between Denver Water and Eagle County won't have any immediate effect on reservoir operations and trans-divide diversions in Summit County. But the agreement could ramp up the pressure to export more water from Summit County in the long run - or it could provide impetus for an overall settlement that balances West Slope and Front Range interests. "Anytime something like that happens, it puts a bigger bulls eye on Summit and Grand County," said County Commissioner Tom Long. "It's just a matter of time before they Denver Water) look to start maximizing and exercising their water rights here," Long said.

Under the agreement, Denver Water relinquished long-held rights to water from streams flowing out of the Eagles Nest Wilderness, on the Eagle County side of the Gore Range, including the Upper Eagle River, the Piney River and Turkey Creek. Plans for developing that water included a pipeline through the Gore Range to North Tenmile Creek and into Dillon Reservoir, for export to the Front Range via the Roberts Tunnel...

Not everyone thinks that the Eagle County deal will result in more pressure on Summit's resources. "The settlement is one piece of the puzzle in the global negotiations with Denver," said attorney Glenn Porzak, an instrumental player in the complex game of Colorado water poker. What the deal does do is put Summit County in the "driver's seat" when it comes to other related projects that could be part of an overall West Slope-Front Range settlement, Porzak said. Those projects include schemes like a proposed Blue River pumpback, carrying water from Green Mountain Reservoir back upstream to Dillon Reservoir, as well as a possible reservoir near Wolcott, in Eagle County. The Eagle County agreement could provide some momentum for moving forward on these other plans. In the long run, it could be part of a comprehensive settlement that will benefit Summit County by helping ensure water levels in Dillon Reservoir for the important summer recreation season, as well as providing some additional yield for local use. Dave Little, Denver Water's manager of water resource planning, also said the recent deal with Eagle County has to be seen as part of a larger picture with many moving parts. Little also singled out the Blue River pumpback and Wolcott Reservoir as key pieces to solving the overall puzzle of how to equitably divide Colorado's limited water supplies.

More Coyote Gulch coverage here.

Category: Colorado Water
5:59:22 AM    



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