Tuesday, November 11, 2008

Coloradans asked to urge water providers to practice good stewardship Here's a letter expressing concern over the Windy Gap Firming Project (Northern Colorado Water Conservancy District) and Moffat Tunnel project (Denver Water), written by Drew Peternell in the Denver Post. As the state's leading coldwater fisheries conservation group, Trout Unlimited shares the concerns expressed in Gretchen Bergen's commentary about the potential impact of the Windy Gap and Moffat Tunnel water diversion schemes on the health of the Colorado and Fraser Rivers and the wildlife and communities that depend on them. The Northern Colorado Water Conservancy District and Denver Water Board, respectively, are proposing these projects to bring additional water across the Continental Divide from Grand County to serve population growth on the Front Range. Every Coloradan has a stake in the healthy flow of our rivers and streams. As Bergen noted, if you dry up the rivers, you don't just hurt fish and wildlife -- you also dry up key sectors of the economy and kill jobs. Grand County, with its heavy dependence on agriculture and recreational tourism, will be especially hard hit if the Colorado and Fraser, which already bleed tens of thousands of acre-feet of water annually to the Front Range, are further depleted. He adds a call to arms to Coloradans: Coloradans should also insist that their water providers practice good stewardship. Let your water utility officials know that you care about Colorado's rivers and wildlife, for today and for future generations. Contact Denver Water at 1600 W. 12th Avenue, Denver, 80204; and Northern Colorado Water Conservancy District at 220 Water Avenue, Berthoud, 80513. You can also submit comments on Northern's Windy Gap project by Dec. 29 to Will Tully, Bureau of Reclamation, 11056 W. CR 18E, Loveland, 80537. More Coyote Gulch coverage here and here. Category: Colorado Water 8:30:09 AM     Conservation easements: New state commission hears complaints at meeting in La Junta The shiny new Conservation Easement Oversight Commission -- scheduled to start reviewing conservation easements on January 1st -- got a jump on the problem Monday at a hearing at Otero Junior College in La Junta, according to Chris Woodka writing in the Pueblo Chieftain. From the article: Frustrated landowners want the state to call a time out on conservation easements and fix problems they say were created by laws that encouraged donation of the easements without a procedure to track and stop abuses... [Jim Butcher, a Pueblo subdivision developer] was just one speaker in a parade of woeful tales that have grown from conservation easement audits by the Internal Revenue Service and Colorado Department of Revenue in recent years. About 30 people from a crowd of more than 100 addressed the newly formed Conservation Easement Oversight Commission Monday at Otero Junior College. Commission Chairman Dan Pike said there may be more than 200 easements in Southeastern Colorado under scrutiny. Erin Toll, director of the Colorado Division of Real Estate, explained the commission was formed in July to sort out the worst abuses of conservation tax credits... State and federal lawmakers who attended the meeting said they believe there are ways to fix the problem short of scrapping conservation easements altogether. "I would make a recommendation the commission ask the Department of Revenue and IRS that the ranchers who made easements be left alone," said U.S. Rep. John Salazar, D-Colo. "I do represent the heart and soul of America." Salazar said he will continue to put pressure on the IRS, adding that federal conservation programs need to continue encouraging wise use of resources in order to help farmers stay in business... Nearly all of the stories of landowners told Monday followed the same script: The landowners obeyed the rules, spent tens of thousands of dollars on experts, and gave up future development rights for activities like subdivisions or gravel mining that they saw happening all around them. Most talked about protecting the land for future generations, the water or the lifestyle and downplayed the money. Far from making a killing, many are at the end of the rope financially and grasped at conservation easements as a last-gasp lifeline. Those who sold the tax credits and faced audits were told their easements were worth nothing, or only a fraction of the value listed, and some are now looking at penalties three times greater than the money they received. Jillane Hixson told the commission about her family's decision in 2003 to donate a conservation easement on 150 acres of property south of Lamar, next to a golf course and across the road from a housing development. They looked at it as a way to save a 100-year-old farm. The family, already maxed out on credit, borrowed $70,000 to pay for the easement, thinking they were well within state rules. An IRS evaluation determined the easement was flawed, and essentially worthless. The family is appealing the decision, but could wind up paying $200,000 in penalties and interest. That could put the entire 3,000-acre family farm at risk. "For three years, I have jumped at every beck and call of the IRS and the state of Colorado," Hixson said. "To add to the 'joy,' now those who purchased my tax credits are suing me. To say that this has been stressful is an understatement. . . . I can't tell you the countless nights I've stared at the ceiling, in great angst, contemplating that by a stroke of a pen, I have wiped out the life work of grandfather, father and my brothers."[...] Numerous speakers echoed the sentiment that Southeastern Colorado is being singled out as lacking value, despite the fact that landowners were told just the opposite by foundations, lawyers, engineers and real estate professionals. Update More coverage from Jerd Smith writing in the Rocky Mountain News. From the article: [Jillane Hixson] and dozens of other landowners in the Lower Arkansas Valley are deeply angry with the state because they've invested thousands of dollars in legal fees, appraisals and habitat studies to comply with state conservation easement law, only to have their tax credits invalidated by taxing authorities. The landowners are calling for the state to suspend the conservation program, while upholding easements granted between 2003 and 2007, before a comprehensive reform program was enacted... Colorado launched the easement program in 2000, but until this year, there was no state oversight of the program, and millions of dollars in improper easements and tax credits were granted. Many used super-inflated appraisals to boost the value of the tax credits or protected lands of questionable public value. Still others allowed gravel mining and oil and gas development, a violation of the IRS code. Hundreds of transactions are being investigated by the Colorado Division of Real Estate, and the Colorado Attorney General's Office has convened a criminal grand jury to investigate several land trusts, appraisers and attorneys. However, landowners here say the state must step forward to honor their transactions. U.S. Rep. John Salazar, who represents the region, said Colorado may need to suspend the program or at least grandfather in easements of landowners who made a good-faith effort to comply with the law. But John Stulp, Colorado commissioner of agriculture, said it will be difficult for Colorado to enact any across-the-board fix because problems are different across the state and different land trusts and appraisers are involved... Jim Butcher, a landowner from Pueblo, is holding several tax credits that he can't sell, not because he did anything wrong but because the program has become so tainted that the market for the credits is drying up. Butcher said Colorado needs to admit it set up the program poorly and help landowners who have permanently forfeited their development rights. More Coyote Gulch coverage here. Category: Colorado Water 8:15:10 AM     Energy policy: Biofuel from algae From the New York Times (Matthew L. Wald): "A Colorado company will break ground early next year on an algae farm that is intended to produce thousands of gallons of substitutes for gasoline and diesel at a rate per acre far higher than current biofuel projects. Solix Biofuels, of Fort Collins, said on Monday that it has raised $15.5 million in capital and will begin with a five-acre plot to produce 'biocrude.' That will in turn be shipped to an oil refinery in place of crude oil, according to Douglas R. Henston, the company chief executive. Investors include on the Southern Ute Indian Tribe, on whose reservation, near Durango, the farm will be located; Valero Energy Corp., the refinery operator; and Infield Capital, an investment fund." From the Solix website: Algae production does not compete with agriculture. Algae production facilities are closed and do not require soil for growth, use 99% less water than conventional agriculture [ed. emphasis added], and can be located on non-agricultural land far from water. Since the whole organism converts sunlight into oil, algae can produce more oil in an area the size of a two-car garage than an entire football field of soybeans... Algae thrive on a high concentration of carbon dioxide. And nitrogen dioxide (NO2), a pollutant of power plants, is a nutrient for the algae. Algae production facilities can thus be fed exhaust gases from fossil fuel power plants, and even breweries, to significantly increase productivity and clean up the air. Update More coverage from the Fort Collins Coloradoan (Cari Merrill): Fort Collins-based Solix Biofuels announced this morning it will build an algae biofuel facility near Durango. The company that focuses on creating biofuels from algae has raised $10.5 million in its first round of outside funding and has a $5 million commitment from investors to be used to build the facility. The Durango facility will be a significant advancement, providing the capabilities to produce thousands of gallons of algae-based biofuel at a rate per acre higher than current projects, according to the company. More Coyote Gulch coverage here. Category: Climate Change News 8:01:11 AM     Energy policy -- oil and gas: Methane levels rising in domestic water wells in Garfield County Methane levels in groundwater near Silt is a concern and the levels are rising, according to a report written by Philip Yates in the Aspen Times. New Colorado Oil and Gas Conservation Commission rules passed last year are designed to take into consideration the effects on groundwater supplies from development. We'll see. From the article: An analysis of about 700 water samples from 100 water wells and other water sources south of Silt and Rifle shows an increasing presence of methane, according to a consultant who reviewed the data. Geoffrey Thyne, a geology professor at the Colorado School of Mines, said the level of methane detected in those samples, collected over a five-year period, may indicate the presence of natural gas and produced water in area water wells. While produced gas and water may be impacting area wells, it is happening at levels below where the Colorado Oil and Gas Conservation Commission may take possible regulatory action, Thyne said. The impact that methane -- which is a primary constituent of natural gas, according to the Environmental Protection Agency -- may have on area wells is expected to increase as more drilling occurs in the area, Thyne told Garfield County commissioners on Monday. "I think there is a reason to worry about continued development without taking into account what we already know," said Thyne, adding there are now about 1,000 wells in the area he analyzed. "We are seeing a slowly building problem with the more wells we put in. The question is how many wells do we put in?"[...] Thyne, who was hired by the county to review the water data, said his analysis of water samples showed some samples that had greater than 1 part per million of methane and that seem to be related to the 1,000 natural gas wells in the area. He added that most of the high methane concentrations occurred in the central part of the study area, while similar high concentrations were found in the southeast study area. "All wells leak slightly," Thyne said. "Water wells show higher levels of methane because of that." While state oil and gas regulators largely think the high presence of methane may be a false-positive, or mostly a naturally occurring phenomenon, he disagrees with that interpretation. "Most of the domestic well methane [impacts] we see is from produced gas, not from natural fermentation, which some people have alleged," he said. Geological features, like long, linear fractures in the area, may serve as a possible upward conduit for natural gas in the area, Thyne added. While the water samples did not show any significant presence of benzene, which is a known carcinogen, Thyne noted compounds like benzene largely won't be detected 200 feet away from its source. More coverage from the Grand Junction Daily Sentinel (Dennis Webb): Most of the highest concentrations of methane in water appear to be in the Divide Creek area south of Silt, where gas contaminated surface waters in 2004, Geoffrey Thyne told Garfield County commissioners Monday... None of the study's results of water well testing showed any levels of benzene or other drilling-related contamination requiring regulatory action. Methane in water isn't regulated and the gas vents away through bubbling once it reaches a certain concentration, Thyne said. However, the gas can lead to explosions if it is allowed to build up in enclosed areas, which could happen if a domestic water system includes holding tanks in a basement, he said. The county plans to notify water well owners of the test results... [Thyne] said he disagrees with the Colorado Oil and Gas Conservation Commission, which contends that some methane that appears to come from natural gas production in the area instead is originating from biological sources. If so, there would be signs of carbon dioxide resulting from microbial oxidation, he said. The COGCC could not be reached for comment Monday. EnCana spokesman Doug Hock said some natural gas in the Divide Creek area originates close to the surface rather than from energy production. He said EnCana is confident that new state drilling procedures in place in the Divide Creek area are protecting domestic water from natural gas development. More Coyote Gulch coverage here. Category: Colorado Water 7:47:29 AM

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