by Bill Knowles
WALSENBURG- The Two Rivers Water Company, with offices in Walsenburg and headquartered in Denver, has a purchase agreement for the Orlando Reservoir in Huerfano County in hand. This transfer of water ownership and storage in the county could signal the development of one of the last great water reserves in the state. Two Rivers will revitalize the Orlando lake system and the Cucharas Reservoir to store all their water.
“The purchase of the reservoir along with the direct flow rights and the ditch system allows us to reassemble a system that was originally designed to store 75,000 acre feet of surface and ground water in Huerfano and eastern Pueblo Counties,” John McKowen, Two Rivers Chairman and CEO told the Huerfano World Journal during an interview.
The $3.1 million purchase will add an additional 3,100 acre feet of senior storage capacity along with 7.8 cubic feet per second of senior direct flow water rights along the Huerfano River.
By reassembling the original component parts and capturing ground water being reintroduced to the stream system from coalbed methane production (CBM), farming in the county can be restored to viable economic levels, according to a Sept. 29 press release from the Two Rivers Water Company.
The irrigation system that was in use in the early 20th century supported a substantial agricultural business with a portion of the water supply being ‘produced’ water from coal production. It was the Huerfano-Cucharas Irrigation Company (HCIC) that adjudicated significant storage and direct flow water rights during that period of “King Coal.”
With the onset of the Great Depression, the steel mills in Pueblo shut down. Since the coal mines in Huerfano were dependent on the steel production, they too began to close, ending ground water discharge from the mining operations.
The components of the irrigation system, reservoirs and ditches, were parceled out, and with the diminished supply of ground water, farmers were left with a substantially depleted water supply system. Farm production decreased on the ditch system with tens of thousands of acres of land drying up along the Arkansas Valley main stem.
However with the recent demand for increased coalbed methane production in Huerfano County, more than 10 million gallons of produced water per day will be discharged into the Cucharas River when Petroglyph moves into Phase III of its plan to harvest CBM. And this increased flow of water into the river might be caught in the Cucharas Reservoir, which Two Rivers purchased earlier in 2010.
So is a deal being worked out between Two Rivers and Petroglyph? McKowen wasn’t shy in saying that he would like to get his hands on Petroglyph’s produced water. He denied a deal has been worked out but didn’t rule one out in the future. But before taking on additional water storage, Two Rivers will still need to rebuild the Cucharas Reservoir’s dam which is in disrepair and is seeping water.
“Rebuilding the dam will cost between $15 and $20 million,” McKowen said. And because the reservoir fills with sediments quickly, the capacity of the new dam would be about 50,000 acre feet. Presently it is permitted to hold about 10,000 acre feet.
Some fear that this might be the beginning of a water run on Huerfano County. They fear that as the Southern Delivery System comes closer to being a reality, water will be moved from Pueblo to Denver, Aurora or Colorado Springs. As a result, water rights held by farmers and ranchers downstream on the Arkansas River, and ultimately the conditions defined by the Arkansas River Compact, will demand a move of water from Huerfano County, one of the last great water reserves in Colorado, to the Arkansas River.
But if anyone attempts to purchase water rights in Huerfano County, they may find that after the first acquisition, the cost on successive water rights purchases could rise rapidly. If, as McKowen suggests, water rights are the 401k’s for the area’s ranchers and farmers, many of them will want the best price for this finite resource. And this will put competition into the market for anyone with the money who can put the water to beneficial use.
Park, Dolores and Chaffee Counties passed a one mill tax in the 1970s and established water districts to purchase water rights by offering market value plus ten percent. But that was before TABOR. The Taxpayer Bill of Rights limits a special district to a 5% increase in expenditures from one year to the next. Thus if the price of water skyrockets, water districts would be hamstrung to compete to purchase it. The 5% limit can be altered by a vote of the taxpayers, however even that could change with the pending ballot question on amendment 60.
Then along came Vance vs. Wolfe, a Colorado Supreme Court ruling in April 2009. In that case the Supreme Court ruled that all water in the state is tributary unless proven otherwise and that removal of water for coalbed methane production is a beneficial use. On the heels of that ruling, the State Legislature passed 09-HB 1303 affirming the beneficial use ruling of the Supreme Court and a new policy was put into place.
The new policy would require augmentation of the produced water that is tributary and puts the burden of proof on the drillers of oil and gas wells to show that their wells are using water that is non-tributary. This overrides the earlier policy based on state laws giving landowners or gas and oil drillers rights to non-tributary water because these wells could be thousands of feet deep, where domestic or irrigation wells may be hundreds of feet deep.
The state defines non-tributary groundwater as water that can be pumped from wells and not have even a one percent depletion on the surface flows over 100 years.
And with demand for potable water in twenty years estimated to be 40 percent greater than supply, according to a recent World Bank study, this will affect agriculture as well, with ranchers and farmers finding competition for fresh water supplies growing more intense and expensive.
"Of course, the produced water from coal must meet the relevant allocation regulations and environmental standards of the 21st century. Historic reservoirs, like the Orlando, need to be rehabilitated, ditch systems repaired and satellite metering systems installed," McKowen said. "It′s time for Huerfano and eastern Pueblo County to put these renewed water sources back to work and restore the farming and municipal communities in the areas originally served by the water production."