Another perfectly sunny, perfectly dry weekend in Pagosa Springs. The lawn is looking a bit brown, however.
From an Associated Press story running on the Colorado Sun, on October 10, 2020:
The summer drought that lingered throughout Colorado has become worse. The entire state is currently experiencing abnormally dry conditions and nearly 17% of the land area is in exceptional drought, the most extreme category, the US Drought Monitor said.
The drought is happening just a year after most of Colorado was declared drought-free. Conditions have deteriorated over the past year due to drier conditions, warmer temperatures and a higher level of evaporation. It has also been a perfect backdrop for wildfires…
Several important things happen, here in Colorado, during ‘drought’ conditions.
- Farmers and ranchers have a greater need to draw irrigation water from our rivers and streams.
- Urban dwellers apply more water on their lawns, also drawn largely from our rivers and streams.
- There’s less water in our rivers and streams to draw.
- Colorado sends less water into Lake Powell — to be used, once it gets passed on down to Lake Mead, by agricultural corporations and residents in California, Nevada and Arizona.
- Forests and grasslands dry out and become more prone to devastating wildfire.
- The water industry clamors ever-more-loudly for ever-more-expensive water projects.
- The profits to be made selling water and water rights look ever-more-attractive to hedge fund investors.
And, of course, news outlets have something to write about.
Looking at the list of important things, just mentioned, three of the items are directly related to the discussion we heard at the initial ZOOM meeting of the newly formed ‘Anti-Speculation Law Work Group’ on October 7. Many years ago — in 1922, to be exact — a small group of water industry professionals and attorneys were appointed the task of writing the Colorado River Compact. This agreement, eventually signed by the seven states that get water from the Colorado River and its tributaries, was a noble attempt to keep the federal government from taking control of the Colorado River. According to the agreement, Colorado, Wyoming, New Mexico, and Utah are required to send, each year, about 7.5 million acres feet past the water gauge at Lee’s Ferry, just west of Lake Powell — to be allocated to California, Arizona and Nevada. (Mexico is also part of the agreement, but they often get ignored in news articles.)
The agreement actually requires “75 million acres in any 10-year period” measured as a ten-year running average… which is a slightly different concept, because it (theoretically) allows for occasional drought conditions.
Unfortunately, California has been using more than its allocation each year… and the excess withdrawals, coupled with numerous recent drought years, have sucked stored water out of Lake Powell and Lake Mead — which were nearly full in 1998, but are now less than half full, with Mead at only about 40% of capacity.
Extreme drought in Colorado does not bode well for Lake Mead. But it bodes well, if you are set up to sell water.
How to proceed? Should Colorado change its water laws to prevent certain people from profiting off our public resource?
Here’s Alexandra Davis, Water Resources Division Deputy Director for ‘Aurora Water’ — a department of the municipal government in Aurora, a home-rule city within the Denver metropolitan area — speaking at the October 7 ‘Anti-Speculation’ meeting.
“We currently have about 380,000 citizens in the City of Aurora. It’s the third largest city in Colorado. We expect it to grow, potentially, by 2070, to just under a million people… we’re only one-third built out, in terms of the area that Aurora has within the city boundaries. So we are a growing city.
“Aurora started its own water rights program in the 1950s. Before the 1950s, it was served by Denver Water. So Aurora came to the game a little late.”
“The game” here is the acquisition of Colorado water rights, in a region where rivers and streams are under pressure to supply agricultural, municipal, industrial, recreational, and environmental needs, while also remaining full enough to supply the Lower Basin states.
Ms. Davis:
“And Aurora uses significant resources, acquiring water.”
As well they might, if they are planning to triple their population. One of the key ways that cities obtain additional water is by purchasing a ranch or farm with historically valuable water rights, and then ‘drying up’ the land by re-directing the water to municipal uses. This process permanently destroys the farm or ranch as a food-producing operation, because the land, legally, can no longer be irrigated.
Ms. Davis spent 20 years working as an attorney, and in other capacities, in various state government departments, and has been “very fortunate to see water through various lenses, of law, policy and now, management.” She referred to some comments made previously by other Anti-Speculation group members at the meeting.
“So, we’ve talked about property rights. We’ve talked about flexibility, and a program that allows for uses. We’ve talked about conditional water rights. One of the things that [the term] ‘speculation’ brings to mind for me, is ‘price’ and ‘use’.
“The law talks about the actual use, and whether you can put water to use. But speculators — to me — are acquiring water, not because they intend to use it over the long term, but because they want to make a significant profit when they flip it.”
As a person working in a water department that purchases water rights, Ms. Davis obviously has concerns about, say, a New York hedge fund buying up a farm in 2020, and then selling the farm (with its water rights) a few years later to, say, Aurora Water for a much higher price. If enough Colorado farms were purchased by investors with the intent to buy-low-sell-high, the increased cost borne by Colorado taxpayers and water users could prove rather spectacular.
There is, of course, a very simple way to prevent this from happening. The legislature passes a law that prohibits the sale of a water right for more than the original purchase price. That removes any possibility of speculation, and thereby protects the taxpayers and water users.