Reading Gary Wockner’s op-ed piece on Monday — “Colorado Water Board Shelves ‘Demand Management’ Scheme” — we learned that the Colorado Water Conservation Board (CWCB) has announced a “hard pause” on its work studying the viability of ‘demand management’, a program that would allow Colorado to pay water users to temporarily and voluntarily conserve water, and store whatever is saved in Lake Powell for future use.
‘Future use’ meaning, having hundreds of thousands of acre-feet stored in Lake Powell, in case the Lower Basin states — Arizona, California and Nevada — decided to demand the full annual allotment of Colorado River water they were promised back in 1922, when seven states made a compact defining how the water would be allocated among all the states touched by river.
Demands for water allocations could also come from Mexico, and from more than two dozen Indian reservations.
“No more energy spent on this right now. Until the facts change; until someone brings us new information,” CWCB chair Jaclyn Brown said last week.
Demand management is a key piece of the Drought Contingency Plans agreed to back in 2019, when it was already obvious that Lake Powell might soon drop below the level needed to generate hydropower. A poorly understood piece, thus far.
From a March 25 article by reporter Chris Outcalt in the Colorado Sun:
The idea was that the Upper Basin states — Colorado, New Mexico, Utah and Wyoming — would each investigate the feasibility of paying water users to conserve water on a temporary and voluntary basis and then store the extra in Lake Powell in a special 500,000 acre-foot “account.” Then, if needed, that water could later be used by the Upper Basin states to meet delivery requirements specified in the Colorado River Compact.
The CWCB, the primary Colorado agency tasked with protecting and managing the state’s water resources, set to work investigating demand management’s potential, and recently found themselves “further along in the process than the other three states.” But in order for the program to be feasible, it needs buy-in from all four Upper Basin states.
The fact that Colorado is ‘ahead’ of the other states in studying the issue, prompted the CWCB board to take a “hard pause” on examining the concept.
“We have to let the other states catch up with their concerns, and the issues they see,” said Brown.
A 205-page report from 2020 suggested that funding a 10-15 year demand management program might cost the state between $10 million and $40 million, without identifying where, exactly, the money would come from. Other issues discussed in the report were economic damage to communities and surrounding businesses, if agricultural producers stopped producing and instead simply ‘sold’ their water… how to prevent downstream users from simply siphoning off the excess water before it ever reached Lake Powell… and the legal issues implied in paying someone to ‘not use’ a public resource. (Surface water is defined in the Colorado constitution as a public resource.) Other tricky ‘demand management’ issues have been discussed by CWCB, but not yet solved.
Some demand management ‘pilot’ programs, over the past couple of years, had focused on paying farmers and ranchers not to irrigate.
Here’s the Colorado Sun article again:
“I’m not an agriculturalist,” Brown said. “But I live on the West Slope and grew up here and I don’t want to change the fabric of Colorado to the point where the only people that can afford to have ranches are rich people from out of town, that it’s a tax write off or it doesn’t matter to them if they’re making money or not. I worried the further we got down the demand management road, it was going to fall on ag.”
CWCB chair Jaclyn Brown touches ever so lightly, here, on the elephant in the room. Or the elephant in the river.
During the late 1800s and early 1900s, the prime agricultural tracts in Colorado were settled by farmers and ranchers, many of whom obtained water rights to irrigate their fields and meadows. Because Colorado water law grants priority to the oldest water rights, these ‘senior’ agricultural rights are some of the most valuable assets in the American West.
But life in Colorado has become an increasingly expensive proposition, and in communities like Pagosa Springs — where it was once possible to make a living raising cows — the temptation to sell off your ranch to a wealthy buyer has resulted in the conversion of many agricultural operations into millionaire properties. Or billionaire properties.
A ranch is typically sold with its water rights intact, as part of the sale. So, here in Pagosa, we’ve see vast irrigated properties that were once working ranches, but which are now ‘hobby ranches’ — operated not to earn a living but rather, to justify ridiculously low agricultural property tax rates.
It’s a tax loophole that makes the tax loophole used by Short-Term Rentals look like chicken feed.
The state can’t easily address this problem. Because genuine agricultural farming and ranching in Colorado is so often a marginal business, the property taxes need to remain ridiculously low, or we risk driving family farms out of business. But here in Archuleta County, 96% of the water diverted from the San Juan River is used by ranches. How many of these ranches are actually operated as authentic businesses? And how many are operated merely for the property tax benefits?
If CWCB wanted to somehow address the elephant in the river — ‘tax shelter ranches’ — how many millions of gallons of water could the state of Colorado deliver downstream to the thirsty cities and farms in the Lower Basin states?
I can’t recall coming across a vigorous discussion of this question, in the media. Meanwhile, I come across articles every day, warning me that the American Southwest is in a ‘megadrought’ and that the situation is guaranteed to get worse… as climate change gets worse.
When I run the numbers on my pocket calculator, it appears to me… if the owners of senior water rights in Archuleta County cut their water diversions by 3%, that would be roughly equivalent to our entire community of homes and businesses cutting our water use by 50%.
Does the same situation reign throughout the American West?