Background

In 2012, Colorado and Washington became the first two states to legalize marijuana for recreational use. While using, possessing, and growing marijuana remains illegal at the federal level, twenty states and Washington, DC have legalized marijuana for medical purposes. Maryland also allows medical use as a defense in court. Notwithstanding its illegality at the federal level, the medicinal and recreational marijuana industries have been operating under tricky circumstances, namely the lack of access to banking and insurance services. While the burgeoning industry works out its financial issues, the challenge of bringing an illegal crop into the semi-legal market requires addressing an issue that farmers across the arid west encounter: Where to get water to grow plants.

Growing Marijuana

Legalization does not change the fact that growing marijuana is a water intensive endeavor.  Outdoor growing operations may require anywhere from one to fifteen gallons per plant, per day.  For comparison, growing one square foot of potatoes in Colorado requires only about sixteen to twenty-nine gallons of water per growing season. The retail price for marijuana ranges from $150.00 to $300.00 per ounce, whereas the recent price of potatoes is about $0.04 per ounce. Given the wide ranges of potential revenue and estimates of water requirements for growing marijuana, growers can expect a return of about $0.22 to $6.67 per gallon of water “invested” in each plant of marijuana grown outdoors (assuming two ounces of marijuana are harvested from each plant). Compare those figures with the return of about $0.02 to $0.03 per gallon of water to grow one square foot, yielding about eleven to fourteen ounces, of potatoes. The cost of obtaining water sufficient to maintain the marijuana growing operation may constrain production, but clearly, there is an economic advantage to growing weed. However, water is but a single cost that a business must account for among many.

Growing indoors is another option for marijuana growers, especially since grow operations in Colorado must be in an enclosed and locked space. Indoor growers can expect a return close to, or even exceeding, the upper range noted above. Further, there are many methods of growing indoors, and water use varies greatly. Although water savings from reduced evapotranspiration – the amount of water lost by evaporation and released from plants – growing indoors are significant, growing indoors requires energy-intensive equipment that increases energy costs. The growing area is also restricted, constraining the number of plants that a grower can cultivate. Nonetheless,the quantity of water required to cultivate marijuana outdoor or indoor is sure to raise an eyebrow or two, especially given persisting drought conditions in western states.

Environmental Concerns

One of the problems legalization may remedy is that illegal grow operations cause environmental degradation. The United States Forest Service estimates a cost of up to $15,000 per acre to remediate polluted watersheds from illegal marijuana growing operations, partly due to the uncontrolled use of fertilizers and pesticides. In California, illegal grow operations are blamed for pollution harming salmon populations in the Eel and Klamath Rivers. By bringing marijuana out of the black market, states could allocate the use of water in producing marijuana and hold growers accountable for environmental violations, instead of chasing down criminals (or so the thinking goes). However, unless the cost to obtain water legally is less than that of the illegal method, the economic incentive is to stay on the run and use “free” water for grow operations. Illegal marijuana growers, as opposed to legitimate farmers, operate in the black market and have no incentive to follow water use rules. The risk to an illegal marijuana grower’s investment remains constant even when following the rules because the product is illegal. Proponents of the newly legalized industry point to the self-regulating nature of the business, where law-abiding companies single out rule breakers to maintain market competitiveness, advance the legitimacy of the industry, and create an incentive to follow the rules.

Political Concerns

In July 2013, the Board of Pueblo County Commissioners unanimously approved a plan to build greenhouses and grow marijuana on a property with groundwater rights. Rural residents who depend on water to sustain their agriculture-based community opposed the plan. Residents resisted the use of water rights for marijuana cultivation, with one neighbor noting the scarcity of water in a nearby ditch. In September 2013, La Plata County commissioners heard concerns from a resident forced to haul water by truck to his home because of a lowered water table, allegedly due to a marijuana grow operation. Notably, La Plata County prohibits commercial operations from using its water to grow marijuana, potentially affecting a grow operation’s ability to obtain reliable water.

Both opponents of the marijuana industry and those concerned with water conservation are likely to voice their disapproval to  city and county commissioners who approve land for growing marijuana. These stakeholders possess a political check and can back up their resistance to the industry by voting for marijuana foes. Such a scenario may force municipal governments to address new water issues typically left for state administrative bodies to address, as opposed to water issues limited to their local jurisdictions.

Conclusion

Newfound industries face unique challenges. Emerging from the black market, the marijuana industry is only beginning to address issues that will lend itself to the world of legitimate business. From the Federal Government to the local board of commissioners, legalizing marijuana affects every regulatory aspect of business. Of course, if Uncle Sam decides to enforce his laws and send the industry back to the black market, marijuana growers will have more concerns than water use alone.

 

The title picture is of an outdoor, organic cannabis garden and is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license to Cannabis Training University. The use of this picture does not in any way suggest that Cannabis Training University endorses this blog.


Sources:

Controlled Substances Act, 21 U.S.C. § 841 (2010).

La Plata County, Colo., Code ch. 94, art. 4 (2012).

Office of National Drug Control Policy, Marijuana Resource Center: State Laws Related to Marijuana, http://www.whitehouse.gov/ondcp/state-laws-related-to-marijuana (last visited March 3, 2014).

Bureau of Labor Statistics, Mid-Atlantic Information Office: Average retail food and energy prices, U.S. city average and Midwest region, http://www.bls.gov/ro3/apmw.htm (last visited March 29, 2014).

United States Geological Survey, Water Science School: How Much Water Falls during a Storm, http://water.usgs.gov/edu/sc2.html (last visited March 29, 2014).

Kristen Wyatt, Marijuana Industry Relieved as Feds Allow Banking, Denver Post (February 14, 2014), http://www.denverpost.com/marijuana/ci_25145150/marijuana-industry-relieved-by-banking-memo.

John Ingold, Colorado Firefighters Found Large Pot Garden During Waldo Canyon Fire, Denver Post (August 22, 2012), http://www.denverpost.com/ci_21368074/colorado-firefighters-found-large-pot-garden-during-waldo.

John Ingold, A Colorado marijuana guide: 64 answers to commonly asked questions, Denver Post (December 31, 2013), http://www.denverpost.com/marijuana/ci_24823785/colorado-marijuana-guide-64-answers-commonly-asked-questions.

Alastair Bland, California’s Pot Farms Could Leave Salmon Runs Truly Smoked, National Public Radio (January 13, 2014), http://www.npr.org/blogs/thesalt/2014/01/08/260788863/californias-pot-farms-could-leave-salmon-runs-truly-smoked.

Dana Kelly, Bringing the Green to Green: Would the Legalization of Marijuana in California Prevent the Environmental Destruction Caused by Illegal Farms?, 18 Hastings W.-N.W. J. Envtl. L. & Pol’y 95, 101 (2012).

Leading California Marijuana Attorney Says Growers Must Focus on Water Conservation, PRWeb (March 22,2012), http://www.prweb.com/releases/marijuana-attorney/california/prweb9316223.htm.

Colorado State University Extension, Seasonal Water Needs and Opportunities for Limited Irrigation for Colorado Crops http://www.ext.colostate.edu/pubs/crops/04718.html (last visited March 3, 2014).

Colorado State University Extension, Fertilizing Potatoes, http://www.ext.colostate.edu/pubs/crops/00541.html (last visited March 29, 2014).

Nick Bonham, County OKs pot greenhouse, Pueblo Chieftain (July 11, 2013), http://www.chieftain.com/special/marijuana/1456099-120/marijuana-property-county-pueblo.

Wax Jones, Marijuana: Pueblo County Approves Grow Facility Despite Water Rights complaints, Westword (July 15, 2013), http://blogs.westword.com/latestword/2013/07/marijuana_pueblo_county_approv.php.

Chuck Slothower, La Plata County Grapples Over Sale of Retail Marijuana, Durango Herald (October 1, 2013), http://www.durangoherald.com/article/20130930/NEWS01/130939945/0/taxonomy/La-Plata-County-grapples-over-sale-of-retail-marijuana.

Emery Cowan, County Sets Medical Pot Rules, Durango Herald (June 26, 2012), http://www.durangoherald.com/article/20120627/NEWS01/706279930/0/SEARCH/County-sets-medical-pot-rules.


Heavirland v. State

Heavirland v. State, 311 P.3d 813 (Mont. 2013) (holding (i) Montana case law applies retroactively in determining sufficiency of evidence rebutting the presumption of abandonment of water rights founded on a prolonged time of nonuse, and (ii) claimants provided sufficient evidence to defeat the presumption of abandonment and excuse twenty-four years of nonuse of irrigation rights).

Frank Truchot filed and perfected the subject water right in 1904. The right granted Truchot water from Muddy Creek for irrigation. Christina and Henry Weist purchased the water right in 1913. Their son, Ray Weist, took over the farm and continued to utilize the water right for flood irrigation, when available, from the mid-1940’s until 1961. Utilization of the right was particularly difficult because of the slope and heavy clay soil of the Weists’ fields. Ray stopped irrigating in 1962. His son, Lyle, stated that his father’s age and the inefficiency of flood irrigation were the reasons Ray stopped irrigating. Lyle also testified that, in the event that they used pivot irrigation in the future, Ray had three-phase power connected to the farm.

Lyle returned to and purchased the family farm in 1975. After researching the farm’s water rights history, in 1981 Lyle and his wife, Linda, filed a statement of claim in the Montana general stream adjudication. Lyle installed a fourteen-tower Valley Center Pivot and resumed irrigation in 1981–82. He continued to use the pivot until 1991, when he sold the water right and property to Loren and Sue Heavirland. The Heavirlands thereafter irrigated every year but one when water was unavailable.

Lyle and Linda Weist’s claim was in the Temporary Preliminary Decree for Basin 41O with attached Department of Natural Resources and Conservation (“DNRC”) issue remarks. The remarks noted that the 1962 Teton County Water Resource Survey and the 1978 USDA Aerial Photography indicated zero acres irrigated at the farm. Meetings between DNRC and the Weists did not resolve the issue remarks. DNRC Water Resource Specialist Kraig Van Voast (“water master”) reviewed the documentation and found that he did not have information that could resolve the lack of proof of irrigation from Muddy Creek. The water master therefore joined the State of Montana to the adjudication, pursuant to Mont. Code Ann. § 85-2-248(7) (2013). The State moved for partial summary judgment regarding the issue of abandonment, and the water master granted the motion. The water master found that the period of nonuse from 1962 to 1982 raised a rebuttable presumption of abandonment; this finding moved the burden of proof to Lyle Weist and the Heavirlands (“claimants”) to rebut the presumption.

At an evidentiary hearing, the water master found that the claimants had abandoned the water right, stating that the claimants’ evidence did not overcome the burden to rebut the presumption of intent to abandon the water right. Claimants then filed an objection with the Chief Judge of the Montana Water Court (“water court”). Claimants presented two central arguments: (i) the law as it stood in 1973 applied to the abandonment of then-existing water rights, meaning the water master erred in retroactively applying 79 Ranch, Inc. v. Pitsch, 666 P.2d 215 (Mont. 1983), to their existing water right; and (ii) even if 79 Ranch applied, the claimants offered evidence sufficient to rebut the presumption and excuse the twenty years of nonuse.

The water court first held that 79 Ranch applied to the case at hand. 79 Ranch states that a long period of nonuse creates a presumption of intent to abandon a water right and causes the burden of explaining the nonuse to shift to the claimant. 79 Ranch also requires that a claimant present concrete facts or conditions, not just wants and wishes to utilize the right, to rebut the presumption of abandonment. The water court then applied 79 Ranch and concluded that the water master erred in not finding that the evidence was sufficient to rebut the presumption of intent to abandon. The State appealed to the Montana Supreme Court (“Court”).

The first question the Court examined was whether the water court correctly found that 79 Ranch applied to the abandonment of a water right that predated that case. The Court noted that the 1973 Montana Constitution, as well as the Water Use Act, protects “existing rights.” But the Court went on to hold that 79 Ranch did not run counter to the state constitution’s protection of those rights and did not change or create new law. Rather, 79 Ranch clarified the standard for abandonment, meaning its retroactive application did not offend the claimants’ rights or Montana law.

The second question the Court addressed was whether the water court properly held that the claimants presented adequate evidence to show that they did not intend to abandon their water right. The State argued that the evidence presented was insufficient because (i) the claimants did not offer adequate evidence to show that Ray stopped irrigating his property because of his age or health, and (ii) the connection of three-phase power to the property did not necessarily indicate intent to install a pivot irrigation system.

The Court held that the claimants’ presentation of the difficulty of flood irrigation on the property, coupled with Lyle’s testimony regarding his father’s age and health, were sufficient to overcome the presumption of abandonment. The Court stated that there was no reason to doubt Lyle’s statements about his father and the property. The Court also found that Ray’s installation of a pivot irrigation system was proof enough of his father’s belief that Lyle would want to use that type of system. The Court also stated that Lyle’s continued irrigation with the new system supported the notion that the Weists did not intend to abandon the water right. Weighing the evidence presented in its totality, the Court held that the water court correctly concluded that the water master erred in finding a lack of sufficient evidence to rebut the presumption of intent to abandon the water right.

The Court therefore affirmed the water court’s decision to apply 79 Ranch retroactively. The Court also affirmed the water court’s conclusion that the claimants presented evidence that was sufficient to justify the decades-long nonuse and therefore to rebut the presumption of abandonment.

 

The title picture is of a Montana ranch and is licensed under the Creative Commons Attribution 2.0 Generic License to Tony Hisgett, who does not in any way endorse this blog.


O, dear daughter, be not discomforted!

They can attempt to possess your beauty

Beyond measure, without sufficient ends

And looking glasses, frenzy, berserk, de-

Hydrate marvels they have engineered in

Fact, conveyance, deed, statute, law, decree,

Cannot substitute for the Natural Stream

Of your loving boundless intimacy.”

 –Excerpt from “Mother to Daughter,” written and read by Justice Gregory J. Hobbs, Jr. in celebration of the 40th year of Colorado’s instream flow law January 15, 2014.

Roughly 200 western water policy enthusiasts gathered in the Colorado Supreme Court’s Courtroom on January 15, 2014, to celebrate the 40th anniversary of the state’s Instream Flow (“ISF”) Program and discuss the program’s role in the future. Twenty-four entities generously hosted the cordial event including the Rocky Mountain Land Use Institute, the Colorado Water Congress, the Nature Conservancy, the University of Denver’s Water Law Review, and the law firm Kaplan, Kirsh, & Rockwell just to name a few. Several of the attendees were Water Law Review former staff, Board members, and contributors.

ISF Program Background

In 1973 the Colorado legislature integrated instream flow water rights by entrusting the Colorado Water Conservation Board (“CWCB”) with the state’s appropriation authority to preserve the natural environment to a reasonable degree. ISF water rights are non-consumptive and in-channel or in-lake uses of water held by the CWCB to ensure minimum flows on certain reaches of streams and rivers and in lakes. The CWCB consults with hydrologists, engineers, natural resource scientists, and geomorphologists, among others to make factual determinations about which lakes and stretches of stream to preserve and improve to a reasonable degree. The IFS Program helps the state protect diverse ecosystems ranging from coldwater fisheries and waterfowl habitat to glacial ponds.

A series of lawsuits challenged the CWCB’s authority to appropriate water without diverting it from streams. Several water users claimed that in Colorado, the right to use water requires a physical diversion in addition to the claimant showing the water will be put to a beneficial use. Over time, the Colorado Supreme Court clarified that ISF appropriation by the CWCB is a legal means of ensuring minimum stream flow to preserve the natural environment to a reasonable degree, the CWCB’s water right is junior, and that the CWCB has a fiduciary duty to enforce the use right in the name of the people of Colorado.

Colorado’s 1986 legislature recognized the value of marketable water rights for instream flow by allowing the CWCB to accept donations and purchase senior vested water rights. “The board also may acquire, by grant, donation, bequest, devise, lease, exchange, or other contractual agreement… water, water rights, or interests in water…The board may use any funds available to it for acquisition of water rights and their conversion to instream flow rights.”  In this state, the right holder vests water rights through beneficial use of the water. The 1986 statute permitted the CWCB to convert the beneficial use from the original right holder’s use (e.g., agricultural use, irrigation) to the CWCB’s use of preserving or improving the environment to a reasonable degree and maintaining minimum stream flows and lake levels.

Since 1973 the CWCB appropriated over 9,000 miles of stream and roughly 480 natural lakes and acquired over twenty-five water right donations or long-term contracts for water totaling 500 cubic feet per second. That means that by 2014 the CWCB appropriated either junior or senior rights to nearly one third of the state’s perennial streams for preserving and improving the natural environment to a reasonable degree.

The ISF Program’s 40th Anniversary Celebration

Colorado Supreme Court Justice Gregory J. Hobbs Jr. welcomed attendees at the ISF Program’s fortieth anniversary celebration with his keynote historical overview of the state’s water laws. For twenty-three years before joining this state’s highest court, Justice Hobbs practiced environmental, land use, and water law. Since 1996 Justice Hobbs served the people of Colorado on our Supreme Court and plans to retire in 2016. Justice Hobbs read his fortieth anniversary ISF Program poem, “Mother to Daughter.”  Hobbs spoke enthusiastically about how the advocacy that led to instream flow rights demonstrates our community’s common bond: a deep value in Colorado’s rivers, streams, and lakes. He stressed that Coloradans put their hearts, minds, and passions into the water policy shift that the ISF Program embodies. Hobbs submitted that ISF Program “is a landmark of the integration of the values of the flow into a prior appropriation water law system.”

Justice Hobbs explained that the ISF Program came about following an intense pro-development era and represents the paradigm shift of the 1970’s when many people simply wanted to protect what was left of the natural world.  During this period the United States legislature enacted the Clean Water Act, the Clean Air Act, the Endangered Species Act, and the Federal Land Policy and Management Act, along with other significant environmental legislation.

According to Justice Hobbs, the central challenge of the ISF right in Colorado was determining whether the state’s water laws allow a use-right without diversion. He explained that the 1975 Colorado Supreme Court gave deference to the legislature by upholding the ISF law because the CWCB’s water right is junior to the senior right holders and does not cause injury to prior water rights. Today, the ISF Program enables the CWCB to protect waterways and improve water quality.  Justice Hobbs concluded his introductory remarks by characterizing the ISF Program as “work well-done and work well to be done!”

A Retrospective on the ISF Program at Forty

Linda Bassi discussed the ISF Program’s accomplishments and moderated the first panel of speakers, which included Patti Wells and Eric Kuhn. After working for the CWCB for a decade, Bassi is now the CWCB’s Stream and Lake Protection Section Chief. She has extensive experience with the ISF Program both from her work at the CWCB and in the Attorney General’s office representing the Division of Water Resources and the CWCB.

Bassi explained the ISF Program has a multifaceted role in the water community. The program involves the CWCB’s (1) coordination with federal agencies to address federal resource protection goals through state-held water rights, (2) partnerships with water suppliers to enable water projects to move forward while protecting the natural environment, and (3) collaboration with Colorado Parks and Wildlife and conservation groups to protect and improve Colorado’s rivers, streams, and lakes. Bassi’s presentation included photos of stunning landscapes and waterways throughout Colorado that the ISF Program empowered the state to protect through appropriations, acquisition agreements, and donations. Boulder Creek, the Colorado River, Dead Horse Creek, and Hanging Lake are just a few of the watercourses benefiting from the IFS Program. Bassi noted that Governor Hickenlooper’s executive order compelling the CWCB to create Colorado’s first Water Plan (“CWP”) directs the CWCB to foster “a strong environment that includes a healthy watershed, rivers and streams, and wildlife.”

Patti Wells discussed the IFS Program’s elements that make it work and allow it to endure today. Wells serves as the Denver Water Board’s (“DWB”) General Counsel as she has since 1991. She also represents the City and County of Denver as a CWCB board member. Wells is a former board member of the Water Quality Control Commission and the Colorado Water Trust. Mayor Peña appointed Wells as Denver’s first female City Attorney.

According to Patti Wells, the ISF Program’s two essential elements are its “requirement for balance and the involvement of the public.” To demonstrate the balance element, Wells quoted the statute’s directive for the CWCB “to correlate human activity with reasonable preservation of the natural environment” and mentioned that over time this phrasing turned out to be brilliant. Wells maintains that the CWCB tends not to engage in extremist, absolutist discussions because the wording of the statute guides the CWCB to consider what is necessary to a reasonable degree.

Wells emphasized the ISF Program’s public notice and comment process while comparing the administrative agency setting to litigation. Wells suggested that much of the program’s flexibility is because the CWCB makes decisions in a boardroom with public input instead of in a courtroom. The fact that the CWCB’s determinations are reviewed under the Administrative Procedure Act is especially significant to Wells because it means that courts usually defer to the CWCB’s findings. In addition, when experts appear in front of the CWCB they do not duel each other as they might in a judicial proceeding.

Another strength of the ISF Program, according to Wells, is that the CWCB must have a natural landscape that requires protection in order to acquire rights unlike the federal government’s methods of water right acquisition. She used the example of Hanging Lake to illustrate part of the CWCB’s decision-making with regards to water rights acquisition. The Board hiked to Hanging Lake and after seeing “the mist in which the Columbine grows” determined that the landscape needed all unappropriated water there to protect that particular environment to a reasonable degree. Wells considers the ISF Program to function well because it is a robust form of state-based environmental protection that enables Colorado to protect itself from the “heavy hand of the federal government.” Wells concluded by commending the ISF Program for its contemplation of all water uses, inherent flexibility, and great results.

Eric Kuhn followed Patti Wells in the first panel of speakers. He is the General Manager of the Colorado River Water Conservation District, (the “River District”), a former board member of the CWCB representing the Colorado River Basin, and an at-large Inter-Basin Compact Commission (“IBCC”) representative. Working for the River District since 1981, Kuhn possesses a deep understanding of the work it does in this state. The River District’s charter from 1937 empowers it to “preserve and conserve for Colorado, its Colorado River Compact entitlement.”

Kuhn outlined the River District’s “evolution” in relation to the ISF Program explaining that it originally opposed the program, then it supported the program, then it opposed the program again. Today the River District works to improve the ISF Program. A future challenge Kuhn detects for the ISF Program relates to how the state should deal with recreational activities. He clarified that providing water for recreation is outside the scope of the CWCB’s charge to protect the environment to a reasonable degree but he perceives it as a looming dilemma that requires a broader discussion.

A Forecast for the ISF Program: Its Challenges for the Future

Melinda Kassen, the Principal of WaterJamin Legal and Policy Consulting Services and member of the IBCC, moderated the second panel, which included James Eklund, Drew Peternell, and Amy Beatie. Kassen posed several introductory questions to the panel such as “what new types of water rights could the state create”; “how far should the ISF Program go”; “should we be protecting shoulder flows”; “should we be protecting more than just cold-water fisheries”; “should we be protecting peak flows”; “what else can the state do to protect current flows while looking at warmer, drier times”; “who should be allowed to hold these flows—should it always remain exclusively in the hands of the CWCB”; and “how should the state evolve the program to make it stronger and more meaningful?”

James Eklund, the CWCB’s director, said, “people think of Colorado water law as a slow, lumbering beast with little ability to change—but if you step back and squint your eyes a little bit, or maybe a lot, you could get the impression that we actually have the capacity to innovate when the conditions demand it in this state.” Eklund submitted that the ISF Program is part of Colorado’s tradition of innovation in water law and policy and asserted that the CWCB’s Water Plan is the next step.

The Colorado Water Plan represents “shaping the future of Colorado with intention” to Eklund. He warned that without a comprehensive state water plan we run the risk of chaotic consumption of our most valuable resource in a divided and inefficient way that provides certainty to water users—consumptive and non-consumptive alike. Eklund urged that the Water Plan is crucial for maintaining state ownership and control over our waterways and the habitat the waters provide. He posited that if Colorado wants to maintain control over its water, then it requires “a way to preserve, improve, and enhance—to a reasonable degree—our ISF Program.” Eklund said that the CWCB is in the business of learning more about Colorado’s rivers, streams, and lakes. He believes the future of the ISF Program involves a deeper scientific understanding of the state’s water resources that will hopefully lead to an informed and engaged public that has access to good facts about water.

Drew Peternell, the Director of Trout Unlimited’s (“TU”) Colorado Water Project, followed James Eklund. TU is a national, nonprofit fisheries organization. TU’s Water Project mission is to maintain and restore Colorado’s rivers and creeks in order to sustain healthy coldwater fisheries.  Peternell argued that the future of the ISF Program would increasingly involve the acquisition of senior water rights in order to put water back into depleted streams. Additionally, Peternell urged that the CWCB must address concerns from irrigators since they own the majority of the senior water rights.  Peternell understands irrigators’ interests because his organization regularly partners with them on projects that mutually benefit agricultural operations and coldwater fisheries. He believes that the state needs to do more to make the ISF Program attractive to irrigators. Irrigators hesitate to participate in the program because they must transfer their beneficial water use to the CWCB. The process leading to the CWCB’s acquisition of senior water rights for restoring streams is too difficult, costly, and risky for many irrigators, according to Peternell.

Peternell discussed pending legislation proposed by Senator Gail Schwartz and endorsed it as a way to make the ISF Program attractive to irrigators. Senate Bill 23 would allow irrigators who make water efficiency improvements to transfer the right to the water saved by the efficiency improvement to the CWCB for instream flow use. Otherwise, there little incentive for irrigators to implement water efficiency measures in Colorado’s prior appropriation system. This would open a new category of water for ISF use to the CWCB. This bill would also incent organizations like TU to finance repairs of irrigators’ aging irrigation infrastructure and allow irrigators to modernize their diversion structures more easily, which would ultimately keep more water in the streams. Peternell’s emphasis on making it simpler, less expensive, and less risky for senior water rights holders to transfer their water rights to the CWCB for IFS use seems well placed.

Amy Beatie, the Executive Director Colorado Water Trust (“CWT”), left attendees with a sense of urgency to protect Colorado’s waterways. As a University of Denver Water Law Review founder and current Advisory Board member, former law clerk for Justice Hobbs, and member of the Colorado Water Congress’s Board of Directors, Beatie ardently spreads her passion for water law and policy. Beatie pointed out that the CWT does not have an advocacy or policy agenda. The CWT mainly participates in projects focused on restoring streams in times of drought. Beatie said that even though the CWT does not do policy, its people can still dream about what they want Colorado’s rivers to look like. Amy Beatie emphasized the “obvious, yet understated power of people.”  She asked the audience questions about what could be accomplished if every person in the room spent five hours thinking of ways to make the program better and acting upon their ideas. Beatie stressed the power of innovation. Beatie compelled the audience to imagine what the success of the ISF Program looks like and what they could do to make the program better. Beatie then pressed the audience to “stop imagining and let’s go out the door and start doing!”

Audience Questions & Conclusion

Both panels fielded questions related to instream recreational water use and recreational in-channel diversions (“RICD”s). Patti Wells expressed concern about the prospect of legally requiring water providers to deliver recreational flows and said, “I am not sure that those flows are the responsibility of the state to provide.” Drew Peternell mentioned the RICD Program and suggested the state should protect recreational values in rivers that do not currently have RICD protection with a water right or protective measure that goes beyond RICD’s. Amy Beatie believes adequate protections for recreational flows are in place because the Colorado Supreme Court acknowledged recreational use as a beneficial use. Beatie posited to the extent that recreational flows are “important to communities, they may be appropriated just like any other water right for a beneficial use.” Justice Hobbs opined on the matter of recreational flows stating, “we should be optimistic.” Hobbs does not believe Colorado needs to amend its constitution to address issues arising from recreational flows because he trusts the minds of the next generation to create new policies that serve all water users.

Some themes emerged throughout the afternoon of speakers as they discussed the ISF Program in the context of Colorado water law. Speakers stressed the ISF Program’s balance and flexibility as its strong points and highlighted Colorado’s role in water rights innovation. The concern about recreational flows and the RICD Program demonstrates the next horizon of innovation for instream water rights. Hobbs’, Eklund’s, and Beatie’s optimism and enthusiasm for the future of water law and policy in Colorado left many attendees with a smile as they trickled downstairs for the reception.

 

The title picture is of the Colorado Supreme Court courtroom, located in the new Ralph L. Carr Colorado Judicial Center. The picture  is licensed under the Creative Commons Attribution 3.0 Unported license to Jeffrey Beall, and the use of this picture does not in any way suggest that Jeffrey Beall endorses this blog.


Background

On January 17, 2014, California Governor Edmund G. Brown Jr. declared a state of emergency addressing the severe drought conditions in the state. The past year was the driest in recorded state history, and as of February 27, 2014, surveys estimated only 24% of average snowpack. The Governor’s state of emergency declaration calls on Californians to reduce their water usage by 20% and directs state agencies to impose various efforts aimed at conserving water. In addition, the Governor stated, “I’ve declared this emergency and I’m calling all Californians to conserve water in every way possible.” Yet, despite this declaration and the severity of the situation, most major water providers and the Governor opted for voluntary cuts, choosing not to impose mandatory water restrictions with fines for excessive use.

Current Conservation Options

No Californian Governor has ever ordered mandatory statewide water restrictions, and while that option is within the Governor’s power, major uncertainty exists over how enforcement of that rationing would work. While the state holds the power to allocate water within it, the responsibility of managing and distributing that water lies at the local level, spread out amongst over 3,000 water providers, ranging from cities to municipal water districts, to private farm districts operating wells. The bottom line is these entities rely on selling water, not conserving it. A 20% percent reduction in water consumption and the subsequent loss of revenue would undoubtedly result in future rate increases. As a result, reducing water consumption through mandatory conservation measures are unpopular for cities and utilities.

Prior to the current drought, many water providers elected to implement tiered water rates to encourage conservation. Tiered water rates set a lower price for the initial basic use allocation. After that base, each additional water-use block or tier increases in price, causing a user of more water to pay at a higher rate than a user who stays within the basic use allotment. Tiered water rates stay within the voluntary classification of rationing that California has opted to use, while also using a market-based approach to achieve water conservation results.

Proposition 218

Passed in 1996, Proposition 218 limits the ability of local governments in California to raise taxes or fees without the approval of property owners while also including a proportionality condition by requiring that those taxes and fees cannot exceed the cost of providing the public service. In 2006, the California Supreme Court clarified that Proposition 218 applied to local water, refuse, and sewer charges. The result of this ruling meant that water providers could not charge one group of water users more in order to subsidize the fees of another group of water users. For instance, agricultural water users like farms and ranches who traditionally use much larger water volumes for their crops and livestock could not be charged at a higher rate than urban water users who use smaller volumes for domestic purposes.

In the 2011 case City of Palmdale v. Palmdale Water Dist., the California Court of Appeals held that an existing tiered pricing structure had instilled a “dramatically higher and disproportionate” pricing structure on irrigation users and violated the proportionality requirement in Proposition 218. While it remains unclear if the application of Proposition 218 will dissuade the use of tiered pricing systems in California, prior cases have shown that water providers must prove that they satisfy the proportional cost of service associated with a tiered pricing structure. Water providers must prove proportionality of the costs increases they pass on to consumers in relation to the increased service cost to provide that water.

Smart Metering

The creation of the proportionality requirement potentially created a unique opportunity for water providers to refine their conservation pricing policies through the use of smart metering. Smart metering has two main components: meters that measure chronological intervals, and a communication channel that allows the water provider to obtain readings on demand. Many Western states already use real time or near real time data collection software to monitor their distribution and collection systems. Detailed accounting is essential in order to ensure that both temporal and quantitative requirements are met. Smart metering offers essentially the same information, breaking down individual customer usage by time intervals and quantity. In the case of complying with Proposition 218’s proportionality requirement, a water provider could establish peak use hours where the energy costs associated with providing that water are higher. Then by using smart metering to compare usage to those peak times, water providers could provide the necessary proof to overcome the proportionality requirements.

The benefits of smart metering could also enable individual customers to monitor their own usage habitats by reading their own meters from inside their home. This technology would provide consumers current usage-data to evaluate and base water use decisions on.

Potential Issues

While smart metering does offer a potential solution to the use of tiered pricing systems under Proposition 218, it is important to acknowledge how difficult it would be for some water providers to comply with the proportionality requirement. While comparing energy costs to demand may be relatively simply, the calculation becomes far more complicated when integrating multiple supply sources into the cost of service equation. Cost of service must consider where a municipality received its raw water supply: whether supply comes from a gravity fed ditch, groundwater pumping, or, as here in Denver, pumped under the continental divide. These different sources would have a dramatic effect on how to equate the cost of service. Water providers may have to untangle the costs of each of their water sources, in combination with the costs of storage, treatment, and distribution, in order to be ready to comply with the scenario posed by Proposition 218.

Conclusion

As California continues to struggle with drought, water conservation policies will come under further scrutiny. If the courts decide that tiered pricing in combination with smart metering passes Proposition 218’s proportionality requirement, the result may be a valuable water conservation tool for California.

 

The title picture is of the San Gabriel Dam and Reservoir, located in Los Angeles County, California, in December 2013. The picture is attributed to Shannon1 and licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license. The use of this picture does not in any way suggest that Shannon1 endorses this blog.


Sources:

Bryan Barnhart, Rebecca Anderson Smith, Upgrading Conservation Pricing Proposition 218, Smart Meters, And The Step Beyond Tiered Rates, California Water Law Journal (Jan. 3, 2014), http://blogs.mcgeorge.edu/waterlawjournal/upgrading-conservation-pricing-proposition-218-smart-meters-and-the-step-beyond-tiered-rates/.

Governor Brown Declares Drought State of Emergency, Office of Governor Edmund G. Brown Jr. (Jan. 17, 2014), http://www.gov.ca.gov/news.php?id=18368.

Paul Rodgers, California drought: Why is there no mandatory water rationing?, San Jose Mercury News (Feb. 15, 2014), http://www.mercurynews.com/science/ci_25153774/california-drought-why-is-there-no-mandatory-water.

Driest Year on Record?, California Dept. of Water Resource (Feb. 28, 2014), http://www.water.ca.gov/waterconditions/.

San Juan Capistrano- Prop 218, Water in the West (Oct, 10, 2013), http://waterinthewest.stanford.edu/resources/forum/san-juan-capistrano-prop-218.

Smart Metering for Water Utilities, Oracle (Sept. 2009), available at www.oracle.com/us/industries/utilities/046596.pdf.


Colorado Water Congress Annual Conference 2014: Investing in Public Water Education

January 31, 2014

The Colorado Water Congress held its annual convention at the end of January at the Hyatt Regency. On the last morning of the convention, Nicole Seltzer, the executive director of the Colorado Foundation for Water Education, moderated a four panel discussion titled “Platform Plank V: Investing in Public Water Education.” The discussion focused around effective ways to engage citizens in the water permitting process. Seltzer explained how it is important to educate the public to help make them a partner in problem solving. The panelist included Rick McCloud, the Water Resources Manager of the Centennial Water and Sanitation District; David Nickum, the executive director of Colorado Trout Unlimited; Brian Werner, the Public Information Officer of Northern Water; and Lurline Curran, County Manager of Grand County. The four panelists represented a range of perspectives and commented on effective ways to facilitate public input. They each commented on the purpose of public involvement, the issues associated with public communication, and suggested ways to make public communication in the permitting process more effective.

Rick McCloud of the Centennial Water and Sanitation District spoke of his challenges and victories with public engagement in the Chatfield Reallocation Project, a project aimed at expanding the Chatfield Reservoir. McCloud acknowledge that the federal requirement is the underlying reason for public involvement in the water permitting process. However, his team also realizes that their projects impact people and it is in the organization’s self interest to get public input from people who have superior knowledge. McCloud admitted that it is often challenging to have meaningful public involvement because there is frequently a great disconnect in communicating some of the fundamental issues of a project. When a disconnect arises, people tend to make untrue conclusions about the plan, he noted.

To ameliorate the communication issues, McCloud suggested that agencies should engage the public more than the required federal minimum. There should be open, honest, and straightforward attempts to involve the public early because the days of backroom decisions are over. McCloud implemented his suggestions in the Chatfield Reallocation Project. Because Chatfield is such a loved and highly visited Colorado park, McCloud said they made it their mission to inform the public early and often so that their plans to alter the park would not surprise the park visitors. His team created a public relations program where they handed out flyers to park visitors, posted signs in the park, created a website, and also managed a hotline for people to call and comment about the project. McCloud also stated that they held a series of monthly meetings discussing the mitigation plans for the park, and four out of the five environmental firms found reasons to support the project.

David Nickum of Trout Unlimited represented the public interest group voice among the panelists.  He spoke about how groups like his involve citizens in the water permit process. Nickum noted that public interests groups allow a large number of people to organize and let the interest groups publicly reflect their values. He explained that involving the people who live near a proposed project in the permitting process is extremely important. Those are the people who will care the most and give the greatest insight because they see the area on a day-to-day basis, Nickum commented.

Nickum also highlighted the lack of dialogue present in the federal permitting process. He stated that the federal requirements provide a “propose and respond” kind of process, where people just submit comments and the agency responds. When asked about potential solutions to more effectively engage the public, Nickum suggested the integrated licensing process is a good model because it frontloads the public input. Getting the public involved early helps navigate what issues need to be studied. This process is also beneficial because it encourages public dialogue and helps the agency seem more credible to the public. Additionally, he noted, the more public engagement before triggering the National Environmental Protect Act (“NEPA”), the quicker the NEPA process runs.

Brian Werner of Northern Water has worked with the public agency for thirty-two years and spoke to his experience with public involvement on the Windy Gap Project. The purpose of public involvement is to figure out how to make projects better. Also, the public gets us to a place where we can build the project, Werner remarked.

For Werner, the length of permitting process is the most frustrating with regards to public involvement. He explained the difficulty of keeping the public engaged for ten years on the same project. Werner also discussed the challenges associated with public misinformation. In addition to the public often getting wrong details about a project, citizens often do not realize that the federal agencies dictate the process, and state agencies do not have as much leeway and control in the process as the public thinks.

When asked about potential solutions for the public communication struggles, Werner noted that there has to be a better way to do the Environmental Impact Statement (“EIS”) process. Werner would like to see a briefer and more simplified process as well as shorter and more easily understandable documents to facilitate public comment. Additionally, Werner thinks that there needs to be more coordination during the comment period because there is a lot of cherry picking by the various agencies.

Lurline Curran, County Manager of Grand County, primarily commented on her experience in working with the public on the Windy Gap Project. Public involvement facilitates the permitting process, Curran explained. Once the locals approve a project, the federal process flows more smoothly.

Curran also discussed some of the downfalls of the federal permitting process as well as other challenging aspects with public communication. Specifically, Curran mentioned that the EIS process eliminates the public dialogue. People send in their comments, and although the agency might answer them on one page in their report, the EIS excludes an actual interchange. She believes that Grand County found a solution to the limited dialogue present in the federal setting and set a template for how groups should work with the public. Curran credits the 1041 permitting process with helping achieve the necessary dialogue that lets all people feel like the permit issuer heard them. For example, in Grand County when the staff presents their recommendation for a project, the people in the audience get a chance to make statements in response in a town hall setting.

To Curran, the most frustrating part of public communication is trying to determine how to communicate with all groups in a way that they feel secure in a process where there can be lag time between various steps. To keep the public informed, Grand County developed a list with everyone who wants to receive information about the Windy Gap Project, and sent those individuals updated information. If you really want public input, Curran notes, you have to be willing to take the time to get it.

Despite the varying backgrounds of each panelist, Rick McCloud, David Nickum, Brian Werner, and Lurline Curran, all found that public participation, if approached right, could enhance the water permitting process.

The title picture is of downtown Denver, Colorado. The picture is attributed to George Miquilena under the Creative Commons Attribution-Share Alike 2.0 Generic, and the use of this picture does not in any way suggest George Miquilena endorses this blog.


Yellow Jacket Water Conservancy Dist. v. Livingston, 2013 WL 6800619 (Colo. 2013) (holding the Water Conservancy Act’s holdover provision, containing neither temporal nor reasonableness requirements, allowed district’s holdover directors to remain in office past their original term as de jure officers with authority to act on behalf of the district).

The Yellow Jacket Water Conservancy District (“Yellow Jacket”) held conditional water rights to several bodies of water located in northwest Colorado. Yellow Jacket’s board of directors met on September 29, 2009, and authorized the filing of diligence applications with the water court. On the date of the meeting, Yellow Jacket’s board of directors, normally a nine-member panel, had one vacancy as well as four directors whose terms had expired but who were still performing their official duties pending appointment of qualified replacements. After reviewing Yellow Jacket’s diligence applications, several parties (hereinafter “Livingston”) objected to the board’s authority to approve the filing these documents. Livingston argued that Yellow Jacket could not have assembled a valid quorum because only three of the nine directors were serving unexpired terms on the date of the board meeting. Livingston filed for summary judgment asking the Rout County District Court, Water Division 6 (“water court”) to cancel Yellow Jacket’s conditional water rights.

While the water court recognized that the WCA contained a holdover provision, the court relied on case law from other states in finding that the four holdover directors had remained in their positions for an unreasonable amount of time past the expiration of their terms. The four holdover directors’ terms expired on October 18, 2008, nearly one year before the board meeting. Consequently, the court found that Yellow Jacket’s board had not assembled a valid quorum and lacked the authority to approve the filing of the diligence applications. As a result, the water court granted Livingston’s motion for summary judgment, deeming Yellow Jacket’s conditional water rights abandoned and cancelled.

On appeal, the Colorado Supreme Court (“Court”) began its analysis by reviewing the purpose and procedure of Colorado’s Water Conservancy Act (“WCA”). In order to maintain a conditional water right, the holder is required to file an application for a finding of due diligence every six years. These applications help ensure that the holder is continuing to work toward completion of the project that initially led to the conditionally decreed appropriation. The water court then publishes the applications, allowing interested parties to contest the continuation of these conditional water rights.

The Court next examined the holdover provision of the WCA. Looking at the plain language of the statute and construing that language according to rules of grammar and common usage, the Court found that the WCA unambiguously allows a director to hold office for the original term, as well as any interim term, without limitation, pending the appointment of a duly qualified successor. The Court noted its longstanding position that when a statute provides that an incumbent may remain in office until a successor is duly qualified, the incumbent remains as a de jure officer, with all the authority vested in such position. Finding no legislative intent to impose temporal or reasonableness requirements on holdover terms, the Court declined to read either limitation into the statute.

The Court held that the water court had erred in its reliance on a standard of reasonableness, rather than the plain language of the holdover provision of the WCA. Accordingly, the Court reversed the water court’s decision to cancel Yellow Jacket’s conditional water rights and remanded the case for further proceedings.

 

The title picture is of the White River, which flows through the Yellow Jacket Water Conservancy District.


In 1898, the discovery of gold in Nome, Alaska triggered a new gold rush. Miners commonly used mercury to recover gold from ore and, over time, mercury and unrecovered gold accumulated in the aquatic environment and settled into the sediment below. Now, over 100 years later in Nome, summer gold prospectors seek their fortune in the mercury-laden sediments dredged up from the sea floor. Using shovels, sluice boxes, and boat-mounted excavators to dig up sediments, miners look for gold and remobilize toxic heavy metals in the process.

Heavy Metals

Heavy metals commonly enter aquatic environments as the result of natural processes, such as rock weathering and soil erosion. At low concentrations, these metals support metabolic activity in aquatic organisms and have little to no detrimental effect. However, at higher concentrations, these heavy metals can become toxic. Releases associated with anthropogenic activities such as mining, municipal wastewater treatment, manufacturing, and the use of fertilizers and organochlorine insecticides have significantly increased heavy metal concentrations in aquatic environments.

Sediments serve an important environmental role in absorbing heavy metals. Metals such as cadmium, chromium, copper, lead, and mercury precipitate out of the water over time and become concentrated in the sediments below. When remobilized, these sediments may act as a non-point sources of pollution, releasing high concentrations of heavy metals and directly impacting overlying waters, aquatic species, and other organisms dependent upon the contaminated water source for nourishment.

Heavy Metals in the Aquatic Environment

Water and sediment contamination has a significant correlation with the heavy metal content of aquatic organisms, such as fish. However, studies show that heavy metal levels are higher in aquatic organisms than in the surrounding environment. This is due to bioaccumulation, a process by which the amount of heavy metals present in an organism progressively increases over time because the rate of intake exceeds the rate at which the body can eliminate the substance.

Heavy metal contaminants in water sources have triggered significant fish and bird kills. In Montana, a once large, upstream copper mining and processing industry contaminated the upper Clark Fork River environment with toxic heavy metals. By the mid-1950s, high levels of copper and other metals caused significant fish kills, and most of the fish that once inhabited the area disappeared. Presently, efforts are in place to remove and clean up contaminated sediment, and fish have returned to the river. However, the negative impacts still linger. Osprey chicks in the area, identified as an indicator species because they eat fish from a specific area located very close to the nest, show blood mercury levels one hundred times the level considered problematic for humans. Further, blood mercury levels will increase over time as these birds mature and consume more heavy metals.

The Threat to Human Health

Remobilized heavy metals may also present a significant threat to human health. Consuming fish contaminated with heavy metals carries significant health risks, which may include, among other things, still-births and miscarriages; hypertension; severe damage to the body organs and the nervous, digestive, and immune systems; and even death.

For thousands of years, residents of Nome have relied upon fishing activities for “cultural and nutritional sustenance.” Today, these fishing activities continue in Nome’s public mining areas and other offshore locations where miners dredge up sediments and toxic metals. Although health officials in Alaska express concern with the risks miners face from exposure to mercury, the effects of dredging up heavy-metal rich sediments may be farther reaching. Where dredging and other releases of long-sequestered sediments occur in areas contaminated with heavy metals as a result of human activities, these operations have the potential to remobilize heavy metals, severely impacting the aquatic environment and local animal and human populations.

 

The title picture is of a gold mining dredge in Chatanika, Alaska. The picture is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license to Darren Giles. The use of this picture does not in any way suggest that Darren Giles supports this blog.

 


Sources:

Maria Lucia Kolowski Rodrigues and Milton Luiz Laquitinie Formoso, Geochemical Distribution of Selected Heavy Metals in Stream Sediments Affected by Tannery Activities, 169 Water, Air, and Soil Pollution 167 (2006), available at http://www.environmental-expert.com/Files%5C0%5Carticles%5C9340%5CGeochemicalDistribution.pdf.

Zafer Ayas, et al., Heavy metal accumulation in water, sediments and fishes of Nallihan Bird Paradise, Turkey, Journal of Environmental Biology (July 2007), available at http://www.jeb.co.in/journal_issues/200707_jul07/paper_04.pdf.

Characterization of the Ashepoo-Combahee-Edisto (ACE) Basin, South Carolina: Sediment Contaminants, National Estuarine Research Reserve System, available at http://www.nerrs.noaa.gov/doc/siteprofile/acebasin/html/modules/watqual/wmsedcon.htm (last visited April 1, 2014).

Index of Definitions: Bioaccumulation, United States Geological Survey, http://toxics.usgs.gov/definitions/bioaccumulation.html (last visited on April 1, 2014).

John R. Garbarino, et al., Heavy Metals in the Mississippi River, (Robert H. Meade ed., 1995), http://pubs.usgs.gov/circ/circ1133/heavy-metals.html.

Montana Osprey Project: Heavy Metal Studies, University of Montana Environmental Biogeochemistry Laboratory, http://cas.umt.edu/geosciences/osprey/heavyMetalStudies.php (last visited April 1, 2014).

Nome Dredgers Resource Guide: A Quick Guide for 2012 Dredging Activities in Nome, Alaska (May 2012), available at http://dnr.alaska.gov/mlw/mining/nome/Nome_Dredgers_Resource_Guide_ver1.pdf.

Northwest and Artic: 1897-1920 Gold, Alaska History and Cultural Studies, http://www.akhistorycourse.org/articles/article.php?artID=66 (last visited April 1, 2014).

Yereth Rosen, Alaska, concerned about gold miners’ health, to test them for mercury, Reuters (Aug. 25, 2012), http://www.reuters.com/article/2012/08/25/us-usa-alaska-miners-idUSBRE87O09220120825.