Colorado Water Law: An Historical Overview, Update 7

Colorado Supreme Court Justice Hobbs has written a series of Colorado Water Law updates, published in the University of Denver Water Law Review. The first article was published in Volume 1, Issue 1, in 1997. To provide our readers with the most up-to-date water law information, the editors have periodically updated works previously published in the Water Law Review. The following is an update to Colorado Water Law: An Historical Overview, Appendix – Colorado Water Law: A Synopsis of Statutes and Case Law.

 

Vance v. Wolfe

“While the term ‘beneficial use’ is undefined in the Colorado Constitution, the 1969 Act defines it broadly as ‘the use of that amount of water that is reasonable and appropriate under reasonably efficient practices to accomplish without waste the purpose for which the appropriation is lawfully made.’ Under the language of the 1969 Act, the CBM [Coalbed Methane] process ‘uses’ water – by extracting it from the ground and storing it in tanks – to ‘accomplish’ a particular ‘purpose’ – the release of methane gas. The extraction of water to facilitate CBM production is therefore a ‘beneficial use’ as defined in the 1969 Act.

Arguing against this interpretation, the Engineers and BP'[British Petroleum] assert that the use of the water during the CBM process cannot be a ‘beneficial’ one because the water is merely a nuisance. They stress that the goal of the CBM process is to capture the gas, not the water. The water, they continue, is simply an unwanted byproduct of the process. In sum, they question how the use of the water in this case can be termed ‘beneficial’ when they consider it to be a hindrance. . . . ‘[W]e disagree[.]

In fact, the presence of water and its subsequent extraction during CBM production is far more than an ‘inevitable result.’ Indeed, the presence and extraction of water are integral components to the entire CBM process. CBM producers rely on the presence of the water to hold the gas in place until the water can be removed and the gas captured. Without the presence and subsequent extraction of the water, CBM cannot be produced . . . While the Engineers and BP are correct that no Colorado case has specifically held that water used during CBM production is a beneficial use, this fact does not prevent us from finding such a beneficial use where our case law and the language of the 1969 Act so dictate.

As the water court noted, the Ranchers’ central concern is the protection of their vested senior water rights. We agree with the district court that our prior appropriation system exists to protect water rights holders. Here, the extraction, storage, and reinjection of water during CBM make the water inaccessible to other water rights holders such as the Ranchers. When the water is stored in surface tanks, a small quantity is lost to evaporation. At a later time, the water is typically reinjected, via underground injection control wells, into designated geologic formations that lie deeper than the aquifer from which the methane is produced. Consequently, ‘beneficial use’ also means use of water for a designated purpose – the result of which is to make the water inaccessible to other water rights holders.

We emphasize that determining the boundaries of ‘beneficial use’ requires careful case-by-case factual analysis and our holding today addresses the unique circumstances involved in CBM production. The definition of ‘beneficial use,’ however, is a ‘broad’ one, and we agree with the Ranchers that it is broad enough to cover the extraction of water to facilitate CBM production. In rendering our decision, we observe that the General Assembly may choose to make modifications to the statutes in light of our opinion.

In sum, while the production of oil and gas is subject to extensive regulation by COGCC [Colorado Oil and Gas Conservation Commission], it is also subject to the 1969 Act and the Ground Water Act. And, as noted above, we find that the extraction of water to facilitate CBM production is a beneficial use under those provisions.”

Vance v. Wolfe, 205 P.3d 1165, 1169 (2009) (case citations omitted).

Click here for a PDF of the entire article: 14 U. Denv. Water L. Rev. 159, 2010-2011

 

View the first article by Justice Hobbs here: 1 U. Denv. Water L. Rev. 1, 1997-1998.

View the first update to Colorado Water Law:  2 U. Denv. Water L. Rev. 223, 1998-1999.

View the second update to Colorado Water Law: 4 U. Denv. Water L. Rev. 111, 2000-2001.

View the third update to Colorado Water Law: 6 U. Denv. Water L. Rev. 116 2002-2003.

View the fourth update to Colorado Water Law: 8 U. Denv. Water L. Rev. 213, 2004-2005.

View the fifth update to Colorado Water Law: 10  U. D. Water L. Rev. 391, 2006-2007.

View the sixth update to Colorado Water Law: 13 U. Denv. Water L. Rev. 389, 2009-2010.