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A company with an interest in oil shale development in western Colorado is seeking to maintain its water rights associated with a proposed reservoir on Thompson Creek that would be located within an area proposed for oil and gas lease withdrawal.
Puckett Land Co. is seeking to hold on to conditional water rights that date to 1966 for a 23,893-acre foot reservoir on Thompson Creek, a tributary of the Crystal River just south of Carbondale. It would be nearly one-fourth the size of Ruedi Reservoir, which, when full, holds just over 100,000 acre-feet. The reservoir site is located on Bureau of Land Management land in Pitkin County.
According to water court documents
filed in November, Puckett says the water is needed for the “commercial development of Puckett’s oil, gas, coalbed methane and/or oil shale minerals.” The water is decreed for industrial, domestic, recreational, irrigation, power, mining and all other purposes related to shale oil production, including the maintenance of a camp and community.
Puckett Land Co., based in Greenwood Village, Colorado, holds interests in 17,500 acres of land in Garfield and Rio Blanco counties, according to the application. The Thompson Creek water rights are described as being part of an integrated system that includes conditional rights for two small reservoirs, and a pump and pipeline on Starkey Gulch, a tributary of Parachute Creek. Those Parachute Creek basin reservoirs have not been constructed.
Attorney for Puckett Land Co. Peter D. Nichols said that it would be inappropriate to respond to questions from Aspen Journalism while the application is pending in water court.
The proposed reservoir site is within the boundaries of an area that the U.S. Forest Service and BLM are proposing to withdraw from eligibility for new oil and gas leases. The proposed Thompson Divide withdrawal area is comprised of 224,713-acres in Garfield, Gunnison and Pitkin counties that generally straddles the ridge of mountains running from south of Glenwood Springs to the northern edge of the West Elk Wilderness, south of McClure Pass.
Carbondale-based conservation group Wilderness Workshop supports the withdrawal, and executive director Will Roush said a reservoir on Thompson Creek is highly problematic for many reasons, including its many harmful effects on the ecosystem.
“The local community has been working for over a decade to protect Thompson Creek and the surrounding lands; damming the creek runs counter to these efforts and deeply held community values,” Roush said in a statement. “Furthermore, the intended use of this water would be to enable oil shale and other fossil fuel production. Given our water and climate crises, utilizing precious West Slope water to increase climate pollution is simply unacceptable.”
The proposed reservoir site is just upstream from Sunfire Ranch, which is near the confluence of Thompson Creek and the Crystal River. In 2020, Pitkin County spent $10 million to put a conservation easement on the property, meaning that most of the 1,240-acre property is protected from development. Pitkin County also has its own taxpayer-funded board, Healthy Rivers, that funds programs and grant requests that focus on improving water quality and quantity.
Pitkin County Attorney John Ely said he is evaluating Puckett’s application and deciding whether the county wants to weigh in. Interested parties have until Jan. 31 to file statements of opposition in water court. As of Friday, no such statements had been filed.
Conditional water rights
The reason Puckett has been able to hold on to water rights that are nearly 60 years old without putting them to beneficial use lies in a quirk of Colorado water law that at least one scholar says needs to be reformed. Conditional water rights allow a would-be water user to reserve their place in the priority system based on when they applied for the right — not when they put water to use — while they work toward developing the water. Under the cornerstone of water law known as prior appropriation, older waters rights get first use of the river.
To maintain a conditional right, an applicant must every six years file what’s known as a diligence application with the water court, proving that they still have a need for the water, that they have taken substantial steps toward putting the water to use and that they “can and will” eventually use the water. They must essentially prove they are not speculating and hoarding water rights they won’t soon use.
But the bar for proving diligence is low. Judges are hesitant to abandon these conditional water rights, even if they have been languishing without being used for decades. Andrew Teegarden, a water fellow at the Getches-Wilkinson Center for Natural Resources, Energy and the Environment at the University of Colorado School of Law, argues this is partly because in Colorado water is treated as a property right.
“Some of the standards I think are a little lackadaisical merely because they don’t require the holders to spell out and specify all of the diligence activities that an individual took,” Teegarden said. “Most of the diligence applications that you’ll see are not filled with tons and tons of information; it’s more general statements about things like maintenance and building infrastructure. … It seems like we could require a little bit more specificity out of some of these holders.”
In Puckett’s diligence filing, the company says that in the past six years, it has spent nearly $100,000 on maintaining, repairing and upgrading its infrastructure and overall water system on its properties in the Colorado River basin; spent more than $80,000 on operational activities such as road maintenance and erosion control; spent more than $16,000 on professional services, including survey and title work; and has spent more than $80,000 on legal services to protect and develop its water rights.
The application does not specifically mention work regarding the Thompson Creek reservoir site in its list of diligence activities and says that diligence on any part of the system constitutes diligence with respect to the entire system. It is not clear how the Thompson Creek reservoir would operate with other parts of the system.
Puckett also said in its application that current economic conditions are adverse to oil shale production, but that that should not be sufficient on its own to deny its diligence claim.
Diligence filings are common and often fly under the radar. In 2017, the last time Puckett filed a diligence application for the Thompson Creek reservoir, no parties filed statements of opposition in the case. In the diligence filing prior to that, in 2010, only one party — the owners of the Crystal River Ranch — came forward as opposers. In that case, Puckett agreed to abandon conditional rights for a pipeline that would have diverted water from a point below the proposed dam.
Oil shale and water use
In 2009, conservation group Western Resource Advocates produced a report called “Water on the Rocks
” about oil shale water rights in western Colorado. According to the report, in anticipation of a boom, in the 1950s and ’60s, companies with an interest in western Colorado oil shale amassed an enormous portfolio of water rights because extracting the oil from shale, a type of sedimentary rock, requires huge amounts of water. The report found that there were conditional water rights associated with oil shale development for 27 reservoirs with 736,770 acre-feet of water in the mainstem of the Colorado River basin.
If these conditional water rights were to be developed, the impacts could be felt by other water users throughout the basin. When the holders of conditional rights with older priority dates finally begin diverting water they have not used in decades, they may force junior rights holders to stop using water, something Teegarden calls “line-jumping.” The sheer volume of water tied to oil shale development, if ever used, could upend the whole system.
“As soon as some of these conditional rights begin coming online, they’re going to curtail these users that have been receiving that water in some cases for decades,” Teegarden said. “We have these users who have been making productive use of the state’s water for all this time and have been following all of the requirements of the law, but now they are the ones that might be punished for their use of the water.”
In a draft paper on the unintended consequences of conditional water rights in Colorado, Teegarden advocates for reforms to the anti-speculation and due-diligence standards. He says if users fail to put water to beneficial use within the typical 10-year abandonment period, the conditional water rights should be abandoned. With the help of the legislature, water courts could also implement a strict time limit for putting conditional rights to beneficial use and stop allowing them to exist indefinitely. For example, extensions through diligence filings could stop being granted after 50 years.
“I think that we really need to be serious about looking into and reforming these conditional rights before the time comes where we see some of these impacts to other water users across the state,” Teegarden said. “Because if we wait until that point, we won’t be able to guarantee a water-secure future, especially with the volumes of water that are associated with these conditional rights.”
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