Colorado’s bid to dry up water speculation revolves around the drain

A move to dry up water speculation in Colorado once and for all ended in the legislature despite intense pressure from drought and water developers, with lawmakers saying they were loath to do harm farmers’ ability to sell their most valuable asset.

The Senate Agriculture and Natural Resources Committee introduced the anti-speculation bill after first accepting an amendment to make it an intersessional study of the problem. Technically, the measure could be revived, but the sponsors of the bill say the problem is solved for this year.

As the source of the West’s most important rivers, serving tens of millions of people, Colorado “is a prime target” for water speculators, said sponsor Sen. Don Coram, R-Montrose .

“There is a real danger of these billion-dollar funds coming in and taking possession of this water,” Coram told the committee last week.

Legislators and representatives of water conservation districts who work with farmers have countered that the water courts already prevent outright speculation and that making the sale of water rights more difficult would be a blow to the greater right of ownership possessed by farmers and state ranchers. The biggest problem for farmers right now, they said, is competition with wealthy cities for limited water supplies.

“We don’t see speculation,” said Joe Frank, director of the Lower South Platte Water Conservation District in northeast Colorado. “Instead, we are seeing pressure from municipal suppliers buying agricultural supply for future dry-offs.”

Colorado already has anti-speculation laws that require people to put their water rights to “beneficial use,” such as irrigating a farm, supplying tap water to a city, or releasing more water into rivers for recreational purposes.

Water tribunals require those claiming a new use of a water right to show that they have a client for the new beneficial use. But there is no clear agreement on when legal brokerage is more like speculative trading.

State water experts say unanswered questions include how long a water buyer must use the right before selling it to another party without the deal being considered an illegal reversal. There is also no clear consequence if a purchaser subsequently changes the water use that he expressed when acquiring the right to water.

The bill backed by Coram and Sen. Kerry Donovan, a Vail Democrat, was intended to target situations where a water right is purchased specifically with the intention of making a profit from a sale or trade. subsequent transaction.

Coram claimed in backing the bill last week that this is already happening. He pointed to Water Asset Management, an out-of-state investor that purchased shares of the Grand Valley Water Users Association. The New York-based investor currently leases water use rights to local farmers, said it is involved in long-term farming, and has worked on water conservation improvements. But Coram said there was little to stop the investor from being paid by downstream states to let water flow into the Colorado River instead of watering the state’s crops. .

Those who want to curb speculation also point to the San Luis Valley, where private Front Range investors want to use the well water rights they bought to head to Douglas County or other suburban buyers. fast growing.

“Somehow, somewhere, we have to put the guardrails in place to protect the water for the people of Colorado,” Coram said. He noted that he had been working unsuccessfully on anti-speculation legislation since 2019 and that at the current pace, the legislature would not do anything until “when the water has already left the state.”

Donovan said increasing drought and growing pressures threaten Colorado with compact appeal in the coming years, which means state or federal officials will cut off local uses of Colorado River water to satisfy agreements with lower basin states like California, Nevada and Arizona. When Colorado needs to find water on a compact appeal, Donovan said, the state shouldn’t “find itself negotiating in a time of crisis with someone who just wants the highest price. raised”.

Coloradans are understandably nervous, she added, about cutting farmers’ assets, and she understands that “water always takes a long time to figure out.” But she was disappointed, she said, that even the amendment for further legislative study could not move forward.

“I was hopeful that by having a bill we would force the conversation,” she said.

Correction: This story was corrected on April 26, 2022, to reflect that the amendment turning the bill into consideration was passed before the bill was tabled.

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Melissa C. Keyes