Fracking bidders top farmers at Colorado water auction
DENVER – Front Range farmers bidding for water to grow crops through the coming hot summer and possible drought face new competition from oil and gas drillers.At Colorado’s premier auction for unallocated water this spring, companies that provide water for hydraulic fracturing at well sites were top bidders on supplies once claimed exclusively by farmers.The prospect of tussling with energy industry giants over water leaves some farmers and environmentalists uneasy.”What impact to our environment and our agricultural heritage are Coloradans willing to stomach for drilling and fracking?” said Gary Wockner, director of the Save the Poudre Coalition, devoted to protecting the Cache la Poudre River.”Farm water grows crops, but it also often supports wildlife, wetlands and stream flows back to our rivers. Most drilling and fracking water is lost from the hydrological cycle forever,” Wockner said. “Any transfer of water from rivers and farms to drilling and fracking will negatively impact Colorado’s environment and wildlife.”The Northern Water Conservancy District runs the auction, offering excess water diverted from the Colorado River Basin – 25,000 acre-feet so far this year – and conveyed through a 13-mile tunnel under the Continental Divide.A growing portion of that water now will be pumped thousands of feet underground at well sites to coax out oil and gas.State officials charged with promoting and regulating the energy industry estimated that fracking required about 13,900 acre-feet in 2010. That’s a small share of the total water consumed in Colorado, about 0.08 percent. However, this fast-growing share already exceeds the amount that the ski industry draws from mountain rivers for making artificial snow. Each oil or gas well drilled requires 500,000 to 5 million gallons of water.A Colorado Oil and Gas Conservation Commission report projected water needs for fracking will increase to 18,700 acre-feet a year by 2015.Farmers who go to the auctions seeking to produce food – or maybe plant more acres – are on equal footing with companies seeking water for fracking, Northern Water spokesman Brian Werner said.”If you have a beneficial use for the water, then you can bid for that water,” Werner said. “We see the beneficial use of the water as a positive for the economy of the whole region. Fracking is one of those uses. Our uses of water have evolved over 150 years.”Riding his tractor last week, Colorado hay producer Lar Voss, who bid for water at the recent auction, accepted this approach. Voss bid for 100 acre-feet “to be sure I’ve got enough for the crops,” he said. Selling water to those who can pay the most “is what ought to happen.”But farming advocacy groups raise concerns.”How do we continue to sustain agriculture when there’s just more and more demand on our water resources in this state?” said Bill Midcap, director of the Rocky Mountain Farmers Union, which represents 22,000 producers in Colorado, Wyoming and New Mexico.”The governor has said agriculture is helping Colorado come out of this recession. How do we keep those dollars flowing from agriculture into the state economy with more and more stress on our resources – such as water?”Energy industry players “carry a big stick” at auctions and likely have the money to prevail in a free-market competition for scarce water, Midcap said.At the recent auction, Fort Lupton-based A & W Water Service Inc. bid successfully for 1,500 acre-feet of water, paying about $35 per acre-foot. That’s slightly higher than the market price that irrigators pay for leasing water along the Front Range. The average price paid for water at NWCD’s auctions has increased from around $22 an acre-foot in 2010 to $28 this year.A & W also leases water from Longmont, Loveland, Greeley and other cities – and hauls it to drilling sites.Among other bidders seeking water for industrial use, Leonard Wiest, president of the Windsor-based development company Trollco Inc., said he sees growing revenue from energy firms.”If we’ve got the water, we would welcome them as a customer,” Wiest said.State natural resources officials emphasize that fracking still uses a relatively small share of water consumed in the state, with around 87 percent used for agriculture.”The future is upon us. There’s always been competition for water in Colorado. As industries develop, and industries fade, you’ll see a shift in who can afford to pay the price,” said Nicole Seltzer, director of the Colorado Foundation for Water Education, a nonprofit funded by state government and the energy industry.Colorado’s state-backed round-table process for addressing water challenges “has made preserving agricultural water in this state a priority,” Seltzer said. “But you have to balance that with a free-market economy.”
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