Shaping Water Access and Allocation

A Relation Analysis of Water Use for Oil and Gas Development in Colorado

by Katie Boone, Ph.D. Candidate, Geosciences, Colorado State University &
Dr. Melinda Laituri, Ecosystem Science and Sustainability, Colorado State University

Map of Colorado with oil and gas development highlighted in green and the counties of study outlined in red (Oikonomou et al., 2016).
Figure 1. Map of Colorado with oil and gas development highlighted in green and the counties of study outlined in red (Oikonomou et al., 2016).

Introduction
The state of Colorado’s Division of Water Resources considers water
use for oil and gas (OG) extraction activities as short-term and an
insignificant percentage of Colorado’s overall water consumption.
The Statewide Water Supply Plan makes no mention of concern
about OG water uses; and OG activities are not represented at the
Basin Roundtables, a state initiated water governance mechanism
mandated to integrate bottom-up, local decision-making into the
State’s Water Plan. These are the predominant entities responsible for
guiding water policy, and while Colorado’s institutions were built on
the premise of mining interests, the contemporary pace and scale of
energy extraction represents a new phenomenon that has not been
critically examined. Indeed, the quantity and sourcing of water for OG
operations are not accurately documented or fully understood by state
agencies. At the same time, the number of active OG wells in the state
has gone from 22,500 in 2002 to almost 54,000 in 2016. Changing
water use is particularly important on the South Platte River in Weld
County and the Colorado River in Garfield County since they contain
the largest percentage of active wells with 22,724 and 11,067 OG wells
respectively. Throughout its lifecycle, each well uses between 3-8 million gallons, or between 9-24 acre feet of water. To meet the increasing demand for OG use, water suppliers, right holders, and Colorado’s diverse community of users are innovating ways to navigate the rules governing water access and allocation to find flexibility in the State’s water institutions.

With financial support from the National Institutes for Water
Resources and the Colorado Water Institute, this research study examined how OG water users are able to find flexibility in the system
when other uses have not, who is impacted by this type of flexibility,
how, and what it means for access by other users. What does
differential access look like if it exists and what does its presence
illuminate about the system of prior appropriation? A comparative case study was conducted, spanning the U.S. Continental Divide
to investigate divergent influence and change of OG water use in
Garfield and Weld counties to examine these questions (Figure 1).
These regions are of particular importance since they are located
above Colorado’s most productive OG fields, the Piceance and
Denver-Julesburg Basins respectively. These regions have differing
shale geologies, land tenure (private versus publically owned), divergent regional histories, and water sourcing strategies related to OG extraction. Identifying how increased water use for OG shapes and
is shaped by the institutions of water rights both historically and in
new ways will inform adaptive policy-making and institutions.

Methods
A comparative case study methodology provided the necessary indepth examination of the ‘how’ and the ‘why’ of social and political
change processes, an important step in building our understanding
of water access and allocation mechanisms. State water institutions,
policy, and local level decision-making comprise the ideal
space to examine the actions and daily experiences of institutional
decision-making on individual actors while compiling data that
offers insights into larger scale changes in Colorado’s water governance. A mixed-methods approach was used to integrate historical institutional analysis, document analysis of water rights, indepth interviews, and geographic information systems (GIS). The
historical institutionalist method traced the development of water
rights and national energy policy as it related to OG development.

Then, an analysis of water rights for OG development was based
on identifying current water sourcing strategies in Weld and Garfield
counties. Data were gathered from published research and from a
document analysis of primary source formal water court agreements
including Substitute Water Supply Plans (SWSPs) and Water Right
Decrees. The analysis of legal documents collected from government
databases were evaluated in three phases. First, a literature review
identified strategic search terms to locate the relevant water right
decrees and short-term lease agreements (SWSPs) from the Colorado
Division of Water Resources (DWR) online databases Laserfiche
(http://dwrweblink.state.co.us/) and HydroBase (http://water.state.co.us/DataMaps/Pages/default.aspx). Search terms fit into categories of energy company, water provider, transport names, county, water uses, and key terms including oil and gas.

The second phase applied a Boolean search logic to locate the relevant water rights and SWSPs in the government databases from 2000-2014, a time frame including the height of OG production and the subsequent decrease of drilling activities and water use. Boolean searches consisted of combinations of county name, energy company, water organization name, and keywords such as ‘natural gas’ and ‘oil’. Records returned from searches were organized using a common naming convention for systematic document and folder organization. Phase three entailed the document analysis using coding for applicant and water right holder name, diversion location, appropriation date, water source, decreed use(s) and volume, and proposed new use(s).

Katie_Boone_conducting_interview_for_her_research_project_-_credit_Katie_Boone.jpg
Katie Boone conducting an interview for her research project. Photo credit Katie Boone.

Then, interviews with farmers and ranchers, water managers, and OG company representatives shed light on how access and allocation is or is not flexible for multiple uses and/or sites of differential water access. In this case, utilizing qualitative interview methods provided the means to gain a better understanding of local definitions, perceptions and behaviors on the core topics of water access and allocation related to OG development, or how this institutional change is experienced by people on the ground.

Trends in Oil and Gas Water Access and Allocation in Weld and
Garfield Counties

Water rights have evolved differently across Weld and Garfield
counties and within the South Platte and Colorado River Basins
(Figure 1). Thus, OG operators in these two counties acquire water
through distinct access mechanisms. The South Platte River Basin
flows through Weld County, out towards eastern Colorado and
Nebraska. The river supplies the greatest concentration of irrigated
agricultural lands in Colorado, with 85% of water used to irrigate
831,000 total acres, representing 24% of the state’s irrigated acres.
OG began in the early 2000s and Weld County is the top producing
county with 22,108 active OG wells. Operators purchase water
rights from agriculture and have short-term leasing arrangements
including SWSPs from a variety of private entities. These entities
include: water haulers, municipalities and increasingly from
stakeholder-driven irrigation and reservoir companies, particularly
those leasing water diverted from the Colorado River Basin
through the Colorado Big Thompson (CBT) project. CBT water
is diverted from western Colorado, under the Continental Divide
and into the South Platte River Basin, flowing across the Eastern
Plains in Colorado. CBT water is legally multi-use (i.e., municipal,
industrial, irrigation) and considered more flexible since water can
be leased to diverse use types without long and costly water court
change of use cases. The South Platte River is over-appropriated,
meaning that there are more legally sanctioned water uses then
there is water, OG operators are nevertheless able to access water
for OG development.

On the western side of the Continental Divide, Garfield County
is the second largest producing county after Weld County with
11,000 active wells and located on the main stem of the Colorado
River Basin (CRB). The main stem of the CRB has 268,000 or 8%
of the state’s irrigated acres of farm and ranch lands. OG operators
lease small amounts of CRB water from private entities such as
ranchers and conservancy districts, however, the predominant
trend is for OG companies to own their own water rights. These
rights were acquired from agriculturalists starting in the 1940s in
anticipation of a federally funded oil shale boom. Many of these
rights remain ‘conditional’, meaning they have reserved a place in
the priority list, have proven intent to divert the water by taking a
justifiable first step toward development but do not immediately
need to put the water toward a beneficial use. A conditional right
holder intends to make beneficial use of the water for some sort of
future development, in this case OG extraction. The different access
and allocation mechanisms across the two counties represent
divergent interpretations of the same institution of prior appropriation rooted in unique contexts and histories.

Conclusion: Reflection on Research Experience
This research project has provided the opportunity to get to
know a diversity of water users, understand their interests,
concerns, and vision for the future of water access and allocation
in Colorado. Colorado’s water community has been generous
for their time to interview and respond to questions about water
rights and OG activities. Participating communities share a lot in
common, while at the same time work through points of contention
and historical grudges. Despite the diversity and challenges,
there remains a common mission to do what is necessary to keep
water for agriculture alive in Colorado.

Colorado’s water institutions and rights change and adapt relationally with changing uses on the South Platte and Colorado Rivers, generating contemporary water accessibility for the state’s
diverse users. To understand these processes, social complexity is
defined and integrated through a relational examination of historic
policy outcomes, their influence on contemporary water allocation
and access, changing water use for OG, and the physical nature of water as continually evolving and shaping one another. This integration links the hydrological and social impacts, while further
enriching our understanding of how adaptive water governance is
iteratively shaped through this same relational process.

In sum, issues of water access related to OG development have
been identified piecemeal through individual conversation and
in newspaper articles demonstrating the real concerns of farmers,
environmental groups, and state legislators. No substantive
studies have examined the tradeoffs of water access for the state’s
diverse users. While water quantity for extraction is still contested,
a sufficient amount of data has been gathered from this research
study, specifically from the Division of Water Resources’ database
to identify changes in water rights precipitated by increased OG
production. If differential access is occurring, water policy should
account for it and ensure all users have access to beneficial uses,
particularly as the state moves toward more flexible water administration mechanisms. At the same time, formal policy often has
divergent impacts on groups of people. This research examines
these potential impacts and tradeoffs and will propose policy
alternatives. The data analysis is still continuing so stay tuned for
comprehensive research findings this fall!