Mining “Modern” Colorado Water Law 

I am a practicing tax attorney and CPA, mainly, but I am not a water lawyer, as most water lawyers will no doubt be quick to point out. But in 2015 I did listen to a recorded continuing legal education conference put on by the Colorado Bar Association for water lawyers and hydraulic engineers entitled “Conflict Resolution in Colorado Water Rights Proceedings.” It was the fifteenth in an ongoing series of all-day programs to educate water lawyers and engineers, a sign of just how complex and contentious Colorado water law is.[1]

 I learned from the conference that of the 40,000 to 50,000 cases filed in Colorado courts every year, only 300 are water court cases, less than 1 percent. However, water court cases consume 16 percent of the court’s time, a testament to how complex they are. Judge Andrew Hartmann, the Division One basin judge covering the South Platte basin, said he sets about a third of the water law cases for trial. Even if nine out of ten opposers cease objecting, a single remaining opposer forces the parties to prepare for trial. Nearly all cases settle, many as late as the weekend before trial begins according to Judge Hartman. That does not save much money.

“Getting out the week before trial only saves us ten percent of the cost of going to trial,” said Lisa Darling, who was then a water manager with Aurora Water, is now the executive director of the South Metro Water Supply Authority and was on a panel during the 2015 conference.

Water rights in water court decrees, many issued before 1900, are typically defined as direct flow rights in cfs and by the number of acres being irrigated, not in terms of historic consumptive use, the amount of water that crops consume. The decrees set forth the maximum permissible water diversion, and most irrigators aim to divert the full amount of their decree. Robust diversion records are valuable when selling a ranch. That is why so much water is diverted from rivers in Colorado and throughout the West—the system is designed to achieve that very outcome.

Since historic consumptive use, the average amount of water consumed on a ranch over all the years it is being irrigated, is not difficult to estimate, as it involves multiplying the number of acres being irrigated by the water consumed, which agricultural colleges in every state have estimated with crop coefficients. However, since it is not determined until it is duked out in water court, HCU is always the “big unknown.” That is why I say that most irrigators do not know what their true water rights are, and most don’t know until they try to sell and go through an HCU determination process, which is something one might well prefer to do just once if possible.

Engineers typically assume that hay consumes about two feet of water per acre, which means that a 100-acre field consumes 200 acre-feet of water per year. Corn typically consumes 16 inches per year, two-thirds as much as hay. Those two crops account for 85 percent of all Colorado agricultural products.

We prioritize water rights based on when decrees were issued, so determining historic consumptive use and when it is in priority should be straight forward.

Except that it isn’t.

Determining historic consumptive use in Colorado involves hiring engineers, calculating ditch losses, estimating underground return flows, reviewing decades of water diversion records, adjusting for sprinkler vs. flood irrigation, and . . . we’re just getting started. Emily Hunt, who was then an infrastructure and water manager at the City of Thornton and now is deputy infrastructure director for Thornton, was also on a panel at the 2015 conference. She noted “There are thousands of engineering opinions that can be disputed.” Lisa Darling added, “Different experts can have different opinions, and both can be right. That’s why so many water disputes get negotiated and settled.”

When data is missing, experts can differ. (And when the data is water percolating underground where no one can see it, as when it comes to groundwater, experts differ in nearly every case). Hunt described the water rights department she oversees at the City of Thornton, whose water portfolio includes thirty water rights. “We have two full time employees just managing the water court process, including the water attorneys and engineers we hire,” Hunt said. In addition to our in-house water attorney, we have three water law firms and six engineering firms on retainer. All are very expensive.” Every time they spend $50,000 opposing a case, Hunt must inform the Thornton city council. “It does not take long to reach $50,000,” she said. “That’s basically hiring an expert.”

Darling managed the acquisition and protection of South Platte River basin water rights for Aurora. Her department at the time consisted of an in-house staff of five employees and two large water-law firms on retainer. In October 2015 Aurora was involved in 75 cases in Division One, the South Platte basin, either as an opposer or as the applicant, according to Darling. When an attorney in the audience asked a question during the conference, she demurred, saying, “I’m not sure we can talk about cases without an attorney here.” But Hunt from Thornton quipped, “I’m sure I have an attorney here, probably three of them!”

Cases often settle outside the courtroom where parties agree how much water can be transferred from agricultural to municipal use. Attorneys call these “consent decrees.” They usually lack the finality of a court decree since they contain disclaimers saying they cannot be used to determine water rights or as evidence later in water court. Consent decrees preserve each party’s right to duke it out in court later, preserving future work for the water law firms that draft them. And if and when water users get to court, including cities which own many agricultural water rights, they want their water rights to appear as robust as possible. And there has been a built-in bias to make water rights look bigger than they are since the original tenets of Colorado water law were first laid down in 1859. The state engineer enters water court cases and estimates historic consumptive use to counteract the self-interested bias that everyone else has to inflate their water rights.

From the audience of the continuing legal education conference, Colorado Supreme Court Justice Hobbs observed that senior agricultural water right holders—that is, farmers and ranchers —are intimidated by the high cost of water court and complain that their legal and engineering court costs can far exceed the cost of operating ditches. “It is a cost of doing business,” Darling conceded, but also said “the farmers we work with are the most savvy businessmen we come in contact with. The poor farmer—I don’t see that anymore. It’s such a tough industry to survive these days.”

Colorado water law is particularly lucrative for the law and engineering firms that big cities have put on retainer. Cities pay them with money raised from taxpayers and utility customers who contribute a few dollars a month. It’s the classic situation that Mancur Olsen observed—a small, self-interested group has way more to gain than the large unwashed masses have to lose. But individual farmers and ranchers must pay their own money to play in water court, and that stings. Thornton’s Hunt said, “In Colorado we do not have a choice, everything goes through water court.” On a later panel, attorney Joseph Dischinger said, “Business litigation is different from water court because water attorneys are a tribe that keeps seeing each other.” While Dischinger may never again run into the attorney on the other side of a commercial lawsuit, that’s not true in water court. And it is not just water attorneys that keep seeing each other. At the water meetings I attend, I also see a consistent cast of professional engineers, city planners, and utility managers.

First in Time

Colorado water law in Colorado got off to a hectic start.

On May 6, 1859, John Gregory discovered gold in Gilpin County near the western edge of Black Hawk. Word got out and 5,000 miners joined Gregory by May 31. Another 10,000 miners arrived by the end of June.[2] Thanks to the abundant water in North Clear Creek, Black Hawk quickly became a mill town, processing ore from the nearby mines.[3] Visualize 15,000 miners camping out in Black Hawk, speaking the native tongues many brought with them from Europe, hammering out Colorado water law. But that’s what they did. The foundations of Colorado water law were laid down in Black Hawk in those chaotic few months of 1859.

Colorado’s first territorial government was established in 1861, fifteen years before becoming a state in 1876. A tiny fraction of water is used in Colorado for mining today. The US Geological Survey is the organization that measures water use in America since so much of it comes from below ground. In 2005, the agency reported that while 15,300,000 acre-feet of fresh water was used by humans in Colorado, only seven acre-feet of fresh water was used in mining.[4] Colorado water law so intrigued Israeli law professor David Schorr that he wrote a book about it in 2012, appropriately titled, The Colorado Doctrine.[5] Schorr argued that at its heart, Colorado water law is egalitarian and historically sought to level the playing field. Formed when robber barons ruled railroads and other industries, Schorr believes Colorado water law meant to keep greedy corporations at bay, preventing them from hoarding a scarce resource and exploiting it for profit. In fact, water is free to irrigators. Forever, apparently. We do not assess or tax water. And there is no charge for taking two or ten times more water than needed to irrigate a field from a free river (although it’s not consistent with state law to do so).

Water law throughout the West, including Colorado, has its origins in mining law because miners got here first. Agricultural water use, the dominant use today, was grafted onto mining water law, yet the two uses could not be more different. A miner’s water right is non-consumptive: no water is consumed as water is used to strip precious metals from the surrounding rock. All water used in mining returns to the river, albeit sometimes in a sorry, polluted state. The miner’s water right is the amount diverted from the stream, not the amount consumed. An irrigator’s ultimate water right, on the other hand, is entirely consumptive, measured by the amount of water that plants consume while growing. However, many irrigators think and behave as though the more they divert, the bigger their water right. This thwarts most attempts to leave more water in rivers. When a farmers sells an agricultural water right to a municipality, the amount consumed by crops is what is sold, not the amount diverted. Irrigators who are selling to a municipality, which requires a “change case,” do not know exactly what they own until it is vetted in water court by engineers and attorneys during a “battle of the experts.”

The United States has two forms of water law, riparian law and prior appropriation. (When you add in groundwater, a third rule of law applies, the rule of capture—whoever captures groundwater by pumping it gets to keep it). Riparian law, dominant in the East, holds that any person with land bordering a river or lake can take water without limit. It does not matter who got there first because, at least in theory, there is enough water for everyone. Prior appropriation in the West could not be more different. It honors a seniority system based on who got there first, and it is irrelevant whether or not a property borders a stream or lake. Prior appropriation law dominates west of the 100th Meridian, and it is premised on water scarcity. California, on the other hand, has a confusing mix of prior appropriation and riparian law because the water users who got there first came from riparian states and clung to the notion. California legislators grafted prior appropriation law onto riparian law, making it even more confusing. When groundwater is involved, the rule of capture can also come into play as well. Colorado is by no means the only western state plagued by the issues described here.

Prior appropriation holds that the first person to put water to beneficial use has the superior right to continue using the water perpetually. Prior appropriation law has always treated the river as free to the taker, regardless of the impact that diversions have on stream health. Qualifying for beneficial use is remarkably easy—as long as water grows hay, or any other crop, it meets the beneficial use requirement. When rivers are high, as in spring runoff, the river is called a “free river” and not “under administration.” As such, anyone can divert or capture the excess flows, even without a water right, as long as it is put to a beneficial use. And by controlling the water and putting it to a beneficial use, you can then obtain an official use right from the state, in the form of a decree with a priority date, and enjoy free water forever, at least according to your priority, and ultimately, if there is water in the river. The next user who begins using water obtains the second priority right, superior to all later arrivals and junior only to the first user. And so on. As long as senior users do not call out junior users by “making a call” on the river, juniors can use whatever water they can put to beneficial use. And there is a lot of room in irrigation for “beneficial use.” The law motivates users, particularly irrigators, and cities that own agricultural water rights, to divert and use as much as they can, under their respective decrees, to make their water rights as robust as possible through detailed diversion records. 

A “call” is an official legal demand by a senior water right holder, via a state-employed division engineer, to prevent a junior water right holder from using the senior’s water. A call will be placed by the state when senior irrigators can show they aren’t getting their share, but juniors are still diverting water. Usually the first land that was irrigated is lowest in the basin since river valleys broaden as they descend. Fields are typically larger and growing seasons are longer there. Johnny-come-lately settlers irrigated fields higher in the basin, and they are known as “upstream juniors.” They are upstream and have later, junior rights that are at risk of being called out.

In Colorado, indeed all over the West, any water right holder can entirely dry up, or “sweep,” a river. This issue came to a head in Oregon in 2002 when Reclamation, with the support of President George W. Bush, permitted hay irrigators to dry up the Klamath River. That caused an entire salmon run to perish, a total of 64,000 adult spawning fish including the endangered Coho salmon.[6] Even junior instream flows, which are legally defined in Colorado as environmental flows designed to “preserve the environment to a reasonable degree,” cannot prevent a senior water right holder from entirely drying up a river.

The downsides to the priority system have been recognized by others before. Consider this short, if intense, description of the ill-effects of prior appropriation from Donald Pisani. He was a history professor and water law scholar at the University of Oklahoma when he published a book in 1996 entitled Water, Land, and Law in the West, The Limits of Public Policy, 1850-1920.[7]

“Prior appropriation creates absolute rights and provides little incentive to conserve water,” Pisani writes. “Indeed, users are encouraged to consume more water than they need so they can maintain a claim to the largest supply possible. This misuse, in turn, leads to waterlogged fields, the buildup of alkali and salts from excessive irrigation, abandoned farms, the pollution of surface-and-groundwater from pesticide runoff, damage to fish and wildlife from excessive diversion, an increased use of underground water, inadequate land use planning, and the neglect of the water needs of Native American communities. Even though the right to use water was given away for nothing by the federal government or the states, prior appropriation does not recognize a ‘public interest’ in how water will be used.”

Well, thank you Professor Pisani! Other than that, do you think it’s a good way to regulate water use?  

Western Colorado, where 80 percent of the state’s water originates, was designated as an Indian reservation until the Ute Treaty signed in 1881 reversed this. Native Ute tribes ceded all territory in Colorado except for a small strip along the southwest border near the Four Corners area that the Ute Mountain Ute and Southern Ute Indian tribes occupy today. As soon as the Army escorted the last 1,458 Ute Indians living in Grand Junction to a new reservation in Utah, whites rushed in and claimed land to farm, Before 1881 was over, water rights were being claimed from Ouray to Meeker. Picture how many people would show up if free lots were advertised in Grand Junction today, and you get a sense of what western Colorado was like in 1881. Colorado’s real gold is water, not the yellow metal that miners toiled over. And for many, leaving water in a stream is like walking past a gold nugget in the stream without bothering to pick it up.

In 2014, according to state information (the Colorado Decision Support System website), there were 59,671 diversion points where water is taken from streams and rivers, more than one for every two square miles of state land. And for some, leaving extra water in the river at any one of these diversion points is like leaving $100 bills on the ground.

Figure 9.1 Diversion points in Colorado (CDSS)

Figure 9.2 Diversions, square miles and wells in basins.

Water lawyers in Colorado spend their careers specializing in arcane technicalities and learning obscure nuances that are unique to particular water rights. And that’s why the average water lawyer is likely to say, “You don’t have it quite right” or “It’s complicated” when asked even the simplest question. It’s partly because they are coy about protecting their clients’ rights, and partly because Colorado water law is inordinately complex, governed by hundreds of statutes. But “you don’t have it quite right” is a conversation stopper and a handy excuse to resist even the simplest recommendations for change. For an example of their complicated world, here’s a passage from a 2017 case where attorneys for Denver Water were seeking to firm up Denver’s right to divert water from Dillon Reservoir to the Front Range. The utility increased its diversion from 520 cubic feet per second to 654 cfs, enough to deliver another 40,000 acre-feet over five months. (The case also was keeping Denver Water’s dream to build the Two Forks Dam and Reservoir Project alive but, well, that’s complicated).

The conditional water rights to the Blue River Diversion Project and Dillon Reservoir were originally decreed in Civil Action Nos. 1805 and 1806, Summit County District Court, on March 10, 1952. After appeal to the Colorado Supreme Court, Case Nos. 1805 and 1806 were remanded for further proceedings. In 1955, Case Nos. 1805 and 1806 were removed to the United States District Court for the District of Colorado (“Federal District Court”) where they were consolidated with Case No. 2782, and renumbered Case Nos. 5016 and 5017. On October 5,1955, the parties to C.A. 2782, 5016 and 5017 entered into a stipulation which formed the basis for the Final Decree, which was entered by the Federal District Court on October 12, 1955 (the 1955 Stipulation and Final Decree are referred to jointly herein as the “Blue River Stipulation and Decree”).[8]

To be fair, there is language in the decree that better explains what is happening, but this is typical of what one must wade through in nearly every water court decree. One result of writing like this is that few people know what is going on with water in water court. And as far I as I can discern, what the above passage is saying is that Denver Water had a conditional water right to store 252,678 acre-feet in Dillon Reservoir and to divert 788 cubic feet per second through the Roberts Tunnel to the Front Range with a priority date of June 24, 1946. Denver Water’s 1946 right was conditional because it hadn’t yet built Dillon Reservoir or the Roberts Tunnel. It is inferior to Reclamation’s right to fill Green Mountain Reservoir lower down the Blue River so irrigators in Grand Junction can get water in August through October. It also addresses what water insiders know as the “Blue River Decree.”[9]

The above passage was in a proposed water decree written by Denver Water’s lawyers and submitted to Judge Boyd in Water Division Five, the Colorado River basin, for his signature. He normally would sign it unless attorneys representing other water rights impacted by the decree raise a fuss. They won’t because they already agreed to its terms. The judge won’t ask the attorneys to write more clearly because judges usually don’t ask attorneys to write better than this. Law schools don’t either. On the other hand, in an effort to be fair, I will concede that to an informed water lawyer, the passage is an efficient summary of the history of the case. But the general public is kept out of that discussion, likely. Colorado water law concepts, however, are deceptively simple, as is the basic science of hydrology. The legal concepts of water law in Colorado are set forth in Sections 5-8 of Article 16 of the state’s constitution, titled “Irrigation and Mining,” and they have remained unchanged since the Constitution was written and ratified in 1876. The sections below are entirely reproduced from the Colorado constitution since they are so remarkably brief.

Irrigation

Section 5. Water of streams public property. The water of every natural stream, not heretofore appropriated, within the state of Colorado, is hereby declared to be the property of the public, and the same is dedicated to the use of the people of the state, subject to appropriation as hereinafter provided.

Section 6. Diverting unappropriated water—priority preferred uses. The right to divert the unappropriated waters of any natural stream to beneficial uses shall never be denied. Priority of appropriation shall give the better right as between those using the water for the same purpose; but when the waters of any natural stream are not sufficient for the service of all those desiring the use of the same, those using the water for domestic purposes shall have the preference over those claiming for any other purpose, and those using the water for agricultural purposes shall have preference over those using the same for manufacturing purposes.

Section 7. Right-of-way for ditches, flumes. All persons and corporations shall have the right-of-way across public, private and corporate lands for the construction of ditches, canals and flumes for the purpose of conveying water for domestic purposes, for the irrigation of agricultural lands, and for mining and manufacturing purposes, and for drainage, upon payment of just compensation.

Section 8. County commissioners to fix rates for water, when. The general assembly shall provide by law that the board of county commissioners in their respective counties, shall have power, when application is made to them by either party interested, to establish reasonable maximum rates to be charged for the use of water, whether furnished by individuals or corporations.

Here are my takeaways from the above language.

The Colorado Constitution says water is public property.

The constitution says water is subject to the right of prior appropriation so that whoever first puts it to beneficial use has the superior right to continue using it.

It says in times of shortage, domestic use for human and livestock consumption has priority, followed by agriculture, then industry.

It says, irrigators whose claims do not border streams (and therefore are not riparian) have the right to cross another’s property, dig a ditch there, and move water from the stream through the ditch to their mining claim or ranch.

And the Colorado Constitution says county commissioners have the power to set rates that ditch companies can charge for water so they cannot gouge customers. This last right, which was meant to stop speculators from hoarding water and charging exorbitant rates for it, has rarely been exercised, as the environment for ditch companies soon changed after the constitution was adopted. The  last time a county set water rates was in 1890.[10]

But Colorado’s constitution failed to address either wasteful use or the environment, issues that are at the forefront of nearly every discussion about western water use today. In my opinion, if the following sentence was added to the end of Section 6, it would fix the major problems with water law in Colorado, both eliminating waste and improving stream health: “Beneficial use shall mean only the minimum amount of water that needs be diverted from the river to accomplish the intended use.” Instead, the state adopted a position of “maximum beneficial use,” even if they did not use the exact phrase, and not a position of “minimum beneficial use.” In plain terms, it was as if the state said, “Why yes, take as much water as you need,” but not, “Why yes, but take as little water as possible.”

That’s not to suggest that changing a water right today is easy. If water right holders change the type, place, or time of use, or if they change the point of diversion from the stream, or how water is being diverted (the means of diversion), or if they change the place of storage, or if they exchange or substitute their water right for another water right, they must ask a court for permission, known in water speak as a “change case.”[11] Irrigators try to avoid change cases since that is when the court determines historic consumptive use, the number of acre feet consumed each irrigation season. That’s expensive and more often than not results in a ratcheting down of the water right. Any citizen in Colorado, can object to the change, and no further “standing,” such as owning a water right, is required to do so. Opposers can be individual water users, other municipalities, local government agencies, the state of Colorado or anyone who opposes the change of use case.[12] (Attorneys also routinely file statements of opposition as a convenient way to monitor a given case, as they then get automatic updates. And sometimes they file “statements of opposition in support” of an application, which for a profession based on the meaning of language cannot be a proud moment). Water court objectors regularly include the largest water providers in the state like Denver Water or Colorado Springs Utilities. Denver Water’s annual revenue exceeds $455 million (up from $250 million when I first researched this in 2014), and it can afford to spend years in court.[13]

Water right holders need to stay under the radar, and many do that by doing the same thing they and their predecessors have been doing since they got around on horseback in the 1800s. They often divert the maximum amount they can, keep mum about their use, restrict access to their land, and stay clear of water court. The quest to prove beneficial use has led to a “use it or lose it” paranoia where rivers are regularly swept and dried up to prove rights are being actively used. Water right holders risk nothing by diverting all the water they legally can. There is a very low bar for what qualifies as “beneficial use.” Growing the least profitable crop in the West by diverting water in a ditch across a rocky talus field that leaks four times as much water as it delivers can still qualify as beneficial use. And we cannot really blame irrigators, as they are reacting rationally to the law as it is currently written and applied.

Lastly, Colorado law permits cities and developers to speculate, or more charitably, plan for how to use water rights in the future, under the “great and growing cities” doctrine. This allows cities to file for “conditional water rights” they cannot currently use but will grow into at some future date. A conditional water right has a priority date as of the date filed. It is conditional because it is not currently being used—water insiders refer to conditional water rights as “paper” rights because they exist only on paper and are not “wet.”

            And water managers don’t want to let go of conditional water rights.

Conditional water right holders keep their place in line by showing due diligence, often minimal, toward “perfecting” their rights. Perfecting means transitioning from paper rights to wet water projects that actually hold back, or “firm up,” water rights in dams for diversion.  Due diligence often consists of paying engineering firms to prepare engineering studies or hiring law firms to scan filings and file objections in water right change cases. On most Colorado rivers, conditional water rights far exceed the capacity of the river, and they will never be turned into wet water—that is, actual diversions from the stream. Many conditional water rights on west slope rivers are held by east slope diverters such as those held by the Southeastern Colorado Water Conservancy District on the Fryingpan River. Often, the conditional water rights will require that a dam be built to perfect the water right, as the storing of water is considered a beneficial use. Their main value is that they hold a place in line for the conditional water right holder that is superior to later filed water rights.

As is true throughout the West, nearly every stream in Colorado is over-appropriated. Over-appropriation means that more water rights have been filed than water is available to satisfy those rights, except in wet years or during high spring runoff. River flows depend on winter snowpack, typically peaking around June 1 in Colorado (it used to be June 10, but hotter temperatures have sped up snow melt and the peak is often 10-14 days earlier). No two years are alike.  Most new water projects being proposed in Colorado today are designed to capture “excess” water in high flow years. Northern Water, which is based in Berthoud between Fort Collins and Boulder, is planning to do this in the NISP project, which would “lop off the top of the hydrograph” on the Poudre River and hold it back in Glade Park Reservoir near Ted’s Place on Highway 287 for release later in the summer[14]. Environmentalists object, saying high periodic spring flows are necessary to keep a river healthy.

Another factor that influences how water is used is the unfounded fear of being accused of abandoning your water right. Irrigators are often counseled to divert as close as possible to the stated level of their decree (without waste and with reasonable efficiency, of course). A lawyer speaking at a pre-recorded 2014 real estate law conference I listened to said, “I don’t know much about water law, but I do know that engineers tell you to always use every last drop.”[15] And so one of the biggest mistake water rights holders think they can make is not to use, or at least divert, every last drop they are entitled to in their decree. If irrigators fail to take as much as they legally can, or fail to put it to beneficial use, they risk being accused by the state of abandoning the unused, or un-diverted water.

Not to be repetitive here, but, again, under Colorado law, no water right holder is entitled to more water than they need to achieve a stated beneficial use, without waste, and with reasonable efficiency. This means if an irrigator does not need the full amount of water in their decree, they shouldn’t worry about it, because they don’t need it and they are not entitled to it. Oh, but they do worry, and they do divert toward their full decree.

But in practice, being accused by the state of abandoning water is highly unlikely for the average irrigator, at least on the West slope. The state engineer prepares a list every decade of water rights that are no longer being used, placing them on the abandonment list. But the volumes of water are normally small and it is rare that the state determines a water right has been abandoned[BG1] . Non-use creates a presumption of abandonment, but water right holders can contest this finding by proving that they never intended to abandon the water right, or that they could not divert water because their ditches were in disrepair or there was insufficient water in the stream. The much simpler solution, of course, is to use the water, even if the activity is unprofitable or unnecessary.

Today, “use” is often confused with “divert.” In practice, if not under the law, simply diverting water from rivers is often enough to constitute use, whether or not the water is actually applied to beneficial use, such as flooding a field. For example, the Town of Carbondale diverts nearly 6,000 acre-feet a year out of the Crystal River to irrigate only 13 acres, more than 450 acre-feet of water per acre! It runs the water through the ditches that wind through parts of town and then dumps the water back into the Roaring Fork River near Satank.

And significant water rights are almost never abandoned. Colorado tacitly eliminated the abandonment rule for water rights older than 1922 on the west slope because those rights are superior to the claims that California, Arizona, and Nevada have to the Colorado River when they signed the 1922 Colorado River Compact. Abandoning them would favor Arizona if it ever made a compact call. But that is only true for the Colorado, Gunnison, and Southwest water divisions where only two water rights older than the 1922 Colorado River Basin are listed on the current decennial abandonment list that was published July 1, 2020. The two pre-1922 rights are in the Gunnison Basin, and they total 10.04 cubic feet per second.

Water rights older than 1922 with many dating to the 1800s are regularly included on the abandonment lists in the South Platte, Arkansas, Rio Grande, and Yampa river basins.[16] The South Platte Division 1 abandonment list contains over 1,700 water rights, about two-thirds of which are wells. Abandonment is still a serious threat that water right holders must take seriously.[BG2] 

In theory, the abandonment risk forces water right holders to diligently use their water rights or to free them up for other users. In practice it causes water right holders to divert to the full extent of their decree, all but guaranteeing that the maximum amount of water that can be diverted from a stream will be diverted at all times.

The effect of this legal situation is terrible for rivers. While mountain bike riding with my son on Basalt Mountain, I came upon a diversion ditch that was capturing all of a creek’s 0.1 cfs flow, a trickle of water about the diameter of a quart water bottle, into a diversion ditch. The water crept down the ditch for a couple of hundred feet until it seeped into the unlined ditch and dried up completely. No field was being watered, but the diversion still swept the tiny mountain stream. Isn’t this illegal because the water is not being put to beneficial use? If confronted, the rancher could claim that runoff could increase the following day or week due to a thunderstorm or late season snowmelt, and  push enough water through so the trickle could reach his field. These situations occur all the time and no action is taken to remedy them. The local water commissioner employed by the division engineer could prevent this by pointing out the water is not being put to beneficial use.

But the Basalt Mountain site is so remote, and the Roaring Fork Valley is so large that the hard-working water commissioner probably hasn’t visited this site in years, nor many others just like it. The water commissioner wants to get along with the irrigators on every ditch, and the application of state water law is biased to ensure that no water in the stream runs downstream unused. So, the water right holder keeps drying up the stream to evade any challenge that the right was abandoned. This is even more ludicrous when you stop to consider that abandonment is a toothless threat [BG3] on the west slope.

I am convinced that the threat of abandonment causes irrigators to divert to their full decree. If they really have stopped using their water because its unprofitable, then why take away a right that isn’t being used anyway? Abandonment is the “lose it” in “use it or lose it,” and it provides the legal justification to dry up rivers. By eliminating it we take away this harmful incentive. Abandonment is arcane, but when I suggest abandoning abandonment to water lawyers, they go silent and usually mumble that it’s a bad idea.

Overall, there is a large gap between what laws in Colorado say about how water can be used, and how water in the state is actually used. Consider the table below.

Table 9.1 What Colorado law says versus how it is applied

What Colorado water law says

How Colorado water law is applied

Don’t speculate

Speculate

Don’t waste water

Take all you want and ignore waste

Don’t take more than you need

Take more than you need

Use it or lose it

Never lose it

Must be diligent

Don’t have to be diligent

Can make a ditch more efficient

Don’t have to make a ditch more efficient

Must measure water use

Don’t have to measure water use

Must accurately report use

Don’t have to report use/no one checks reports

It’s a right to use a public resource

It’s a private resource to hoard

River compacts establish and limit what downstream states can take

Use every drop or else downstream states will

Source: Ken Ransford

            I recognize that the above table is somewhat shocking in regard to the wide gap between the law and the reality in the ditch and on the ground. A lot of this stems from the original process to establish water-right decrees pre-1900, where district court judges took the word from irrigators on how much water they needed to divert to irrigate their land.

            One good source on this is Elwood Mead, the namesake of Lake Mead. He was the head of Reclamation from 1924 until 1936, but he also had a long career in water and irrigation, beginning in Colorado. He taught an irrigation class in the late 1880s at what is now CSU and then served as the state engineer in Wyoming. In 1889, he went to work for the U.S. Dept of Agriculture as head of “irrigation investigations,” where he was trying to figure out how much Western water could, and would, irrigate how much Western land. In 1903, he wrote and published a book entitled Irrigation Institutions: A Discussion of the Economic and Legal Questions Created by the Growth of Irrigated Agriculture in the West. In the book, he reviews and compares the water-rights administration system in Colorado, Utah, Wyoming, and California.[17]

            In the Colorado chapter, he is both withering and blunt in his criticism of early water-right decrees, and worthy of quoting at length.

            “In the earlier adjudications the amounts of appropriations were on the estimated capacity of ditches and canals,” he writes, on page 148 of the book I read. “Sometimes the amount was fixed by the measurement of the ditch, and sometimes by what the appropriator claimed. With very rare exceptions it does not seem that the acreage of land which had actually been irrigated exercised any influence. The real issue was the amount of water diverted or proposed to be diverted.

            “As the adjudications were held remote from the ditches and the land affected, and the judge or referee did not visit the lands and ditches to see for himself whether the situation was as it had been described, appropriators were encouraged to make extravagant claims. All of the conditions, therefore, contributed to favor of granting of rights to water in excess of the actual uses or necessities.”

Remember, this is from 1903, so no can say this issue has not been around for a while.

He then goes to say that “each referee or judge seems to have exercised his individual discretion or have followed his personal opinions in determining what an appropriation of water should mean or in deciding what facts are necessary to establish it. This has given rise to some eccentricities and grotesque features in Colorado appropriations, which would not have existed if all rights had been established in accordance with some consistent policy. In the earlier decrees stress was laid upon the dimensions and carrying capacities of the ditches, and the amount of the appropriation was never less than the capacity of the ditch – often several times that capacity. In recent decrees the amount of appropriations rests mainly upon the area of land irrigated. Where the acreage is the governing condition it would seem that the duty of water employed in computing the volume appropriated should be in approximate accord with water right contracts, or with the average volume used in irrigation. This, however, is seldom the case.”

In other words, the size of a water-right decree should equal the amount of water one needs to achieve a stated beneficial use, i.e., to irrigate a specific amount of land, without waste or inefficiency, i.e., “the duty of water.” As you may have discerned by now, that’s one of my main points in this book. Thank you, Mr. Mead!

He makes another excellent point on page 366, in a chapter called “Methods for Future Development.”

Granted, the quote comes from when he was making a case against private investment in water, but it is still relevant to my main points. Italics, btw, are mine.

“The only right to water which should be recognized in an arid land is the right of use, and even this must be restricted to beneficial and economical use in order that the water-supply may serve the needs of the largest possible number of people. Ownership of water should be vested, not in companies or individuals, but in the land itself. When water rights are attached to land, the needs of the crop are always a sure measure of beneficial use. When rights are made personal property, beneficial use becomes simply a legal fiction. Attaching rights to land divides the control of streams like the ownership of land among a multitude of proprietors. Reservoirs and canals are then like the streets of a town, serving a public purpose.”

Mead’s 1903 discussion was fateful. As we’ll see in the chapter on the Colorado River Compact, negotiations initially collapsed because the states over-estimated how much water they were allegedly using. They did not come back to the table until Delph Carpenter, a Greeley lawyer, suggested the Upper and Lower Basins would each receive 7.5 million acre feet. Mead’s recommendation that water should be tied to the land was also historic. Montana follows this principle, but Colorado does not. Since water can be sold from ranches to cities, or from the West slope to the East slope, Colorado incentivizes irrigators to use as much as they can so they have more to sell if they every decide to sell their water.

I like how Mead stresses “economical use” and the “needs of the crop.” Taking only what one needs, and striving for “minimizing beneficial use,” if you will, and not “maximizing beneficial use,” as the State of Colorado is intent on doing, makes sense to me. And to Mead, I would suggest.

The public street analogy reminds me of how a water-right decree is like a driver’s license. A decree is a “use-license,” if you will, from the state to divert the public’s water, just as driver’s license is a “use-license” to drive on public roads. But like a driver’s license, a decree is just the start of the rules one must follow while wielding your license.  In driving, one must adhere to a speed limit (in theory) and driving conditions, and one also must have a working vehicle, i.e. with both taillights working.  Adhering to the speed limit in irrigation means diverting only what one needs to achieve a beneficial use, and diverting toward a specific crop, not an old decree. And having a working vehicle in irrigation means running an intact ditch system. And yes, I’m in favor of much stronger enforcement in irrigation. If the state engineer is a “water cop,” she or he needs to put a lot more state patrollers in the field and tell them to strictly enforce the speed limit.

I know I’ve been critical of return flows in this book, at least in regard to some irrigators overstating the benefits of a return flow as a way to mask over-diverting and system inefficiencies, which can be hard to discern and intermingled with the inevitable return flows that result when putting water on land. As such, I think I need to concede that Mead also does a very nice job in his book of describing return flows, and their benefits to rivers. But before I do, I would note that he does say return flows have their limits when it comes to benefitting a river.

“Up to a certain limit irrigation on the headwaters of a river is a benefit to the users of water below. About one-third of the water diverted returns to the stream as waste and seepage. The water diverted during the flood season which returns as seepage comes back slowly and helps swell the stream when it is low and water is most needed. The exact time of return varies, of course, with the location of the lands irrigated and with the character of the soil, but in a general way, the effect of the diversion of floods in irrigation is to equalize the flow of rivers. They carry less water when high and more water when low.”

Okay, Mr. Mead, fair enough, but irrigators should still seek to minimize their return flows, say I. And let’s not forget that in Australia’s water-short Murray-Darling system, return flows have been eliminated because everyone there uses sprinklers. How is it that one of the most important components of Colorado water law does not even exist in other places?

 Wading Through Water Court

To apply for a new water right or to change an existing water right, the holder files an application in water court, which is simply a division of district court. Water cases are administered by usually a single water court judge in each of the state’s seven water courts, which are organized by administrative “divisions.” (Water court judges are not necessarily specialized judges but are just district court judges who regularly handle other types of cases, along with water court cases). Water courts have their own rules and procedures, which are layered on top of the byzantine Colorado Rules of Civil Procedure, so the court rules alone serve as a significant barrier to entry.[18] Water law is so arcane, governed by hundreds of statutes and court cases, that water attorneys can’t seriously practice any other type of law, and lawyers that do not practice water law wade into water court at their own risk.

Figure 9.3 Water divisions in Colorado (Boyles)

Each water court has a “referee” who attempts to settle water change cases but if they do not settle, water court judges make the final determination. Referees are lawyers with prior water court experience. Only in Colorado do courts determine all changes to water rights—in every other Western state an engineer administers water rights. In those states the state engineer’s decision can be challenged in court, but this is rare so water rights administration is typically significantly cheaper in other states. In Colorado, every change to water rights starts out in court.

Once a change case is initiated, anyone can take pot shots at the applicant, by filing a statement of opposition, so the process amounts to a legally sanctioned gauntlet. Opposers, who typically have a water right on the same water source, can claim that the applicant is not using as much they claim, or that they have abandoned their rights, or that they are using more than their historic allotment allows, or that they are irrigating more or different acres than their decree permits.[19]

Enormous engineering and legal fees are spent arguing over “return flows,” which is the water that seeps underground and, in theory, eventually travels back to the river through underground channels. Downstream users ostensibly rely on return flows, and imaginative lawyers and engineers put their children through college arguing about how long these flows take to get back to the stream or where they merge into a stream. Return flows are a gift for water engineers and lawyers who like to litigate. Since you cannot see them you can argue over them indefinitely.

Water rights applicants must mail a notice to other water rights holders whose land or water rights are affected by the change case application. If a diversion ditch crosses their property, or water is stored on their property, or water is beneficially used on their property, the water right owner must be personally notified.[20] All other persons with water rights on the stream find out about the water court application by reading the court’s “resume[KR4] .” The resume is a monthly listing of all water court actions filed in the previous month, one prepared for each water court division. Water lawyers in Colorado normally  scan the division resumes each month to keep abreast of case filings, a tedious process since it can run for a dozen pages or more without a single blank line! Anyone can contact the court and request a copy of a change case application. Unlike the criminal docket, few, if any, reporters in Colorado monitor water court proceedings, so the public rarely hears about water transactions. Reporting by Aspen Journalism, often on conditional water rights, is a rare exception, but for the most part, water court flies well under the radar, albeit at a slow pace!

A water right’s priority date is established as of the date water is diverted from a stream or pumped from groundwater and actually put to beneficial use, but the right itself is not official until the water court issues a “decree” recognizing the right. As of 2014, over 177,000 water rights had been decreed in Colorado.[21][KR5] 

If a water right application is not opposed, a referee will typically approve it. If opposed, the referee tries to resolve it, typically over a period ranging up to 18 months. When that doesn’t work, the case is referred to the water court judge. That could easily take a year or more. Added up, it could take over two years for an irrigator to get approval to change their water right.

The applicant has the burden to prove that a water right change will not injure any other user on the stream. Imagine if the opposite was true, that opposers had to prove that a change in use reduced the water they were historically receiving. That would make it easier to change wasteful irrigation practices, but irrigators and water lawyers consistently object to any discussion of changing this burden of proof. I realize this may sound arcane, but cases are often won or lost simply based on which party has the burden of proof, especially when evidence is hard to come by or subject to varying interpretations. In the world of Colorado water law, making the water right holder prove that a water right change will not injure any other user on the stream is one of the biggest barriers to meaningful water reform.

Environmental groups, it is worth noting, rarely participate in water court cases due to the great expense of doing so. That means there is rarely anyone advocating for the river in water court, as it just costs too much. Imagine an environmental non-profit trying to raise $100,000 or $300,000 to claim that an irrigator is harming a stream by diverting an extra two or three cfs from one of the 59,671 diversion points in Colorado.

 Water commissioners monitor diversion records that indicate how much is diverted from a stream each year and onto a property, but these are often spotty. Irrigators self-report how much water they divert, and typically they state that they divert the full amount of their decree—it’s in their self-interest to do so. Diversion structures can clog with branches, or the metal flumes in the ditch that measure water use can get undermined and shift in high runoff, thereby making the diversion records inaccurate. Also problematic are the measuring devices themselves on a given headgate. Most are far from state of the art, or even accurate. And in court, even if opposing parties accept the diversion records, diversions do not measure an irrigator’s ultimate, and transferable, water right. As previously discussed, the water right is the consumptive use right, the amount that crops consume.

At a 2013 conference I attended, Gunnison lawyer Kendall Burgemeister spent an hour explaining the steps he takes to calculate historic use in order to prove up and sell water rights.[22] He starts with the historic court decrees—there are usually several per ranch or diversion ditch—and then studies the diversion records for each decree to determine how much water was actually being diverted from the river into the ditch each year. There can be considerable gaps and these must be explained. Burgemeister then searches the chain of title, the deeds that get recorded every time a ranch or any part of it is sold, to track how the water rights were transferred. This is tricky since ranchers and irrigators are frequently selling or buying quarter sections (160 acres) or quarter-quarter sections (40 acres) from their neighbors. Since water rights can be bought and sold separate from the land, separate chains of title are developed for water rights as well as the underlying real estate. In essence, he typically has to review several court cases dating back a hundred years or more, and then compare these multiple cases to diversion records, year by year, also extending back decades.

If the water rights are managed by a ditch company, where all users on the ditch contributed their water rights in return for shares in the ditch company, Burgemeister has to determine if the ditch shares are still valid. Sometimes the original share certificate cannot be found, and a lost instrument bond has to be posted. It is a long and involved process that cannot be scaled—it just can’t be speeded up. I suggested that it would be prudent to make that information publicly available so the next time someone wanted to sell or change that water right we would not have to reinvent the wheel and compile this information all over again. Burgemeister responded that this information is his “work product,” and gives his firm an edge the next time the water right comes up for sale. Once a firm has done this analysis several times in a local region, it has a leg up against even high-powered law firms coming over from Denver. The cost to assemble this data is so daunting that it effectively means the only time water right holders will ever go to this expense is when they want to sell their water right. Few can afford to do this if they simply want to change where they use their water or to temporarily lease their water to a neighbor. It is just one more impediment to reforming Colorado water law.

Figures

Figure 9.1 Diversion points in Colorado (CDSS)

Figure 9.2 Diversions, square miles and wells in basins

Figure 9.3 Water divisions in Colorado (Boyles)

Notes

[1] Conflict Resolution in Colorado Water Rights Proceedings, Continuing Legal Education, Colorado Bar Association, Oct. 9, 2015.

[2] Hollister, O., 1867, The Mines of Colorado, pg. 75-76, Samuel Bowles & Co.

[3] Baldwin, M., “The Gilpin Tramway,” http://gilpintram.com/index.html.

[4] USGS, “Estimated Use of Water in the US in 2005,” Circular 1344, Table 2B, pg. 8, http://pubs.usgs.gov/circ/1344/pdf/c1344.pdf.

[5] Schorr, fn. 4.

[6] “The Klamath River,” downloaded Mar. 16, 2016, Water 4 Fish.

[7] Pisani, Donald. J. Water, Land, and Law in the West, The Limits of Public Policy, 1850-1920. Lawerence: University Press of Kansas, 1996. P. 2.

[8] Findings of Fact, Conclusions of Law, Judgment and Decree, Concerning the Application for Water Rights of the City and County of Denver . . . in Summit County, Colorado, Case No. 2006CW255, pg. 5, filed Apr. 14, 2017, in District Court, Water Division No. 5, Garfield County, Colorado.

[9] The 2017 case is earth-shaking to the Western Slope, because it keeps Two Forks Dam very much alive. The court held that Denver Water made absolute another 134 cfs of its 1946 conditional water right, leaving only 134 cfs remaining as a conditional water right (pgs. 38, 50). The court held Denver exercised sufficient diligence to preserve the remaining 134 cfs, and that it had adequate storage to hold the 134 cfs made absolute in its nine reservoirs and additional gravel pits excavated along the South Platte River (pg. 31). It affirmed Denver Water’s right to reuse to extinction the additional water diverted from Dillon Reservoir in the water reuse plant it plans to build in the WISE project. The case further held that Denver Water has done sufficient due diligence in the form of water permit applications, engineering studies, and population projections to someday store up to 400,000 acre-feet of Dillon Reservoir water in a future Two Forks Dam (pg. 31). That is 60 percent larger than Dillon Reservoir. In the case, Denver Water admitted that it expects its population to grow 1.1 percent per year by 2050, jobs to grow 0.9 percent per year (pg. 33), and that citizens in its service area will be using 181 gallons per day, down from 220 gallons per day in 2050 (pg. 35).

[10] Schorr, pg. 86, citing S. Boulder & Rock Creek Ditch Co. v. Marfell, 25 P. 504, 505 (Colo. 1890).

[11] Hobbs, G., Citzen’s Guide to Water Law, 2009, Colorado Foundation for Water Education, pg. 15. See also Nazarenus Stack & Wormbacher, Attorneys at Law, “Changes of Water Rights,” downloaded July 5, 2024,https://www.nswlaw.com/water-rights-resources/changes-of-water-rights.  See also, Colorado Water Law Benchbook, Chapter 9 Surface Water Rights, Section 9.6, Changes of Water Rights. 

[12] Elgqvist, A., “Series: Colorado Water Law Basics #4 - Change of Use in Colorado: Making Municipal Water Supplies Available from Irrigation Rights,” Lytle Water Solutions, LLC, downloaded 7-4-2024, https://www.lytlewater.com/blog/change-of-use-in-colorado-making-municipal-water-supplies-available-from-irrigation-rights.

[13] Denver Water raised $455 million in 2023 from 1.5 million customers, an average annual charge of $304 per customer, or $25.31 per month. See, Denver Water 2023 Approved Budget, pg. 57, downloaded July 5, 2024, https://www.denverwater.org/sites/default/files/2023-budget.pdf.

[14] Brown, E., “Bill in the works could speed up permitting process for new water projects,” Apr. 5, 2013, Greeley Tribune.

[15] Kerrigan, T., Wilson, S., “Exciting Discovery on a Way to Organize These Issues in an Interactive, Efficient, Usable and Updatable Program - GIS Mapping,” 2014 Real Estate Symposium, Continuing Legal Education, Inc.

[16] Colorado Division of Water Resources, “Division of Water Resources Releases Decennial Abandonment List of Water Rights,” July 1, 2020, https://dnr.colorado.gov/press-release/division-of-water-resources-releases-decennial-abandonment-list-of-water-rights. The two water rights listed on the abandonment list in the Gunnison Basin are from the Van Loan Ditch on Coates Creek, Administration Number 22848 20288 with an appropriation date of 06-23-1910, and Administration Number 30895 24866 with an appropriation date of 01-30-1918.

[17] Mead, Elwood, Irrigation Institutions: A Discussion of the Economic and Legal Questions Created by the Growth of Irrigated Agriculture in the West. London: The Macmillan Co., 1903, pages. 148 and 366.

[18] Colorado Court Rules, Chapter 36, Colorado Uniform Local Rules for all State Water Court Divisions, adopted in 1990 and amended in 2004, 2009, 2011, 2014, 2016, 2018, 2021.

[19] Most water in Colorado is managed by men and, at least among ranchers, their average age is increasing by one every year. Joseph Campbell says that early human societies were formed by irrigators who prayed to a feminine goddess until Aryan herders swept down from the north approximately 10,000 years ago, running roughshod over the planted fields and replacing the female idols with their male gods. The Power of Myth, 1991, Anchor Publishing.

[20] Mosely K., “Heightened notice Requirements for Water Rights Applications,” June 2003, The Colorado Lawyer, Vol. 32, No. 6. p. 93.

[21] Wright, S., “It All Comes Down to Water: Justice Hobbs Meanders Through Water Law,” Sep. 25, 2014, Telluride Watch, http://www.telluridenews.com/the_watch/news/article_194b29f3-1f47-5735-b430-e25e879ea9b9.html.

[22] Burgemeister, K., “Water Rights Due Diligence – What you Need to Know,” Water Transfers, CLE International Water Law Institute, Beaver Creek, July 25, 2013.

 [BG1]So note a threat? See p. 21, where it is.

 [BG2]Is it a threat or no?

 [BG3]But you said earlier, see p. 21, it is a threat. Which is it?

 [KR4]We discuss the resume on pg 3-4 of the prior chapter, To Reform Irrigation, Reform Water Law.

 [KR5]We say this in chapter 8 as well.