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Water Law

Fall 2013-- The Energy Issue

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Colorado is one of the top-10 producing states for oil and gas, with the center of that activity closing in on populated areas, heightening residents' alarm and raising concern about the water required. The argument is similar when it comes to power generation-- a reliable power supply is integral to our day-to-day lives and reliant on water. Join CFWE in exploring the topics of energy development and power production in Colorado. Flip through or download the Energy Issue online.

 

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The Power (and Energy) of Water

By Joshua Zaffos

For five decades, the Cherokee Generating Station, on the north side of Denver, ran on western Colorado coal and cheaply powered the population boom of Colorado’s Front Range. Its four coalfired, steam-electric generating units produced up to 717 megawatts, enough electricity for more than half a million homes. The plant—one of the largest operated by Xcel Energy in the state—also emitted many thousands of tons of pollutants annually, including nitrogen oxides, sulfur dioxides and carbon dioxide, contributing to poor air quality, smog
and climate change. As for water, Cherokee was more innovative. The plant requires up to 10 million gallons or 30 acre feet per day to operate, but its water supply for years has been recycled wastewater from the same households purchasing its power.

Cherokee may embody the good, the bad and the ugly of energy development and power generation, but for the last two years, this cornerstone Colorado power facility has been undergoing a $530 million makeover to replace coal with more efficient natural gas. Xcel has already demolished Cherokee’s two oldest coal-fired units, and will shutter another by 2015. In their place, construction is now underway on a new 569-megawatt natural gas-fired, combined-cycle plant, which uses gas and steam turbines to run on fuel as well as waste heat that would otherwise be lost as exhaust. The last 352-megawatt coal-fired unit will be converted to run on natural gas by 2017.

The retrofit is the keystone of Colorado’s strategy to slash Front Range air pollution, including reducing smog-causing ozone levels by 86 percent. The 2010 Clean Air-Clean Jobs Act, signed into law by then-Governor Bill Ritter, serves as a roadmap to bring the state into compliance with federal air quality standards by phasing out older coal-fired power plants and replacing them with more efficient and less polluting gas-fired facilities and renewable energy. The law also helps Colorado prepare for anticipated federal greenhouse gas regulations to address climate change.

Read more: The Power (and Energy) of Water

Do Oil and Water Mix?

By Allen Best

Technology has produce a bonanza of oil and gas. But many want assurances that water resources are not being harmed.

Whatever you may think about oil and gas drilling, acknowledge this much: The technology is jaw-dropping. A decade ago, library shelves were sagging with books foretelling declined production of oil and natural gas. Guess what? In July 2013, the International Energy Agency announced that the United States will become the world’s leading producer of natural gas in 2015 and the world’s leading producer of oil in 2017.

The technology driving increased production isn’t altogether new. Hydraulic fracturing was first used in Colorado in 1948. The application of water, sand and chemicals at high pressures to stimulate production is called by the industry and regulators a “frac.” To journalists, that spelling looks unkempt, so the news outlets call it a “frack.” To opponents, it’s a four-letter word no matter how you spell it. What’s different between those original fracks and those currently done an average of five times every day in Colorado is like the chasm between the first Apple computers and MacBooks today: the new versions are immensely more powerful—and more precise. Instead of pumping fluids by the thousands of gallons, as the first fracturing jobs did, today companies commonly use more than 5 million gallons of water to “shoot” deep rock layers and fracture them. Tiny fissures smaller than a follicle of hair are formed and propped open by sand particles and other “proppants,” allowing the oil and gas to escape out of the rock and into well casings. Fracturing chemicals, which constitute less than 1 percent of hydraulic fracturing fluid’s total volume, are used to improve effectiveness. Many are ordinary, benign household or industrial substances, but some are known carcinogens and other toxins, raising concern about potential impacts to water quality.

Read more: Do Oil and Water Mix?

Power in the Marketplace

How Companies are Pursuing and Acquiring Water to Power Colorado

By Caitlin Coleman

In July 2012, the city of Aurora stopped negotiating. They had exchanged their last term sheet, and the city council voted eight to three in favor of striking a deal—the Anadarko  Petroleum Corporation could lease water from Aurora for five years, with an option to extend for another five.

Suddenly the Front Range was buzzing with news of the lease. Some papers ran just the facts: Anadarko would pay the city a healthy $9.5 million total, or $1,200 per acre foot of water, receiving 1,500 acre feet each year. Other stories featured the emotional side—the worries and upset of citizens.

“We were surprised at the response, because, when you stripped off the uses of water, it seemed like a normal deal with many of the same elements as before,” says Lisa Darling, Aurora Water’s program manager for the South Platte River Basin, who negotiated the deal.

It was normal, in that Aurora leased some of its excess water supply—a customary practice for the city. But the end-user here, Anadarko, will employ the water in oil and gas development, using it for drilling and hydraulic fracturing in Weld County. This was new for Aurora.

Recent years have heralded other negotiations that link water rights holders to energy or power companies, with varying outcomes. Both energy companies, which extract natural gas, oil, coal, uranium or other energy-producing minerals, and power companies, which use those fuels or renewable sources to generate electricity, require water for their operations, which in Colorado means access, in some form or another, to a water right.

Water rights for energy are nothing new. In fact, Colorado’s prior appropriation system, commonly summed up as “first in time, first in right,” is rooted in early hardrock mining, where it was first applied. This system, now administered across all “beneficial uses” of water in the state, allows for those with older, senior rights to use water before those who hold newer, more junior rights in times of shortage. Although power plants have been around for decades with water rights of their own, their water supply portfolios are changing, while oil, natural gas and coalbed methane production has been growing in a fast, new fashion. All require water.

Read more: Power in the Marketplace

Water Law Resources

Guide to Colorado Water Law explores the basics of Colorado water law--learn how it has developed and how it is applied today. This, WEco's most popular Citizen's Guide, was authored by Colorado Supreme Court Justice, and WEco Board Vice President, Gregory Hobbs. Take a look or purchase a copy.

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Law Supplement Headwaters magazine a special edition of Headwaters that provides an in-depth look at Colorado water law. Browse the magazine to supplement our Citizen's Guide and your knowledge. View it here

Administration Headwaters magazine read how enforcing the law in our water-scarce state can get tricky and meet the men and women who allocate Colorado's most precious resource. Browse the issue here.

  
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