While any good auction brings a fierce bidding war, and water auctions are probably more heated than most, today’s contenders for water in Colorado aren’t just farmers — now farmers have the oil and gas industry to bid against.
As the Denver Post reported yesterday, an auction hosted by the Northern Colorado Water Conservancy District for excess water diverted from the Colorado River Basin saw top bids coming from companies who work in hydraulic fracturing like A&W Water Service Inc., raising the average price paid for water at Northern Water’s auction from around $22 an acre-foor in 2010 to $28 this year.
It’s not just a matter of changing prices, water uses are changing– and it’s expected that we’ll need increasing amounts of water for fracking. As the Grand Junction Daily Sentinel Published:
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.
Quoted in the Denver Post, Nicole Seltzer with the Colorado Foundation for Water Education said:
“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.”
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.”
Then again, any energy development in Colorado is likely to be water and land intensive– read more about the water/energy/land nexus in What Does a New Energy Economy Mean for Colorado’s Water and Agriculture?
Print
Correction: Initially we listed Trollco. Inc. as a company that works in fracking. That was incorrect. Trollco Inc. is a real estate development company out of Windsor who purchased water during the auction. The Post wrote:
“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.”
Please note that farmers are still getting their water! Northern Water just posted this on Facebook:
Some articles are incorrect in posing that our recent Regional Pool Program water auction left farmers “high and dry” because fracking companies put in high bids. We’d like to note that only one out of 72 bidders didn’t acquire water in this auction.
Considering the dry March we had and the dismal forecasts for April, we feel this auction was a key opportunity for farmers to get their crops going.