DISTRICT COURT, WATER DIVISION NO. 6, COLORADO Court Address: 1955 Shield Drive DATE FILED: August 30, 2017 12:03 PM FILING ID: 987A6406EBDE4 P.O. Box 773117 Steamboat Springs, CO 80477 CASE NUMBER: 2014CW3043 (970) 879- 5020 ____________________________________________________ CONCERNING THE APPLICATION FOR WATER RIGHTS OF The RIO BLANCO WATER CONSERVANCY DISTRICT, a Colorado Water Conservancy District In the White River or its Tributaries In RIO BLANCO COUNTY, COLORADO Attorneys for Rio Blanco Water Conservancy District Edward B. Olszewski, #24723 OLSZEWSKI, MASSIH & MAURER, P.C. 1204 Grand Avenue P.O. Box 916 Glenwood Springs, CO 81602 Phone Number: (970) 928-9100 E-mail: ed@ommpc.com ▲COURT USE ONLY▲ Case Number: 2014CW3043 Div.: Ctrm.: RESPONSE TO COMMENTS OF THE DIVISION ENGINEER Applicant, Rio Blanco Water Conservancy District (“Applicant”), by and through its undersigned attorneys, hereby provides the following Response to Comments of the Division Engineer received via e-mail from the Division Engineer dated July 31, 2017: 1. Engineer Comment: Also, and more in general, this application continues to contain aspects that are speculative and this is concerning to me. The court should not be awarding a water right if it is speculative in any regard and simply awarding a water right with terms and conditions that the applicant has to do X, Y and Z by a certain time or the result will be... does not sit well with me. Once a person obtains a water right, it rarely goes away and as such it is critical that it is proper to begin with. Applicant Response: Applicant disputes that any portion of the application is speculative as described in more detail below. Applicant is a water conservancy district and its application is intended to be as all-inclusive and as flexible as possible subject to anticipated reasonable demands expected with District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 2 a reasonable planning period. Terms and conditions that provide some flexibility in water supply planning are critical and should not be minimized. Projects evolve and sometimes take decades to complete. As the project evolves, certain aspects can and will be dropped by Applicant if necessary and appropriate during subsequent diligence filings. However, to do so now is premature. 2. Engineer Comment: Below is a list of the items I believe remain speculative: The 90,000 AF request remains speculative. It is based on a highest estimate long term need for oil shale up to 42,300 AF. What oil and gas industry has contacted the District indicating a need for such amount of water and entered into an agreement with the District to contract for this water. It is also based on the highest estimate long term need for “Environmental” (in-river fish habitat and maintenance) up to 42,000 AF. What evidence does the District have that shows that the target flows under the Recovery Program are 300 cfs at the Watson gage? Also, has the District entered into any agreement with the Recovery Program to provide these flows. Finally it is my understanding that the Recovery Program could “go away” in 2023. Applicant Response: A. The White/Yampa/Green Basin Roundtable (“BRT”) has elected to use the maximum energy demands referenced in the White River Storage Feasibility Study, (which is where these values were developed) for their modeling of the White River basin. This includes all of the model runs for future demands they are considering, not only the Wolf Creek Reservoir Project. B. The BRT has completed four energy needs assessments. Each assessment included narrowing the scope and refining needs. There was significant BRT discussion and state funded financial resource input to quantify the demands. These water demands have since been included within the Yampa White Green Basin Implementation Plan (“BIP”) and included within the State Water Plan in its entity which was adopted by Governor Hickenlooper. C. Early discussions RBWCD staff/representatives had with then Executive Director of DNR Steve King, John Stulp/Special Policy Advisor to the Governor for Water, Russ George/CWCB Board of Director/Former Executive Director DNR, and Jay Gallagher/CWCB Board of Directors all gave direction stating the need to follow the BRT process and methods while using the information and studies the BRT has developed for inclusion within the White River Storage Project (Wolf Creek). D. Harvey Economics Purpose & Need Evaluation is provided in Appendix D of the White River Storage Feasibility Study. Section 2.2.2.1, Oil Shale, Data Sources states the following: “As with the natural gas sector, Harvey Economics interviewed a number of industry representatives, including Dr. Jeremy Boak of the Colorado School of Mines, Glenn Vawter of the National Oil Shale Association (NOSA) and Roger Day of American Shale Oil (AMSO). R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 3 These interviews provided detailed background on the current state of the oil shale industry, both globally and locally, as well as the technologies being researched and utilized by companies, potential water demands and the potential timing and level of activity that could be seen in Colorado. Harvey Economics also reviewed the Phase I, and Phase II and Phase III Energy Development Water Needs Assessment Reports regarding projections of regional oil shale development and potential water use. In addition, NOSA completed an updated Water Use Estimate for 2014, which Harvey Economics also reviewed.” Additional information is provided on this in Section 2.2.2 of Harvey Economics’ report. E. The largest oil shale deposit in the US is within the White River Basin. This is substantiated by USGS data and studies. Energy reserves within the White River Basin have been fully substantiated by the US Geological Survey. Applicant is in discussions with an energy company for the joint development/use of the Wolf Creek Reservoir. F. The 300 cfs flow target is based on information in the “Colorado Recovery Program FY 2013 Annual Project Report” that documents a dry year baseflow target of 300 cfs in the White River at Watson. The Recovery Program staff is working towards completing the Programmatic Biological Opinion by 2018; however, their discussions continue to indicate the 300 cfs documented in the FY 2013 Annual Project Report is reasonable. G. Applicant has no knowledge of the Recovery Program “going away”. The Recovery Program (along with the Nature Conservancy) has been working hard on the PBO with no indications to Applicant that it will end or fail to be implemented in some form in the future. Stakeholders are in the midst of completing a White River Management Plan with specific regard to the endangered fishes. H. Applicant has entered into a stipulation with objector Colorado Water Conservation Board that provides for the relinquishment of certain rights in the event the water is not developed in a reasonable time. 3. Engineer Comment: The irrigation use remains speculative. You have provided in the proposed ruling that the irrigation consists of “All lands capable of irrigation from the Wolf Creek Reservoir, yet to be determined”. Additionally you have not provided the number of acres to be irrigated. In the applicant's breakdown of the amount of water that makes up the 90,000 AF claim, irrigation is not even listed. Response: There is a demand for irrigation water in the White River Basin. Similar to energy and environmental demands, the exact amount of irrigation demands will not be known until the water is available for use. Lands capable of being irrigated are estimated at 28,208 acres. The R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 4 BRT has an increase in Ag lands identified which is included within the BIP and included within the State Water Plan. This was fully adopted by Governor Hickenlooper. The BRT has included specific goal language within the BIP for an increase in ag lands. The following is from YWG BIP page 1-9: Measurable Outcomes: Preserve the current baseline of approximately 119,000 irrigated acres and expand by 12% by 2030. Encourage land use policies and community goals which enhance agriculture and agricultural water rights. 1.2.5 Improve agricultural water supplies to increase irrigated land and reduce shortages. Processes: Identify specific locations in the YWG Basin where agricultural shortages exist and quantify the shortages in times, frequency, and duration. Consider the potential effects of climate change, drought and compact shortages in these analyses. Identify projects that will bring new irrigable lands in the YWG Basin into production using new water diversions. Recommend possible site-specific solutions in collaboration with local water users. Recommendations include an initial analysis of hydrology (water variability), cost, financing, and permitting. Recommended projects could include new storage, enlargement or repair of existing reservoirs, infrastructure to improve irrigation system efficiency, etc. Evaluate multiple objectives of recommended solutions. Develop methods to assist with streamlining permitting in a cost-effective manner. Applicant is working to address issues specifically identified in the BIP. 4. Engineer Comment: In a separate email where I questioned the place of use, you initially replied that it is the entire White River basin and I responded that this was not realistic especially given the fact that the District boundaries do not cover the entire White River basin and there is definitely not exchange potential throughout the basin. You then further responded by stating that the District could provide water usage outside the boundaries via an intergovernmental agreement. Absent an IGA in place, this is speculative. R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 5 Response By increasing storage on the White River at Wolf Creek Reservoir more water will be available for use in the Upper White River to further allow development. Exchanges will be allowed to operate (or not) based on the location of the exchange and whether there are intervening water rights. It is impossible to know the exact extent to which exchanges will be made or exactly where they will be located. An IGA was given as an example of how the Applicant could provide water outside of its District boundaries in the future. 5. Engineer Comment: Finally, as I reflect on the application, I am not sure I understand the purpose of the surface water right claim. If the off-channel water storage right claim recognizes the right to divert up to 400 cfs from the Wolf Creek Reservoir Pump and Pipeline to fill Wolf Creek Reservoir, then there is no need for a separate surface water right to fill the reservoir unless the surface water right will be used for purposes other than to fill the reservoir. Response: Applicant will consider the Division Engineer’s comment and drop the claim if Applicant determines it is redundant and unnecessary 6. Engineer Comment: Finally, finally, if I recall correctly this case is before the Judge acting as the referee, in which case, a ruling would be entered first whereby such ruling could be protested correct? (This is not to say we would protest a ruling per-se, but in the event we felt it was prudent for us to do so, I want to make sure.) Response: This is a procedural question and the Water Judge acting as Water Referee will need to determine if it is appropriate to issue a ruling referee and then confirm it as a decree after the 20 day protest period or simply issue a decree of court. Applicant will seek clarification at the next status conference. 7. Engineer Comment: I am more than happy to sit down with you and your client to discuss these issues further if you would like to. R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 6 Response Applicant believes such a meeting would be very productive and will be contacting the Division Engineer to arrange an in-person meeting to discuss the above. RESPECTFULLY SUBMITTED on this 30th day of August, 2017. OLSZEWSKI, MASSIH & MAURER, P.C. By: /s/ Edward B. Olszewski Edward B. Olszewski, Atty. Reg. # 24723 ATTORNEYS FOR PLAINTIFF, RICHARD J. MURR In accordance with C.R.C.P. 121 § 1-26(9), this document has been electronically filed via CCES. A printed copy of this document with original signatures is maintained by the filing party and will be made available for inspection by other parties or by the Court upon request. R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 7 CERTIFICATE OF SERVICE I certify that on August 30, 2017, I served a copy of the foregoing document to the following by: U.S. Mail, postage prepaid Hand Delivery Fax Electronic Service via CCES Glenn E. Porzak, Esq. Karen L. Henderson, Esq. Kristin H. Moseley, Esq. Porzak, Browning & Bushong, LLP 2120 13th Street Boulder, CO 80302 (303) 443-6800 gporzak@pbblaw.com kmoseley@pbblaw.com khenderson@pbblaw.com Attorneys for Objector Exxon Mobil Jefferson V. Houpt, Esq. Ryan M. Jarvis, Esq. Beattie, Chadwick & Houpt, LLP 932 Cooper Avenue Glenwood Springs, CO 81601 (970) 945-8659 jhoupt@bch-law.com rjarvis@bch-law.com Attorneys for Objector TerraCarta Energy Resources Claire E. Sollars, Esq. P.O. Box 881302 Steamboat Springs, CO 80488 (970) 757-2713 Clair.Sollars@hughes.net Attorney for Objector 4M Ranch, LLC Erin Light, Division Engineer Water Division No. 6 505 Anglers Drive, Suite 101 P.O. Box 773450 Steamboat Springs, CO 80477 (970) 879-0272 Erin.Light@state.co.us Dick Wolfe, State Engineer Division of Water Resources 1313 Sherman St., Suite 818 Denver, CO 80203 (303) 866-3581 Dick.Wolfe@state.co.us R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc District Court, Water Division No. 6 Case No. 14CW3043; Application of Rio Blanco Water Conservancy District Response to Comments of the Division Engineer Page 8 Barbara L. Clifton, Esq. Barbara L. Clifton, P.C. 127 East 5th Street Rifle, CO 81650 (970) 625-2410 bcliftonpc@yahoo.com Attorney for Objector John W. Savage et al.* *Stipulated out of case 03/20/2016 John G. Nelson, Esq. Law Office of John G. Nelson 1624 Market Street, Suite 202 Denver, CO 80202 (303) 376-6227 Attorney for Objector Oscar S. Wyatt, Jr.* *Objector is now 4M Ranch, LLC Kristen C. Guerriero, Esq. Special Assistant U.S. Attorney Office of the Regional Solicitor 755 Parfet Street, Suite 151 Lakewood, CO 80215 (303) 231-5353 x552 Kristen.Guerriero@sol.doi.gov Attorney for Objector BLM**Stipulated out of case 08/27/2016 Cynthia H. Coffman, Attorney General Jennifer Mele, Senior Asst. Atty. General Natural Resources & Environment Section Office of the Colorado Attorney General 1300 Broadway, 7th Floor Denver, CO 80203 (720) 508-6282 jennifer.mele@state.co.us Attorney for Objector CWCB**Stipulated out of case 03/13/2017 /s/ Edward B. Olszewski R:\Edward\RBWCD.Wolf Creek Reservoir.14CW3043\Comments_P15.Response to Comments of the Division Engineer.08302017.doc