August 21, 2020

ISC: Intrepid water rights could make or break Pecos River settlement agreement

Black River 2 (CC BY 2.0) by JoelDeluxe

Black River, a tributary of the Pecos River in southeastern New Mexico.

After a dry and hot summer this year, the Office of the State Engineer is preparing to pump water from wellfields in the Pecos Basin to meet the state’s water obligations to Texas in 2021. 

Despite a substantial credit under the Pecos River Compact, an agreement between New Mexico and Texas for water that flows through the Pecos River, dire drought conditions in the basin this year mean the state might need to spend as much as $1.4 million in pumping to deliver enough water to the New Mexico-Texas border. 

Source: Interstate Stream Commission

“If we go below that zero red line, we’re risking federal takeover of the river,” Nathaniel Chakeres, attorney for the Interstate Stream Commission (ISC), told legislators in a presentation to the legislative Water and Natural Resources interim committee. 

But drought isn’t the only thing threatening the state’s deliveries, according to Chakeres. The ISC, along with the Carlsbad Irrigation District (CID), the Pecos Valley Artesian Conservancy District (PVACD) and other water managers in the basin are currently protesting an industrial company’s claim to some of water in the Pecos River.

Intrepid Potash is hoping to temporarily lease 5,700 acre feet of water from the Pecos to oil and gas operators in the area to use in extraction. The water is too saline for agricultural or municipal use, but could be used in lieu of potable freshwater in activities such as drilling.

Intrepid, which says it holds water rights to 19,000 acre feet per year, has not diverted its water from the Pecos in years, due to extenuating circumstances.

Chakeres said the current ISC and irrigators are concerned that if Intrepid were to begin diverting its water, the state and irrigators would not be able to meet the obligations set forth under a settlement agreement to the compact that was settled in 2003. 

“What we believe is at stake is the success of the 2003 Pecos Water Settlement Agreement,” Chakeres told the committee. “If Intrepid is going to be taking out 5,000-10,000 per year or more from the river right above the state line, that threatens to undo most or all of the compact related benefits that accrued as a result of the settlement.” 

Intrepid’s water rights

Intrepid’s water rights, through its predecessors, stretch back to 1883, making them senior to both the Carlsbad Irrigation District and the Pecos Valley Artesian Conservancy District. But due to a number of circumstances, those rights have not been exercised for decades, said Charles DuMars, an attorney at Law & Resource Planning Associates, who is representing Intrepid in the litigation. 

New Mexico and Texas entered into the Pecos River Compact in 1947. A settlement agreement was reached in 2003 to help New Mexico meet its obligations following litigation between the two states that determined New Mexico was severely under-delivering to Texas. 

But between 1947 and the settlement agreement in 2003, Intrepid wasn’t diverting water  because there wasn’t enough in the river, DuMars said. 

“The delivery point to Texas is only 31 miles below the delivery point to Intrepid’s predecessors. So any amount that was insufficient in the river was also insufficient to Texas at the diversion point,” DuMars said. “It’s very self evident [based on modeling] that there was just insufficient water between 1947 at the time of the compact, to date, until they started revising it and coming up with a settlement solution.”

DuMars said the company worked with the OSE for years in an attempt to put its water rights to use, despite the lack of water in the river. The OSE granted a number of supplemental well permits between the 1950s and the 1980s to Intrepid, and affirmed in multiple documents spanning the time period that Intrepid had retained its water rights, DuMars said. 

“The rights are not lost when there’s insufficient water in the river, economic conditions, including bankruptcy of a predecessor or other reasons why you can’t actually use the water,” DuMars said.

Between 1995 and 2001, Intrepid entered into a Cooperative Conservation Agreement with the ISC, in which Intrepid was paid to not divert its water, according to DuMars. 

“The quid pro quo was that those otherwise valid rights would not be forfeited or abandoned during that time,” he said

In 2017 and 2018, Intrepid submitted eight applications for temporary changes to its water rights to accommodate its plans to put that water to use in the oil field. The company received preliminary approval from the OSE to sell or lease 5,700 acre feet per year, but that water managers in the area protested the approval, arguing that Intrepid’s water rights are no longer valid. 

“In November [2019], that administrative litigation related to those protests had been stayed for settlement talks,” Chakeres said. “That stay expired without a settlement, and the parties have agreed that Intrepid’s water rights are significant enough that we needed an adjudication of how much those water rights were still valid.”

The trial for that adjudication is set for December. 

Irrigators worry about Pecos water agreement 

AJ Olsen, an attorney for the PVACD, said the Pecos Water Settlement Agreement has played an incredibly important role in water management for the region. 

“But for the settlement agreement, the CID and the PVACD and everyone in the lower Pecos would not be talking to each other,” said Olsen. “Short of the word awful, it would be god awful.”

But climate change may be jeopardizing the settlement’s success. This year has been particularly problematic for irrigators in the lower Pecos, according to Steve Hernandez, attorney for the CID. 

Source: U.S Drought monitor.

“The red on that monitor represents extreme drought, and that makes up about half of the Pecos system,” Hernandez said, referring to a drought monitor map (above). “We didn’t have that last year.”

This year’s drought is compounding a recent trend of annual water delivery losses, Hernandez said, which is further straining the state’s ability to meet its delivery obligations. 

“Our total diversions from the river were 50,688 acre feet, and we were only able to deliver 33,132 acre feet. That’s a system loss of 34.64 percent,” Hernandez said. “Why is that important? When we have full years of allocation, like we did in 2018, that loss is only 29 percent. Last year, when we had a full allocation, that loss went up to 30 percent. Now it’s at 34 percent.”

“We’re seeing a trend here that the system is looking like it’s headed into a drought, it’s not reacting, there’s more losses, when there’s more losses that means less water gets to the field, that means less water goes to return flow, it means less water gets back to the state line,” he said. 

Under these conditions, Hernandez said, the system would not be able to meet the state’s delivery obligations to Texas. 

“The numbers that [Chakeres] is talking about that Intrepid is claiming, between 5,800 and 10,000 — if you put that stress on the system, and couple that with the pending drought we’re about to have, that line of our compact compliance is going to drop dramatically,” Hernandez said. 

If the water levels get too low, that could trigger a “priority call,” which is similar to an emergency declaration in which water allocations would prioritize parties that hold the most senior water rights, and leaving those with less senior rights without water and out of luck.

“That’s why this case is so important, and it has attracted so much attention among those people that gave up a lot for the settlement agreement,” Hernandez said. 

Olsen agreed. 

“The impact of the diversion of the water which is sought by Intrepid would be devastating to the state of New Mexico, from Santa Rosa Reservoir down,” Olsen said. 

Parties looking forward to adjudication 

The adjudication process will determine whether Intrepid has lost any of its water rights during the decades it has gone without diverting. Intrepid CEO Robert Jornayvaz told NM Political Report he’s fairly confident the OSE has demonstrated over the decades that those rights still exist. 

“The license rights we’ve had for well over 60 if not 70 years. The state has recognized those rights in hundreds of documents,” Jornayvaz said. He added that the company has been eager to reach an agreement with the ISC and the other water managers involved in the litigation. 

“We tried over the past four years to reach a settlement with both the state and the ISC so that we wouldn’t impact the compact,” Jornayvaz said. “We’re good citizens in New Mexico. We’ve tried to settle this.” 

Requests for comment from CID were not met as of press time, but PVACD superintendent Aron Balock told NM Political Report the adjudication will determine how much of Intrepid’s water rights are still viable.