Naval Oil Shale Water Demands Welcomed by Colorado Water District

A pending adjudication of water rights in Colorado offers an encouraging new twist on an old problem. It appears that an assertion of an implied federal reservation of large scale water rights for Naval Oil Shale Reserve development may pre-empt the rights of present water users in a manner that will actually benefit water district members and protect the environment of a water-scarce region.

In the Western United States water is generally governed by the law of appropriations. That law holds that a water user acquires rights in water by the physical diversion and beneficial use of water. The user need not own land adjacent to the water-course; he has the right to transport the water many miles over the lands of others to reach his point of use. The law is a first in time, first in right system. A diverter may consume as much water as he reasonably needs, so long as he does not interfere with the use of the "senior" users who appropriated before his diversion.

The appropriations system, in its many modified forms, is a recognition of the general scarcity of water in the West. Unlike much of the United States, most of Arizona, New Mexico, Utah, Colorado, Nevada, and Wyoming face permanent water shortages that have not yet become crises only because of the relatively low population densities in those states. When Western water laws and policies were made, states felt that the water needs of valuable economic assets could not be denied for their distance from an adequate water supply. Almost all the water in arid Western states is now fully appropriated; in dry years a junior appropriator may receive little or no water. In many basins the amount of water rights claimed exceeds stream flow in all but flood conditions.

The implied reservation doctrine is a judicial fiction holding that when the United States reserves a piece of land for a particular purpose, it by implication also reserves rights to such water as is necessary for the reasonable use of that land. Under that doctrine the courts have found that creation of an Indian reservation sets aside needed water rights,¹ as reservation of land for a reservoir creates a federal right to the water necessary to fill that reservoir.² The doctrine is limited in two respects. First, it applies only to reserved lands, such as national forests, national parks, or natural resources reserved for specific uses. It does not apply to the federal public domain in general, nor does it apply to lands that are withdrawn only from specific uses, as from mineral entry under the General Mining Law of 1872. Second, the priority of the reservation of water over the water rights of other private users is dated from the time of the reservation; a federal implied water reservation is senior only to those private appropriators who made their diversion and application subsequent to the reservation of lands.

With the emergence of the implied reservation doctrine it became apparent that many fully-appropriated streams were subject to potentially senior claims of a federal reservation. An irrigator with a priority date of 1950 might legitimately fear that the development of resources on an upstream federal reservation established prior to 1950 could require enough water to pre-empt his water rights [4 ELR 10147] and those of all subsequent diverters. Since the United States has long claimed immunity from state procedures to quantify and condition water rights, there was no way to determine the amount of water the government would claim for resource development until it actually began diversion.

In the 1971 case of District Court of Eagle County v. U.S.,³ the Supreme Court held that the United States could be joined as a party to a state adjudication of water rights. Although the state could not deny or condition federal use,⁴ it could force the United States to quantify its claim — specify just how many annual acre-feet it would reasonably require. For holders of water rights under color of state law the ruling was a mixed blessing. For the first time the United States would have to quantify its claims, lending certainty to water allocation. However, the United States did not have to compensate the users who would be pre-empted by that retroactively senior quantification, leaving nothing to prevent the government from asserting the largest possible claim.

Colorado has been the leader in forcing federal water right quantification, and with good reason. Snowmelt provides barely adequate water supplies in spring, and by summer water is often critically short. Streams and rivers in Colorado are chronically over-appropriated. This water shortage is characteristic of much of the West, but in Colorado it is compounded by uncontrolled urban growth on the "front range" land just to the east of the Rockies (Denver, Colorado Springs, Pueblo, Greeley), and by the presence of vast federal oil shale reserves in the northwest corner of the state, where oil shale development could create huge water demands.

A Colorado District Water Court in Glenwood Springs (the same court whose quantification of federal water rights was upheld by the 1971 Eagle County decision, supra) is in the preliminary stages of adjudicating the water rights of the United States for Naval Oil Shale Reserve development.⁵ Naval Oil Shale Reserves differ from other federal oil shale lands in that they were specifically reserved for the defense needs of the United States. Since they are reserved for a particular purpose, they carry with them an implied reservation of water rights dating from their establishment in 1920.⁶ The government has filed a proof of claim for consumptive use of 200,000 acre-feet of water per year from the Colorado River Basin — as much as ten percent of the entire state's share of the river's yield.⁷ In order to get 200,000 acre-feet of water at the point of use, a considerably greater headgate diversion (point of actual diversion from the stream or river) will be necessary to compensate for canal leakage, evaporation and other inefficiencies in transporting the water to the place where it is to be consumed. Actual diversion from the watercourse could total 300,000 acre-feet or more annually.

This huge claim is just the kind of massive use that some environmentalists fear, but is "reasonable" in that it is probably not too out of line with what rapid development of the resource and associated uses would require. The Interior Department very conservatively estimates the needs of a single 50,000 barrel per day oil shale plant at 8600 annual acre-feet, which does not consider related uses, such as the domestic needs of the required labor force.⁸ Environmentalists fear that actual water needs are much greater.

One of the major parties to the adjudication, the Colorado River Water Conservation District (CRWCD), asserts that fears of an environmental dry-up or a detrimental loss of precious irrigation water are completely unfounded. When briefs are filed and arguments commence this fall, attorneys for CRWCD plan to go along with the government claim almost all the way, except for a dispute over the precise quantity needed, and figure that such a course of action will actually improve the local water situation.

It takes some probing and the assistance of the CRWCD to understand how a consumptive use of 200,000 acre-feet of water per year could enhance a local water table. The answer seems to be that the junior appropriators whose rights are likely to be cut off by oil shale development are for the most part out-of-basin diverters to the east, such as the City and County of Denver. When Denver pipes water over the mountains from west to east to water its lawns and gardens, that water returns not to the Colorado River Basin after use, but rather finds its way into the South Platte River, which ultimately drains into the Mississippi. Out-of-basin diversions act to dry up [4 ELR 10148] the land in one basin so that another area might flourish. To Colorado River Basin residents in the western region of the state it hardly seems sensible to dry up their farms so that Denver might water its bourbon.

Such intermountain water diversions are a hot political issue in much of the Rockies, and some Colorado River Basin residents would welcome in-basin pre-emption of out-of-basin diversions, even if occasioned by potentially disruptive oil shale development. Local ranchers and farmers know that the amount of water returned to the local subsurface aquifers is just as important as the amount of water left in the river. Even if most of the oil shale water is totally consumed, it will still return more water to the local environment than in the case of an out-of-basin diversion.

Other possible environmental benefits claimed by supporters of oil shale development include preservation of natural upstream river conditions, as upstream diverters junior to the oil shale priority date are forced to cease diversion. This could increase stream flow above the oil shale and allow some of the natural conditions of the river to return to their pre-irrigation state. In addition, pre-emption of Denver water appropriations could mean a slowing of front range growth rates, but Denver's considerable political clout, combined with its quite adequate alternate water sources (including early Colorado River water priorities) probably negate the possibility of any involuntary curb on its expansion. Development of western slope oil shale and its attraction of the required labor force could mean a more even distribution of Colorado's population, but any relief this would bring to the front range urban corridor would be offset by the environmental damage inherent in sudden western slope population increases.

The Colorado River Water Conservation District is admittedly pro-growth, and its promotion of economic expansion on the western slope sometimes places it at odds with local environmental interests. It might well be that without the considerable economic gains to be reaped from oil shale development, its members would feel less comfortable about potential environmental damage. Certainly at this point most observers consider water consumption to be only one of the many problems connected with the development of this resource, such as water pollution, visual scarring of the earth, and disposal of spent shale.⁹

Nevertheless, it would appear that a peculiar combination of circumstances has exposed a small silver lining in the cloud over oil shale development. By using vast quantities of Colorado River Basin Water and returning at least part of that water to local streams and subsurface aquifers, the United States may protect the local environment. Whether other problems of oil shale development will overshadow this limited benefit remains to be seen.

1. Winters v. U.S., 207 U.S. 564 (1908).

2. Dicta in F.P.C. v. Oregon, 349 U.S. 435 (1955). See also the classic case on the implied reservation doctrine, Arizona v. California, 373 U.S. 546 (1963).

3. 401 U.S. 520, 1 ELR 20189 (1971); and its companion case, U.S. v. Dist. Ct. for Water Div. No. 5, 401 U.S. 527, 1 ELR 20191 (1971). Both cases were founded on a statutory waiver of federal immunity from state water adjudications found in the "McCarran Amendment," 43 U.S.C. § 666 (1970).

4. See comment, State Water Board Decision May Halt New Melones Project, 3 ELR 10062, for one aspect of the problems involved in attempted state conditioning of federal water use.

5. In the Matter of the Application for Water Rights of the United States of America for Naval Oil Shale Reserves, Case No. W 467, (Colo. Dist. Ct. for Water Div. No. 5).

6. 10 U.S.C. §§ 7421 et seq.

7. The right of the state of Colorado to use the waters of the Colorado River Basin is limited by interstate compacts between itself and other states through which the river and its tributaries pass, thus its "share" of the Colorado River is less than the amount of water which crosses its borders in that watercourse. Estimates as to what percentage of Colorado's share is represented by 200,000 acre-feet vary, but sources at the Colorado River Water Conservation District provided the ten percent figure. The Denver Board of Water Commissioners would suggest a figure of five percent, still a quite substantial claim.

8. If the Navy grants oil shale development leases to private corporations, the courts may have to face the intriguing constitutional issue of whether a corporation may profit by the use of water resources whose right of use depends on a federally implied right, and was taken from individuals without compensation.

9. See comment, The Department of Interior's Prototype Leasing Program: Oil from Shale, 4 ELR 10031.