Water Wars of the West begin

Mark down January, 2023, as the month the Water Wars of the West began in earnest.

Four incidents this month point to intensifying skirmishing ahead as the fight is joined over the dwindling amount of water carried by The Colorado River. The West’s most important waterway has reached a crisis point because of a 23-year megadrought, earning the designation of most endangered river in America.

Our reporters hear that the state Attorney General’s Office is lawyering up for a possible onslaught of litigation over who has rights to what water across seven Western states in the Colorado River Basin.

Here are three battlegrounds that have emerged just this month. More are sure to come:

Western Slope vs. Wall Street

Is water the new oil?

That was the question posed by a joint investigation by CBS News and The Weather Channel about a Wall Street firm’s possible water speculation outside of Grand Junction. “Private investment firms are showing a growing interest in an increasingly scarce natural resource in the American West: water in the Colorado River. For some of the farmers and cities that depend on the river as a lifeline, that interest is concerning,” CBS wrote.

The scarcer a commodity becomes, the more valuable it grows (think housing or diamonds), and the story explored whether a company called Water Asset Management is looking to make some serious financial gain off of Colorado’s pain.

The Madison Avenue hedge fund has bought at least $20 million of land in western Colorado in the past five years.

WAM President Matthew Diserio has called water in the United States “a trillion-dollar market opportunity.”

Andy Mueller, general manager of the Colorado River Water Conservation District, told CBS that it is clear WAM wants the water, not the land, betting they’ll be able to sell some of the water rights at big profit as demand outstrips supply. The question is, what happens to the farms in Grand Valley if that happens — do they dry up and blow away?

“I view these drought profiteers as vultures,” Mueller said to CBS. “They’re looking to make a lot of money off this public resource. Water in Colorado, water in the West, is your future. Without water you have no future.”

There are laws against water speculating in Colorado that require people to put their water rights to “beneficial use,” such as irrigating a farm, delivering tap water for a city, or releasing more water into rivers for recreation.

But beneficial is pretty broad, so the laws are too weak to stop what Water Asset Management is doing, which they say is improving farms by making them more efficient so they can sell parts of its water rights to other farmers and cities in need.

Just the way outside investors drove up prices in Colorado’s housing market, look for more hedge funds to see big dollar signs in buying up Colorado water rights in the future. Ranchers and farmers vs. hedge funds may be the new Cowboys and Indians of the West.

City vs. suburb

Earlier this month, the city of Scottsdale, Ariz., turned off the tap for the unincorporated suburb of Rio Verde Foothills, blaming the megadrought. Scottsdale said its own residents must come first and the city could no longer sell water to 1,000 people in 500 to 700 homes just beyond the city limits.

Rio Verde residents now scramble each week to buy water

at much higher prices on the open market from other sources and brokers, and in a mad dash to conserve, are flushing their toilets with rainwater, eating off paper plates, skipping showers and taking laundry to friends houses in Scottsdale, according to recent media reports.

It’s a perfect example of what happens when runaway growth slams into shrinking water supplies.

A variation on this theme is happening right now in Colorado Springs.

The most powerful developer in Colorado Springs, Norwood Development Group, in order to get the city to prioritize water for its in-city developments over future suburban annexations, threatened to ask voters to approve a stringent water rule that could block new annexations for decades. With that threat hanging over it, the city adopted a similar, but less restrictive standard that still prioritizes water for Norwood developments, according to a story by Denver Gazette reporter Mary Shinn.

Norwood’s measure could have blocked the city from growing in size for 20 to 30 years because of the water requirements it insisted on, Mayor John Suthers told Shinn. A cynic might say Norwood is leveraging drought fears to strong arm the government into preferential treatment. Anyone for a replay of “Chinatown?”

Colorado, Wyoming, Utah, Arizona, New Mexico, Nevada vs. California

In response to a Jan. 31 deadline set by the federal government for proposed Colorado River water usage cuts from the seven basin states, six states agreed on a plan while California begged off, proposing its own plan.

Most notable about what was suggested by Arizona, Utah, Wyoming, Colorado, New Mexico and Nevada in the Jan. 31 letter to the U.S. Bureau of Reclamation is that the lower basin states — Arizona, Nevada and California — would take into account evaporation as water is transported across the desert when they tally how much water they use from the river, which they don’t now. That means big cuts in usage to account for those losses. The agreement also said lower basin states should accept additional cuts to water use if the level at Lake Mead falls below certain elevations.

No way, said California. It’s plan has no evaporation losses built into it and hints at bigger cuts for Arizona and Nevada, while preserving California’s senior water rights that give it first dibs on Colorado River water.

CNN reported that during negotiations, representatives from California’s powerful water districts proposed cutting off some of the West’s biggest cities — including Phoenix and Las Vegas — in favor of California agriculture. Cities versus farms could become the biggest battleground of all in the future.

If all seven states cannot agree on a single plan together, the Bureau of Reclamation promises to impose arbitrary cuts on all states. And water officials said that almost certainly will provoke a flurry of lawsuits.

Then the wars that are heating up now will be fought in a new ring by new contestants — courtrooms and lawyers.

But make no mistake: Though developers, hedge funds and lawsuits have replaced hired guns, raiding parties and six shooters, the Waters Wars of the West have truly begun.