Farmers pitted against oil and gas corporations

For farms in the U.S. West, oil wells are thirsty rivals

A new race for water is rippling through the drought-scorched heartland, pitting farmers against oil and gas interests, driven by new drilling techniques that use powerful streams of water, sand and chemicals to crack the ground and release stores of oil and gas.

NY Times,

7 September, 2012

A single such well can require five million gallons of water, and energy companies are flocking to water auctions, farm ponds, irrigation ditches and municipal fire hydrants to get what they need.

That thirst is helping to drive an explosion of oil production here, but it is also complicating the long and emotional struggle over who drinks and who does not in the arid and fast-growing West. Farmers and environmental activists say they are worried that deep-pocketed energy companies will have purchase on increasingly scarce water supplies as they drill deep new wells that use the technique of hydraulic fracturing.

And this summer’s record-breaking drought, which dried up wells and ruined crops, has only amplified those concerns.

“It’s not a level playing field,” said Peter V. Anderson, who grows corn and alfalfa on the parched plains of eastern Colorado. “I don’t think in reality that the farmer can compete with the oil and gas companies for that water. Their return is a hell of a lot better than ours.”

But industry officials say that critics are exaggerating the effect on water supplies.

Energy producers do not — and cannot — simply snap up the rights to streams and wells at the expense of farmers or homeowners. To fill their storage tanks, they lease surplus water from cities or buy treated wastewater that would otherwise be dumped back into rivers. In some cases, they buy water rights directly from farmers or other users — a process that in Colorado requires court approval.

“This is an important use of our water — to produce energy, which is the foundation of all we do,” said Tisha Schuller, president of the Colorado Oil and Gas Association. “Think about the big users of water — agriculture, industrial development. All these things require energy.”

In average years, farmers and ranchers like Mr. Anderson say they pay about $30 for an acre foot of water — equal to about 326,000 gallons — a price that can rise to $100 when water is scarce. Right now, oil and gas companies in parts of Colorado are paying as much as $1,000 to $2,000 for an equal amount of treated water from city pipes.

That money can be a blessing for strained local utilities and water departments, but farmers say there is no way they can afford to match those bids.

“We’re not going to be able to raise the food we need,” said Ben Rainbolt, executive director of the Rocky Mountain Farmers Union. “How are we going to produce this with less?”

In the spring, during an annual auction of surplus water in northern Colorado, Mr. Anderson and a handful of other farmers were outbid by water haulers who supply hydraulic fracturing wells. Although Mr. Anderson ultimately got the water he needed as bids settled after the auction, the mere shadow of energy producers at the auction offered a glimpse of their growing presence in the rush for Western water.

“Energy companies are moving quickly to shore up supplies,” said Reagan Waskom, director of the Colorado Water Institute at Colorado State University. “They’re going to find it, and they’re going to pay what they need to pay, and it’s on an order of magnitude of what crop producers can afford to pay. That changes the whole deal.” […]