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<br />H'ATER Ll \r R!:T/EW
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<br />VoJum:c .~
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<br />lssuc!
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<br />ARTICLE UPDATE
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<br />115
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<br />"We agree with Chevron that the water court properly considered
<br />the current economic feasibility of the shale oil project. The plain
<br />language ofs~ction 37-92-301 (4) (c) recognizes that current economic
<br />conditions beyond the control of the applicant might adversely affect
<br />efforts to perfect the water right. This provision prohibits courLe; from
<br />using such a circumstance to deny a diligence application when there
<br />is other evidence of reasonable diligence. As a result, when current
<br />economic conditions beyond the control of an applicant slow progress
<br />(owards the perfection of a conditional water right, it is not improper
<br />for a court to considf'T (h(' efTerf of rhe ar!vt>r<;c economic condirions."
<br />Jd. at 92:~-24.
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<br />oITset the loss of the hydrostatic overflow, which ill the Denver Basin
<br />formations of the fOllr enumerated aquifers was approximately 40,000
<br />acre feet per year. There is no indication anywhere ill {he legislative
<br />record that any senators were aware of the existence of the South Park
<br />formation of the Laramie-Fox Hills aquifer. Moreover, they had no
<br />knowledge concerning the amount of hydrostatic overflow occurring
<br />in that formation or the amount of augmentation that would be
<br />necessary to avoid injury to senior surface water rights in proximity to
<br />that formation. M
<br />Park Count)' Spollslll~n's R..llCh, L.L.P. v. Bargas, 986 P.2d 262, 271~72 (Colo. 1999).
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<br />918,923 (Colo. l~l99).
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<br />"In this case. there is undisDuted evidence that Chevron exercised
<br />reasonable dilig.ence despite the adverse economic conditions in the
<br />shale oil industry. As noted, supra, the water court found that Chevron
<br />had planned for a diversion facility, planned a dam on Roan Creek,
<br />planned for pipeline facilities, prepared environmental baseline
<br />studies, prepared a detailed master planning document for Chevron's
<br />Parachute Creek Unit, and had participated in miscellaneous activities
<br />rdated to the conditionai water rights such as iitigation, research
<br />projects, and studies. Therefore, we hold that it was not improper for
<br />the water court to consider the economic conditions of the shale oil
<br />industry when it made its reasonable diligence determination, and we
<br />reject the Subdistrict's contention."
<br />[d. at 924.
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<br />"M!". Harrison also explained the augmentation requirements of
<br />Senate Bill 5 for non tributary and "not non tributary" wells. Like the
<br />definitional subsection at (10.5), the augmentation provisions at
<br />sections 37-90-137(9) (b) and (c) referred only to 'the Dawson, Denver,
<br />Arapahoe, and Laramie-Fox Hills aquifers.' They made no express
<br />mention of the Denver Basin. After detailing the rules for
<br />augmentation, Mr. Harrison told the representatives: 'Again let me put
<br />this overall perspective on it. These sfJecific ndes apply only to the Denver
<br />Basin !onnalion.f. '"
<br />Jd. at 272-73.
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<br />'Thus, [Park County Sportsmen's Ranch] is entitled to pursue
<br />...,rater rights to the ground water beneath its lands in South Park
<br />pursuant to the doctrine of prior appropriation in accordance \'lith the
<br />Water Right Determination and Administration Act of 1969, but, to
<br />the extent that it makes out-of-priority diversions, it must avoid
<br />material injurious depletions to senior surface rights."
<br />Jd. at 275.
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<br />Park County Sportsmen's Ranch, L.L.P. v. Bargas
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<br />~The recommendations of the Getches and Bishop Committees
<br />fonned the basis of Senate Bill 5, which the General Assembly
<br />eventually enacted with a non tributary definition as set out in section
<br />37~90-103(lO.5).... [T]he senators were aware that different
<br />hydrological formations in different areas of the state might require
<br />distinct administration.... Elliott and Simpson's statements
<br />corroborate what appears clear from all of the Senate hearings: that
<br />the designation of the Dawson, Denver, Arapahoe, and Laramie-Fox
<br />Hills aquifers in subsection (10,5) was designed to modify the
<br />definition of non tributary for purposes of the Denver Basin only. The
<br />senators understood that this modification would result in the loss of
<br />approximately 40,000 acre feet of ground water then discharging from
<br />the four enumerated aquifers, because the hydrosul.tic head of those
<br />aquifers would be disregarded in determining whether they were
<br />nontributary. However, they also understood that Senate Bill 5
<br />3.ccounted for this loss by requiring augmentation from the four
<br />J.quifers back illlO the Denver Basin to an extent that would sufficiently
<br />
<br />Municipal Subdistrict, Northern Colorado Water Conservancy District
<br />v, OXY USA, Inc,
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<br />~The very nature of a conditional right suggests that the 'can and
<br />will' test applies until the right matures into an absolute decree. A
<br />conditional water right 'encourage[s] development of water resources
<br />by allmving the applicant to complete financing, engineering, and
<br />construction with the certainty that if its development plan succeeds, it
<br />will be able to obtain an absolute water right.' At each successive stage
<br />of the project, parties must appear before the court to demonstrate
<br />sufficient work to prove that the applicant is moving toward
<br />completion of the project. Unless the applicant makes this showing,
<br />the conditional right is speculative and violates the anti-speculation
<br />doctrine. In this respect, the anti-speculation doctrine and the 'can
<br />and .wil~' requirement. are closely related, although the 'can and will'
<br />test IS shght!y more strmgent.
<br />Recently in Chevron, we stated that the holder of a condilional
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