A judge has upheld the states rules that exempt some gas and oil wells from stricter regulation of their water use, but the ruling contains one notable exception.
Its an exception that just happens to involve most of the gas wells being drilled in Southwest Colorado.
Judge James Hartmann of the water court in Greeley ruled in favor of State Engineer Dick Wolfe, who adopted rules in 2010 that allowed his office to avoid detailed regulation of the water use by many of the 40,000 gas and oil wells in Colorado.
However, he threw out the portion of the rules that covers the Southern Ute Indian Reservation, where most of the regions gas drilling occurs.
The debate began six years ago, when two Southwest Colorado ranching families Bill and Elizabeth Vance and James and Mary Fitzgerald sued the state engineers office for not regulating water use by nearby coalbed methane wells. The ranchers worried that gas drilling, which uses a lot of water, could deplete the springs they rely on to keep their land irrigated.
The state Supreme Court ruled for the ranchers. In a decision that became known as the Vance case, the high court declared that water extraction during gas drilling constituted a beneficial use of water and required the companies to get water well permits.
Until the Vance ruling, the industry and state regulators treated the water as a waste product that did not need to be regulated under Colorados complicated set of water laws.
Fearing a deluge of 40,000 well permit applications, the Legislature gave the state engineer the authority to decide which gas wells are so deep they will not hurt other peoples water rights, and which ones need stricter scrutiny, including plans to replace the water they use.
The Vances, Fitzgeralds and many others sued again, but on Thursday the judge upheld most of the rules Wolfe adopted.
For the most part, I think it was a good ruling for the state, said First Assistant Attorney General John Cyran, who defended the state engineers office in the lawsuit.
But the plaintiffs also are happy about the ruling because of one paragraph near the end.
In that paragraph, the judge declared the rules apply only to the use of water in gas and oil drilling, and they cant be used in court to win a water right for the industry.
That is the main event, believe it or not, said Sarah Klahn, a lawyer for the plaintiffs.
Most of the water at issue lies deep underground, and its dirty and salty. But its also plentiful, and as pressures increase on Colorados limited water supply, the deep water could have potential value.
Klahn said gas companies shouldnt be able to claim it without jumping the usual legal hurdles.
She doesnt mind that the judges decision upheld the rules because he also said companies have to prove their case in court if they want expanded water rights.
This basically levels the playing field. This allows the state engineer to issue permits in a way thats efficient, but it also allows water users to know that if industry comes into court, theyre going to be treated exactly the way other water users are treated, Klahn said.
Colorado law gives landowners the right to all the groundwater under their land, no matter how deep it is, unless the water connects with surface streams and could affect other peoples water rights.
However, Hartmanns ruling leaves much of Southwest Colorado in a legal limbo.
Although the judge upheld the state engineers rules statewide, he ruled that they should not apply within the boundaries of the Southern Ute Indian Reservation because it is unclear who has jurisdiction over water.
Lawyers for the state and the tribe said they are considering appealing that portion of Hartmanns ruling or at least asking him for clarification.
We were surprised by the decision, said Adam Reeves, a lawyer for the Southern Ute tribe. Were evaluating our next step.
Cyran said he, too, questioned the Southwest Colorado portion of the decision.
I dont think there was any problem with us passing that rule, because I do think we have authority there, Cyran said.
The states team is considering what to do next, and it might ask the judge for a clarification, he said.
Klahn said that now that the state engineers rules have been thrown out in Southwest Colorado, the Supreme Courts decision in the Vance case is the last word on the legal status of water in the region.
Energy companies including BP took the states side in the lawsuit. BP spokeswoman Lisa Hough said the companys team is still reviewing the Southwest Colorado portion of the ruling.
But she noted that BP already has water well permits for its coalbed methane wells, so the ruling should not affect current operations.
The San Juan Citizens Alliance, which was a plaintiff in the case, is sponsoring seminars later this month on the legal status of Southwest Colorados groundwater.
Reach Joe Hanel at joeh@cortezjournal.com.