Dealing in the water market

by Cat Urbigkit

Although the Town of Pinedale had intended to sell its 4,800-acre foot Fremont Lake stored water right for a total of $10 for a 30-year term so the state could establish an instream flow for Pine Creek, that deal hasn’t yet occurred. With the council unwilling to vote in favor of the water rights deal, council members instead decided to put the issue to a non-binding public vote in the spring of 2006.

Former state engineer Jeff Fassett, now a private consultant with instream flow advocacy group Trout Unlimited as a client, had sent a letter to Pinedale Mayor Rose Skinner suggesting the $10 value for the water right. That’s $10 total, not per acre-foot or even per year.

At last week’s Wyoming Water Association education seminar in Casper, Neal Stelting of Westwater Research in Laramie (a water marketing firm) spoke of the growing water market, noting that environmental groups are now big buyers. This classification of buyer is growing “at a rate faster than any other group out there,” he said.

Although Wyoming water law isn’t structured to make water rights deals easy, the demand just isn’t as great as in other states at this time, Stelting said.

When asked about the range of values that take place in water deals, Stelting said there is a big variation. In Idaho, in an agricultural area without a lot of demand, the value is $11 an acre-foot, per year. But in an area of demand, that value rises to $150 per acre-foot per year.

Most sellers of water rights in the West are agricultural producers. In the period 1998-2002, there were 750 water rights transactions in Colorado, compared to 13 in Wyoming.

Major developing markets include major urban areas of the Front Range, Colorado; Wasatch Front, Utah; Central Valley, California; Phoenix and Seattle.