Opinion ID: 2584073
Heading Depth: 1
Heading Rank: 10

Heading: Anti-Speculation Doctrine

Text: We next address the remaining issue of whether the anti-speculation doctrine applies to the Commission's determination of Denver Basin designated ground water rights under subsection (7). We hold that it does. All water within Colorado is a public resource, and no person owns the public's water. Rather, persons may obtain rights of use under applicable provisions of law. Upper Black Squirrel Creek, 993 P.2d at 1181; Farmers High Line Canal Reservoir Co. v. City of Golden, 975 P.2d 189, 198 (Colo.1999); Bayou Land Co., 924 P.2d at 146-47 (Colo. 1996). The administration of a water use right, as we have seen, depends upon the statutory allocation of the category of waters to which the right attaches. See Chatfield E. Well Co., 956 P.2d at 1271. Even though Denver Basin ground water is allocated and managed differently from tributary surface waters, the CGMA mirrors the anti-speculation, beneficial use, and non-waste precepts of Colorado water law. [34] Id. The anti-speculation doctrine precludes the appropriator who does not intend to put water to use for her own benefit, and has no contractual or agency relationship with one who does, from obtaining a water use right. [35] In other words, a person who intends to hold the right only to sell it or dispose of it for profit in the future, rather than acquire it for the purpose of applying water to an identified beneficial use, is not entitled to a determination of a water use right. Three Bells Ranch Assoc. v. Cache La Poudre Water Users Ass'n, 758 P.2d 164, 173-74 n. 11 (Colo.1988). This doctrine was initially established in the context of tributary surface water rights. In the context of the CGMA, this doctrine embodies the conservation aspect of the twin statutory goals of development and conservation. See § 37-90-102(2) (To continue the development of [nondesignated] nontributary ground water resources consonant with conservation shall be the policy of this state.). In Colorado River Water Conservation District v. Vidler Tunnel Water Co., 197 Colo. 413, 594 P.2d 566 (1979), we discussed this requirement of non-speculative intent with respect to tributary surface waters. In that case we reviewed an application for a conditional storage right under the Water Right Determination and Administration Act of 1969, [36] which planned use of a small percentage of the water to irrigate the applicant's own land but sought to sell the remaining water to unidentified municipalities, without a contractual or agency relationship, based upon assumptions of future population growth and need. Id. at 418, 594 P.2d at 569. We held that evidence of future needs and uses of water without contractual commitments to use any of the water was insufficient to show the intent to put the water to beneficial use. We concluded that [o]ur constitution guarantees a right to appropriate, not a right to speculate.... To recognize conditional decrees grounded on no interest beyond a desire to obtain water for sale wouldas a practical matterdiscourage those who have need and use for the water from developing it. Id. at 417, 594 P.2d at 568. [37] Although Vidler involved an appropriation of tributary water under the 1969 Act, which does not apply to designated ground water, [38] we held that the anti-speculation doctrine does apply to designated ground waterthat is, to ground water located in a designated ground water basin but outside the boundaries of the Denver Basin. Jaeger v. Colorado Ground Water Comm'n, 746 P.2d 515 (Colo.1987). We concluded that the rationale supporting our decision in Vidler to apply the anti-speculation doctrine to surface water also applies to designated basin ground water. Id. at 522-23. Thus, a user within a designated basin, not located in the Denver Basin, must satisfy the anti-speculation doctrine requirements to obtain a conditional permit to drill a well. Id. at 523. Since our holding in Jaeger technically applied only to designated ground water located outside the boundaries of the Denver Basin and did not specifically address the Denver Basin designated ground water involved here, the Bradburys argue that the Jaeger rationale is inapposite. Because only the overlying landowner, or someone who has the landowner's consent, may obtain the use rights to the Denver Basin ground water underneath her property, the amount or quantity of ground water to be withdrawn is determined differently from the allocation system of modified prior appropriation applicable to the designated ground water involved in Jaeger. As a result, the Bradburys argue that the anti-speculation doctrine is neither needed nor justified. This argument is unpersuasive. Because all Colorado water is a public resource and the right to acquire it is a use right, the landowner seeking to use Denver Basin ground water possesses only an inchoate, statutory right to apply to use the water located under her land. To suggest that the anti-speculation doctrine does not apply to these waters because use is limited to overlying owners of land, and excludes others who lack the owner's consent, disregards the goal of conservation and the public nature of this resource. Ground water located in the four deep Denver Basin aquifers represents a finite, exhaustible public resource. If the rate of withdrawal is assumed to exceed the rate of recharge, then, as the statute assumes, withdrawals will lead to a reduction in aquifer storage and a diminished discharge to surface waters. See Southwestern Colorado Water Conservation Dist., 671 P.2d at 1313 (Nontributary ground water supplies ... may dwindle because water can be withdrawn from the aquifers in excess of the recharge rate, causing a `mining condition.'). Hence, there is a need to conserve this finite resource to offset the mining of the aquifers caused by pumping that may reduce discharge and deplete water storage. As additional support, we note that surface waters are replenished annually, whereas pumping that exceeds recharge will eventually deplete the usable water in the Denver Basin Aquifers. See, e.g., Brett Heckman, Principles and Law of Colorado's Nontributary Ground Water, 62 Denv. U.L.Rev. 809, 814 (1985). Thus, it would be logically inconsistent to apply this conservation doctrine to waters that are seasonably replenishable but not to waters that are finite and exhaustible. For these reasons, the Vidler and Jaeger rationales should apply equally to Denver Basin designated ground water. This conservation doctrine should apply when the Commission fixes or quantifies the landowner's water use right. In other words, the anti-speculation doctrine applies when the Commission makes the final determination of the amount of ground water allocated to the use right, acting pursuant to the provisions of subsection (7). § 37-90-107(7)(c)(III); Thompson, 194 Colo. at 497, 575 P.2d at 378 ([T]he extent of beneficial use and the measure of the water right is fixed at the time a final decree is entered.). Thus, when the Commission determines a water use right to designated ground water in the Denver Basin under § 37-90-107(7), an applicant must establish a threshold showing that there exists a beneficial, non-speculative use for the amount of allocated designated Denver Basin ground water that will not create unreasonable waste. If the use will occur on land other than the applicant's, then the applicant must establish that the applicant has a contract or agency relationship with another entity for the water's beneficial use.