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Grand Canyon Trust protests Deseret Power’s water rights deal with oil shale developer

An aerial view of Deseret Power's Bonanza Power Plant in Uinta County, Utah, July 13, 2011.
Uncle Kick-Kick
Flickr, CC BY-SA 2.0
An aerial view of Deseret Power's Bonanza Power Plant in Uinta County, Utah, July 13, 2011.

An environmental conservation organization is trying to stop a Utah company from holding onto its irreplaceable water rights.

Grand Canyon Trust, an Arizona-based nonprofit, filed an administrative protest with the Utah Division of Water Rights against Deseret Power Electric Cooperative over its failure to put 11,000 acre-feet of water from the Green River to beneficial use.

An administrative hearing was held Tuesday to determine whether the trust had legal standing to protest the water right.

Under Utah law, water rights holders must use all the water allocated to them within a certain period of time or they risk losing that water to the state.

An Estonian oil company, Enefit, initially bought the water right to build a commercial oil shale mine and processing plant in the Uinta Basin near Vernal. The South Project, as it is known, would use nearly 10,000 gallons of water a day to process synthetic crude oil, according to Grand Canyon Trust.

However, Enefit never used the water.

As a result, the company was on the verge of losing its water right. So, it transferred the right to Deseret Power, which owns the Bonanza Power Plant near Vernal, for $10 in 2013. Deseret Power was able to extend the water right by stating the water would be used to meet the growing electrical needs of the state. Deseret Power’s acquired right is set to expire in 2025.

“But before Deseret Power filed that request for an extension, it signed a contract with Enefit and granted Enefit the exclusive right to use all of that water for the next 30-plus years for oil shale mining and processing,” alleged Micheal Toll, a staff attorney for Grand Canyon Trust, during the administrative hearing.

Toll argued Deseret Power should forfeit the right and give the millions of gallons of water back to the public.

“That contract proves that Deseret Power is not meeting its legal obligation to exercise diligence in putting that water to beneficial use,” Toll said.

Toll said Enefit confirmed the contract in federal court, but told KUER the trust does not have a copy of the contract. The trust did ask the state engineer to obtain the contract through legal means.

However, Richard Hall, an attorney representing Deseret Power, said the company has no obligation to meet beneficial use until its extension expires.

”Deseret Power, as a wholesale electrical cooperative, is under no obligation to demonstrate diligent development currently,” Hall wrote in a legal briefing to the state engineer. “By July 30, 2025, Deseret Power will need to either put the water to beneficial use (and complete the proof of beneficial use) or file the extension request.”

The trust argued they have standing “by virtue” to fight the water right obtained by Deseret Power because PVR Inc., a Utah business, is a member of the trust and has a “portfolio” of water rights.

Wade Foster, a Deseret Power attorney, contended Grand Canyon Trust isn’t actually a water user since the entity doesn’t own any water rights itself.

“I think it's an open question whether or not that makes the trust a user of water,” Foster said.

Hall added the term “user of water” is ambiguous in state statute and the discretion should be left up to the state engineer to determine.

Clark Adams, the Utah water rights specialist presiding over the hearing, didn’t come to a decision on whether Grand Canyon Trust had legal standing to protest the water right in question.

He requested more legal briefings from both parties that explained the harms and merits on each side. Once those are submitted, either a decision about legal standing will be made or another hearing will be scheduled.

Saige is a politics reporter and co-host of KUER's State Street politics podcast
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