Pure Cycle Corporation Announces Second Fiscal Quarter 2014 Financial Results

April 14, 2014

waterfromtap

Here’s the release from Pure Cycle Water:

Pure Cycle Corporation (NASDAQ Capital Market: PCYO) today reported financial results for the six months ended February 28, 2014. Basic and diluted loss per share decreased 38% from a loss of $.08 per share in last year to $.05 per share this year.

“During the second quarter we continued to see our business grow and develop driving long- term shareholder value” commented Mark Harding, President of Pure Cycle Corporation. “We are very excited to have record water sales and deliveries and are continuing to add value to our Company through monetizing our valuable water assets.”[...]

Revenues increased approximately 51% during the our six months ended February 28, 2014 compared to our six months ended February 28, 2013 primarily as a result of increased water sales used for fracking.

More infrastructure coverage here.


Noble Energy looks to the Denver Basin Aquifer System for non-tributary groundwater for operations

January 29, 2014
Denver Basin Aquifers confining unit sands and springs via the USGS

Denver Basin Aquifers confining unit sands and springs via the USGS

From The Greeley Tribune (Eric Brown):

Many water needs in the region have been met by buying supplies from farmers and ranchers, but a Noble Energy manager said Tuesday the oil and gas industry could and should stop being a part of that problem, and explained what his company is doing to get water. The large energy developer is looking to use deep groundwater wells — drawing “non-tributary water” — to meets its needs down the road, said Ken Knox, senior adviser and water resources manager for Noble, during his presentation at the Colorado Farm Show in Greeley.

Farmers and others who pump groundwater typically draw water that’s less than 100 feet below the Earth’s surface — water that’s considered to be “tributary,” because it’s connected to the watershed on the surface and over time flows underground into nearby rivers and streams, where it’s used by farmers, cities and others. Wanting to avoid water that’s needed by other users, Knox said Noble is looking to have in place about a handful of deep, non-tributary groundwater wells that draw from about 800 to 1,600 feet below the Earth’s surface. Digging wells that deep is considered too expensive for farmers, Knox and others said Tuesday, and the quality of water at that depth is typically unusable for municipal or agricultural uses.

One of Noble’s deep groundwater wells is already in place, and the company is currently going through water court to get another four operating in the region down the road, Knox said. Along with digging deeper for water, Knox explained that Noble across the board is “strategically looking” to develop water supplies that don’t put them in competition with agriculture or cities.

Oil and gas development, according to the Colorado Division of Natural Resources, only used about 0.11 percent of the state’s water in 2012 — very little compared to agriculture, which uses about 85 percent of the state’s supplies. But in places like Weld County — where about 80 percent of the state’s oil and gas production is taking place, and where about 25 percent of the state’s agriculture production is going on, and where the population has doubled since 1990 and is expected to continue growing — finding ways for an economy-boosting energy industry to not interfere with the water demands of farmers, ranchers and cities is critical.

The growing water demands of the region is coupled with the fact that the cheapest way to build water supplies is to purchase them from farmers and ranchers who are leaving the land and willing to sell. Those factors leave the South Platte Basin, which covers most of northeast Colorado, potentially having as many as 267,000 acres of irrigated farmland dry up by 2050, according to the Statewide Water Supply Initiative Study, released by the state in 2010.

With that in mind, the Colorado Farm Show offered its “Water Resources Panel: Agriculture, Urban and Oil and Development Interactions.”

Joining Knox on the panel were John Stulp, who is special policy adviser on water to Gov. John Hickenlooper; Dave Nettles, division engineer with the Water Resources Division office in Greeley; and Jim Hall, resources manager for the city of Greeley. The panel was moderated by Reagan Waskom, director of the Colorado Water Institute at Colorado State University.

Knox also spoke Tuesday of Noble’s and other energy companies’ efforts to recycle the water they use in drilling for oil and gas — a hydraulic fracturing process, or “fracking,” that involves blasting water, sand and chemicals into rock formations, about 7,000 feet into the ground, to free oil and natural gas. The average horizontal well uses about 2.8 million gallons of water. Some water initially flows out of the well, but another percentage flows back over time. Knox stressed it is cheaper for companies to dispose of that returned water and buy fresh water for drilling purposes than it is to build facilities that treat used water. But, seeing the need to make the most of water supplies in the region, Noble is willing to invest in water-recycling facilities and other water-efficiency endeavors.

Hall noted that the city of Greeley, which leases water to both ag users and oil and gas users, has seen a decrease in the amount of water it leases for energy development. With improved technology and improved drilling techniques, also decreasing is the amount of land oil and gas development is using, and the number of water trucks on rural roads.

Knox said oil and gas companies — once requiring about 8 acres for one well site — can now put four to eight wells on just 3 acres, meaning the impact on farm and ranch land is less than it once was. By becoming more water efficient, he said Noble has decreased its water truck loads by 1.65 million annually, and reduced its carbon dioxide emissions by 264,000 tons.

More oil and gas coverage here and here.


The winter 2014 ‘In the pipeline’ newsletter from United Water is hot off the presses

January 26, 2014

United Water's operations north of I-70

United Water’s operations north of I-70


Click here to read the newsletter. Here’s an excerpt:

Officials from United Water and Sanitation District joined state and local government dignitaries and leaders of area water districts on October 18 to dedicate Arapahoe County Water and Wastewater Authority’s (ACWWA) Chambers Reservoir and celebrate ACWWA taking initial renewable water deliveries from its ACWWA Flow Project.

United played a key role in development of both the Chambers Reservoir and the ACWWA Flow Project, building the reservoir for ACWWA and acquiring the 4,400 acre-feet of renewable water that is the keystone of the ACWWA Flow Project.

More South Platte River Basin coverage here.


CSU, Noble Energy and DNR partner on groundwater monitoring project in the Wattenberg field

December 6, 2013
Groundwater monitoring well

Groundwater monitoring well

From The Greeley Tribune (Sharon Dunn):

Like the crime scene investigators on television, researchers in northern Colorado will be taking an intense look at water wells throughout the oil patch in a demonstration study in the coming months to determine changes in the water over time. Conducted through Colorado State University in partnership with Noble Energy, the Colorado Water Watch demonstration project will soon begin water table monitoring in test wells at roughly 10 Noble production sites in a real-time look at how the water changes.

“It was conceived not so much as a research project but as a tool to provide information to the public,” said project lead researcher Ken Carlson, an associate professor Civil and Environmental Engineering at CSU. “The oil and gas industry is taking the initiative here to provide some visibility.” Read the rest of this entry »


‘Groundwater will be a part of the state water plan’ John Stulp #COWaterPlan

December 5, 2013
Colorado Water Plan website screen shot November 1, 2013

Colorado Water Plan website screen shot November 1, 2013

From The Pueblo Chieftain (Chris Woodka):

Call it a wet-headed stepchild. Colorado has puzzled for years about how to account for its underground water resources, with about the same impact as water sloshing in the bottom of a precariously carried bucket. A state water plan will attempt to incorporate groundwater management, including possible aquifer storage, even though the relationship between surface water and well water is not fully understood.

“Groundwater will be a part of the state water plan,” John Stulp, the governor’s water adviser, told about 80 attendees of a groundwater conference this week. “There are a number of studies and plans that will go forward as the state water plan is developed.”

The conference, organized by the American Groundwater Trust, was designed to address policy as a follow-up to more technical reports generated from a 2012 conference.

While Colorado water rights stretch back to the mid-1800s, groundwater in the state was of little concern until more high-capacity wells were drilled in the 1950s and 1960s. It wasn’t until 1969 that well use was incorporated into the elaborate web of prior appropriation water right, explained Steve Sims, a water lawyer who once defended the state’s water rights in the attorney general’s office. But since then, a tug-of-war between the General Assembly and water courts has muddied how groundwater is treated. Non-tributary wells are regulated by a separate commission.

“What we got was a hodgepodge of rules,” Sims said. “It’s been driven by real estate developers.”

Key court cases eroded the jurisdiction of water courts themselves as well as the power of the state engineer to regulate wells, he said. The Empire Lodge case triggered a legislative fix to substitute water supply plans in 2002. The 2009 Vance case changed the way the state accounts for water produced by oil and gas drilling.

Geography also plays a part. Alluvial well regulations differ in all of the state’s major river basins, as well as in non-tributary basins. There is little scientific understanding of the relationship of groundwater levels to surface flows, other than the common wisdom that surface irrigation or flooding increase the levels, while pumping and drought decrease them. But the timing of return flows, availability of underground storage sites and long-term effects of pumping are still unknown.

“It’s not a precise science,” said Reagan Waskom of the Colorado Water Institute, which is completing a study of the South Platte basin mandated by the state Legislature in 2012. “If you had a valve and could put water back into the river when you need it, it would be great.”

More Colorado Water Plan coverage here.


Text of the Colorado Basin Roundtable white paper for the IBCC and Colorado Water Plan

December 3, 2013
New supply development concepts via the Front Range roundtables

New supply development concepts via the Front Range roundtables

Here’s the text from the recently approved draft of the white paper:

Introduction
The Colorado River Basin is the “heart” of Colorado. The basin holds the headwaters of the Colorado River that form the mainstem of the river, some of the state’s most significant agriculture, the largest West Slope city and a large, expanding energy industry. The Colorado Basin is home to the most-visited national forest and much of Colorado’s recreation-based economy, including significant river-based recreation.

Colorado’s population is projected by the State Demographer’s Office to nearly double by 2050, from the five million people we have today to nearly ten million. Most of the growth is expected to be along the Front Range urban corridor; however the fastest growth is expected to occur along the I-70 corridor within the Colorado Basin.

Read the rest of this entry »


‘Don’t goddamn come here [#ColoradoRiver Basin] any more’ — Lurline Curran

December 3, 2013
Colorado transmountain diversions via the State Engineer's office

Colorado transmountain diversions via the State Engineer’s office

Here’s an article about the white paper approved last week by the Colorado Basin Roundtable, from Brent Gardner-Smith writing for Aspen Journalism. Click through and read the whole article. Here’s an excerpt:

“Don’t goddamn come here any more,” was the way Lurline Curran, county manager of Grand County, summed up the roundtable’s position just before the group voted to approve a white paper it has been working on for months.

“We’re trying to tell you, Front Range: Don’t count on us,” Curran said. “Don’t be counting on us to make up all the shortages.”

The actual paper crafted by the Colorado roundtable states its case in a more diplomatic fashion, but it is still blunt.

“The notion that increasing demands on the Front Range can always be met with a new supply from the Colorado River, or any other river, (is) no longer valid,” the position paper states…

“There is going to have to be a discussion and plan for developing a new West Slope water supply,” the South Platte roundtable stated in a June memo directed to Committee.

Together, the South Platte, Metro and Arkansas roundtables are pushing that discussion. They’re asking the state to preserve the option to build “several” 100,000 to 250,000 acre-foot projects on the Green River at Flaming Gorge Reservoir, the lower Yampa River, and/or the Gunnison River at Blue Mesa Reservoir…

On Nov. 25, the members of the Colorado River roundtable clearly wanted to inform the Committee that they don’t support the idea of new Western Slope projects.

Jim Pokrandt, a communications executive at the Colorado River District who chairs the Colorado roundtable, said the group’s paper, directed to the Committee, was “an answer to position statements put out by other basin roundtables.”

The Committee’s eventual analysis is expected to shape a draft statewide Colorado Water Plan, which is supposed to be on the governor’s desk via the Committee and the Colorado Water Conservation Board in 12 months.

And while there has been a decades-long discussion in Colorado about the merits of moving water from the Western Slope to the Front Range, the language in the position papers, and the roundtable meetings, is getting sharper as the state water plan now takes shape.

“It’s not ‘don’t take one more drop,’ but it is as close as we can get,” said Ken Neubecker, the environmental representative on the Colorado roundtable, about the group’s current position.

The paper itself advises, “the scenic nature and recreational uses of our rivers are as important to the West Slope as suburban development and service industry businesses are to the Front Range. They are not and should not be seen as second-class water rights, which Colorado can preserve the option of removing at the behest of Front Range indulgences.”

That’s certainly in contrast to the vision of the South Platte, Metro and Arkansas basin roundtables, which in a draft joint statement in July said that the way to meet the “east slope municipal supply gap” is to develop “state water projects using Colorado River water for municipal uses on the East and West slopes.”[...]

The white paper from the Colorado roundtable states that “new supply” is a euphemism for “a new transmountain diversion from the Colorado River system.”

“This option must be the last option,” the paper notes.

Instead of new expensive Western Slope water projects, the paper calls for more water conservation and “intelligent land use” on the Front Range.

It goes on to note that Front Range interests are actively pursuing the expansion of existing transmountain diversions — many of which are likely to be blessed by the Committee because they are already in the works.

It says the Western Slope has its own water gap, as the growing demands of agriculture, energy development, population growth and river ecosystems are coming together in the face of climate change.

It calls for reform to the state’s water laws, so it is easier to leave water in Western Slope rivers for environmental reasons, and it rejects the Front Range’s call to streamline the review process for new water projects.

“Streamlining as a means of forcing West Slope acquiescence to any new supply project ‘for the good of the state’ is unacceptable,” the paper states.

Finally, the document advises the state not to endorse or get behind a Western Slope water project unless it “has been agreed to by the impacted counties, conservancy districts and conservation districts from which water would be diverted.”

More IBCC — basin roundtables coverage here. More Colorado Water Plan coverage here.


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