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Environment

As metro Denver grows, another caller wants to tap the vast aquifer under the San Luis Valley

Politically well-connected Renewable Water Resources has Gov. Bill Owens in its court, but a coalition of water warriors has fended off two other attempts

Gary Boyce's property Rancho Rosado sold to Sean Tonner of Renewable Water Resources after Boyce died. Tonner's company is planning a $600 million pipeline to bring water from the San Luis Valley to the Front Range. (Nina Riggio, Special to The Colorado Sun)
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This story was published in collaboration with Bitterroot, an online magazine about the politics, economy, culture and environment of the West. 

An adobe arch spans a well-kept dirt road northwest of Crestone, wooden arms protruding from its sides. The name Rancho Rosado is engraved in the weathered brown wood, the red letters fading to pink.

Behind the arch, a meandering line of trees hugs a stream — an unusual feature in this parched landscape. The Sangre de Cristo range looms above the ranch. It’s July, and little snow remains in the high peaks that were blanketed white just a month before.

A collapsed log structure sits behind the arch, engulfed by the low brush and cactus that stretch from the ranch to eternity. The high desert of the San Luis Valley is dotted with small clusters of trees that mark its towns: Moffat’s grove is just down the road; Alamosa’s branches wave in the haze that builds in the desert air. 

Longtime San Luis Valley resident Chris Canaly credits the valley’s unobstructed view of other towns for fostering a sense of community. “You might not necessarily hang out in Manassa, but you can see Manassa from the northern part of the valley. You can see Center, you can see Alamosa,” she said. “And even though everybody lives far away in different neighborhoods, there’s a real sense of belonging to the same place.”

Rancho Rosado, though, is not like the other ranches that fill the vast San Luis Valley. The property owner, Sean Tonner, also has an office in a Denver suburb, where he is head of a company called Renewable Water Resources. Tonner wants to drill a series of wells on his recently acquired ranch and pipe 22,000 acre-feet of water a year around the Sangre de Cristos to the ever-growing Front Range population center. Tonner argues folks at both ends of the pipeline would benefit by sending water to metro Denver and money to the economically distressed San Luis Valley. His company would get plenty, too. Selling the water at $25,000 an acre-foot — the going rate these days, according to water lawyers in the state — would generate $550 million in revenue. 

Across the West, water is being funneled from agricultural regions to fast-growing cities like Phoenix, Salt Lake City, and Los Angeles. The San Luis Valley is no stranger to such proposals. Since the 1970s, a series of investors with statewide and international clout has tried to siphon its groundwater to the Denver area. A resilient coalition of farmers, ranchers, and environmentalists has, time and again, fended off the advances. Tonner’s proposal, though, is better prepared to navigate the legal hurdles that defeated its predecessors. The West is becoming simultaneously drier and more populous, and the San Luis Valley’s water is a prize too tempting to pass up. 

“We’re fighting just to keep our water rights,” rancher Keith Tolsma said. “But somebody else is interested in buying water to supply Denver and [Colorado] Springs. How are we going to argue with that? There’s millions of people over there with bigger pocketbooks than us.”

2 billion acre-feet of water untapped

The 8,000-square-mile San Luis Valley is one Colorado’s agricultural centers, but it can be a harsh place to farm. The valley floor gets less than 7 inches of rainfall per year, and the average altitude is 7,500 feet.

Large swaths are too arid to support even sagebrush, and trees cling only to riverbanks fed by snowmelt in the high peaks. Still, irrigated circles of barley, potatoes and alfalfa cover the valley floor. Cows and sheep graze in open fields.

Agriculture is possible here thanks to the enormous two-tier aquifer beneath the valley. In 1969, the U.S. Geological Survey estimated that the valley’s shallow unconfined aquifer and the deeper confined aquifer — so called because of the clay layers encasing it — held at least 2 billion acre-feet of water, nearly 40 times the combined capacity of the West’s two largest reservoirs, lakes Powell and Mead. It didn’t take long for water speculators to start circling. 

In the late 1980s, Canaly was working at a bakery when a man sauntered in looking for something other than bread. He introduced himself as Alex Crutchfield, vice chairman of American Water Development Inc., and said his company had bought the 97,000 acre Baca Ranch nearby. The company’s plan was to pump 200,000 acre-feet of water a year out of the valley. “But the good news,” Canaly remembered him saying, “is people like you will be able to sit on a board and figure out how we’re going to spend all that money.” 

Canaly wasn’t moved by dollar signs. She worried the San Luis Valley couldn’t handle that level of water extraction and figured others felt the same. So she organized the Citizens for San Luis Valley Water in 1989, and quickly built a coalition opposed to the groundwater pumping. 

“When they made that proposal, you would not believe how quickly ranchers and environmentalists got together around that issue,” said George Whitten, a third-generation San Luis Valley rancher. 

George Whitten, a third-generation rancher in the San Luis Valley, says environmentalists and ranchers came together quickly to fight the first plan to tap the vast aquifers under the valley back in 1989. (Nina Riggio, Special to The Colorado Sun)

Canaly held educational events at which valley residents could learn about the hydrology of their home. Once the water left the basin, they were told, it wasn’t coming back. Opposition coalesced around lawsuits filed by local water conservation districts, residents, municipalities, the state and the federal government. “Of course, we were pretty adamant that you can’t [pump 200,000 acre-feet] and not injure other water rights here,” said Cleave Simpson, general manager of the Rio Grande Water Conservation District. In 1994, the Colorado Supreme Court upheld a district court ruling that the pumping would adversely affect shallow aquifers and surface-water rights, and AWDI’s plan was shelved.

But it didn’t die. A year after the court decision, Maurice Strong, AWDI’s principal, sold the Baca Ranch to Gary Boyce, founder of Stockman’s Water. Boyce hoped to pipe 150,000 acre-feet a year to Denver, where he estimated he could sell the water at $5,000 per acre-foot — a potential $750 million windfall. Boyce’s plan differed from AWDI’s in that he pledged his surface-water rights to compensate farmers affected by pumping. But Boyce met the same resistance as Strong, and never managed to turn the water into cash. His proposal so galvanized the community that The Nature Conservancy stepped in, bought the Baca Ranch in 2002, and transferred portions of it to the federal government to establish the Baca National Wildlife Refuge and Great Sand Dunes National Park.

AWDI and Stockman’s representatives were painted as water barons, but their motivations varied. Some were brought by profit and some by pragmatism, looking for the least damaging way to navigate an increasingly dire situation. Boyce’s purchase of the Baca Ranch was backed by Farallon Capital, the hedge fund started by environmentalist investor and 2020 Democratic presidential candidate Tom Steyer. AWDI counted William Ruckelshaus, the first administrator of the Environmental Protection Agency, and former Colorado Gov. Richard Lamm as principals. Lamm said he signed up, in part, because of Maurice Strong’s international acclaim as an environmentalist. In 1972, before taking a crack at Western water, the Canadian organized the first United Nations Conference on the Human Environment, the predecessor to the modern UN climate gatherings. 

At the time of AWDI’s proposal, a plan to turn Cheesman Canyon, along the South Platte River, into a reservoir was in the works. “I was governor, we had a need for water on the Front Range, and the Denver Water Board had this big plan to take the most beautiful canyon in Colorado and put a goddamn dam in it,” Lamm, now co-director of the University of Denver’s Institute for Public Policy Studies, said. “And San Luis Valley had, I was told and I believe, an incredible amount of water that was not being utilized.”

That logic lives on. Boyce sold the Baca to The Nature Conservancy, but he hung on to another property — Rancho Rosado. After he died in 2016, his estate sold that property, and its attached water rights, to Tonner of RWR. 

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San Luis Valley water is security in prolonged drought

RWR plans to drill a series of wells into the deeper confined aquifer and pipe 22,000 acre-feet a year to the Front Range. The company has not yet filed a proposal in Colorado’s water court, which must approve these measures, nor has it lined up a buyer.

Tonner cited water security as the greatest threat to Colorado’s growth, and that means it needs to go to the Front Range. Prolonged drought, he said, could put major population centers between Denver and Colorado Springs at risk of running short on water. “Meanwhile, we have a source of a billion acre-feet? You know, we’re all Colorado. We’re in this together.”

The proposed $600 million pipeline project follows U.S. 285 over Poncha Pass, passing near this farm on its way to the Front Range. (Nina Riggio, Special to The Colorado Sun)

To quench metro Denver’s thirst, the proposed pipeline would leave Rancho Rosado heading west and north, past open pasture, stables and barns, new trailers and the broken remains of abandoned homes. It would climb 1,100 feet to the summit of Poncha Pass, 42 miles away. It would slip through the narrow gap between the Sangre de Cristos and La Garitas and leave the valley — and its farmers — behind. After another climb, this one over Trout Creek Pass, it would spill into the South Platte’s tributaries and flow to Chatfield Reservoir, capacity 27,000 acre-feet. Denver rises beyond Chatfield’s smooth blue surface, shimmering in an urban haze. All told, RWR’s pipeline could cost $600 million.

Former Colorado Gov. Bill Owens is an RWR principal; Tonner was his deputy chief of staff while he was governor. Since then, Tonner has consulted for both political campaigns and businesses, and he is listed as a managing partner at a lobbying and communications firm in Denver.

The RWR plan has some elements working in its favor that previous iterations lacked. For one, it’d pump just a tenth of Maurice Strong’s and AWDI’s goal. Tonner and RWR also claim they will retire more water rights than they pump by buying 30,000 to 35,000 acre-feet of water from ranchers and farmers, leading to a net recharge of the aquifer and therefore not damaging other rights. There’s also a clear user for the water; that the Front Range will need more is not speculation. 

“People immediately say, ‘Oh, it’s a scheme, they’re here to steal our water,’” Tonner said. “If they take a second and they look at what we’re proposing, look at the size, the benefit to both communities, they’d see it’s a fair deal.”

Tonner said more than 40 farmers have agreed to sell their water, though no money has exchanged hands; none has been named publicly. No one I spoke to in the valley thinks they know anyone who has sold, but Simpson, the water district manager, admits folks wouldn’t tell him if they had. 

If RWR can provide buyers and sellers — to prove the plan isn’t speculative — and evidence the pumping won’t draw down the aquifer or harm other water rights, Boulder water attorney John Buchanan said the courts must let the plan proceed. “The court can’t really look at that and say, ‘Well, you know, you’re not going to injure anyone, but this is really gonna hurt the community,’” he said.

Since Citizens for San Luis Valley Water began fighting AWDI’s pipeline, the value of water has dramatically increased. Shares of the Colorado-Big Thompson Project, which transports more than 200,000 acre-feet of water from the Western Slope to the Front Range each year, have increased to $30,000 from $1,150 since 1989. For that sum, shareholders have received an average 0.74 acre-feet a year. The skyrocketing price of water mirrors population growth. Between 2000 and 2017, 1.3 million people moved to Colorado, with 1.1 million of them going to the urban centers of the Front Range.

The West’s water is increasingly dispensed from suburban sprinklers and showerheads rather than irrigation ditches in fields of sugar beets and barley. When the C-BT Project began piping water to the Front Range in 1957, 85% of its yield went to agricultural use. In 2018, 70% of the water went to cities and towns. As Western states get drier and more populous, the distribution of water shows where priorities lie — and where the money is.

“Cities can always outbid farms. And that’s just the way it’s been. And that’s the way it’s always going to be as far as I can tell,” said Doug Kenney, director of the University of Colorado’s Western Water Policy Program. “It’s not just twice as much or three times as much — it can easily be 50 times as much. The different economic values are that extreme.”

The state of Colorado estimates that the South Platte River basin, which includes Denver, will need up to 500,000 new acre-feet of water to meet demand by 2050. Houses are still being built, people are still moving in. The water has to come from somewhere. 

Eric Perramond, who teaches environmental science at Colorado College, said Denver and the San Luis Valley are the latest iteration of a process emblematic of the modern West. Ever since 1913, when Los Angeles diverted the Owens River from the remote eastern Sierra to quench its growing thirst, the West’s water has moved toward population centers. Take Crowley County, on the Eastern Plains. The agricultural region, 150 miles east of  the San Luis Valley, boasted 50,000 irrigated acres in the 1970s. A series of water buys shrunk that to 5,000 by 2015.

“They must’ve sold their water rights about 10 years ago. And boy, down there, it looks like a post-Dust Bowl community. You cannot make a living really of any kind without water there,” Perramond said.

Perramond said Colorado’s state water plan, adopted in 2015, frowns on “buy-and-dry” tactics in which cities buy out a farmer’s water rights, but that’s not stopping planners who must shore up water supplies for some of the country’s fastest growing areas. 

It’s easy to paint this as simple economics, a resource being reallocated to where it’s most valuable. Water, however, isn’t like other resources. If economics dictates, you can use aluminum instead of steel, pine instead of oak. Nothing can replace a lost water right. While a multimillion-dollar buyout for an aging farmer could look appealing, many in the San Luis Valley hope resistance is as strong as it was in the ’80s. If farmers sell this time around, the valley could be changed forever. If the water leaves, the people might, too.

The San Luis Valley’s surface water was over-appropriated by 1900. Unable to irrigate using just the Rio Grande and creeks, farmers started drilling wells with newly developed electric pumps. In 1972, the state stopped issuing well permits because farmers were over-draining the aquifer. Now, to take groundwater, the interested party has to secure the water rights for existing wells.

Valley farmers are already struggling to make the water meet their agricultural needs in the midst of a changing climate. Since 2011, farmers in parts of the valley have paid self-imposed fees for the groundwater they pump (in total, an average of 170,000 acre-feet a year over the last five years), but the aquifer continues to decline. If they don’t manage to restore the aquifer, the state has threatened to shut down the pumps. 

“If curtailment happens,” Tonner said, “it’s not going to be buy-and-dry. It’s going to be dry-and-dry. If the state shuts off the wells … farmers go out of business.”

RWR argues that buying up ranchers’ water rights, on which it plans to spend $68 million, would recharge the aquifer, making the whole district more resilient to drought. Furthermore, Tonner pledged that RWR’s application in water court would allow no more than the stated 22,000 acre-feet withdrawal. But Simpson, the water district’s GM, isn’t buying the environmental perks. He said even if there was a net benefit to the aquifer, RWR’s wells would concentrate the pumping in a small area, which could damage other water rights and nearby protected lands.

“They tout the project as environmentally friendly, and I just challenge you to find me a community in this state that sold water out of their basin and said, ‘This is a really good idea. We should be figuring out a way to do more of this,’” Simpson said. “Find an environmental group that says transferring water out of a basin to another one is really a good step for the environment. I just think that’s contrary to logic.”

Environmental interests don’t necessarily align with economic realities. George Whitten’s surface water rights have been in his family since the 1870s, and they later dug wells. Whitten has no plans to sell, but when someone starts offering buyouts, he said, it’s hard not to listen. He’s 66, and none of his kids wants to take over the ranch.

“Right now we live in a world where my best cow isn’t worth as much as one marijuana plant,” Whitten said. “And so, sure, if somebody comes around and they’re talking about amounts of money that’s beyond anything that I could ever really imagine, of course that makes people stop and think.”

George Whitten moves the electric fence twice a day so that the cattle are getting enough to eat but also to prevent overgrazing on his parched San Luis Valley Ranch. (Nina Riggio, Special to The Colorado Sun)

Simpson thinks the region’s poverty is one reason the valley has seen so many piping plans. In Saguache County, where the pipeline would start, 21% of people live below the poverty line, nearly 10 percentage points higher than Colorado as a whole. It’s worse in the rest of the valley: in Alamosa County, where the water district is based, the poverty rate is 28%; in Costilla County, it’s 30%. In Douglas County, one place Tonner said his water could end up, the poverty rate is 3.2% and median household incomes top $111,000.

“The San Luis Valley has always carried with it a reputation of struggle,” Canaly said. “I don’t think that [developers] expected the level of understanding that exists here. People really do spend a lot of time trying to understand the systems, especially the water systems, and they’ve spent a lot of time in the mountains. They understand how things connect.”

Tonner said that awareness is one reason farmers are ranchers are hearing him out, though. To sweeten the deal, RWR is floating a $50 million community fund. In addition, RWR is seeking an ongoing fee to be paid by the Front Range water users.

“It’s the most ag-dependent watershed in Colorado,” Tonner said of the San Luis Valley. “That’s not healthy. We should have a more balanced economy — more entrepreneurship, more manufacturing.” The community fund, he said, could kick-start those initiatives.

Simpson keeps fighting the pipelines, in part, because he feels they threaten the lifestyle he was raised in, one he wants to pass on to his son. 

“I’m an engineer by trade,” Simpson said. “I could be better off financially staying in an engineering field, but this is home. This is where I grew up, and this is what I love to do.”

Simpson grows alfalfa, one of the most water consumptive crops in the valley, and knows he might have to make changes if he wants his son to be able to take over the operation. To keep the aquifers healthy, everyone is going to have to make sacrifices. 

To others, even those who have tried and failed to move San Luis water over the Sangre de Cristos to Denver, past is prologue. 

“If you’re gonna grow a Los Angeles of the Rockies, which is what we’re growing here,” Lamm said, “then we will be back knocking at the San Luis Valley’s door.” 


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