The phrase “whiskey is for drinking, water is for fighting” is often used when discussing Western water rights issues.
It’s also probably apt for a recent appeal filed by a group of Carbon County ranchers against a state-approved water exchange plan for the HF Sinclair Refinery they say ignores more than 100 years of water law precedent in the state.
Carbon County residents William Steward, Jack Berger, John Bucholz and Laura Bucholz filed their appeal to the Board of Control of the State Engineer’s Office in December to block Sinclair from taking more water from the North Platte River during drier years.
“If the appeal is unsuccessful, the HF Sinclair water agreement could set a troubling precedent,” Berger said in a prepared statement. “Allowing the exchange to proceed could alter Wyoming’s unique water rights system, where water is owned collectively by the people of the state.
“We’re concerned this decision could lead to treating water as a commodity, as has happened in neighboring Colorado, instead of as a shared and managed resource.”
Sinclair is a major economic driver in Carbon County, employing more than 500 people and producing more than 85,000 barrels of oil per day, according to the Carbon County Economic Development Corp.
What’s It About?
Wyoming water laws generally state that water rights should be tied to the land itself, not to the owner of the land. That means the rights can’t be sold off by themselves.
During very dry years, which have become more common over the last few decades, Sinclair Refinery wants to divert up to 500 acre-feet of water from the North Platte River to use at its refinery near Rawlins. In exchange, it would forgo using diverted water for the irrigated ranchland it owns on the ER Ranch near Encampment during the summer months, where Sinclair owns water rights for irrigation and domestic use.
The ranch and its corresponding water rights were bought by the company in 2022 specifically for this diversion purpose.
The refinery wants to boost its supply of available water during the later winter and spring months to make up for summer months when less water is available.
The Wyoming State Engineer’s Office approved this plan in October.
The water rights of the Pathfinder Reservoir always take priority over the refinery’s water rights from the North Platte. Since 2002, water allocations have occurred about once every four years, limiting Sinclair’s water availability in those years.
During those lean water years, Sinclair has had to seek temporary replacement water supplies to ensure it can keep its operations going.
“To address this serious operational risk, HF Sinclair has been seeking a more permanent solution to its water shortage problem,” Wyoming State Engineer Brandon Gebhart wrote in his October decision letter approving the water use.
The ranchers argue that Wyoming law only allows water taken from the North Platte River to be used for farming and irrigation, not industrial refinery operations.
Although this is true, irrigation users can also apply for a temporary change of use for up to two years. Sinclair already pursued this option, finding the temporary nature of these transfers did not solve its permanent water needs.
Diversions
Wyoming law also allows water appropriators to seek a permanent change of use, which is what the ranchers believe Sinclair is doing.
The ranchers say that under Wyoming law, the refinery’s plan is not a water “exchange” because Sinclair would use “foregone diversions” to replace the diverted water from the Encampment River, which eventually flows into the North Platte.
“Foregone diversions consist of water that is simply left in the river rather than being diverted for irrigation, and it is not measured,” the ranchers’ appeal reads. “Thus, it is impossible to determine whether the amount of replacement water is equal to the amount of water diverted out of priority at the refinery.”
During a public meeting held in Saratoga last summer, Saratoga Encampment Riverside Conservation District Water Resource Specialist Justin Stern warned that by not irrigating the Encampment ranch, HF Sinclair would negatively impact downstream users because of the loss of return flows into the system, according to BigFoot99.
The town of Encampment also wrote a letter opposing the plan, but Carbon County and Rawlins officials have backed Sinclair.
State’s Perspective
Gebhart disagrees with the ranchers and said that HF Sinclair is within its right to ask the state for permission to exchange water from one source to another.
In a letter he included with his October decision, Gebhart wrote that the exchange resolves Sinclair’s serious water shortage problems while continuing to irrigate its ranch during normal water years.
“In my opinion, the exchange is not adverse to the public interest simply because it allows the continued industrial use at the Sinclair refinery by ceasing irrigation on the ER Ranch in allocation years,” Gebhart wrote in his decision letter.
Gebhart does not believe the exchange will negatively affect other landowners or the Pathfinder Reservoir, which has not opposed the exchange.
If the exchange is determined to be negatively impacting other users at some time in the future, the state water commissioner will be allowed to adjust its terms.
Gebhart also doesn’t believe it amounts to a permanent change and change of use because Sinclair would only divert water during drier years.
“As a result, the exchange avoids any negative impacts of a permanent change in those (non-dry) years,” Gebhart writes.
Ramifications
The ranchers also believe Gebhart lacks the authority to make the decision he did because only the state Board of Control can grant an exchange.
They also believe the exchange as requested will be nearly impossible to administer and may violate the 2001 landmark court ruling of Nebraska v. Wyoming, which limits the amount of water that Wyoming may use from the North Platte River, and includes water consumed for purposes other than irrigation.
Gebhart disagrees that the exchange will be too difficult to administer. His order also requires Sinclair to modify, install or maintain all facilities necessary to administer it and report its daily intake of water during allocation months.
The ranchers and landowners also claim that Gebhart approved Sinclair’s plan without first resolving other outstanding water rights issues in the area.
“While we acknowledge the economic importance of HF Sinclair’s refinery to Carbon County, the broader public interest must take precedence,” Saratoga resident Jon Nelson said in the press release. “The needs of ranchers, wildlife, and downstream communities that rely on the North Platte River must be given equal consideration.
“It’s evident the state engineer favored a corporation without sufficiently protecting the interests of other water users.”
Gebhart declined to offer further comment when reached by Cowboy State Daily on Tuesday. He said the refinery has a green light to move forward with the diversions while the appeal is pending.
The Board of Control is reviewing the appeal, and its next meeting is in February.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
