Geothermal water issue gets murky

Issues regarding a proposed lease on the town’s geothermal effluent discharge dominated discussion at the Nov. 5 meeting of the Pagosa Springs Town Council.

As reported in The SUN Oct. 2, the town is considering a series of 10-year leases set up to accommodate the Springs Resort’s need for additional geothermal resources for a proposed $250 million expansion. Although subject to ongoing negotiations between attorneys representing The Springs Resort and the town, the lease would grant 400 gallons per minute (GPM) of effluent discharge from two town wells, leaving the town with about 50 GPM.

In an 11th-hour letter from BootJack Management to the council, David Smith (representing BootJack) requested a lease, with the same terms outlined in the proposed Springs Resort lease agreement, for 100 GPM from the same wells tapped for the pending Springs Resort agreement. “Our concern is that, after the lease, there’s nothing left,” said Smith, “I think it’s in the town’s best interest to dole out the water, hold onto it until use has been shown.”

Mayor Ross Aragon and council members stated some concerns about the timing and intent of the BootJack lease request. “What’s frustrating is you coming in at the eleventh-hour,” said Aragon, The Springs Resort is already going forward with their development.”

Council member Mark Weiler was more forceful in his objections to the lease request, saying, “The Springs Resort is already doing something but as far as I know BootJack Management has no plans at the current time. You’re asking us to pull out of an agreement that is already in the works, but you don’t have anything to offer. If you’re just trying to get us to inhibit something, well, that’s just bad.”

Smith told council that BootJack did indeed have plans for a project, stating, “David Brown has a concept for development.”

Asked if any plans had been submitted to town staff or to the planning commission, associate planner Joe Nigg responded that he was not aware of any projects or plans pending for BootJack. Lacking any documented proposal for development, Smith was left with scant leverage for getting council to consider the lease request. Council member Stan Holt said, “The value is not in the lease, it’s in development led to from the lease,” reminding Smith that the town has less interest in how the water is used than what results from its use.

Calls to Smith requesting details of any development plans went unanswered as of press time.

While not outright dismissing the lease request from BootJack, the board was clear that, until development plans sweetened the pot, any impediment to a lease with The Springs Resort had to come with substantial promise of benefit to the town.

Not to say that a lease with The Springs Resort was without barriers. Council member Shari Pierce said, “My concern is that we’ve asked The Springs Resort, time and again, to remove their request on water rights and as of (tonight), they still have not done that.”

As reported in the Oct. 9 SUN, The Springs Resort has filed on absolute rights for the effluent discharge from town geothermal wells that would, if those rights are granted, give The Springs Resort ownership of that water. The filing has been a sticking point with the town and, as Pierce said in the meeting, The Springs Resort has been asked by the town to rescind the filing several times.

According to Pete Kasper, lead water commissioner in Pagosa Springs for the Division of Water Resources, The Springs Resort had still not revoked its filing on the rights. According to Kasper, discussions with attorneys for The Springs Resort revealed that, by maintaining the filing, The Springs Resort was “using the filing as a placeholder,” in case the town’s offer of a lease gets pulled.

Both parties, entrenched in their positions, are seemingly caught in a Catch-22 situation: the town won’t move forward with granting a lease on geothermal water unless The Springs Resort pulls its filing for rights on that water; The Springs Resort won’t pull its filing on the water until it has assurances that the town will grant a lease on that same water.

Another issue with the lease is the yet undetermined amount required to sustain the town’s proposed geothermal greenhouse project. When asked how much water might be required for the project, Michael Whiting replied, “Speaking as someone on the task force for the geothermal greenhouse, it’s anywhere from 30-200 GPM.”

Actually, in a report provided to council showing geothermal water needs in other greenhouse projects — projects of the scope proposed for Pagosa Springs, between 0.2 and 0.7 acres — the water requirement is (based on data from other projects) 60-200 GPM. In a follow-up call to Whiting, he stated that the “60-200 GPM is probably closer to the real estimate.”

As a concept on paper in the mayor’s office for the past few years, the geothermal greenhouse is beginning to gain momentum as an actual project. With council having approved matching funds last August for a feasibility study, the project awaits a grant award to complete the study. If the grant is awarded, the town will then decide how to proceed with the project — if at all. With national and global economic conditions shaky at best, the town could decide that a geothermal greenhouse is not a realistic expenditure. On the other hand, the project might be viewed by the town as an attraction that highlights its geothermal resources.

With issues of geothermal water so often front-and-center, council considered, briefly, the formation of a geothermal advisory board. As new energy technologies evolve, potentially raising the value of geothermal resources, and as developers scramble for access to those resources, an advisory committee would seem a godsend in helping council untangle the multitude of issues involved with geothermal water rights.

New town manager David Mitchem said, “The town has a number of assets that are valuable. Looking at those assets from a policy standpoint requires further discussion.”

Council member Jerry Jackson, appearing to oppose the idea of a geothermal advisory board, said, “I think it’s an extremely political situation. I think we need to keep it at the council and staff level. We’re in trouble if we do this now.”

Council member Darrel Cotton agreed, saying, “Formation of an advisory board would be tough; someone would feel left out. We need policy first; do it internally and without another group.”

Jackson suggested council schedule a work session to further investigate the lease with The Springs Resort, speak with the town’s attorney Bob Cole, and continue discussing what, if any, geothermal policy the town should pursue.

Having dealt with litigation in the past regarding geothermal resources, the town has a clear need for policy in regard to those resources; whether an advisory board is necessary for drafting that policy is apparently a matter for debate. However, as Kasper said in a phone interview with The SUN, “The town can do any number of things with the water (pertaining to the proposed lease agreement) prior to sending it out to The Springs Resort. However, that potentially opens the town up to litigation.”

Town geothermal supervisor Phil Starks sees another issue at stake — the overall health and integrity of the aquifer. “I’d like to see monitoring done on all the wells, something that’s not being done at the moment. Put all the data together in a longitudinal, ongoing study to see what we have. We have the technology to digitally monitor wells, the data would go directly onto a computer to give us data on accurate flow fluctuations throughout the year.”

Legal, economic, hydrological, and geothermal issues all contribute to a complex and contentious mix that will have to be addressed by the town, sooner than later. How the town decides to approach its valuable resources will be the topic of a work session following the council’s mid-month meeting on Thursday, Nov. 20, at noon. Although the proposed lease with The Springs Resort will be the focus of the work session, larger issues of policy will also make it into the conversation. Given the complexities of the various issues, it appears doubtful that council will reach an even fragmentary resolution to its various problems.

jim@pagosasun.com