Food versus Energy (Part II): The view from Colorado

Gunnison River, where water is diverted via tunnel to
irrigate the Uncompahgre Valley, Colorado

I wrote this post a few weeks ago about the conflicts between ag interests and natural gas extraction in Australia.  The New York Times reports today on similar conflicts in the United States.  Kirk Johnson's story focuses on the competition for water between farmers on the one hand and oil and gas interests on the other.  His dateline is Greeley, Colorado, and the headline is "For Farms in the West, Oil Wells are Thirsty Rivals."

Johnson reports that oil and gas interests in Colorado are paying record high prices for excess water that they buy or lease from cities.  While farmers have tended to pay between $30 and $100 for an acre foot of water (about 326,000 gallons), depending on scarcity, oil and gas companies are now paying as much as $1K to $2K for that amount of treated water purchased from cities.  Farmers say they can't match those bids.  Peter Anderson, a corn and alfalfa farmer in eastern Colorado, casts farmers as the underdogs based on the value of the commodity delivered:

Water from the Gunnison River
irrigating a farm near Montrose, Colorado

It's not a level playing field.  ... I don't think in reality that the farmer can compete with the oil and gas companies for that water.  Their return is a hell of a lot better than ours.  

But as water-intensive as fracking is, the controversial process is consuming far less water than farmers are right now in Colorado.  Oil and gas companies estimate their 2012 water use at 6.5 billion gallons--or about a tenth of one percent of the state's total water use.  That figure is disputed by Western Resource Advocates, an environmental advocacy group that puts the figure at perhaps twice that much.  But even 13 million gallons is a drop in the proverbial bucket compared to the whopping 85.5% of Colorado's water use that goes for irrigation and agriculture.

Oil and gas may be David to ag's Goliath when it comes to water use, but tension between these sectors is likely to increase, particularly during times of drought and as the gas industry's needs grow--growth projected to be 16% over the next three years.

A spokesperson for agricultural interests articulated the conflict as one between food and energy.  For example, Johnson quotes Ben Rainbolt, executive director of the Rocky Mountain Farmers Union:

We're not going to be able to raise the food we need.  How are we going to produce this with less?

A spokesperson for the Colorado Oil and Gas Association puts a different spin on it, calling energy the "foundation of all we do," including agriculture.

But isn't this really a "chicken and egg" situation?  That is, food is energy--the first form of energy--and without it, people can't engage in energy production or energy consumption for other purposes.  

I note that Colorado law requires court approval of these bulk water purchases, so it will be interesting to see if and how legal norms around such approval evolve as oil and gas industry demands for water grow.

Cross-posted to Legal Ruralism.

Food v Energy in the "Land of Plenty"

Among the agriculture and rural development issues I have become aware of during my time in Australia is the growing conflict over coal seam gas (CSG).  Coal seam gas, you ask?  That's what Aussies call the natural gas released by fracking, and Aussies are beginning to debate the practice as hotly as we are in the United States.  But the Australian context for this debate--which has evolved into outright conflict in several locales--is different in various regards to what it is in the U.S., including the legal schemes for regulating the practice and the extent to which farmers and others in rural areas can prevent it.

This February 2012 piece by Bond University law professor Tina Hunter summarizes several of the issues, including who has the power to regulate or prevent the practice.  In short--it isn't the individual land owners.  Hunter's headline speaks volumes, "Food security v energy security:  land use conflict and the law. "  She writes:

The development of unconventional sources of gas (such as coal seam and shale gas) is providing Australia with energy security, as well as generating a huge export industry in the form of LNG [liquified natural gas].

* * * 

However, many of the coal seam gas deposits occur in areas of high agricultural fertility.  This includes the Darling Downs area of Queensland, and the Liverpool Plains of NSW, which comprises only 6% of Australia's total agricultural area, but produces more than 22% of its food.

This is Australia's breadbasket.

 * * * 

This  creates conflict in land use; farmers are understandably reluctant to allow their prime agricultural land to be used for coal seam gas extraction.  However, as the law stands at present, even if a farmer owns the land, a government has the right to grant a licence to an energy company to extract the coal seam gas from under the ground, by drilling wells to extract the gas. 

Hunter notes that Queensland has "declared a two-kilometre exclusion zone on mining activities near towns with more than 1000 people," and that "farmers are calling for a similar embargo over prime agricultural areas."   

One thing that makes this tension between ag and energy particularly interesting in the Australian context is that both mining and agriculture have typically fallen within the purview of several states' Department of Primary Industries (DPI).  See, for example, the State of Victoria's website here.  But those departments are increasingly being divvied up.  The DPI website for Queensland redirects to the new Department of Agriculture, Fisheries and Forestry (DAFF), which mimics the federal delineation between the DAFF on one hand and the Department of Resources, Energy and Tourism on the other.  (Resources refers to mineral, oil and gas resources--which makes its clustering with tourism very odd.)  South Australia's site is here, and you can see that as of the beginning of the year, it transferred its minerals and energy resources division to a new Department of Manufacturing, Innovation, Trade, Resources and Energy.  Western Australia, which has seen the greatest benefit from the nation's resource boom but which has no coal seam gas wells, has separate departments for Agriculture and Food and for Mines and Petroleum.  Perhaps these relatively administrative divisions reflect that sense that ag and various extractive industries cannot peacefully co-exist, either within government or on the ground.  An earlier post about a conflict between farm and coal interests is here.

Hunter goes on to highlight the water issues in particular, noting Australia's perennial water woes, particularly in the Murray-Darling basin, west of the Great Dividing Range, where the federal government has preached conservation and restricted farmers' use of water.  She notes that--contrary to Western Australia, New South Wales and Queensland are linked to the Great Artesian Basin.  This means that fracking chemicals entering groundwater there could contaminate a water supply of enormous importance.  Other academic analysis of the issues is here.  A report commissioned by industry is here.  A prominent Australian environmentalist comments here.

Recent Australian media coverage of fracking issues include this very recent story about Victoria banning new licenses on coal-seam gas projects (a story which the Chicago Tribune picked up this week-end), and this one about a blockade of a coal-seam gas project in Newcastle, New South Wales.  Here's an Australian Broadcast Corporation (ABC) website on the issue, which includes an interactive map of existing wells.  You can see that many of the Queensland wells are in the areas south and west of Chinchilla and Dalby, not far from where I took the photo shown at top.  The ABC website is called Coal Seam Gas by the Numbers. Not surprisingly, some of those numbers are jobs statistics.  The industry is predictably touting its job creation potential--as in a billboard I saw on one of my Queensland drives between the Darling Downs and Brisbane with a headline about job creation by CSG in Queensland.

Just this week-end, the Sydney Morning Herald's News Review section featured a front-page story about the resource boom, which is projected to end in the next half century or so, as different resources--from gold to coal--are exhausted.  As the nation asks what next, it remembers the decline of the agriculture sector, according to the story by Peter Martin and Matt Wade.  They write:

Those who grew up in the 1950s were forever being told the nation rode on the sheep's back.  Back then the farm sector accounted for one quarter of Australia's production.  Today it accounts for a little over 2 per cent.

That's a sobering statistic for the agriculture sector and one that would seem to bode well for the energy sector when its interests are in direct conflict with those agricultural producers.  It also seems to be bad news for rural communities generally because a great deal of Australian resource extraction is being done in "fly in, fly out" mining camps, which circumvent local economies.  One anti-CSG group picked up on the community angle in a statement earlier this month:  

Coal seam gas represents a serious risk to farm enterprises and water resources, to the future profitability of agriculture and other industries such as tourism, and to the social cohesion of rural communities.

 Read posts about the links--and conflicts--between fracking and agriculture in the U.S. here, here, and here.

Cross-posted to Legal Ruralism.