About the project
Colorado’s Front Range is home to 88% of the state’s population and the water supply gap is expected to reach 400,000-acre-feet annually by 2050. This gap will be exacerbated by increasing population and a warming climate.
More than 70 percent of Colorado’s precipitation falls to the west of the Continental Divide. Water can be transferred from the western slope to meet Front Range demand.
Colorado’s Front Range water market is already among the nation’s most active and highest-priced. In 2019, Colorado Big Thompson (CBT) water rights cost more than $89,000 per share – up from $12,000 nine years earlier.
Demand for the Water Horse Project as a potential new water source has been validated with interest expressed from municipalities, agricultural, and industrial users.
The legal use of water from the Green River and Flaming Gorge Reservoir to benefit Colorado users is part of the policy, institutional, and legal framework of the Colorado River Compact (1922) and Upper Colorado River Basin Compact (1948) which distributes water supplies in the western United States.
The environmental flows and downstream fisheries of the unique Green River System -- including the 3.8 million acre-foot Flaming Gorge Reservoir -- are legally protected by the federal government under the National Environmental Policy Act (NEPA).
At the same time, however, extensive modeling performed by the U.S. Bureau of Reclamation and other organizations have determined that the Green River has a substantial surplus of water which can be used to assist water-short regions like Colorado’s Front Range, while fully maintaining the Green River System’s environmental and economic benefits.
Under the legal and public policy framework of the Compacts – that apportions water between the seven basin states of the Colorado River, Colorado is entitled to a maximum of 51.8% of the water available for the Upper Basin States, equal to 3.88-million-acre feet annually. Currently, however, Colorado is only utilizing approximately 2.50-million-acre feet annually which leaves up to 1.38 million acre-feet annually of Colorado River water unallocated and available for use by the State.
The Water Horse Project will draw from the remaining, unused portion of water allocable to Colorado under these compacts.
In recognizing Colorado’s Front Range growing water supply-demand imbalance, the 2010 Statewide Water Supply Initiative conducted by the Colorado Water Conservation Board and Colorado Department of Natural Resources identified development of a Flaming Gorge pipeline as among four appropriate concepts for addressing this need.
The Water Horse Project is the only current proposal that meets the Colorado Inter-basin Compact Committee’s seven principles for new trans-mountain diversions, which are now part of the 2016 Colorado Water Plan.
At a time when politicians and taxpayers are largely opposed to publicly funding large-scale, long-term infrastructure projects, the Water Horse Project is being privately financed on the front end facilitating a viable path to an effective public-private partnership.
Water Horse Resources has filed for water permits and point of diversion head gates on the Green River in Utah and, alternatively, in Wyoming, which gives Water Horse priority over any other infrastructure projects that would seek similar water rights. The Company also holds a priority water supply contract request from the Bureau of Reclamation to water from Flaming Gorge Reservoir.
The Water Horse Project’s proposed right of way lies largely within the Interstate 80 Federal Energy Corridor from southwest Wyoming into Colorado’s Front Range, which is a recognized existing utility corridor which will simplify the environmental and other permitting processes. Being in this corridor with multiple other pipelines, acquiring land for pipeline right of way and other facilities should also be easier to acquire.
Water Horse Resources has initiated environmental permitting the National Environmental Protection Act. The company has been working closely with the U.S. Bureau of Land Management (BLM), which is expected to act as lead federal agency for the project. Water Horse Resources and BLM have already agreed on a Cost Recovery Agreement to move forward with an Environmental Impact Statement.
With MasTec among its investment and development partners, Water Horse Resources has an experienced, world-class team capable of bringing the innovative project to completion.
There are no “comparable sales” of water rights on the Front Range to the Water Horse Project as no other water on the Front Range has this flexibility or reliability:
a trans basin, 365 days a year delivery
no senior right or geographical constraints where the water can be used
the water can be used multiple times to extinction
The economic premise for the Water Horse pipeline project is that the cost of water rights on the Front Range will underwrite the cost to build the project and, that once built, the pipeline can competitively operate to deliver water comparable in operating cost to current water suppliers to the Front Range.
The most comparable water rights are from the Colorado Big Thompson project built many years ago which indicate sales in the $85,000 per acre foot range recently. Another indicator of the value of water is the cost of a water tap fee to a developer for a new single family dwellings in some municipalities of $30,000 to $40,000 for one third acre foot of water annually understanding that some portion of these tap fess are utilized for the infrastructure to serve the dwelling. Three single family homes equates to $90,000 to $120,000 per acre foot of water. It should be noted that the small City of Wellington, CO recently raised its new single family home water tap fee recently to over $60,000.
All indications are that the demand and cost of water will continue to increase compounded by recent years of drought on the Front Range and Water Horse believes these costs will underwrite a large diameter, long distance pipeline to deliver large volumes of water to the Colorado Front Range.
The Water Horse Project will benefit from strategic advantages that the Green River and its complimentary 3.8 million acre-foot Flaming Gorge Reservoir have over other water sources, including a geographically unique snowpack, later snowmelt season and more favorable climate change expectations.
Every new acre-foot water supplied to Colorado’s Front Range generates $150,000 of economic impact, while the Water Horse Project build-out will generate more than 2,000 good-paying jobs during construction and approximately 25 permanent jobs in pipeline operations.
The Water Horse Project will be a mini-stimulus plan for counties and towns along the pipeline’s path. Similar to the Rockies Express Pipeline Project which was built shortly after the 2008-2009 economic downturn, the Project will inject money into local economies. Initial property tax revenues from the Water Horse Project will total almost $25 million.
Designed to efficiently convey water 365 days a year, the underground pipeline prevents water loss due to evaporation or absorption. Cross-basin water rights can be re-used to extinction, creating significantly more water for the Front Range and commanding a market premium compared to less flexible within-basin water rights.
Water along the pipeline will drop some 3,000 feet from the Rocky Mountains into Colorado’s Front Range region. With its hydropower component, the Water Horse Project has the potential to generate electricity to power surrounding communities or be sold into wholesale markets.
The Water Horse Project will provide opportunities for regional utilities to grow their renewable energy portfolios through additional development of wind and solar energy for power pump stations along the pipeline.