Oct 212010

A continuation of  2010-10-20 regarding Intensive Livestock Operations (ILO’s) on the South Saskatchewan River.  Sue and Cathy trying to get the City of Saskatoon involved.

The QUANTITY OF WATER argument will not divide people into pro and anti-beef,  it should bring everyone on-side and it does not allow any wiggle room for the Government.  The phrase “source water protection” allows an out –   (we’ll regulate).  The River at Saskatoon is at just over 16% of the volume that was there in 1912.  It is a steady downward trend-line which ILO’s and more water-intensive industry, along with population growth will accelerate.  When I first started following the trend-line, I am guessing maybe that was in 2003,  the volume at Saskatoon was 20% of the 1912 volume.   We are in urgent need of stabilizing the amount of water in the River.   We have to stop the downward trend-line, level it out before it gets to zero.


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“Source water protection” includes both quality and quantity.   But it tends to be addressed mostly from the point-of-view of contaminants in the water.

The strategic deficit in the approach is that all the Govt has to do, or all the City has to request is more stringent enforcement of regulations.  You leave the door wide open for that response.  All they have to do is to provide reassurances to the public and the ILO’s will proceed.  Also, the community Conquest (ILO’s) is further from the River – –   not so obviously a pollution source.

Strategically I think you have to attack it on the QUANTITY of water that is available.   Build on the article in the National Geographic – – people will recognize it.   Use the graph by David Schindler.

The pro-active position:   Saskatchewan should be putting a moratorium on withdrawals of water from the South Sask River right now, in order to stabilize the trend-line.   Alberta already has a moratorium on withdrawals  from  the South Sask River.

Arising out of the fact that we are running the river dry,  an important issue:  when SaskWater sells the water to the ILO’s  (assuming they do):   what happens when there is a shortage of water?   What is the “Rights to water” regime in Saskatchewan?  In Alberta it’s, as you know, “first in time, first in right” with regulations as to how this is managed.

In 2003 when there was a water shortage in Idaho, it was tax-payers who had to cough up money to buy off the (in that case – irrigators, as opposed to ILO’s in our case) , to the tune of $73 million for that one summer alone.   This was in order to have the water they needed for the running and cooling of the (Queen Elizabeth Power Station in our case).    When over-allocation of a limited Water resource leads to shortages (which will definitely happen, given what we are doing today) it is always Joe Public who picks up the cost.

If an ILO goes out of business, what happens to their license for water withdrawal?   Is it water that just goes back to SaskWater to sell to someone else?   In Alberta the person with the license can sell it – – see the appended articles.

The science AND THE ALBERTA EXPERIENCE show that we are running the River out of water.  I have appended a couple of articles related to the Town of Okotoks and a co-operative that was set up to secure water rights – – they are news items  BECAUSE THE WATER IN SOUTHERN ALBERTA IS OVER-ALLOCATED.  WE ARE TALKING ABOUT THE SAME RIVER, THE SOUTH SASKATCHEWAN.  THERE IS A MORATORIUM ON WITHDRAWLS FROM THE SOUTH SASK RIVER IN ALBERTA.  With some foresight we don’t need to get ourselves into this situation in Saskatchewan.

Water Rights for Sale in Alberta

Published: Monday, February 05, 2007
The Calgary Herald

. . . .   To the 123 farmers and 15 Hutterite colonies that banded together to enter the market, it’s delivered water for drinking, improved the health of pigs and cattle, and allowed people to grow green grass and plant flowers.

“It’s a godsend in this part of the country,” Halvorson said.

But that godsend came with a hefty cost: nearly $23 million — $780,000 of which was paid to the United Irrigation District for a share of its water licence.

In southern Alberta, where a moratorium has been placed on new requests to tap into rivers, water — once free for the taking with government approval — now comes at a cost.

And that cost is expected to escalate as Alberta’s water market matures, its population and economy continues to rapidly expand, and the warming earth keeps zapping more of its water.

In short, demands are growing for a dwindling supply, and already too many people have been given a share of southern Alberta’s water.

As the provincial government works on enhancing its management of the resource, its environment department is considering whether everyone — municipalities, farmers, the oil and gas industry — should start paying for the water they take.

Currently, users pay only for treatment and infrastructure such as pipelines.

A report examining the merits of introducing economic instruments, including water pricing, is slated to head to Environment Minister Rob Renner later this year. Other jurisdictions with established water markets, such as Australia, California and Texas, are being looked at.

“Obviously, I think there’s room for a lot of creativity when we talk about how we are going to manage that limited resource into the future,” Renner told the Herald.

“I would welcome those kinds of suggestions but, at this point in time, I haven’t seen anything, and so I can’t comment one way or another on whether I like them or not.”

In Calgary last Wednesday, water pricing was the topic of discussion at a town hall forum organized by Liberal environment critic MLA David Swann.

Water has become a defining issue in the province’s south, Swann told the 150 residents who gathered at Renfrew Community Centre.

He pointed to the controversy over a request from the Municipal District of Rocky View to use water from the Red Deer River for a mega entertainment complex rising on the northern fringes of Calgary.

The Liberals and politicians and businesses from the Red Deer region strongly oppose the request.

“Rapid growth has placed enormous pressures on our water,” Swann said.

“We have already over-allocated the Bow and Oldman rivers.”

Alberta’s water market was created to address some of those pressures.

The drought of 2001 made it clear the province’s southern rivers were overtaxed. People with newer water licences were cut off because there wasn’t enough water to go around.

While moratoriums on new licences were introduced last August for all southern rivers except Red Deer, few people have waded into the water market.

Alberta Environment has approved 22 water licence transfers, all but one in the Lethbridge area. But only seven of those transfers have been between two parties, and not all for money.

The southwestern Alberta villages of Hillspring and Glenwood, for instance, received ownership of their water licences from the United Irrigation District at no cost because they already had a long-standing agreement with the district for water.

That wasn’t the case for the southeastern group of farmers.

Negotiations went back and forth, Halvorson recalled, before a price of $780,000 for the transfer was settled on.

In all, getting the licence, setting up a water co-op and building 900 kilometres of pipeline to deliver water cost $23 million, split three ways between the provincial and federal governments and the co-op’s farmers.

The bill for each farmer: $26,000. The ongoing cost: $2 a day for water.

The project has been worth every penny, Halvorson said. Good water in this parched corner of Alberta is scarce, even underground.

“If we think we’ve paid a lot for water now, just wait 10 years and see what we’ll be paying,” he said.

“We’ve got water that we’ve never had before. That security of having the water is really something to us.”


(INSERT:   ILO’s from Alberta are moving to Saskatchewan where it’s easy to get access to water.  Not because we have an over-abundance of water.  But because we are largely ignorant about the science which shows that the amount of water in the River is precarious.  They can set up here because the population is kept in relative ignorance.  We are foolish to allow more water-intensive industry to establish more demands on the South Sask River.  We need to come to terms with LIMITATIONS.)

–      – – – – – – –

(Link no longer valid)

CanEra is the largest water licence holder on the Sheep River with access to 715,420 cubic metres annually. Vice-president Brian D. Evans said the water licence was fairly new to CanEra which bought the licence along with Talisman’s oil development projects in southwest Alberta last fall.

Evans said they have technical staff who are familiar with the water licence and its requirements, but were not familiar with the water license transfer system.

When the Town of Okotoks came to CanEra this spring in search of water, Evans became involved and put himself through a crash course on the system.

“It was brand new to me,” said Evans. “So I started to do some individual research.”

Finding information on how and why the Province was proceeding with the transfer system and had discontinued approving new licences in the South Saskatchewan River Basin was not difficult, he said.

“I looked through the Water For Life information available on the Alberta Environment website and the water act,” said Evans. “You could wade your way through it and understand what they were trying to accomplish from a policy perspective.”

An Alberta Environment staff member also helped facilitate the relationship between CanEra and the Town, he added.

Trevor Redman, co-owner of the Crystal Shores Golf Course and Claude Kolk, owner of Kayben Farms near Okotoks, both have water licences. Crystal Shores has licences for nearly 68,000 cubic metres of water.

Both men said they know little or nothing about the water licence transfer system.

Trevor Redman with his dog Divet at the Crystal Ridge Golf Course. Redman, part owner of the Okotoks golf course, holds a water license from the Sheep River for the irrigation of the course.

“I don’t have any information on it,” said Redman.

The golf course regularly doesn’t use its entire allotment, but transferring a portion of their water isn’t likely, he said.

“You never know when you’d have a drought year and needed it all,” Redman said. “You’d feel foolish if you sold and then you needed it later.”

The Province should be letting all water licence holders know their plan, said Redman.

“They should notify everybody with a water licence,” he said.

Kolk said it is concerning that individuals who had to do little previously to obtain a water licence now can sell them on a market that is largely unresolved.

“The (licences) allocated before when it was easy to do, you just had to sign a paper and you didn’t have to put a lot of money into it, now all of a sudden they are sitting on a little gold mine,” he said.

Kolk said water needs should be prioritized. In Lethbridge, where he grew up, there was a system that gave human needs and agriculture demand for water priority before recreation, for example. He said the same priorities should be applied to the water licence transfer system.

“Who gets the rights to the water?” he questioned.

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See the yellow high-lighted block of text in the 7th paragraph below.  People who come here (to Saskatchewan)  from Alberta, if they are establishing water-intensive industry such as beef production, will be signing contracts with SaskWater for longterm delivery of water.  They have learned from experience in Alberta what local people along the South Sask River do not know.   They will use that knowledge to good advantage.  It will be local people who will be sitting unprotected, not them.


Prepared for

Prairie Forum

September, 2007

(Link no longer valid)

. . . . .    Market Characteristics and Motivations

During the period 1999 – 2004, 23 applications for permanent water right transfers were filed.  However, only six of those cases could be described as market transactions, i.e., involving transfers between “arm’s length” parties for money. The majority of applications for water rights transfers were not market-based, but rather involved changing the points of diversion and/or adding to the points of diversion or changing the transfer system. At the time of this study, three of the market-based applications had been approved (one in 2003 and two in 2004), and three were in various stages of the approval process. In four of the six cases the water right transfer involved buyers and sellers in close proximity, but in two cases water rights were moving over long distances (over 100 kilometers) and changes in the points of diversion were involved. A brief description of the trades is presented in Table 1.

The six cases involved the transfer of only 2,780 dam3, representing 0.05 percent of total water rights5.  The extremely small number of trades and volumes of water rights transferred during the first five years of permissible market activity is similar to that found by Bjornlund (2004) in Australia: trades of permanent water rights in the Goulburn-Murray Irrigation District (GMID) started at 0.5 percent and increased to about one percent of total water entitlement per year after six years of trading.

The average trading price of water rights in southern Alberta was $448 per dam3 and prices paid were highly variable, ranging from a low of $140 per dam3 to a high of $740 per dam3. Because these transactions involved the transfer of permanent rights to water, the value should reflect the expected future stream of income to be generated by using the resource.  The coefficient of variation for the prices was 60 percent, which is significantly higher than the price variation found by Bjornlund (2002) in the Australian study. It is also high compared to the coefficient of variation of water prices found in the market for temporary allocations of water in southern Alberta, which was 38 percent (Nicol and Klein, 2006). The 60 percent coefficient is almost five times as high as the coefficient of variation for canola prices in western Canada: 12 percent.

The highest prices were paid for water rights with the most senior priority: $740 for a 1919 priority and $620 for a 1946 priority. The lowest price of $140 was paid for 1982 and 1983 priority rights. The only anomaly was the newly issued water right with a 2003 date for which the buyer paid $550. These findings correspond with those of Colby et al. (1993), where empirical evidence of market transactions in New Mexico showed that the priority date was the most important price determinant.

The highest prices also were paid for water purchased for high value domestic or specialty crop use, ranging between $550 and $740 per dam3. This finding is consistent with empirical evidence from two states in Australia where producers of higher valued products paid higher prices (Bjornlund, 2002), and from New Mexico where urban and industrial buyers paid higher prices (Colby et al., 1993).

Sellers and buyers were asked to provide their motivation for participating in the water market.  Table 2 indicates that in half the cases, sellers were selling the rights to water they were not using.  Combined with this was the awareness of the cancellation provision of the Water Act, whereby Alberta Environment can cancel a water right if it has not been used for a period of three years and if there is no reasonable prospect of the license ever being used. The selling of unused water conforms to findings elsewhere.  In the GMID in Victoria and the Riverland in South Australia, as much as 68 percent and 58 percent, respectively, of all water rights sold was unused (Bjornlund & McKay, 2000). A study of early water rights markets in the Torrumbarry Irrigation Districts and the Pyramid Hill-Boort area in Australia found that many sellers used the introduction of trading to sell an asset that they had never used and had no intention of ever using (Bjornlund, 2003b).

Across all cases studied, southern Alberta buyers were motivated by long-term security of supply.  The water co-operative (case #1) sought a very senior license and obtained a 1919 priority for this reason. The Hutterite colony (case #6) was aware of the demands placed on water and was taking measures to assure a long-term supply for its members. The livestock producer and feedlot operator (cases #4 and #5) needed secure access to water to increase the productive capability of land to support livestock production.  In the case of the feedlot operation, the additional water was bought to facilitate long-run expansion plans. The onion grower and processor (case #2) depended on an assured supply of onions and therefore needed secure water supply. The municipalities (case #3) felt they have greater control over water and more confidence in their supply by holding their own water right6.

This finding is consistent with water markets elsewhere, especially in jurisdictions like California where there is intense pressure for long-term water security from the urban and industrial sectors. California’s population is forecast to grow significantly from roughly 32 million in 1995 to 47.5 million in 2020 (Haddad, 2000). Haddad noted that because industries require water to cool equipment, for cleaning, as inputs to production and for consumption by employees, decisions as to where to locate will depend on long-term water availability. These users require a constant and reliable year-round supply of water. New water resources for environmental needs also are growing. These include, for example, efforts to restore salmon runs on the San Joaquin River and wetlands regions (Haddad, 2000).

From: Cathy   Sent: Wednesday, October 27, 2010 5:52 PM
To: Sandra Finley
Cc: Sue Peterson; JanNLGrnCan Norris
Subject: Re: S’toon council (2 of 2) STRATEGIC ARGUMENT – Run the River dry

Good points Sandra. Also, today I just got the latest issue of the Rams Horn. The front page article is about virtual water exports, and how water is moved around the world by the big agribusiness companies when they do commodity trading. Beef is obviously a huge user of water, and when it is exported, we are exporting our water. I will have to look into it, but I think the the government gives big grants to irrigators to set up their equipment etc., so they are facilitating the export of the virtual water via tax dollars.


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College of Agriculture

Dear Faculty Members,

Please ensure that University  Faculty and students who work in the area of intensive livestock operations (ILO’s) receive the appended information.

Plans for ILO’s in Saskatchewan will run the South Saskatchewan River dry.  The science is clear.


Sandra Finley


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