Update: with comments from former state Rep. Wes McKinley

The Colorado state Senate on Tuesday, in a vote seen partly as a rebuke to the state’s groundwater commission and partly a slap at Gov. Jared Polis, rejected the nomination of Jason Ryan Crane of Springfield to the state’s groundwater commission.

It’s the first time the Senate has rejected a Polis appointment.

The commission’s role is to “manage and control groundwater resources within eight Designated Groundwater Basins in eastern Colorado.” That includes the Southern High Plains water district, which Crane had been representing since his appointment by Polis last October. 

The Southern Plains district has been a headache for the commission in recent years, largely due to numerous legal challenges to the commission’s authority to issue permits, mostly mounted by former state Rep. Wes McKinley of Walsh, in Baca County.

Part of that dealt with Crane’s predecessor, Blake Gourley, also of Springfield. McKinley filed one challenge after another to various permits being approved by the commission, including permits sought by Gourley. Those challenges were based on McKinley’s claim that the permits were tapping water in the Ogallala Aquifer without first checking to make sure the aquifer could handle the demand.

Last September, a Baca County judge, who had been a high school student of McKinley’s, sentenced the Baca County cowboy with 90 days in jail, suspended if he would stop filing those objections. The commission denied McKinley’s filings based on lack of standing, although McKinley owns water rights in the district. 

In the meantime, according to state Sen. Don Coram, R-Montrose, who led the opposition to Crane’s appointment, Gourley sold his 7,000 acres of land (and its water rights) on Dec. 14, 2019, for $3.9 million to Ronald Krutsinger of Norfolk, Nebraska. Krutsinger is tied to LGS Holdings, Coram said, which has been obtaining water permits in the Southern Plains district. Those permits are approved by the district and affirmed by the commission, of which Gourley was a member as well as an applicant, along with Krutsinger/LGS. But four days earlier, on Dec. 10, Krutsinger filed a warranty deed (sale) in Nebraska for the Gourley property to James Oswald of Osceola, Iowa, for $5.3 million, Coram said. Krutsinger and LGS “made $1.3 million in four days,” Coram told Colorado Politics. “That’s better than legislators get,” he joked.

That sale has raised the specter of water speculation. Under state law, water must satisfy “beneficial use,” which means it can only be sold for purposes such as agriculture, municipal use and other designated uses. It cannot be sold for speculative purposes, which would allow the owner to sit on the water rights while their value increases. 

That sale, and a response from Crane during the Senate Agriculture and Natural Resources Committee hearing on May 13, got Coram’s ire up, and he wasn’t alone.

During the confirmation hearing, Coram said he had concerns with the High Plains district, noting that investment dollars are pouring into the district and permits are being granted. Coram said could not validate how much water was left in the aquifer and asked Crane about it. “The position for everybody, if you’ve got the money to get the license and drill the well, that should be your right, unless there’s technical information” that says the aquifer is over-appropriated, Crane responded. “I’m not sure we have all the information” and perhaps should collect more data.

“That’s my concern,” Coram said. “I’m scared to death that we’re headed into the same situation” as the Republican River. “You get permits if you have the money without knowing how much water is there to be allocated,” Coram said.

The committee unanimously approved that the nomination be sent to the full Senate.

On the Senate floor Tuesday, Coram told the Senate the McKinley story. Coram said he’s been so concerned about water speculation that he sponsored a bill on it last year, to make sure the state was keeping an eye on it. 

The depletion of the aquifer is real, Coram said, citing the U.S. Geological Survey. But the approval of permits in the Southern High Plains by the commission has been a rubber-stamp, he told the Senate. McKinley’s requests for hearings have been repeatedly rejected by the commission, despite a constitutional requirement to the contrary. LGS Holdings, the basis for the complaints, started off with 29 wells and then 35 wells, Coram said. The aquifer has been depleted by hundreds of millions of gallons and that’s raised complaints from Oklahoma, which is one of eight states on the aquifer.

The district is not operating in good faith, he said. Crane’s response to his question in committee was disturbing, which Coram characterized as “if you have the money for the permit, you can get the water.” He also told the story tied to Gourley’s sale of his farm to LGS.

Rejecting Crane’s nomination will send a message to the groundwater commission that “we are watching” and that “you follow statute and regulation.” No one, including committee Chair Sen. Kerry Donovan, D-Vail, spoke in favor, although she voted in favor of the nomination. 

The Senate rejected the nomination on a 12-21 vote, with eight Democrats voting against along with 13 Republicans. 

McKinley told Colorado Politics Thursday that he’s very pleased with the vote, which he views as vindication. “It shows there’s a problem” and that lawmakers are now looking at what the commission is doing. He added, however, that it’s unknown what the ramifications of the vote will be.