Local residents, including former state Rep. Wes McKinley, have spent months fighting the appropriation of wells in Baca County, Colo., where water levels are steadily receding. (Video by Skyler Ballard)

Tumbleweeds bounced along County Road 44, 20 miles south of the Colorado town of Walsh. Vast expanses of dry grassland spread in every direction in this southeast corner of the state, the occasional small herd of dusty cattle grazing at roadside.

Farmhouses dotted the horizon.

To most people, this would be the middle of nowhere, but to Wes McKinley, a former state representative who lives in one of those farmhouses along County Road 44, it’s “the center of everything.”

McKinley, 76, walked out of his house leaning on a wooden cane, a cowboy hat shading his face.

“Want a peanut?” he asked, holding out a Tupperware container.

Odd pieces of metal, old cars and even a broken-down school bus littered his property.

To most people, it’s junk. To McKinley it’s a gold mine.

“It all depends on perspective,” McKinley said.

His family homesteaded on the land in 1910 and has been there since, McKinley said. During the days of the Dust Bowl in the 1930s, water in the region was scarce and day-to-day existence was desperate.

Nearly 100 years later, McKinley said he faces a similar challenge as his ancestors.

“I just got through having to redo my water well, my pump,” McKinley said. “My water level dropped.”

“You have to have water; water is the universal substance. Without water, you only live three days.”

That thought and others similar have exacerbated a bitter feud that McKinley and other local residents are having with LGS Holdings Group, a Georgia-based real estate company, which they believe is buying up Baca County land in order to speculate on the water rights that come with it.

When it comes to conflict over water in the parched region, Baca County is one of the active fronts in a wider war around Colorado and the West, in which developers seek to buy local water rights to sell for profit elsewhere.

Two years ago, in the San Luis Valley, private interests from metro Denver were seeking to buy valley water for export. 

“Over my dead body,” said former Colorado U.S. Senator Ken Salazar at one public meeting. Salazar’s family has farmed the valley for generations.

LGS declined comment for this article. McKinley, a pure adversary to LGS, has previously described their position for them: “It’s big boys sitting out there with their fancy suits, cigars and their diamond rings and the girls on their shoulder,” he said. “This is not a little deal.”

Baca County residents rely heavily on ground water from the Ogallala Aquifer, a basin that spans from South Dakota to Texas. But the colossal aquifer’s water levels have been steadily receding.

During 2020 to 2021 wells pumping water from the aquifer measured an average water level decrease of 2.75 feet. Over the past 10 years, the average water level sunk by 12 feet, according to a ground water levels report from the Colorado Division of Water Resources.

Some residents like McKinley who rely on water for daily use, for farming and ranching, worry that the aquifer’s depletion is exacerbated by the 60 water wells LGS drilled.

LGS, incorporated in Stockbridge, Ga., has branches in Kansas and Colorado, but obtaining information about the company beyond their well permits was difficult to find. Adam Printz, an attorney for LGS, declined to comment.

Based on online searches, LGS appears to be an entity formed by real estate developers in Stockbridge. They have interests in several projects in multiple states and under different limited liability company names, which is a common practice from developers.

Douglas Adams, listed online as an LGS principal, also declined to comment.

LGS’ wells vary in use from irrigation and livestock to monitoring and sampling wells and 59 more wells are pending approval, according to well permit applications filed with the Colorado Ground Water Commission, an arm of the Division of Water Resources that administers groundwater resources in eastern Colorado.

The company’s previous well applications were approved but not without strong opposition from residents like McKinley.

“It is a complicated issue,” McKinley said.

Over a period of two years, McKinley filed over 40 objections to the Colorado Ground Water Commission challenging the construction of wells applied for by LGS.

He believes there is not enough water to support the wells, 40 of which are high-capacity wells, which can pump hundreds of gallons of water per minute. 

But the water commission did not agree with McKinley.

Hearings objecting to over-appropriation are intended to decide whether the the construction of one well threatens the functionality of another well, which is determined if the well is built within half mile radius of another, Kevin Rein, the state engineer and director for the Colorado Division of Water Resources, said.

The wells McKinley challenged were not within a half-mile radius of his wells, therefore he didn’t have standing to file objections, Rein said.

“And for that reason, of course, the hearing officer dismissed the hearing, because there was no grounds for one,” Rein said.

Eventually McKinley was barred from submitting objections by a district court judge who found him in contempt of court for his zealous attempts to object to the well applications.

The well permits were approved, but the battle did not stop there.

Over a dozen other residents took up the mission of objecting to LGS’ well requests at the start of 2021.

Almost every objection cited “stress on the Ogallala aquifer” as the reason for opposing the wells, while others cited environmental concerns, including depriving trees of water.

Belinda Sturges, who owns a home near Walsh, helped lead the push for a hearing.

“Water is our lifeblood, you know – we cannot survive without water, every human needs it,” Sturges said. “And I believe that water for people to farm, ranch and reside takes precedence over development water.”

But when Sturges and other residents objected, they were denied hearings from the Ground Water Commission.

“Instead, the people that objected receive these basically threatening letters that, you know, ‘You’re going to be held responsible and you could have to pay damages’ and all this stuff,” Sturges said. “So a lot of them chose to not go forward because they were fearful of having legal repercussions similar to what Wes had.”

If residents are concerned about the aquifer’s sustainability, instead of objecting to individual well permits, residents need to petition to amend the rules and create a new rule that says the Ogallala Aquifer is over-appropriated and closed from further use, Rein said.

“It’s really about local control,” Rein said, “because there are other landowners in the southern High Plains that may want to continue to have that right to appropriate water.”

But when local wells go dry, people migrate from the area to larger towns and cities, McKinley said.

Keith Simon, a farmer near Walsh, says he’s experienced loss of water firsthand.

“In last couple, three years I’ve noticed that the water is just, some of your wells that were pumping 800 (gallons per minute) are now pumping 500,” Simon said.

“I think it’s going to ruin the old farmer way of life. I mean, you’re going to lose the farm family and (what’s left) it’s going be more of a corporation … which I’m not saying is bad, but I hate to see all the smaller families go with it.”

The business of speculation

Flying above the fields of Baca County in a Cessna plane, veins of streams and clusters of trees formed an intricate map of land hundreds of feet below – all of it brown except for lush patches of green fields where wells watered the land.

“Those must be new,” McKinley says pointing to small irrigation ponds gleaming below.

The water below appeared to bring life to everything, but McKinley and some of the other residents worry the wells and the water they release are a venture to drive up the worth of the land and sell it for a profit.

“I’m not saying you’re going to sell your water for $1.49 (per gallon),” McKinley said. “But that is the potential, that’s the water market, it’s money.”

Water speculation is illegal in Colorado, and those who gain rights to water must put it to beneficial use.

In the case of LGS, the water is used for irrigation, livestock and daily use, according to well permits filed with the state.

But based on real estate listings, LGS is trying to sell a plot of more than 45,000 acres for nearly $40 million, which Rein says is within the bounds of the law.

“In terms of making money off of using water rights to irrigate is standard procedure,” Rein said “People can sell the water rights and the land.”

The real estate listing claims the plot has “some of the best hunting in the country” with “incredible diversity in regard to terrain, wildlife, livestock grazing, income opportunities.”

“Speculation in and of itself is not a bad thing, either,” said Steven Greenhut, a water expert with R Street Institute, a public policy research organization. “I mean, it’s just a normal market process. There’s a new water market that’s been created where people can buy and sell a futures.”

Having a market to trade water as a commodity means pricing can provide signals about what is happening on the ground, Greenhut said.

“Anti-speculation laws actually discourage water banking and other collaborative approaches to saving water,” Greenhut said.

But that’s not the way Colorado lawmakers see it.

Speculation occurs when a person or entity seeking water rights does not intend to use the water, but instead keeps the rights in hopes that they will be worth more in the future, said Peggy Montaño, a lawyer with  the state’s Anti-Speculation Law Work Group, a body convened to examine and provide recommendations to improve the state’s anti-speculation laws.

“So they want to flip it, in essence, and that doesn’t benefit the economy of the state of Colorado,” Montaño said. “We’re a desert state, we don’t have enough water to meet all of our needs. So the law says, ‘Nope, you can’t claim a water right and just hold on to it for the future, because someone else might be able to use that water for a purpose now.'”

Montaño said disputes like this are not unusual. That’s why she and other experts were called to investigate Colorado’s anti-speculation laws and give lawmakers recommendations on how to improve the existing laws.

“The local people are concerned that because we are a state that goes from drought, I mean, a large part of our state is now in drought and exceptional drought, that this could impact their livelihood,” Montaño said. 

The work groups recommendations will be given to lawmakers this fall, she said.

Ownership

McKinley drove across bumpy county roads in his beat-up pickup truck, exposed wires hanging beneath the steering wheel.