Lamar pipeline: GP Water chief executive Ken Nyquist — ‘Private enterprise has got to pull the sled’


From The Pueblo Chieftain (Chris Woodka):

[The Lamar pipeline, a] $340 million proposal would divert the water 150 miles from where it was traditionally used, possibly out of the Arkansas River basin. “Private enterprise has got to pull the sled,” Karl Nyquist, GP Water chief executive, said. He touts both municipal and agricultural benefits of the project he is proposing. “But nothing is done in the private sector without an idea of making money.”[…]

Nyquist said the up-front costs of developing a large project can be too much for a growing community to afford. There is a competitive market for new sources of water as cities that rely on the Denver Basin aquifers slowly tap it out. GP Water quietly bought up shares of water in the Lower Arkansas Valley for nine years before deciding to make its move…

At a state Roundtable Summit in Denver last March, former State Engineer Jeris Danielson, who has worked as a consultant for both Boyce and Million, asked Gov. John Hickenlooper if there is a place for private development of state water projects. “We have to be careful bringing in private capital as part of the solution,” Hickenlooper answered. “I don’t have a problem with bringing private capital into the picture, but we need to make sure their goals line up with the state’s goals.”[…]

State officials are taking a wait-and-see approach to private projects, watching projects like Flaming Gorge and the newly announced GP plans cautiously. “I think the jury’s still out,” said Alan Hamel, a member of the Colorado Water Conservation Board and executive director of the Pueblo Board of Water Works. “In recent years, it has become harder to develop a large water project unless you’re a big water provider.”

Hamel said there could be a place for the private sector in filling state water needs, but like Hickenlooper he urges caution. “The unincorporated areas are struggling with coming up with a way to replace non-renewable groundwater assets,” Hamel said. “The Flaming Gorge Task Force is a way to flush out the issues. I think, before we’re done, there have to be some public-private partnerships.”

Be sure to click through. Mr. Woodka provides a lot of detail about water projects in Colorado in the article.

More coverage from Karen Crummy writing for The Denver Post. From the article:

Elbert County residents fear the group will take too much water out of the aquifers, some of which are being depleted faster than they can be recharged. County residents are also worried about an eventual plan to store treated Arkansas River water in their aquifers, fearing it will hurt their water quality. Meanwhile, Prowers County, where Lamar is located, is expected to lose irrigated farmland and seasonal farm-labor jobs as Arkansas River water is pumped north. “The big concern in our community is dried-up land. It’s extremely difficult to get things to grow after it dries up,” said Prowers County Commissioner Henry Schnabel. “I would rather the water was used in our area, preferably for agriculture. But we don’t know much about (the plan) right now.”

Karl Nyquist, head of GP, said the “net benefits” in both counties will outweigh the negative impacts. The pipeline from the Arkansas River means Elbert County will eventually get a renewable water source, which he said should help with economic opportunities. Prowers will enjoy a larger tax base and higher-paying jobs from the plant that will treat the river water to drinking standards. He also said GP intends to retain some farmland, using sprinkler irrigation. “We’re trying to create a win-win for every stakeholder,” said Nyquist, who has scheduled community meetings in Elbert, El Paso and Prowers counties this month to educate residents on the project…

After the public questioned the speed with which the proposal was being considered [by the Elbert County Commissioners] and the secrecy surrounding it, the commission delayed voting on the matter until Aug. 24. “This project popped up and caught a lot of people by surprise,” said John Stulp, special water adviser to Gov. John Hickenlooper and director of the Interbasin Compact Committee, a group created under a 2005 state law to promote cooperation on water- management issues and storage projects…

…through public records and an interview with Nyquist, The Denver Post was able to put together a basic picture of the project. Generally, the financing involves GP Water Group, which is made up of Nyquist and his two partners, David Pretzler and David Bechtel. Pretzler and Nyquist are also on the Highway 86 district board. Both men are also partners in C & A Holding Co., a real- estate management and development company. The Highway 86 district owns 180,000 acre-feet — roughly 58 billion gallons — of aquifer water. That water would be pumped through a 32.5- mile pipeline from southwestern Elbert County to Falcon, which is 15 miles northeast of Colorado Springs, for use while districts are waiting for Arkansas River water. Nyquist said the group is not focused on oil and gas exploration, which is set to begin in Elbert County and will need millions of gallons of water. But he also didn’t rule it out in the future. GP, which owns 39 percent of the Lamar Canal, will pull water from the Arkansas River near Lamar. Once GP, or one of its related companies, goes through the courts to change the use of the river water from agricultural to municipal, it will build a treatment facility near Lamar and the pipeline to Falcon. The group is already constructing a gravel pit in Lamar for water storage. Additional storage at the other end of the pipeline will be in aquifers…

The Arkansas River Compact Administration — made up of two Colorado members, two Kansas members and a federal representative appointed by the president — must give its seal of approval, said Steve Witte, an engineer for Colorado’s natural-resources division. It’s unclear how long that will take. “There isn’t a lot of precedent for this,” Witte said, noting that others have considered similar projects but haven’t followed through.

More Lamar pipeline coverage here.

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