Buying and Selling Water Rights in Montana: What's Working and What's Not?

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My slides for the 11th Annual Montana Water Law Conference.

Also a written summary is available on my blog;

http://www.activelymovingwater.com/2010/10/buying-and-selling-water-rights-in.html

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Buying and Selling Water Rights in Montana: What's Working and What's Not?

  1. 1. Buying and Selling Water in Montana Chris Corbin
  2. 2. water resource management montana water trust chairman bitterroot water forum MBA wr specialist consultant, freelance marketer, entrepreneur Chris Corbin moose drool
  3. 3. business acumen water ingenuity Differentiation
  4. 4. Working and Not Working What is…
  5. 5. Every shovel has two sides.
  6. 6. 1. Clearly defined water rights
  7. 7. Not Working
  8. 8. dynamic surface and groundwater simultaneous interdependencies Physical Challenges
  9. 9. Water is Complex
  10. 10. Never trust a water right.
  11. 11. Adjudication decrees flow rates and the market trades volumes.
  12. 12. Historical water user has passed away or…
  13. 13. moved away or..
  14. 14. aren’t measuring their water use.
  15. 15. Market opportunities will lead to greater water stewardship.
  16. 16. Standards will create market efficiency.
  17. 17. 2. Physical supply and demand
  18. 18. Working
  19. 19. “The West is the fastest growing part of the country. It is also the driest.” - National Geographic Magazine
  20. 20. Steve Running (2009)
  21. 21. Steve Running (2009)
  22. 22. water market demand
  23. 23. Agricultural Urban & IndustrialEnvironmental
  24. 24. Ravalli County
  25. 25. Agricultural
  26. 26. Environmental
  27. 27. Urban
  28. 28. Gallatin County
  29. 29. Agricultural
  30. 30. Environmental
  31. 31. Urban
  32. 32. Missoula County
  33. 33. Agricultural
  34. 34. Environmental
  35. 35. Urban
  36. 36. 169,886 irrigated acres USDA, Economic Research Service (2009)
  37. 37. 297 miles of blue and red ribbon streams 226 miles of dewatered streams Montana FWP, 2009
  38. 38. 59% growth since 1990 Montana Cenus” US Census Montana Census. (2009) 6 April 2009 http://www.census.gov/
  39. 39. Agricultural Urban & IndustrialEnvironmental
  40. 40. 3. Regulatory Structure
  41. 41. Working
  42. 42. last best place market
  43. 43. private leasing law
  44. 44. 21 Brokered over 25,000 acre-feet
  45. 45. Basin Closure and Mitigation
  46. 46. more valid water right claims than water is available . . . over appropriated
  47. 47. Mitigation and Aquifer recharge
  48. 48. Future water demand will be met or mitigated by existing water rights.
  49. 49. private water marketing law?
  50. 50. Instream flow transactions 1987-2007 Scarborough, Brandon. Environmental Water Markets Restoring Streams Through Trade. Publication. Vol. 46. Bozeman, MT: PERC, 2010. Print. PERC Policy Ser.
  51. 51. Private involvement drive water markets.
  52. 52. 4. Transferability of rights
  53. 53. Not Working
  54. 54. Transferability is critical to reallocate water rights to meet new and growing demands.
  55. 55. regulatory uncertainty Barriers to trade costly transfer process
  56. 56. 3 of 45 applications approved HB831 applications approved as of 01/14/10. Data provided by Terri McLaughlin, DNRC
  57. 57. 22 approvals 2-10 month turn 14 correct and complete upon receipt HB 40 applications 7/09 - 7/10 Data provided by Terri McLaughlin, DNRC
  58. 58. Transparency is good.
  59. 59. 5. Enforcement of rights
  60. 60. Not Working
  61. 61. 6.Easy flow of information
  62. 62. Not Working
  63. 63. Average Lease Prices 2003-2008 0 5 10 15 20 25 30 35 40 45 2002 2003 2004 2005 2006 2007 2008 2009 Year Price ($/AF) All prices based on Lotic LLC’s comparable sales database.
  64. 64. Lease Prices 2008 $0.41 $64.16 All prices based on Lotic LLC’s comparable sales database.
  65. 65. Sale Prices 2003-2008 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2002 2003 2004 2005 2006 2007 2008 2009 Year Price ($/AF) All prices based on Lotic LLC’s comparable sales database.
  66. 66. Sale Prices 2008 $133 $7,000 All prices based on Lotic LLC’s comparable sales database.
  67. 67. 7. Market Expertise (Education)
  68. 68. Not Working
  69. 69. Water runs with the land?
  70. 70. First documented Montana Water Rights Transfer: 1895
  71. 71. 8. Water Market
  72. 72. Working
  73. 73. Big Sky Brewing Company
  74. 74. water restoration certificates
  75. 75. Photo courtesy of the Montana Water Trust Dewatered stream
  76. 76. Photo courtesy of the Montana Water Trust Restored stream flow
  77. 77. Water in Beer = Water in Stream
  78. 78. 4 million gallons of water restored
  79. 79. Grass Valley French Ditch Company Roots
  80. 80. Missoula: 1901
  81. 81. Missoula: Now
  82. 82. Missoula
  83. 83. Urban
  84. 84. Grass Valley French Ditch Co.
  85. 85. Grass Valley French Ditch Co.
  86. 86. 20% reduction in revenue
  87. 87. A Shares B Shares Restructured Shares 20% 80%
  88. 88. A Shares B Shares Current Purpose of Use irrigation and stock ?
  89. 89. A Shares B Shares Current Purpose of Use: Irrigation and Stock irrigation and stock ?
  90. 90. A Shares B Shares Future Purpose of Use: Marketing irrigation and stock mitigation
  91. 91. Reinvest in irrigation infrastructure
  92. 92. Grass Valley French Ditch Company Roots
  93. 93. chris corbin chris@loticwater.com 406.531.9156 www.loticwater.com www.activelymovingwater.com

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