Applying for seniority

*Editor's Note: The online edition of this story has been updated to include comments from HF Sinclair received after the print deadline*

The Wyoming State Engineer’s Office is holding a public meeting in June in Saratoga to allow the HF Sinclair Refinery to explain its proposed exchange of water rights and give the public an opportunity to comment on what effect that may have on their water rights.

“The State Engineer’s Office is holding a public meeting on the proposed HF Sinclair Exchange to provide a public forum for the Petitioner to explain the Exchange and to take comment from the public related to how they believe the Exchange may affect their water right,” said Jed Rockweiler, administrator of the Surface Water Division of the Wyoming State Engineer’s Office. “The State Engineer’s Office will also accept written comments that are postmarked or received by June 14, 2024.”

The meeting will be held at 3 p.m. on June 4 in the Platte Valley Community Center in Saratoga.

Water rights exchanges are governed by Wyo. Statute § 41-3-106, which states:

(a)       Any appropriator owning a valid water right in and to the use of the ground, surface or reservoir waters of the state, where the source of the appropriation is at times insufficient to fully satisfy such appropriation, or better conservation and utilization of the state’s water can be accomplished, or the appropriator can develop appropriable water but cannot economically convey it to its point of use, may petition the state engineer for an order allowing an exchange and the use of stored, direct flow, or ground water from another source.”

“The statute requires that the amount of replacement water be equal to the amount of water that is diverted [taken] under the exchange so that the source is “whole” at the point of exchange,” Rockweiler said.

Former three-term House District 47 Representative Jeb Steward told The Sun he plans to offer his comments on the proposed exchange at the meeting.

“I think it is a terrible idea and I think our state engineer should deny the petition,” Steward said. “There are many reasons this is a terrible idea.”

He said he is reserving his reasons for his statement at the meeting.

“In addition, I think this is a very important meeting to the residents of the Upper North Platte Valley, water users of the Upper North Platte Valley and anyone interested in these issues,” he said.

Corinn Smith, senior director of corporate communications for HF Sinclair Refinery, responded after the print deadline.

Smith said the reason the refinery is proposing the water rights exchange is "to support ongoing safe and reliable operations."

Asked if the refinery needs more accessible water, she said: "HF Sinclair purchased the Encampment River Ranch in January 2023 in an effort to secure adequate water supply for the Parco refinery located in Sinclair, WY, when allocation administration occurs."

"Under the draft exchange petition, we have no reason to believe there will be any negative impact on residential or agricultural water use in the Encampment River Valley," she said.

"As directed by the Wyoming State Engineering Office, the notice of the public meeting was posted in the Saratoga Sun newspaper and through the State Engineer's Office’s email service," she continued. "We look forward to attending the upcoming public meeting."

Water rights issues are a complicated topic.

Steward provided the following background information on the issue of water exchanges

He said Pathfinder Reservoir is located in the middle of Wyoming. The reservoir stores surface water. Priority to these water rights was established in 1904. Seventy-five percent of the water goes to Nebraska, which the farmers use.

The ranchers along the Upper North Platte River use their share of the water rights to grow grass to make into hay to feed cattle in the winter, he said.

The law on these water rights between Nebraska and Wyoming was settled in the U.S. Supreme Court in a lawsuit in 1945, he said. This is referred to as the decree of equitable apportionment or the Modified North Platte Decree, which the Supreme Court then ratified in a case in 2001.

Steward said the case recognizes when certain conditions are met, Pathfinder Reservoir would be short water based on carryover storage and predicted inflows.”

He said the water users may not use all the water they can in any given year so when they try and make a determination that they can be short, then this gives rise to something called an allocation year, which is a call for regulation.”

“So anyone in the Upper North Platte with a water right junior to those established in 1904, will not be able to divert their water,” he said. “This is all important because the water rights for the refinery are junior to 1904. When there is an allocation year, the refinery is not allowed to divert (use) their water under their water rights and they have to find water somewhere else.”

Sinclair needs water to run its refinery, he said. That water and water right is from the North Platte River. They divert water from the river to take to the refinery, when it has been determined it is not an allocation year.

“What Sinclair is trying to do with this exchange petition is get a process in place whereby when the next allocation year occurs they will be able to implement the exchange,” Steward said. “Sinclair is going to take their water from their pipeline to take it out of priority. They can only do that if they replace it from somewhere else.

“What happened is Sinclair Refinery bought (ER Ranch) with the attached water rights they are going to use,” Steward continued. “Sinclair is going to forgo the use of their water rights to replace water that they will divert out of priority.”

“Under Wyoming’s constitution, the State owns all of the water naturally occurring within its borders and the State Engineer is responsible for general supervision of the use of this water,” Rockweiler said. “Exchanges are a statutory tool which provide for the use of the state’s water resources in cases where the source of a water right is at times insufficient to fully satisfy the appropriation, or better conservation and utilization of the state’s water can be accomplished, or the appropriator can develop appropriable water, but cannot economically convey it to the point of use.”

Steward said the State Engineer’s Office is required under Wyo. Statute § 41-3-106 to hold a public meeting because these exchanges have to be in the public interest.

Fundamental Western water law is determined by the date of priority. “First-in-time, first-in-priority right. You get your water first, if your priority is senior to someone else.

If Sinclair uses its water right out of priority, it must replace it by stopping irrigation diversions on ER Ranch, he said.

“If you take (water) out of priority, you have to replace it some other way,” he said.