City of Carlsbad to stay out of lawsuit challenging Intrepid Potash's water rights
A deal between the City of Carlsbad and Intrepid Potash barred the City from participating in ongoing litigation as local water users contested Intrepid’s rights to use water from the Pecos River.
Signed on Feb. 11, following a closed session discussion of the Carlsbad City Council, the agreement dictates that the City will not participate in the case, and in exchange Intrepid agreed to not make a priority call – which could allow them to claim additional water rights – on the City.
In a priority call the State Engineer can determine how to prioritize the available water, cutting off water rights to the most “junior” or youngest water rights holders and prioritizing the older or more “senior” water rights.
If a priority call was made against the City, it could lose its access to the river.
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The council voted for the agreement, 7-1 with Councilor Mark Walterscheid giving the lone dissenting vote at a Feb. 19 special meeting.
Intrepid also agreed to support the City in any future priority calls by providing the City additional water when needed.
A priority call is made by the holder of a water right to the Office of the State Engineer when there isn’t enough water for the prescribed use.
The City and company would also partner and provide one another advanced notice of any changes in location, use or point of diversion of either of their water rights.
The agreement was signed by Carlsbad Mayor Dale Janway, City Administrator John Lowe and Intrepid’s general counsel Kyle Smith.
“The City and Intrepid agree there is mutual benefit for the City and Intrepid to work together with regard to their respective water rights,” read the agreement.
Meanwhile, the Carlsbad Irrigation District (CID) sought to challenge in court claims made by Intrepid that it owned about 34,000 acre feet of water rights in the Pecos River, with about 19,000 classified for consumption.
The CID contended that Intrepid had not used such water rights for decades and had thus “abandoned” them, and challenged the legality of seven “preliminary authorizations” granted by the State Engineer without a public hearing to allow Intrepid to change the use and points of diversion for its water rights as it shifted from using the water to refine potash to water sales to the oil and gas industry.
Potash is an ore commonly used in many daily products including fertilizer, makeup and gun powder.
The plaintiffs argued that the volume of water Intrepid claimed would “dry up” the Pecos River and threaten New Mexico’s ability to meet water delivery requirements to Texas.
Ken Dugan, an attorney representing the CID called the deal “disappointing” as the City would not be able to participate in the case and ensure the water rights of its residents were protected.
He said the Office of the State Engineer would ultimately decide whose water rights would be deprived in the event of a priority call, despite the agreement between the City and Intrepid.
“I’ve never heard of a right to pick and choose who you will call priority on,” he said. “I can’t imagine they could have worked out some special deal.”
Dugan said the City’s involvement in the case was important to ensure Carlsbad’s needs are addressed.
“It just seems like the City of Carlsbad would have a vested interest in getting involved instead of just punting and letting Intrepid win,” he said. “I can’t imagine how Intrepid gets to choose who is exempt from a priority call. That deal seems suspect and it's disappointing.”
City Councilor Jason Shirley, who voted in favor of the agreement said it was a move to protect the water supply for city residents.
“The biggest issue for me was the priority call,” he said. “Having that resolved makes me feel a lot better about the situation. We want to be able to provide water to our community.”
Shirley said the deal was discussed by the City Council in a closed-door meeting as it related to “pending litigation.”
The City was never a party on either side of the case.
Melanie Majors, executive director at the New Mexico Foundation for Open Government (NMFOG) questioned the decision to hold the discussion out of public view.
Majors said that when a board considers items under pending litigation it should be an item which the board and its representation is a party to, whether they sued or are being sued.
Majors said the use of pending legal action “as an excuse is very thin” especially since they were not a party in the legal action.
“It can’t just be a rumor that this might affect us, notification that a lawsuit or legal action would be filed, it had to be specific legal item for them to consider,” she said. “All the action must be conducted in an open meeting and must be done in a roll call vote.”
Read the agreement between the City of Carlsbad and Intrepid Potash:
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.