After the closure of the Chevron Quest Mine in 2014, the company was ready to sell surplus land and water right accumulated by Molycorp decades ago. The Office of the State Engineer denied two water rights transfer requests last month to an El Rito family who hoped to create a small, commercial farm. Questa officials are now wondering if their efforts in northern Taos County and Questa’s economic development are at risk.
Patrick Shaw, along with Jennifer Kostecki–Shaw, gave Chevron $2,000 towards a heavily discounted water right of 4 acreft per year. He said that his family was trying the right thing and buying commercial water just before expanding their family farm. They couldn’t use all of their residential water for food production.
Shaw said, “You’re not allowed sell anything.”
However, the Shaw’s request was denied by the Office of the State Engineer, which put the family’s business on hold.
Ramona Martinez is the district manager for Water Rights District 6. She stated that the applications were denied as the water rights in question “simply do not exist” anymore, “because they were never put to beneficial use since the mine shut down.”
Martinez stated that Chevron had submitted proof of beneficial usage, which means that they are providing documentation of all water they used to benefit. “From 2014 to 2016, they put 1,264 acreft per year down to beneficial usage, and the 1,433 acreft that remained were not put to use for beneficial purposes.”
She also stated that Chevron knew the water rights in question were invalid.
Martinez, who worked closely alongside Chevron to “rearrange water rights” for 2016 said, “All was explained in Day 1.”
She stated that the company requested the OSE to make an exception and recognize the unused acres under the premise that they wanted the company to be good neighbours and help the community.
She continued, “We don’t make exceptions,” and said that the basin in Taos County is “fully-appropriated”, meaning all the water has been allocated.
“There is no water in that system.” [and]She stated that the 1,433 acre foot doesn’t exist and stressed that the water isn’t being used on paper to meet downstream water obligations. She stated that allowing them to use it would require an additional 1,433 acres feet from the system. This would be an increase in system.
Chevron disagrees and stated that it will appeal the state’s decision.
“It is Chevron’s belief that the denials reflect current position of OSE because in May 2020, OSE staff shared an internal draft memo arguing this right is valid.” Christian Isely was Chevron’s economic development advisor in Questa. He said that the reasoning was that “circumstances beyond the control of Chevron prevented them fully using the water rights.”
Isely stated that the circumstances were beyond the company’s control and led to the “permanent shutdown of the mine” in 2014.
Before the state could approve or deny the application, the owners of the Top of the World Ranch located in the San Luis Valley withdrew their application.
Chevron officials in Questa are more concerned about whether the company can move forward with something they’ve been talking about for a while: two transfers water rights to the village, which has accumulated a water debt of 1,800 acres with the state.
Chevron will offer a $1 lease of 1,800 acres to pay off the debt. It will also donate 120 acres of water each year. It’s part the company’s effort support the economy and people in Questa where it was once a major employer.
Isely stated that Chevron recognized the need to address the economic and social impact of the mine closing. These impacts were significant for local businesses, jobs, tax revenue, and other benefits. “And so my responsibility was to diversify the Questa’s economy. We use a significant amount of what we call Social Investment to do this.”
Chevron’s ongoing Superfund cleanup work and mine reclamation projects require significant amounts water. The company wants to return the water to the community, including nine mutual water associations and the Village of Questa. These communities have used more water over their water rights for years than they are allowed to.
“We have sold 133 acres of land [of water rights]Isely stated, “There are nine mutual domestic consumer associations here in Taos,” but that it is taking forever for these applications to be approved.”
Martinez stated that the rights Chevron wishes to transfer to the mutual domestic association are valid and praised Chevron for its efforts to support Questa.
“If Chevron wants be a good neighbor, help the village of Questa, and support economic growth in Taos County,” she stated. She added that the Office of the State Engineer doesn’t prejudge applications.
Isely stated that the mine needs 1,263 acres of water rights in order to continue its operations.
He stated that Chevron must retain Chevrons 1,263 proven up right to complete its mine reclamation and remediation projects as overseen under the New Mexico Environment Department, United States Environmental Protection Agency and the New Mexico Mining and Minerals Division. “As such, they won’t be available for divestment over the next decades.”
Questa and Chevron are yet to submit the applications for the one time 1,800-acrefeet donation, or the annual water rights that would add 120 acres to Questa’s allowable consumption. Therefore, the Water Rights Division is unable to determine whether these rights are valid.
However, Isely’s description suggests that the state will find certain parts of the applications to be problematic. The company proposes to transfer some of the “future use,” water rights that Chevron calls, which are in the same group as the rights that “simply don’t anymore”.
Isely stated that the OSE should declare the 120 acre feet to be donated and the 1,800 acre feet to be leased to Village as valid. “The donation is 100 per cent future use rights, while the lease is a combination future use and proven up. Chevron will soon submit these applications in partnership with Village.
Mark Gallegos, Questa’s mayor from April 1 through April 1, stated that his village is in desperate need of additional water.
He said, “If they give me an additional 1,800 acres, it will give me an even wash and wipe out my debt.” “Then, if they give 120 acres feet that would go into the annual use per annum, which would allow us to grow the community, or if a hotel, car wash, or laundromat comes in, we could provide the water to them,” he said, without adding to the village’s current water crisis.
Gallegos said, “If we had 120 acres more dedicated to the village we could put in an extra well.” “It would reduce the stress on the system to spread them across three wells and maybe even two different locations. [depths of the] aquifer. It would provide us with generational security.”