Homeowners, developers and farmers compete for groundwater in Central Oregon

Large developers are still getting rights to extract groundwater in Central Oregon, even while an increasing number of residential wells are running dry. OPB’s Bend bureau chief Emily Cureton Cook tells us about one development near Redmond and what it reveals about the state’s ability and willingness to regulate groundwater.

Note: The following transcript was computer generated and edited by a volunteer.

Dave Miller: This is Think Out Loud on OPB, I’m Dave Miller. In Oregon’s fastest growing region, wells are going dry at an alarming rate. And as more and more Deschutes County residents have been paying the price of declining groundwater, powerful water rights are being sold to the highest bidder. OPB’s Emily Cureton Cook has been reporting on this issue as part of an ongoing series called Race to the Bottom. She’s been focusing on the ways that Oregon officials who manage groundwater have fueled crises and inequities, and have left the state unprepared to meet the growing challenges of drought and climate change. She brought us this story.

Emily Cureton Cook: Having plenty of room for animals was a big part of why Susan Burdick bought a home southwest of Redmond in 2006.

Susan Burdick: Out in the country, I have five acres. And it’s my little paradise.

Cureton Cook: But that sense of peace changed in 2020, when her well ran dry.

Burdick: It was just all so stressful dealing with everything.

Cureton Cook: At first, Burdick had no running water at all. She waited weeks for a drilling company with a months-long backlog of requests.

Burdick: They couldn’t come because they had so many wells- everybody else was in the same boat, their wells are going dry.

Cureton Cook: The number of Deschutes County residents deepening wells has soared in the last two years. That’s as development is booming. More than 1100 new wells have been drilled. Burdick ultimately paid more than $30,000 in costs, money that she had to borrow.

Burdick: You can’t just keep sucking it out of the ground and let everybody else just lose. You just can’t do that.

Cureton Cook: The groundwater problems in the valleys of Central Oregon’s Deschutes Basin aren’t a surprise. More than a decade ago, state and federal scientists modeled how the trend would likely keep getting worse.

Still, Burdick is watching the dust rise from construction on a large new development down the road from her home. Heavy trucks pull through the gate of what will become the Thornburgh destination resort. This is where developer Kameron DeLashmutt has proposed building three golf courses, multiple lakes, more than 400 lodging units, and nearly 1,000 single family homes.

Kameron DeLashmutt: There’s a great big bucket down there, and we’re taking a cup out of it.

Cureton Cook: He’s seeking state approval to pump almost six million gallons a day from the aquifer. But a shift in how regulators approach groundwater, and opposition from his neighbors, has him in court.

Delashmutt: There is ongoing weaponization of water law by project opponents. We have water, and we have water secure.

Nunzie Gould: As we enter climate change, the question is: where do we put development? What is high value use of water?

Cureton Cook: Nunzie Gould has steadfastly opposed the resort plan for nearly two decades. On a recent day, she hiked the public land bordering its property line.

Gould: So there’s fascinating relics here. There’s the old canal system.

Cureton Cook: She’s surrounded by dry ditches. And she sees this area’s past as a warning of her current battle against Thornburgh.

Gould: It’s always been a real estate scheme, with the promise of this abundance of water.

Cureton Cook: Around 1900, private developers began to lure white settlers here by overpromising water from a creek, saying they could divert it to canals and turn the desert green.

Gould: This was supposed to be settled. But water never came.

Cureton Cook: The developers still made a profit, while the settlers took on debt. This conflict set off a political movement. It was the backdrop as Oregon lawmakers passed the state’s first water laws in 1909, codifying water as a public resource for the first time.

Gould: We never had enough water to deliver surface water. And now we’re just putting straws in the ground.

Cureton Cook: More than 100 years later, Central Oregon may again be a test for how far state officials are willing to go to protect rural residents’ access to water.

Miller: OPB’s Emily Cureton Cook joins us now. Hey Emily.

Cureton Cook: Hey there, Dave.

Miller: So the resort you talked about there would pump six million gallons of water per day from wells. That is the “one cup” that developer Kameron DeLashmutt talked about. Can you put that number in context, how much water is it?

Cureton Cook: Annually, this resort could take about as much water as the entire city of Prineville, with a population of 10,000, reported using all last year. And up to a third of Thornburgh’s water could go to golf courses, according to a permit the state is considering right now. Developer Kameron DeLashmutt recently told me he is planning to scale that back. Overall though, he argues that, because people can still drill deeper and find plenty of water underground, his resort is sustainable.

Miller: What do hydrologists know about how groundwater in the area is shrinking, and what’s causing it? And also, what they’re seeing above ground as well?

Cureton Cook: So we’re primarily talking about the lower lying valleys near Bend, extending north to Lake Billy Chinook near Madras. But keep in mind that groundwater is an issue across a lot of central and eastern Oregon. In this particular area though, we have a lot of data to look at. There’s a long record of well monitoring. And from that, we can see a range of groundwater declines. In some places, the water level has been dropping more than a foot per year. Oregon Water Resources Department Deputy Director Doug Woodcock is well aware of this trend.

Doug Woodcock: It is apparent that the declines are starting to become significant, that it’s persistent and it’s not going away. The demands are increasing.

Cureton Cook: So scientists have studied why this is happening, and they say there are too big driving factors: climate changes and pumping by humans. Those are thought to be driving as much as 80-90% of the downturn. A 2021 state memo says the piping of irrigation canals plays a smaller role in some areas. And this is ultimately going to affect some pretty iconic streams. Think of the Deschutes river, the Metolius River, and the Crooked River.

Miller: So developers like Kameron Delashmutt, they do have to apply for a permit to pump commercial amounts of water. Who is authorizing that kind of use, and then what are those folks taking into account before they issue a permit?

Cureton Cook: We just heard from Doug Woodcock, he’s with the Oregon Water Resources Department, and that agency manages water rights. Its authority is based on this legal bedrock that water in Oregon belongs to the public. But the agency has faced a lot of criticism. It’s got a history of saying yes to groundwater pumping, even in areas where aquifers are in trouble. So Thornburgh may be a case study, its development is caught in the middle of this more permissive past, and the present moment, when the agency is promising to be more cautious about groundwater. Back in 2013, the state actually gave DeLashmutt the green light to build those wells and take that six million gallons a day. But when construction didn’t happen in a five year period, it opened that water permit back up to scrutiny and to a legal challenge.

So it’s important to think about what’s changed since he got that permit. The state has studied more of the crises it’s created by giving away too much groundwater and so even though Thornburgh looks a lot like destination resorts of the past, it’s caught in this shift when Oregon is grappling with how to plan for climate change and for population growth.

But for his part, DeLashmutt has been trying various maneuvers to get the water he wants. In the shift, regulators have said no a few times. On more than one application, they’ve decided his wells would be detrimental to the public interest. Multiple denials say water isn’t available within the capacity of the resource.

But that stance, it isn’t across the board, These same regulators changed their minds when Thornburgh asked for the exact same source of water, just in a different way.

Miller: This is the confusing part. Confusing to me, at least. You found that at least DeLashmutt and Thornburgh got state approval to take water rights from a piece of land that’s actually more than 13 miles away from where the resort would be. Can you explain how that would work, how that kind of water rights transfer happens?

Cureton Cook: These kinds of transfers, they aren’t as heavily scrutinized by regulators, say, when you go to them and want a brand new water right? The transfers don’t consider what’s in the public interest. So what’s happening is DeLashmutt has been buying millions of dollars worth of water rights elsewhere in the Deschutes Basin, and using the state process to transfer some of them to the resort site. And you’re right Dave, it gets really wonky and hard to follow. But the end result is that even in the most drought-stricken basins, in Oregon, groundwater is effectively sold to the highest bidders.

Miller: Do you mean literally through an auction?

Cureton Cook: Yeah, exactly. Here’s an example. One of the water rights to DeLashmutt is buying begins on an historic tree farm just outside of Bend’s city limits. And this tree farm became a subdivision of multimillion dollar homes around 2016 or so. At that time, the new neighborhood was absorbed by the city of Bend’s water utility. But the city didn’t get dibs on the property’s existing water rights. Instead, those went up for an auction. And the city of Bend actually did put in a bid, nearly a quarter of a million dollars, but that wasn’t nearly enough, one city official told me. State records show two companies are still in the process of claiming those water rights and moving them to distant locations.

One of them, KC Development group, wants to fill a private lake for water skiing. And the state has approved that, and a neighbor is suing over it. The other auction winner is DeLashmutt’s utility company, which seeks to use water for five years of construction at Thornburgh, more than 13 miles away from the tree farm’s well. And the state said okay to this too.

But project opponent Nunzie Gould, who we heard from earlier, is taking the approval to court. And faced with Gould’s latest roadblocks, Thornburgh’s lawyers are getting more creative.

Miller: So DeLashmutt has actually offered to give some of his water to local farmers, and several state lawmakers got on board with this offer. What did you learn about how this all went down, this political maneuvering?

Cureton Cook: In May, Thornburgh’s lawyers sent a letter straight to some very powerful people, that being the director of the water resources department, Tom Byler, and Oregon Governor Kate Brown. This letter suggests state officials should allow Thornburgh to get around one of Gould’s pending lawsuits, specifically the one stalling a transfer of the tree farm’s groundwater. And that’s because then, DeLashmutt would make a one time donation of other water he controls to help drought stricken farmers.

And Thornburgh’s lobbyist was able to actually recruit seven state lawmakers to advocate for this trade. It’s a bipartisan group of five representatives and two senators led by a Democrat from Washington county, Rep Ken Helm. And keep in mind the legislature controls the water agency’s budget, and the governor appoints its director, who serves at her pleasure. So in their own letter to the executive branch, these legislators listed just one specific case number, Thornburgh’s transfer. But they say they were advocating to generally cut red tape around water swaps. Rep Mark Owens is a Republican from Crane who signed on.

Mark Owens: We saw an opportunity to get the department to try to realize how we can be more flexible in water management. And that’s what we weighed in on.

Cureton Cook: Owens denies backing Thornburgh in particular. And after OPB brought this whole thing to light, DeLashmutt says he’s offering the water to Central Oregon farmers with no strings attached.

DeLashmutt: I suppose you could try to turn me into a bad guy, but I mean, I’ve got water. It’s worth a lot of money. I’m willing to let people that really need it use it. I’m willing to pay to cover the legal costs to get it to them. And I want absolutely nothing in return.

Cureton Cook: DeLashmutt denies any attempt at a quid pro quo with state officials. He says he has tremendous amounts of water rights, and that the resort will be able to get the groundwater it requires.

Miller: How did the farmers react to his offer of free water?

Cureton Cook: They were sort of the last to know. The irrigation district representing them, that would be the North Unit Irrigation District, didn’t know about this deal until it was already being championed by lawmakers. That’s what the Executive Manager Mike Britton there told me. He said he was initially really skeptical of the motives, and that it felt like the district was being used as a pawn. Eventually though, the irrigators did agree to accept the water, so long as it wasn’t part of any kind of backroom trade.

It’s important to remember these farmers are desperate. They’re about 40 miles from the proposed resort site, and they sell far more crops than anywhere else in Central Oregon. But they’re the last in line for water rights. North Unit farmer Cate Havstad-Casad has told lawmakers that it’s like watching your children’s future blow away. And she sees Thornburgh’s ability to buy up these very powerful senior water rights as emblematic of deeper injustices embedded in the state law.

Cate Havstad-Casad: The message that it sends is that it doesn’t matter if you disappear farmers. We sincerely hope that there is some common sense that is going to look at the inequitable distribution of water right now, and work to redistribute it more equitably.

Cureton Cook: Like Oregon, many western states use this system for dividing up water called prior appropriation. The gist is that people who control the oldest water rights get their share first when supplies are scarce. And it doesn’t matter if someone is using the water to grow food, maintain a private lake for water skiing, or build a golf course resort. These are all what’s called “beneficial uses.” Even illicit cannabis grows are considered a beneficial use by Oregon’s water regulators, so long as the property they’re on has a valid water right.

Miller: That is an amazing fact. Is there any effort to change state law to make groundwater regulation clearer?

Cureton Cook: Uh, no, and yes. When it comes to changing the law, lawmakers active in water policy were reluctant to even discuss it with me, saying it could ruin conversations about these voluntary water swaps. But in terms of how laws are interpreted by state regulators, yes, statewide regulators are promising to impose stricter rules on new groundwater development, possibly as early as next year.

Some legal experts I spoke to argue the watchdogs have already long held more power than they’ve been willing to use. University of Oregon law professor Adell Amos says Oregon officials have avoided answering questions about how to balance this public water supply against private property rights.

Adell Amos: If you’re a powerful interest that wants to privatize water and pump groundwater, why wouldn’t you pick a state where this is all muddled? It makes us an easy target for investors.

Cureton Cook: And there are signs Oregon may be changing course on how freely people can pump. Mismanagement has created crises largely so far in rural agricultural communities, like Harney County. And even there, scientists are expecting aquifer recovery could take hundreds or even thousands of years, but regulators have yet to rein in existing water rights, or stop people from transferring water rights in order to keep pumping in areas where the wells are already going dry.

And the homeowners who complain about these dry wells are usually told their only recourse in state law is to keep digging deeper. That’s because your average domestic well, think of those 1,100 new wells that went into Deschutes County alone in the last year and a half, they aren’t regulated, and they aren’t given legal protection like the larger commercial uses like what we’re talking about with Thornburgh.

Miller: Is there any immediate relief available to Oregonians with dry wells?

Cureton Cook: This summer, taxpayers began funneling about $5.5 million in grants to certain low and middle-income homeowners with failing wells. In Central Oregon, there’s a nonprofit that’s already been making loans to help people deepen wells, NeighborImpact. And it told me the demand is just unprecedented. So that pot of state money is likely to go very quickly, since each dry well can cost tens of thousands of dollars.

Miller: What’s next for the Thornburgh resort?

Cureton Cook: Well, DeLashmutt is forging ahead. He says he’s voluntarily promising to pay to fix neighbors’ wells if the resort causes problems for them within two miles. I should note that that pledge did not convince Susan Burdick, the homeowner we heard from earlier. And for now, the resort has a complicated web of pending water rights transactions, either in front of state regulators or tied up in court.

And even with that going on, and its long term water supply in question, the land base could soon grow. DeLashmutt is in the process of trying to buy 400 acres of state property, and there’s a hearing by the Oregon State Land Board expected on that next month.

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