Intrepid Potash loses appeal seeking to regain rights to Pecos River Water

An appeal filed by Intrepid Potash seeking to regain its water rights on the Pecos River was denied Oct. 18 by a New Mexico appellate court, which found the company had forfeited much of its access to the river.

This verdict sided with a previous district court ruling in a lawsuit filed by the Carlsbad Irrigation District and Otis Mutual Domestic Water Consumers Co-op, challenging Intrepid’s claims that it could pump water out of the river.

The plaintiffs in that case were mostly made up of rural water users and ranchers in the Carlsbad area, reliant on Pecos River water to irrigate crops and provide for area households.

More: Water users 'disappointed' as Eddy County sides with Intrepid in Pecos River water fight

They worried if Intrepid was successful in claiming the water rights, more than 30,000-acre feet (AF) per year, local water supplies could run perilously low, according to the lawsuit.

Attorney for the CID and Otis water users Ken Dugan said the appeal’s denial “saved the Pecos River” by blocking Intrepid from using the water rights.

“Intrepid’s water rights are void. They lost,” he said. “We saved the Pecos River.”

More: 'They've got nothing.' Intrepid loses Pecos River access after Carlsbad legal battle

Dugan said that if Intrepid was allowed to claim the water rights, it would not only deplete the supply of local users but also endanger New Mexico in defaulting on an compact with the State of Texas to provide river water to the neighboring state that shares the river.

“That would have put the state into a complete default of the agreement,” he said. “That was a problem.”

District judge ruled Intrepid ‘abandoned’ water rights through decades of non-use

Fifth Judicial District Court Judge James Wechsler sided with the water users in 2021, finding Intrepid could only claim 150 AF for consumption through salt processing.

More: Trial begins in case against Intrepid Potash's water rights on Pecos River

An acre foot is the amount of water it takes to cover a full acre one foot deep, about 325,000 gallons.

Intrepid had claimed about 35,000 AF of water rights along the river for non-consumptive use and about 19,000 AF for consumption, both for refining potash and selling water to the oil and gas industry.

But although Intrepid once could have had such rights to the river, Wechsler ruled the rights were not used for decades, meaning the company forfeited them.

More: Intrepid Potash defends its Pecos River water rights during trial

The appeals court affirmed this ruling, as “the right to continue using water depends on the continued use of water.”

Wechsler also ruled Intrepid had alternative sources of water to sustain its operations, pointing to augmentation wells and the Caprock formation in nearby Lea County.

Intrepid only used 3,000 AF of those about 8,000 AF in water rights, the judge ruled, meaning it did not need the Pecos River rights to sustain the company.

More: Trial on Intrepid Potash's Pecos River water rights concludes, parties await verdict

Efforts to shift water use from potash to oil and gas sales was also not properly authorized, Wechsler ruled, reversing multiple authorizations issued by the New Mexico Office of the State Engineer in 2017 to allow the company to pump water and sell it to fossil fuel companies.

Those authorizations were deemed illegal and Intrepid was ordered to stop pumping in April 2020 in a separate case by Carlsbad District Judge Ray Romero, who argued the company lacked public input required ahead of such activities.

Dugan said that if the Office of the State Engineer planned to issue such authorizations in the future, it should ensure other water rights holders are afforded the opportunity to protest.

More: Intrepid Potash Pecos River water rights arguments go to court after judge's ruling

“Maybe a little bit of prudence should be used next time,” he said. “That’s why we allow protest. It’s called due process. If you have a water right, you have a vested interest in that water right.”

Intrepid knew its water rights would be forfeited without ‘beneficial use,’ court rules

In the verdict, Appeals Judge Kristina Bogardus combined Intrepid’s appeal of Romero and Wechsler’s verdicts and found Wechsler’s decision nullified the temporary authorization argument as there were no water rights in existence when the authorizations were issued.

“Without valid water rights, appellants cannot apply to change the point of diversion or the place and purpose of use of the water,” Bogardus wrote. “Appellants understood that their water rights would be subject to forfeiture if they were not put to beneficial use.”

More: US Supreme Court rules in favor of New Mexico in Pecos River water dispute with Texas

That verdict was appealed by Intrepid in May 2022 with the company arguing its water rights, despite unuse, were extended legally by the State of New Mexico for decades.

Wechsler and the appellate judges also ruled against multiple time extensions issued by the State Engineer during which the courts said the company and predecessors failed to put the water to “beneficial use.”

“The extensions of time did not include the amount of the water rights for which an extension was granted, did not include a finding that the extensions were made in public interest, and were not statements as to the viability of the water rights,” read the denial of the appeal.

After the most recent denial, Intrepid could still request the New Mexico Supreme Court to consider hearing a subsequent appeal, but Dugan was optimistic the water was protected by courts.

“We’re ecstatic that for now, we have protected the Pecos River,” he said. “We’re ecstatic that right prevailed this time.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on X, formerly known as Twitter.

This article originally appeared on Carlsbad Current-Argus: Intrepid Potash loses appeal seeking to regain rights to Pecos River