Colorado River Rights Snatched up by Investors Betting on Scarcity

The water in the Colorado River is becoming an increasingly desirable investment target for private investment companies as it is becoming an increasingly scarce natural resource in the American West. One of the most significant landowners in the Grand Valley is an investment company called Water Asset Management, which is based in New York and has made at least $20 million worth of investments in Western Colorado over the course of the past five years.

Some local residents, such as Joe Bernal, who depends on water from the Colorado River for his farm, are concerned about the hedge fund's presence and its interests in the river. The hedge fund makes investments in assets and companies that ensure water supply and quality. Its co-founder has referred to water in the United States as "a trillion-dollar market opportunity." Cities such as Denver, Salt Lake City, Albuquerque, and Los Angeles all rely heavily on water from the Colorado River as their primary source of supply.

The snowfall in the Rocky Mountains is the primary source of water for the Colorado River; however, climate change is making the western United States hotter and drier, which is causing the river's flow to decrease. In addition to this, there has been a megadrought that has lasted for 23 years, the worst in 1,200 years, and abuse of the nation's main reservoirs by western states, which has caused damage to these reservoirs.

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Concern has been voiced by residents from all around the region, including local ranchers and Kerry Donovan, who served as a state senator in Colorado previously, regarding the quantity of land that is being purchased in the state for water rights. Not only that but the cost of rent across America has increased substantially in the last few years. 

Water Asset Management has indicated in the past that its approach is to profit from water by making the farms it acquires more effective and then selling parts of its water rights to other farmers and towns. However, Water Asset Management has declined to comment on this matter. The current president of the corporation was formerly the highest-ranking water official in Colorado. On the website of the company, it is said that "limited access to clean water is the resource that will define this century."

It is expected that the federal government will ensure that water continues to flow freely in cities located in the Western United States, and Congress has just recently allotted $4 billion in funding for drought relief, which can be used to pay farmers to fallow their land and not use their water resources. A number of states in the West, including Colorado, are considering offering financial incentives to farmers who leave their land fallow.

Water Asset Management has, in spite of some reservations, made investments in the properties that feature brand-new irrigation systems, and the company's future is directly linked to the outcomes of the Western Colorado farms that it has acquired. It seems conceivable that those who invest in water rights will receive a return on their capital as a result of the increasing demand for water in the West's arid regions.

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What is causing the Colorado River to dry up?

Several factors are contributing to the drying up of the Colorado River. Climate change and persistent drought in the region have reduced the river's flow, while water usage from farms and cities along the river has increased, leading to a water deficit.

What will happen when the Colorado River dries up?

If the Colorado River were to completely dry up, it would have significant impacts on the region. Agriculture would be severely impacted, as many farms rely on the river's water for irrigation. Additionally, cities and towns that rely on the river for drinking water and other uses would need to find alternative sources. The loss of the river would also have an ecological impact on the many species that depend on it for survival.

Will the Colorado River ever dry up?

While it is difficult to predict the future of the Colorado River, the current trends indicate that the river is at risk of drying up if changes are not made to reduce water usage and address climate change. It is possible, however, to take action to restore the river and ensure its long-term sustainability.

Is it possible to restore the Colorado River?

Yes, it is possible to restore the Colorado River. Efforts to reduce water usage, implement more efficient irrigation techniques, and address climate change could help to increase the river's flow and restore its health. Additionally, restoring the river's natural ecosystem and protecting its biodiversity can help to ensure its long-term sustainability.

How long until Lake Mead is empty?

The timeframe for when Lake Mead, the largest reservoir on the Colorado River, will be completely empty is difficult to predict, as it depends on a variety of factors such as water usage and precipitation levels. However, as of early 2022, Lake Mead was at historically low water levels, with a high risk of reaching a critical "shortage" level that would trigger significant water restrictions for states that rely on the river's water.