Know Your Water Rights: A Montana Rancher’s View of the Emerging Water Market (ActivelyMovingWater)

Feb.09, 2009 in Water Rights

(Feb. 8, 2009, ActivelyMovingWater.com)

Interview with Delbert Hawkins

I had the opportunity to work with Delbert Hawkins, a 3rd generation Montana cattle rancher, while I was project manager at the Montana Water Trust. Delbert holds the largest storage water right in Lake Mary Ronan (Lake County, Montana). Delbert also controls the outflow of the lake and has historically released water in Ronan Creek to carry water to downstream alfalfa fields. Ronan Creek later joins with Dayton Creek, a tributary to Flathead Lake. In 2003, I negotiated a 6-year storage water release agreement that provided crucial streamflows in Ronan Creek to increase connectivity with Flathead Lake. This agreement gave Delbert extra revenue for his “Lazy H Ranch.”

Delbert not only holds significant water assets, he is also innovative and perceptive to the emerging water market. For these reasons, I wanted to gather his thoughts on the water market.

1. As one of the first traditional ranchers in the state to sign an instream flow transaction, what are your thoughts on the Montana Water Market?

I think anyone who has water rights should do diligent research concerning the various values of their water rights. I would encourage all water right holders to research transaction opportunities as applicable to value and legalities.

2. What is the future of the water market?

It is obvious to me that water will become more and more valuable over time. I am worried about the government trying to control water rights as they become more valuable. To much governmental control will ruin the market. I want to maintain control and have flexibility in the application of my private property rights (water rights).

3. Would you ever consider separating the water from the land?

No, I wouldn’t because that may prove to be a detriment to future owners and managers. I am worried that separating the land and the water will reduce the future market values of my property.

4. You are beginning to look to retirement and it doesn’t appear you two sons are interested in following in Dad’s footsteps, what challenges does this present with regards to future management of your water rights?

I must not only preserve the rights but hopefully find a way to make them profitable while they are in “limbo” so to speak.

5. What future challenges are other ranchers faced with in a similar position?

As they say, “It all boils down to money.” Generation of adequate cash flow after retirement without parting with substantial portions of real estate is a major problem for we who have reinvested in the farm or ranch operation and therefore have little or no cash reserves to sustain our ” Golden Years!” Pasture leases, leasing farming rights, timber harvest, water right leases or sale, carbon credit sales, and wetland banking are all methods to provide retirement cash flows, if available.

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