BUSINESS
Saturday, March 24, 2018
East Oregonian
Page 9A
BOARDMAN
Lost Valley allowed to tap into off-limits aquifer
State officials
aware dairy was
using loophole
By TRACY LOEW
Statesman Journal
A year after it opened,
Oregon’s
second-largest
dairy has not secured rights
to the nearly 1 million
gallons of water per day it
needs for its thousands of
cows and to process milk.
Instead, Lost Valley Farm
near Boardman moved
ahead without the necessary
permits, using a loophole in
Oregon law to pull water out
of an underground aquifer
that’s been off limits to new
wells for 42 years, alarming
neighboring farmers who say
their water supplies are now
at risk.
Documents obtained by
the Statesman Journal show
Gov. Kate Brown, her staff
and the directors of three
state agencies knew the
dairy would fall back on the
loophole if a proposed water
trade was challenged.
But with dairy owner
Greg te Velde rushing to
meet a deadline to receive
bank financing and move his
8,000 cows — and with the
promise of 150 jobs for rural
Morrow County — state
officials allowed the dairy to
open anyway.
“The proposed dairy
is in the best economic
interests of the region,”
the Oregon Department of
Agriculture,
Department
of Environmental Quality,
Water Resources Depart-
ment and governor’s office
wrote in a joint memo before
announcing they were giving
the dairy the go-ahead on
March 31, 2017, the same
day te Velde’s previous lease
expired.
The state’s approval came
after a year of violations
by the Tipton, Califor-
nia-based
businessman,
who is supplying milk to the
Tillamook County Creamery
Association.
In 2016, the dairy
drilled three wells into the
already-dwindling aquifer
without telling the state, as
required by law, and refused
to register them for months
after state officials found out.
When conservationists
challenged a proposed water
rights transfer on March
30 — the day before the state
approved the dairy — te
Velde told state officials he
would truck in water while
pursuing other options.
But records show he
brought in little water.
Photo courtesy Oregon Department of Agriculture
Conditions at the Lost Valley Dairy near Boardman, some time around June 2017.
Instead, Water Resources
officials discovered months
later that te Velde actually
drew most of the water from
one of the wells, claiming
an exemption for watering
stock — just as the earlier
memos among the gover-
nor’s staff and state agencies
had predicted.
And when ordered to
install a monitoring device
on the well, te Velde put in
one with an unauthorized
reset button, according to
Water Resources officials.
Now, the state’s water
officials say they have no
idea how much water the
dairy is taking out of the
aquifer, which was protected
in 1976 as a “critical ground-
water area” because pumping
levels were declining so
rapidly.
Oregon
law
allows
exempt wells for uses such
as: less than a half-acre of
lawn and garden watering;
industrial use of up to 5,000
gallons per day; or domestic
and drinking uses of up to
15,000 gallons per day.
There is no gallon limit
for stock watering.
Water Resources offi-
cials said Oregon law only
requires that the water is put
to a beneficial use. “Live-
stock watering is considered
a beneficial use,” spokes-
woman Diana Enright told
the Statesman Journal.
But Brian Posewitz, a
lawyer for the water protec-
tion group WaterWatch
Oregon, says the exemption
should be allowed only for
small-scale uses that don’t
impact water resources.
“Allowing Lost Valley
Farm to use the stock
watering exemption in a
critical groundwater area for
what is expected to be up to
30,000 cows illustrates an
abuse of the exemption, a
need to change it, or both,”
he said.
Gov. Brown’s press
secretary, Bryan Hockaday,
refused to answer the
Statesman Journal’s ques-
tions about the staff memos
and emails describing the
state’s
concerns
about
approving the dairy before it
had water rights.
One of those memos was
drafted by the governor’s
natural resources adviser,
Lauri Aunan, who also
communicated directly with
the dairy’s lawyers about the
timeline for approving the
water rights transfer. Hock-
aday said Aunan’s only role
was to ensure state agencies
coordinated with each other.
“This is not a situation
where the governor can inter-
vene on a permitting process,
nor did she,” Hockaday said.
“It’s not a matter of politics.”
Yet documents obtained
by the Statesman Journal
show several members of
Brown’s staff were directly
involved in discussions
about ways to allow Lost
Valley Farm to operate and
the possible consequences if
such actions were challenged
by opponents.
As governor, Brown
oversees all three agencies
and has sole authority to hire
and fire the directors.
Brown and Aunan did not
respond to the Statesman
Journal’s
requests
for
comment. Te Velde declined
to comment.
Maneuvering
for water
Lost
Valley
Farm’s
property came with rights to
Columbia River water, but
that water can only be used
for crop irrigation and only in
the summer. The dairy needs
potable water year-round for
cows’ drinking water and for
processing milk.
Since no new wells are
allowed in the area, the dairy
came up with a plan to trade
some of its Columbia River
rights for some of a neigh-
boring dairy’s groundwater
rights. The neighbor would
stop using his wells, and Lost
Valley would drill wells on its
property.
Internal communications
show the governor’s office
and state agency heads ques-
tioned whether they should
give the dairy the go-ahead
by issuing the wastewater
permit before water rights
were secured.
“Should Oregon issue the
(operating) permit if (Lost
Valley) has not secured
the water it needs for dairy
operations?” Aunan wrote
in a March 6, 2017, briefing
memo. “If the permit is
issued but the dairy does not
secure the water it needs,
this puts the dairy at risk
and may intensify pressure
to allow new groundwater
withdrawals.”
If the public got wind of
the water transfer and filed
objections before it was final,
the Water Resources Depart-
ment noted, the deal could
get held up in the courts for
as long as five years.
That’s exactly what
happened.
A coalition of conserva-
tion groups filed an objection
the day before the state issued
the wastewater permit.
Nearby
Meenderinck
Dairy, worried about its water
supply being harmed, filed a
second objection a week later.
But Lost Valley Farm had
a backup plan.
It applied for two limited
well licenses, meant for
short-term uses such as
construction, and good for
five years. The state granted
one license that was chal-
lenged. In September 2017
the dairy said it stopped using
the water, and withdrew
its application for the other
license.
The dairy had a third plan.
In March 2017 te Velde
told the state that until
the water rights swap was
approved, or he received
limited licenses, he would
buy water from the Port of
Morrow and truck it to the
dairy. He provided the state
with a copy of a contract with
the port, signed March 21,
showing it would purchase
up to 926,041 gallons per
day.
That works out to about
nearly 28 million gallons
per month, although use
would fluctuate slightly with
seasons.
But purchase receipts
from the port show the dairy
bought a small and declining
amount each month, ranging
from 4.3 million gallons in
May to 346,800 gallons in
October.
In November 2017, the
Oregon Water Resources
Department learned the dairy
was operating with water
pumped from the protected
aquifer using one of the wells
it illegally drilled in 2016.
As the dairy was drilling
the first well, Mike Ladd,
the
Water
Resources
Department’s eastern region
manager, wrote te Velde
saying it was uncertain
whether a water rights
transfer would be approved.
He also warned that even if
it was, a state hydrogeologist
would specify construction
standards to ensure the wells
were accessing the same
aquifer.
“Any new appropriation
from the basalts, such as
stock water for 30,000 head
of cattle, will represent a
significant new use within
the critical groundwater area
that will likely injure senior
users,” Ladd wrote.
Ivan Maluski, policy
director for the statewide
independent
agriculture
advocacy group Friends of
Family Farmers, said the state
“seemed to be bending over
backward to get this opera-
tion up and running despite
all the warning signs.”
“The next time a big
mega-dairy wants to come to
Oregon,” Maluski said, “we
should seriously scrutinize
the proposal and protect
our groundwater, instead of
trying to find a way to say yes
at any cost.”
Rep. Greg Smith, who
represents Morrow County,
said he backed the dairy
because his goal is to create
jobs in his district.
“I was a huge advocate
of trying to advance this
project,” Smith said. “That
was based upon the assump-
tion they would follow the
rules.”
An internal document
dated two weeks before the
dairy’s approval is titled,
“Weekly update to Rep.
Smith,” and lays out the
approval timeline.
But Smith said he does
not remember getting weekly
updates, was not involved in
the approval timeline and did
not weigh in on whether the
dairy should open before it
secured water rights.
“My role as a legislator
was to get the company and
the agencies together to
communicate,” Smith said.
$321M contract awarded to
replace McNary Dam turbines
East Oregonian
UMATILLA — A subsid-
iary of General Electric
has been awarded the $321
million contract to build and
install 14 turbines at McNary
Lock and Dam, a process
that will take about 14 years
to complete.
The U.S. Army Corps
of Engineers announced
the contract Wednesday,
naming Alstom Renewable
US LLC after three years of
“research, planning, design
and acquisition” to replace
the current turbines and other
equipment. The 14 genera-
tors create 980 megawatts of
power capacity, according to
the release. One megawatt
supports about 700 homes,
and at full power the dam
supplies power for about
686,000 homes.
The dam was commis-
sioned in 1954 and the current
turbines have been in opera-
tion for more than 62 years.
The modernized equipment
is hoped to increase fish
survival, hydraulic capacity
and turbine efficiency and
durability.
The replacement will
be funded with capital
investment money from
Bonneville Power Admin-
istration, which receives
between $150-$300 million
in revenue from power
generated at the facility each
year.
“This contract award is a
significant accomplishment
for our district and the
region,” said Walla Walla
District Commander Lt. Col.
Damon Delarosa in the press
release. “The re-capitaliza-
tion effort at McNary Lock
and Dam is one of my top
priorities for 2018 ... Once
completed, the improve-
ments recognized from this
project for reliability, oper-
ational flexibility and fish
passage will be substantial
and measurable.”
Bank of EO debit cards support schools
HEPPNER — Bank of
Eastern Oregon is proud
to announce its school
mascot debit card program
contributed over $11,000 to
Morrow County high school
associated student body
organizations in 2017.
Initiated in September
2013, the Bank of Eastern
Oregon mascot debit card
program serves the Heppner,
Riverside, Irrigon, and Ione
high school associate student
body programs, and in 2018
the service is expanding to
support the ASB programs
of Weston-McEwen High
School in Athena.
Since inception the school
mascot debit card program
has contributed over $27,000
to these ASB programs.
The program generates
$0.05
per
transaction
performed with each school
mascot card to that schools
program, and the $10 annual
renewal fee for each card
also goes directly to the ASB.
DRAWINGS FOR PRIZES
FUN FOR THE WHOLE FAMILY
Online registration & race information at
WWW.BUTTECHALLENGE.COM
REGISTER ONLINE BY APRIL 28TH TO ORDER
A CUSTOM TECHNICAL RACE T-SHIRT
All proceeds benefit THE HERMISTON CROSS COUNTRY PROGRAM
Thank you for your support!