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Freshwater Fisticuffs in Court

Timber barons can speculate on trees, land barons can speculate on selling properties but the West is not supposed to have water barons. It’s illegal under Western water law to speculate on water. An Oregon administrative law judge has ruled a private company would be speculating on the waters of the McKenzie River if granted its application for 22 million gallons of water a day out of the river. 

On April 27, the judge recommended to Oregon’s Water Resources Department that Willamette Water Company’s water right application be denied. 

Administrative Law Judge James Han wrote in his ruling that “the preponderance of the evidence established” that the company’s application was speculative because it had no contracts to sell water, had not shown it would obtain them in the future and was applying for more water than it could show it would put to “actual beneficial use.”

WWC said it would sell water to rural communities such as Cottage Grove and Creswell, but the judge wrote that Willamette Water Co. didn’t show it had land-use compliance for water lines and other needed facilities. 

The conservative majority on the Lane County Board of Commissioners voted in October 2011 for a resolution in support of the water bid. Commissioners Pete Sorenson and Rob Handy voted against it.

“I think round one goes to the river, but we don’t control how many rounds this fight will go,” says John DeVoe, executive director of WaterWatch of Oregon. The group has been fighting WWC’s permit application for 34 cfs (cubic feet per second), which was filed in 2008, for several years. 

Judge Han’s proposed order will go to the Water Resources Department (WRD), which could choose to reject or amend the order. A decision is expected soon.

DeVoe says he hopes that the WRD “will see the wisdom in the judge’s order and act accordingly.”

WaterWatch attorney Lisa Brown says that though the argument had more nuances, “At the core of it we just argued there’s not a need for this water and that type of speculative proposal is not allowed under the code.”

If the permit is denied, WWC could still appeal that ruling. The company’s attorneys did not respond to a request for comment before deadline.

Willamette Water Co., which currently has a small 4 cfs permit and serves Goshen, was purchased by Greg Demers in August 2006. In a December 2009 Water Utility Annual Report, the corporation listed two stockholders — Demers and Melvin McDougal. Greg Demers was listed as the company’s president, and Jeff Demers as the director of operations. WWC has shared administration, offices and other goods and services with Frontier Resources LLC, which Oregon’s Corporation Division says is made up of Greg and Jeff Demers, as well as Ed King of King Estate Winery. The Frontier and WWC currently share a mailing address, according to the corporations division. 

 The McDougals and Demers own thousands of acres of land around Lane County and are involved with a dispute with Lane County over their company’s (Lost Creek Rock Products) mining of Parvin Butte (see story this issue).