Oregon Water Rights – How Water Rights Work In The Beaver State
Part of our Water Rights Guide
Like much of the Pacific Northwest, Oregon faces wet winters followed by dry summers, especially in the interior of the state. Its farms and ranches are located in the rain shadow of the Cascade Mountains, and rely on snowmelt, rather than rainfall, to avoid drought.
As the U.S. Drought Monitor reports:
“When drought reaches ‘severe’ status in Oregon, pastures are often dry, and livestock producers wind up being forced to sell cattle…. drought is likely to cause planting delays for growers, cut backs in irrigation water, and falling groundwater levels in wells.”
This makes it especially important to understand the water risk of a piece of land before closing a land deal or investing in irrigation infrastructure. Only by determining the water rights associated with the property can you make an informed decision about the viability of the land for a specific agricultural use.
In this article, we’re going to take a close look at water rights in Oregon, as well as how you can research, verify, and purchase water rights in the state.
Background on water rights in Oregon
According to Oregon’s Water Code, “all water belongs to the public.” This means that all water users must get permission from the Water Resources Department in order to use the water, even if the water resource naturally flows through or under their land.
Oregon water rights are determined by the principle of prior appropriation, rather than riparian rights, which became codified into law in 1909. This means that a senior water rights holder has priority access to water resources, based on the date that the permit was first applied for. In the case of a water shortage, senior users aren’t required to conserve resources for junior users, but any surplus water beyond what’s used or allocated will go to the junior user, and so on down the line.
Senior users don’t have carte blanche to use the water for any purpose, though. Their application for a surface or groundwater permit must specify a “beneficial use,” and the water right may be forfeited if it’s not used at least one time every five years.
This means that simply knowing a parcel of land has water rights attached isn’t enough to guarantee that the allocation will be reliable or sufficient. Additionally, specific basins may have restrictions on water usage and limits on new appropriations. For example, some basins are designated as Critical Groundwater Areas or Problem Areas.
Dams, Canals, and Irrigation Districts
There’s one more issue that’s relevant to Oregon water users: dams. The state has over 1,000 dams, many of which are decades old and need to be removed or repaired:
“About two-thirds of Oregon’s dams are older than their typical 50-year design life and over the next five years, over 70% of these dams will be over 50 years old.”
This is likely to be a contentious issue over the coming years, as farmers, hydroelectric companies, conservationists, and other stakeholders work together to adapt Oregon’s aging infrastructure for an era of increased water scarcity due to climate change.
Currently, many of the state’s canals are managed by Irrigation Districts – municipal corporations that provide water to agricultural users. These open-air canals are often over 100 years old, and are subject to water loss due to leaks and evaporation. The Irrigation Modernization Program is working to improve this infrastructure.
You can learn more about Irrigation Districts on AQUAOSO’s Water Security Platform, which is updated regularly with the latest statistics and district boundaries.
How to confirm that a water right is valid
Because of all the complexity that goes into determining a water right, you may need to do additional research beyond simply identifying a water right. You can use the Oregon Water Resources Department query system to search by application or permit number, location, name, or the stream that the water right applies to.
Remember, all water rights granted after 1909 are appropriative rights, which means that you’ll need to confirm the priority date, and ensure that the water rights haven’t been sold separately from the property itself. If the right is a junior right, how much water will be left after senior rights holders have used their share?
The intended use of the water must also match what’s on the permit:
- Place of use
- Type of use
- Point of diversion
If any of the information has changed, then the water rights holder will need to submit a transfer application before the water can be used for a different purpose.
AQUAOSO can help you look up Oregon water rights, as well as the water risk of a parcel of land and any basin-specific restrictions that apply to it. Our Water Security Platform aggregates all of the data you need in one place, so you don’t have to go looking for it across dozens of regional databases.
How to find and purchase Oregon water rights
Even though Oregon law stipulates that water resources belong to the public, it allows individual water rights holders to lease or transfer water rights for a profit.
Oregon has both water quantity markets and water quality markets that are designed to encourage responsible water use. For example, in Central Oregon:
“Use of water banking along with other restoration efforts has resulted in an improved year-round flow of water in the Middle Deschutes and has discouraged competition for water and conflict over water uses on the River.”
Depending on their basin, a grower may be able to lease or purchase water rights from another water rights holder. According to the Water Market Insider, a total of 47,000 AF of water (valued at $11 million) were sold in 2015.
While this is still small compared to major water trading markets like California, we can expect to see more activity in the years to come, especially as new platforms make it easier to buy and sell water rights using smart water markets.
You can apply for a water right transfer through the Water Resources Department.
How to present a water rights analysis
One way that lenders and investors can benefit from this research is to include a water rights analysis in their loan due diligence documentation. This allows stakeholders to price water risk directly into their land deals and investments and make better decisions overall. After all, water risk will be increasingly tied to business risk in a water-scarce future.
The process of presenting a water rights analysis may look something like this:
- The loan officer demonstrates that the water rights are valid and that the grower has access to a secure water source.
- A senior manager or credit officer presents the analysis to regulators to address any concerns about water risk in the overall risk assessment.
- Senior management reviews the information with investors or the bank’s board to account for water risk in the loan portfolio.
Accounting for water risk in agricultural lending can have positive effects throughout the industry. This results in more accurate appraisals of land value and ensures that growers are well-positioned to pay back their loans mitigating disruptions to the supply chain due to droughts and other environmental factors.
By doing a thorough water risk analysis in advance, you’ll be able to reduce the time it takes to approve a loan and make better decisions about loan applications.
The Bottom Line
Researching water rights in Oregon can be a time-consuming process, especially if you need to look up data in multiple basins or regional databases. AQUAOSO makes it easy by putting the information you need in one place, so you don’t have to spend time chasing it down or hiring a local consultant.
With our unique Water Security Platform, you can zoom in on a particular parcel of land, or zoom out to get a macro view of water as well as other parcel-based data layers in any of the regions we serve.
AQUAOSO is committed to providing accurate information on water risk by aggregating data that would otherwise be impossible to find in a reasonable timeline in order to appraise property or approve a loan.
Water stress is a growing concern in some of the country’s most productive agricultural regions, but not all growers and crops will be impacted in the same way. As the U.N.’s Principles for Responsible Investment blog explains, “Water risk comes in several...
In many parts of the U.S., it’s access to water, not land, that ultimately determines which crops a farmer can grow. An article in Nature reports that, “although it uses only 20% of cultivated lands, nearly 50% of agricultural production relies on irrigation.” As a...
The U.N. Global Compact defines water risk as “the possibility of an entity experiencing a water-related challenge,” which can be anything from water scarcity, to flooding, to the depreciation of water resources, and everything in between. While water issues affect...