By Karen Morfitt

(CBS4) – Plans to build a canal in northeastern Colorado that would divert water from the South Platte River into Nebraska continue to move forward.

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Nebraska Gov. Pete Ricketts announced his desire to build the waterway in January and said a one-hundred-year-old compact between the two states allows for it.

Colorado Gov. Jared Polis through a spokesperson responded to those plans, calling it a canal to nowhere that is unlikely to be built.

While the debate between politicians heats up, those who live and work in the targeted area say they knew it was a possibility.

Julesburg, Colorado, a small town just a few miles from the Nebraska state line, may stand the most to lose given it’s built on the land that surrounds it.

“The farming, it’s our lifeblood. If we don’t have those, we don’t have the grocery stores, we don’t have gas stations, insurance agencies, all those things,” Jay Goddard said.

Like a vein through the community, the South Platte River has been pumping water into the area for decades.

“We are all concerned about our water getting to our (agricultural) producers, our towns, our communities. Yeah, these whole areas would dry up without it,” Goddard said.

Goddard runs the bank in Julesburg and his customers are from both states. He also owns pasture just outside of town.

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Running through his land is an abandoned canal project that Nebraska started years ago before finding it was a flawed project.

“I knew exactly when they started talking, I knew exactly where they were talking about,” Goddard said.

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Nebraska is now going back to that plan and using the 100-year-old compact to do it.

Under the agreement, Colorado is required to keep water flowing at a certain rate into Nebraska every year during irrigation season, but it also allows for some diversion outside of that time, and that portion is what Ricketts has raised issue with.

“In the non-irrigation season, Colorado has not been providing us the water that is called for under the compact,” Ricketts said during a press conference in January.

That’s where the canal would come in.

Jim Yahn, who manages the North Sterling Reservoir, says the compact is clear they can do it, but question why they would want to.

“They are not going to get as much water as they would like and they are going to be diverting it in the wintertime so it’s going to be tough,” he said.

He says under the compact, Nebraska could only start pulling water near Ovid and only after more senior rights were met first including filling several reservoirs.

“We are usually taking the water upstream, so they are going to rely on what’s left over up there,”

The impact would be felt most by those who rely on wells.

“I raise corn, hay and T-bones,” Gene Manuello said.

He and his family have been ranching in the Sterling area for more than 70 years, and while he has surface rights that also predate the canal, he’ll see the impact.

“When we are short of water we are able to use those wells to help subsidize the irrigation,” he said.

The bigger concern raised by Manuello and several others in the area is what happens when those wells dry up.

“These augmentation plans because of this recharge we have created better flows in the river, that have gone into Nebraska the last fifteen to twenty years and it’s all because we are replacing our well usage,” Manuello said.

Joe Frank, the manager of the Lower South Platte Conservancy District, says much of Nebraska’s motivation and fear comes from expected growth in Colorado over the next several years.

It’s a fear he says they share.

“That’s probably our biggest threat. We do look at the canal as a threat and we know it can be built and we accept that, but this demand driven by population growth is probably our biggest threat down here,” Frank said.

He says they are trying to figure out how best to ensure water continues to flow into northeastern Colorado as well and hopes that Nebraska will see they’re fighting a similar battle.

“They have a lot of feasibility work in front of them. They need to study how much water that’s available,” Frank said.

Should Nebraska decide to go forward with building the canal, the estimated cost is more than $500 million. It would mean taking over private property in Colorado along the way. That includes land like the property of Goddard.

“You can see it’s going to be a pretty good size,” he said pointing to the previous canal’s remnants.

While his pasture will be scarred, it’s those with farmland he’s most concerned about, and as a neighbor, he says that concern includes those in Nebraska.

“If it doesn’t get to this part of Colorado, then Nebraska is probably not going to get it,” he said.

Like everyone else along the river, he hopes they can work together on how to move forward.

“Hopefully when it’s all said and done there’s a good solution to it,” he said.

Kevin Rein, director of Colorado Division of Water Resources, says Colorado has always met the requirements laid out in the compact and will continue to do so.

According to both Yahn and Frank, we at times are sending more than the compact requires and discussions are currently underway to build more reservoirs here in Colorado.

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They would be built to store excess from the South Platte River during wet years and help meet growing demand on the Front Range rather than send it into Nebraska and are likely among the planned projects the Nebraska governor is concerned about.

CBS4 requested to speak with Ricketts or get comments from him on CBS4’s story and did not hear back.

Karen Morfitt