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Montana Water Marketing:

An introduction to water rights transactions

Course Description

The course will provide an overview of water marketing in Montana. This will include a market introduction,
market foundation, market drivers, market challenges and market activity. Together these sections will
provide an understanding for what creates the Montana water market, its current status, and future
expectations as the market develops.

Market Introduction
Water marketing is defined as buying, selling, and leasing water rights. Montana’s finite water supply and
increasing water demand presents a need for trade. Markets have long been touted as a means to
efficiently allocate resources. Water is no exception. The recognition of private property rights to water
(water rights) has allowed for water markets to emerge across the West and more specifically in Montana.
This section will define water marketing and illustrate the need for this emerging market.

Market Foundation
Clearly defined water rights and their administration compose the foundation for water marketing. This
course will recognize the water rights elements that pertain to transactions. Specifically, this section will
address the regulatory frameworks that provide the necessary structure for a viable water market. Topics
will include water rights parameters, prior appropriation, beneficial use, abandonment, current statutes, and
recent legislative changes that shape the water market.

Market Drivers
The Montana water market is born from an increasing demand and scarce supply of water resources. This
course will evaluate the impacts of snowpack, runoff, and timing on the state’s water supply. Furthermore,
this course will illustrate four sectors competing for Montana water: 1) agriculture, 2) hydropower, 3)
environment, and 4) urban. The greater the demands presented by these sectors, the greater the market
forces and need for trade.

Market Challenges
Although the Montana water market is rapidly developing, it is not void of challenges. These challenges
include water’s physical attributes, a lack of clearly defined water rights, and high transaction costs. Each of
these hurdles will be examined in greater detail throughout this section.

Market Activity and Trends


Despite market hindrances, water marketing has emerged through growing demands for water resources
and regulatory closures. This section will focus on the types of water rights transactions, what creates water
rights values, water rights valuation methodologies, and market trends in the Montana water market.

1241 South 4 Street West  Missoula, MT 59801  406.531.9156  loticwater.com


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