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12
Western Water Law, Global Climate Change, and Risk Allocation

A. Dan Tarlock

Chicago Kent College of Law

Chicago, Illinois

For behold, The Lord, the Lord of Hosts doth take away from Jerusalem and from Judah the stay and the staff and the whole stay of health, and the whole stay of water . . . I will command the clouds that they rain no rain upon it.

—Isaiah, Books 3 and 5

INTRODUCTION: WHAT THE DOOMSAYERS SAY

Both the urban and rural West are extremely vulnerable to the predicted adverse consequences of global warming (EPA, 1988). Coastal dwellers along the Pacific Ocean face rising sea levels and the loss of littoral land. Estuarine areas face the risk of destruction from sea level rises as the vital balance between fresh water and salt water will be destroyed. Regional fresh water supplies will be adversely affected in difficult-to-predict ways. The head of the Advanced Study Program at the National Center for Atmospheric Research advises that the change will not be a simple shift to a warmer but stable climate. Instead, we must plan for a new climate each decade. The new climate will bring both surface temperature increases and large year-to-year weather variations (Firor, 1990b). Urban areas that survive sea-level rises will probably face severe water shortages as spring runoffs decline and forests die.

Both farmers and wildlife will suffer from the heightened competition for diminished supplies. In California, for example, there may be less snowpack, higher winter runoff, and lower spring and summer runoff. Annual deliveries to the State Water Project could decline by 7 to 15 percent (EPA, 1988). At the same time,



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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona 12 Western Water Law, Global Climate Change, and Risk Allocation A. Dan Tarlock Chicago Kent College of Law Chicago, Illinois For behold, The Lord, the Lord of Hosts doth take away from Jerusalem and from Judah the stay and the staff and the whole stay of health, and the whole stay of water . . . I will command the clouds that they rain no rain upon it. —Isaiah, Books 3 and 5 INTRODUCTION: WHAT THE DOOMSAYERS SAY Both the urban and rural West are extremely vulnerable to the predicted adverse consequences of global warming (EPA, 1988). Coastal dwellers along the Pacific Ocean face rising sea levels and the loss of littoral land. Estuarine areas face the risk of destruction from sea level rises as the vital balance between fresh water and salt water will be destroyed. Regional fresh water supplies will be adversely affected in difficult-to-predict ways. The head of the Advanced Study Program at the National Center for Atmospheric Research advises that the change will not be a simple shift to a warmer but stable climate. Instead, we must plan for a new climate each decade. The new climate will bring both surface temperature increases and large year-to-year weather variations (Firor, 1990b). Urban areas that survive sea-level rises will probably face severe water shortages as spring runoffs decline and forests die. Both farmers and wildlife will suffer from the heightened competition for diminished supplies. In California, for example, there may be less snowpack, higher winter runoff, and lower spring and summer runoff. Annual deliveries to the State Water Project could decline by 7 to 15 percent (EPA, 1988). At the same time,

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona the demand for electricity will increase by 4 to 6 percent over the increase that would occur without global warming. The growing competition between municipal and industrial water users and agricultural water users will exacerbate existing supply shortfalls in populous arid areas, and cities may use their political power at both the state and federal level to bar all but the most essential crops from being irrigated. Simultaneously, the efforts to allocate more water to in-situ uses that began in the 1970s may literally evaporate. A recent global warming disaster scenario includes the prediction that "[i]n northern California, low water levels and high temperatures deoxygenated Tule Lake, inducing epidemics of botulism that eventually killed off immense flocks of ducks and geese that had made Tule the greatest single gathering around the world for migratory waterfowl" (Oppenheimer and Boyle, 1990). GLOBAL WARMING RESPONSE STRATEGIES: WHAT SHOULD WE BE DOING? Three interrelated responses to global climate change have been identified: (1) further research, (2) adaptation to temperature rises, and (3) the reduction of the root causes of the warming (resource demand). The merits of the first option are a given (Guruswamy, 1990). The current debate centers on the comparative merits of the second two options. Carbon dioxide and other greenhouse gases must be reduced to slow the warming, but implementing the third option will require a radical change in energy generation and consumption and thus a radical shift in the economic and social organization of all countries. Climates have historically varied throughout the world, and civilizations accepted variations more or less as fate. In the past, the causes of climate change were unknown natural phenomena rather than human activities; man did not try to manage climate change. However, the legacy of the enlightenment is that climate can be adapted to man through technological progress. The entire settlement of the West can be understood as a living example of this faith. We have refused to accommodate to the limitations of aridity and have sought to turn deserts into gardens for all who would cultivate them. Global warming is forcing a modest reexamination of this practice. Most moderate alarmists counsel adoption of the second strategy: the decade-by-decade adoption of flexible response strategies to prepare us to live with long-term change. Water shortages are one very important category of the full range of possible adverse

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona effects that can be addressed through adaptation. If we can adapt to water shortages, the adaptation will represent the first major reversal of faith in technological progress as the solution to the limitations of nature. Ultimately, adaption to a changing climate is at best a temporary strategy and is not a substitute for more fundamental shifts in resource use. Globally, the answer lies in shifting from non-renewable to renewable energy sources and in curbing explosive population growth (Firor, 1990a). In the West, the answer lies in confronting the relationship between water demand and urban growth. In all the major arid states, unlimited population growth is taken as an article of faith and the function of water policy is to supply all the water necessary to accommodate this growth. Many serious observers of the West think that the question is backwards. We should first set growth limits and use them to temper water demands to the more realistic use of available, possibly diminishing supplies. The Bureau of Reclamation cannot do this alone; nevertheless, the global warming debate may place the Bureau at the center of debate about the future of land use in the West. What happens in Fresno is related to the anti-growth debate in Los Angeles. As the major federal water manager in the West, the Bureau of Reclamation will be affected by global warming-induced water shortages. Flexible adaptation strategies will require the ability to capture and store decreased rainfall and snowfall and to move available, reduced supplies to the areas of greatest demand with speed. However, existing technical and institutional barriers may make this adaptation difficult. This paper addresses the capacity of state water law and federal reclamation law to adapt to the possibilities of shortages as normal rather than abnormal events. It does not address the strategies needed to achieve a new energy balance. Rather, it assumes that the West faces a substantially increased risk of water shortages and speculates about how the existing law of prior appropriation will respond to these shortages, when and if they occur, as well as the likely effect of recent trends in western water law on global warming adaptation. The basic conclusion is that the law of prior appropriation is not well suited in practice to achieve an optimum allocation in times of shortages because of the gap between priority rights holders and demand, but that reallocation trends currently underway can form the basis for a western global warming adaptation strategy.

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona PRIOR APPROPRIATION: IS IT A RISK MANAGEMENT SYSTEM? In theory, state and federal reclamation law have a great capacity to respond to global warming-induced water shortages because the function of western water law has been to allocate a scarce resource among competing users in times of shortage. The law of prior appropriation was developed to allocate water among California miners and to distribute water throughout the West. The law has endured in the face of sharp criticisms about its efficiency (Reisner and Bates, 1989) and equity (Freyfogle, 1986) because it has been able to accommodate changing use demands—by adding indefinitely to the classes of claimants eligible to acquire water rights and by allowing water to be shifted among uses. Irrigators, hydroelectric generators, cities, recreationists, and spokespersons for fish and wildlife have all been accommodated. Thus, the law of prior appropriation, supplemented by federal and state reservoir management, is a potential complete risk allocation strategy. There are two major problems with the use of prior appropriation for risk allocation. First, the law has never been used for this function. As a result, there are major political, institutional, and legal barriers to its use to declare winners and losers, which must be done if water is to be allocated in times of severe shortages. Second, the risk allocation schedules produced by the strict application of prior appropriation will be widely perceived as perverse. The highest priorities are often the lowest-valued uses. For example, the highest priority on the Colorado River remains irrigation, although the highest values of water are for municipal and industrial supplies and the enhancement of environmental values. Perverse priorities are not an absolute barrier because water can be voluntarily reallocated. However, we are just starting to market water on a large scale, and the jury is out on the success of this method of reallocation. Prior appropriation allocates the risks of shortages by a simple principle: priority of use. The question is whether the magnitude of the global climate change risks can be allocated within the framework of prior appropriation. Western water law is premised on shortages and priority schedules that provide clear risk allocation schemes. But we do not expect the risks to occur with any regularity. The whole thrust of federal and state water policy has been to reduce the risk of shortages to as close to zero as possible by the construction of large carryover storage facilities. In some

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona places, such as California, ground water pumping serves the same back-up function. Thus, we expect that reservoirs and ground water will avoid all but the mildest forms of rationing during droughts. States have tried to accommodate unlimited growth on a limited water budget by providing ample margins of safety against shortages. When water deliveries have been reduced or stopped according to a strict priority schedule, the losers have generally been small farmers, Indian tribes, and fish and wildlife. Most irrigators have been buffered by the harshness of prior appropriation by both carryover storage and formal and informal mechanisms that share the burdens of shortages by pro rata rather than pro tanto delivery reductions. Thus, although the law of prior appropriation is a risk allocation mechanism, the expectation that it will be used for this purpose is low. The strong expectations of user security will impede the Bureau of Reclamation should it seek to introduce flexibility (e.g., reallocation) into its mission. Historically, that mission has been to support local users by reducing the risks of shortages to as close to zero as possible by providing sufficient carryover storage to keep water flowing downstream from its reservoirs during dry years and to deliver water to the beneficiaries of the original project at subsidized rates. Our model of natural disaster is the seven-year cycle of plenty and famine experienced by Egypt in the book of Genesis rather than Anasazi long-term drought scenarios. Just as the Pharaoh heeded Joseph's advice and stored the harvests of plenty, so too has the Bureau of Reclamation heeded the vision of scientists and western promoters and stored spring runoffs in wet years to provide reserves for dry years. The faith in our ability to reduce the risks of shortages has powerful and insufficiently noted influence on the western water law. Fear of shortage has been used as the rationale for large projects and has crowded other adaptation strategies off of the political agenda (Stegner, 1986). The issue that prior appropriation poses for global warming adjustment strategies is how flexible the system will be in shifting water to areas of greatest need and in promoting maximum access to a scarce resource. Global warming adaptations will place a premium on both technical and allocative efficiency. Users in water-short areas will have to conserve existing supplies by using less, and they will face increased pressures for reallocation. Economists have long criticized western water law because it ignores higher, alternative values of water. Many western water observers argue that the historic allocation pattern is grossly inefficient. Too much water is used to grow surplus or low-

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona valued crops, and too much water is wasted (Reisner and Bates, 1990). In almost all western areas, agriculture preceded urbanization. Thus, agricultural users hold the most senior water rights. For most of this century, water allocation has been relatively static because the three major uses—agriculture, hydroelectric power generation, and municipal and industrial consumption—were able to share the available water budget without unduly disrupting each other. Until recently, there was a widespread perception that the allocation of western water was eternal, but the system was never completely static. It contained reallocation mechanisms that allowed minor adjustments, though, in general, prior appropriation remained watershed-based in practice. Transfers were the exception rather than the norm (although marginal agricultural areas did shift to urban uses). Today, the exception may become the norm. There is a growing consensus in the water community that water needs to be reallocated from irrigated agriculture to municipal, industrial, and instream uses to protect a broad range of environmental and recreational values. Water marketing has been endorsed by the national environmental community as well as by urban suppliers. Transfers can be used to meet both urban and environmental demands with minimum disruption for existing users. Prior appropriation contains two principles that could become the basis for global climate adaptation. Appropriative rights are usufructuary property rights. The original Edenic vision of the West as a land of small irrigators assumed that water rights should be tied to the soil. However, most states have rejected the appurtenancy principle, and have made water rights transferable property rights. In addition, water has a social value; it can only be used for a beneficial purpose. In this century, beneficial use has been defined only as nonwasteful use. Waste has long been defined by local custom, with the result that few irrigation practices are found to be nonbeneficial. A redefined concept of beneficial use could play a larger role in the future. For example, beneficial use could be defined as efficient use; the beneficial use doctrine would then form the basis for requiring substantial water conservation measures. The operating criteria imposed on the Newlands Project in the Truckee-Carson basin of western Nevada is a possible model of how beneficial use can form the theoretical basis for increased farm and urban water conservation requirements (DOI, 1966). The beneficial use doctrine can be complemented by the public trust doctrine. In California, this doctrine has been used to reallocate vested rights to trust purposes, which include environmental pro-

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona tection. For example, some commentators have argued that the public trust requires reductions in water use and the reallocation of water to dilution flows to redress the adverse effects of agricultural runoff. Water marketing has been endorsed by the national environmental community as well as by urban suppliers. Transfers can be used for both urban and environmental purposes with minimum disruption for existing users. Water marketing could be the cornerstone of an adaptive strategy because water can be shifted to areas of highest demand regardless of its original priority and use. The agreement between the Imperial Irrigation District (IID) and the Metropolitan Water District (MWD) of Southern California could be a model of future transfers. The MWD has paid the IID $120 million to save 100,000 acre-feet of water, which will be added to Los Angeles's lower priority on the Colorado River for the next 30 years, and this is only IID's first trip to the fat farm. Overall, however, we now have more water market theory than we have water markets, largely because proponents have underestimated the complexity of water transfers. The transfer debate centers on two related questions. The first question is, what are the barriers to transfers? Although most western water rights are transferable, the transaction costs of a transfer can be high. The vested rights of third parties must be protected under state law, and in an increasing number of states transfers are subject to public interest review. These barriers are not insurmountable, however. A comprehensive survey of water transfers in six western states (University of Colorado School of Law, 1990) illustrates that a variety of transfers occur both among similar users and from existing to new users. The transaction costs vary from minimal to very high in Colorado, but in all states transfers are generally supported by state law and are taking place. The second question in the transfer debate is, what is the relevant range of third party interests with a stake in the transfer? In past decades, states have begun to include a variety of previously excluded interests in the allocation and transfer process. Environmental representatives, Indian tribes, ethnic communities, and areas of origin now have a greater stake in water allocation processes than they have had in the past. The net result of these developments is to complicate water transfers. As Professor Joseph L. Sax of the University of California, Berkeley, has observed, water transfers are more like diplomatic negotiations than commercial transactions. The expanded compass of protected interests is legitimate; however, it poses new challenges to the water community to distinguish between good and bad transfer barriers (National Research Council, 1992).

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona BUREAU OF RECLAMATION RESOURCES Transfers The 27 million acre-feet of water that the Bureau of Reclamation supplies to farmers throughout the West have been targeted for a starring role in water marketing. Federal reclamation projects have been identified as a major source of water for municipal, industrial, and environmental uses. Reclamation projects use large amounts of subsidized water, often at low technical efficiencies. However, the Bureau faces two major institutional barriers to reallocating the supplies that it controls to adapt to global warming. First, reclamation law creates strong expectations that the original project beneficiaries will be the eternal beneficiaries of project water; every proposed transfer or conservation requirement will be met with substantial, although not insurmountable, opposition. Second, the Bureau's attempt to recast its mission as that of a multiple-purpose manager to deflect criticism that it has helped pollute western waters and degrade or destroy prime fish and wildlife habitats may be inconsistent with global climate change adaptation. Efforts to promote efficiency through cost increases and conservation plans have not been aggressively pursued, although a court has held that there is no constitutional right to federally subsidized water.1 Water marketing advocates argue that voluntary transfers may overcome resistance to transfers and ''can be as effective as appropriate pricing in leading to efficient use of water'' (Wahl, 1989). However, there are many legal and political barriers to the movement of Bureau of Reclamation water away from the original projects. Federal reclamation law was designed to promote family farms. The legacy of this largely unsuccessful experiment is that the law provides no incentives for transfers. As a leading expert has concluded, "Reclamation law is devoid of any explicit Bureau [of Reclamation] water transfer policy" (Driver, 1987). Transfers of project water may take place both under federal and state law, but the prevailing assumption is that they will be the exception rather than the rule. Section 8 of the Reclamation Act of 1902 provides "[t]hat nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use or distribution of water in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carry-

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona ing out the provisions of this Act, shall proceed in conformity with such laws."2 Section 8 was initially construed to mean that the Bureau of Reclamation is "simply a carrier and distributor of water . . . with the right to receive the sums stipulated in the contracts as reimbursement for the cost of construction and annual charges for operation and maintenance of the works."3 However, in the wake of the New Deal expansion of federal powers, the Supreme Court held that Congress may preempt state law.4 The Court adhered to these cases in California v. United States,5 but in 1983 the Court again described federal ownership of rights as "at most nominal'' because the beneficial interest was held by owners of project land.6 Section 8 of the Reclamation Act of 1902 further provides that "[t]he right to the use of water acquired under the provision of this Act shall be appurtenant to the land irrigated, and beneficial use shall be the basis, the measure, and the limit of the right."7 Section 8 also requires that the Secretary of the Interior proceed in conformity with state law in "the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder." The Reclamation Projects Act of 1939 allows the U.S. Army Corps of Engineers and the Bureau of Reclamation to impound water for municipal and industrial use. The net effect of Section 8 is that project water based on state water rights cannot be reallocated by the federal government alone unless Congress has preempted state law. Individual Bureau of Reclamation project contracts may present additional problems. For example, all projects generate return flows, but control of these flows varies. Some contracts give the United States control over the flows for project use; other contracts give the district power to use them within the district or, in the case of the Central Arizona Project, to sell the flows. Recent changes in Bureau of Reclamation policy indicate a greater receptivity to transfers, but the new policies do not eliminate the long-standing bias toward appurtenancy in federal reclamation law. Late in 1988, the Bureau, in its new management mode (as opposed to its engineering mode), announced a seven-principle transfer policy. The policy does not amount to a radical switch to water marketing. It reaffirms traditional Bureau deference to state law and generally announces a reactive, rather than a proactive, position on transfers. For example, the Bureau will become involved only where there is a potential effect on federal projects and services and the transfer has been requested by an appropriate nonfederal political authority. Transfer agreements that are part of an Indian water rights settlement (of which there

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona are many, either negotiated or being negotiated) is the major exception to this passive stance. The policy reaffirms the protection of third party interests and the mitigation of adverse environmental effects. Water will not be transferred unless third party effects can be avoided or mitigated. The policy only touches on the volatile issue of subsidy recapture. The issue is whether project beneficiaries can receive the current market value of subsidized water or whether the government should recapture some or all of the increment of value added by decades of underpriced water. The policy states only that transfers will not be burdened with costs beyond those actually incurred. This response seems inadequate, although most analysts argue that subsidy recapture should be subordinated to the removal of transfer restrictions. Still, subsidy recapture will be an issue in both contract renewals and transfers. Reservoir Operation The Bureau of Reclamation operates carryover storage reservoirs throughout the West. Bureau operations are subject to varying levels of discretion that may change as the result of severe shortages caused by global climate change. Ironically, global climate change may constrain the Bureau's operating discretion more than it is now. Projects may actually have to be operated to meet legally binding allocations rather than to maximize power revenues. Bureau projects are subject to a complex state and federal scheme of priorities and preferences, and these priorities and preferences vary from reservoir to reservoir. The legal position of the Bureau is not clear. The orthodox analysis is that the Bureau is only a carrier for water allocated by state law. Section 8 of the Reclamation Act requires that the Bureau perfect project water rights under state law. This analysis was developed at a time when the Bureau's constitutional powers were not as broad as they are now and the Bureau operated smaller-scale projects. Congress may preempt state law and delegate to the Bureau the power to allocate water as it chooses.8 Thus, the modern rule is that the Bureau must presumptively follow state law unless Congress has chosen to preempt it. The carrier analysis works to structure the operation of small Bureau of Reclamation reservoirs; the Bureau stores the maximum amount of water possible during the spring runoff and answers calls during the irrigation season, refusing to honor a call only if there is not enough to satisfy senior water rights holders. The

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona carrier analogy may also be legally correct for large, multipurpose reservoirs, too, but it is often irrelevant. The amount of water available gives the Bureau considerable discretion to operate the reservoir. As long as supplies are relatively abundant over a three-or 4-year period, there is usually a difference between the de jure operating rules and the de facto operating procedures. Glen Canyon Dam's operation provides an example of the changes in operating procedures that severe shortages must produce.9 Glen Canyon Dam is the linchpin of Colorado River management because it enables the upper Colorado River basin states to store sufficient water to meet their 10-year delivery obligation to the lower basin states. Paradoxically, the Law of the River controls the yearly operation of the dam but does not constrain daily operations for power generation. The reason is that the Law of the River only affects power generation in the case of long-term, extreme water shortages while reservoir law specifies annual fill targets. The dam was constructed as part of the Colorado River Storage Project Act to provide a large reserve to enable the upper basin to withstand prolonged periods of drought and meet its obligations under the 1922 Colorado River Compact to deliver 7.5 million acre-feet to the lower basin every ten years. Because the irrigation and other projects along the upper Colorado River could never pass a clean benefit-cost analysis and could not be subsidized by the beneficiaries, the upper basin states used power revenues from the storage projects to cover a large percentage of the repayment obligations. Glen Canyon Dam is presently operated to maximize power revenues, although hydroelectric generation is a low priority use on the river. In theory, Glen Canyon Dam is controlled by the Law of the River, a complex mass of compacts, international agreements, statutes, judicial decrees, and informal operating procedures. In practice, however, it is controlled by the Bureau of Reclamation and Western Area Power Administration operators, who manage the dam like an automatic bank teller machine for the southwest power grid. There is concern about the adverse effects of pulsating flows on the riverine environment of the Grand Canyon, but global warming could affect the dam's virtually unrestricted use for power generation in other ways. The Law of the River is largely irrelevant to day-to-day operations because it is only a law of mass allocations between regions and among states. The compacts that form the core of the law reflect the prevailing water use values at the time of their negotiation: irrigation and municipal and industrial use, as well as conservation storage to meet the demands for these uses in times of shortage.

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona The negotiators of the 1922 Colorado River Compact assumed that they were allocating an average annual flow at Lee's Ferry, Arizona, of 16 million acre-feet. Article III of the compact apportioned "in perpetuity" the "exclusive beneficial consumptive use" of 7.5 million acre-feet to each basin. The lower basin was given the additional right to the assumed one million acre-feet surplus. In anticipation of the assertion of claims by Mexico, the Mexican burden was divided equally between the two basins. The power of the lower basin was augmented by two provisions of Article III. The first provides that the upper basin states will not cause the flow at Lee's Ferry to be depleted by 75 million acre-feet for any consecutive 10-year period, the second provides that the upper basin states cannot withhold the delivery of water "which cannot reasonably be applied to domestic and agricultural use." A reciprocal duty on the lower basin not to demand deliveries on the same condition is meaningless, because the lower basin puts all its entitlement to domestic and agricultural use. The only mention of power is in Article IV, which subordinates the use of the river for navigation to ''domestic, agricultural and power purposes.'' The relationship between power generation and other uses of the river has been the subject of some speculation among commentators, but there has not yet been a conflict that tests the relationship. The upper basin's 10-year delivery obligation is absolute, thus, the upper basin states are precluded from objecting to the use of this water for power generation before it is consumed by the lower basin states. To establish the relationship between power generation and other river uses, there would have to be a prolonged drought making it impossible for the upper basin to meet its 10-year delivery obligations, and the lower basin states would have to demand the release of water for power generation. The late Dean Meyers suggested that if lower basin consumptive demands are met, Article III (e) prohibits the lower basin from demanding water solely for power generation, because the compact expresses a clear preference for domestic and agricultural uses over power generation (Meyers, 1966). Prolonged warming may create the Anasazi scenarios that river watchers fear. If downstream priority right holders—the several large irrigation districts along the Colorado River in Arizona and California—make a call that triggers the 10-year obligation, however it is defined, the Bureau would have to let water flow through the dam to serve these priority uses, regardless of power contracts. Similarly, the 10-year obligation may be a basis for the upper basin states to require that water not needed for immediate down-

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona stream priority uses be stored in Glen Canyon Dam as a reserve against their 75-million-per-decade delivery obligation (Getches, 1985). New Interests Management of the Colorado under drought conditions is further complicated by the recent efforts to accommodate new interests. The post-Colorado River Compact experience with the accommodation of new interests contains mixed lessons for global warming scenarios. Three major classes of uses were traditionally excluded by reclamation-era allocations: recreation, environmental quality preservation (including public health and fish and wildlife habitat enhancement), and Indian claims. Most of the major developments in water law have revolved around the incorporation of these values at the federal and state levels. In 1922, the full range of relevant interests was not represented in the negotiations. The two most obvious exclusions were Indian tribes and the government of Mexico. Both of these claimants have been accommodated by superimposing new rights onto the original mass allocation. Under the Supreme Court's Winters doctrine, Indian tribes have been given priority to large amounts of water.10 Federal reserved rights may also be claimed by federal land management agencies, and there is an argument that the Grand Canyon National Park enabling legislation allows the National Park Service to assert a federal reserved water right to protect the ecological integrity of the canyon. These rights are assumed by the state in which the reservation lies. Likewise, the government of Mexico obtained quality rights by treaty and quality rights by subsequent international agreements. The accommodation of newer resource values—the use of the river for habitat maintenance, recreation, and the stabilization of riparian corridors such as the Grand Canyon—has proved more difficult. These interests can be recognized through the creation of new rights, but their protection requires management of the river. The web of interconnected statutes, international agreements, and cases that make up the Law of the River is not designed to manage the river for the full range of resource values. All states have resisted management because of a fear that it will dilute their mass allocation consumptive use rights. This defect in the Law of the River is becoming more acute as new values assert themselves.

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona New values are incorporated in federal statutes passed after the 1922 compact and the Boulder Canyon Project Act, but these new statutes are not well integrated into the Law of the River. In the 1960s, Congress began to enact a number of national environmental statutes. The two most relevant for the Colorado River are the Clean Water Act and the Endangered Species Act. These statutes superimpose environmental protection mandates onto existing water allocation regimes without specifying the extent to which prior allocations are modified, but the few court cases involving these statutes suggest that existing allocations must be accommodated to accomplish the federal objectives. Indian water rights are protected under the Winters doctrine. Indians assert large claims to both surface and ground water. The issue with respect to Indian water rights is the range of purposes for which the water can be used. Western water users take the pastoral people analysis of Winters literally, arguing that these rights are restricted for agricultural use on reservations. The Indian tribes generally claim the right to the full range of modern beneficial water uses and the right to lease water off the reservation. Off-reservation use has been allowed on an ad hoc basis in recent Indian water rights settlements. Thus, Indian water rights can be added to the pool of water available to respond to global warming-induced demands. Recreational and environmental uses are at risk because they are junior in fact and in law. These uses are just beginning to get rights status under state law. Generally, under federal law they are protected as regulatory property rights. When they are recognized, they have a low de facto or de jure priority. Thus, they would probably be the first to be curtailed in a global warming management scenario. The recent incorporation of environmental values on the Colorado River illustrates their fragile legal status (Goldenman, 1990) and the challenges ahead for the Bureau of Reclamation to assure that global warming does not destroy the gains made as a result of the recognition of the value of protecting, to the maximum extent possible, natural environments. CONCLUSION Global warming may be the most serious environmental threat facing the West. If, as many believe, global warming is occurring, there is increased urgency to begin the necessary modification of our historic water allocation policies, which are premised on an

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona unlimited ability to outwit nature to accommodate all people attracted to the West. Federal and state western water managers are presented with a unique opportunity to begin the task of designing a set of water allocation institutions that will allow the modern West to continue as a viable region, even as aridity becomes an operational fact of daily life. NOTES 1.   Peterson v. United States Department of the Interior, 899 F.2d 799, U.S. Court of Appeals (1990). 2.   33 U.S.C. Section 383 (1986). 3.   Ickes v. Fox, 300 U.S. 82 (1937). 4.   Ivanhoe Irrigation Dist. v. McCracken, 257 U.S. 275 (1958) (acreage limitation); City of Fresno v. California, 372 U.S. 672 (1963) (federal preference for irrigation); and Arizona v. California, 373 U.S. 546 (1963) (federal allocation in times of shortage). 5.   438 U.S. 645 (1978). 6.   Nevada v. United States, 463 U.S. 110, 126 (1983). 7.   43 U.S.C. 383 (1986). 8.   Arizona v. California, 363 U.S. 546 (1963). 9.   This portion of the paper is drawn from Ingram, Tarlock, and Oggins, 1991. 10.   Winters v. United States, 107 U.S. 564 (1908). REFERENCES Driver, B. 1987. The effect of reclamation law on voluntary transfers of water. Rocky Mountain Mineral Law Institute 33(1):26-27. Firor, J. 1990a. The Changing Atmosphere: A Global Challenge. New Haven: Yale University Press.

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Managing Water Resources in the West Under Conditions of Climate Uncertainty: Proceedings of a Colloquium November 14–16, 1990 Scottsdale, Arizona Firor, J. 1990b. The heating of the climate. Colorado Journal of International Environmental Law and Policy 1:29. Freyfogle, E. 1986. Water justice. University of Illinois Law Review 1986:481-519. Getches, D. 1985. Competing demands for the Colorado River. University of Colorado Law Review 56:413. Goldenman, G. 1990. Adapting to climate change: a study of international rivers and their legal arrangements. Ecology Law Quarterly 17:741. Guruswamy, L. 1990. Global warming: integrating United States and international law. Arizona Law Review 32:221. Ingram, H., D. Tarlock, and C. Oggins. 1991. The law and politics of the operation of Glen Canyon Dam . In Colorado River Ecology and Dam Management. Washington, D.C.: National Academy Press. Meyers, C. 1966. The Colorado River. Stanford Law Review 17:1. National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, D.C.: National Academy Press. Oppenheimer, M., and R. Boyle. 1990. Dead Heat II. New York: Basic Books. Reisner, M., and S. Bates. 1989. Overtapped Oasis: Reform or Revolution for Western Water. Covelo, Calif.: Island Press. Stegner, W. 1986. The American West as Living Space. Ann Arbor: University of Michigan Press. U.S. Department of the Interior (DOI). 1966. Draft Environmental Impact Statement for the Newlands Project Proposal Operating Criteria and Procedures, May. Washington, D.C.: Department of the Interior. U.S. Environmental Protection Agency (EPA). 1988. The Potential Effects of Global Climate Change in the United States. Washington, D.C.: EPA Office of Policy, Planning and Evaluation. University of Colorado School of Law. 1990. The Water Transfer Process as a Management Option for Meeting Changing Demands. Boulder, Colo.: Natural Resources Law Center. Wahl, R. 1989. Markets for Federal Water: Subsidies, Property Rights and the Bureau of Reclamation. P. 130. Washington, D.C.: Resources for the Future.