07 January 2015

What are they smoking in Colorado?

I was looking at the wikipedia article on the 1922 Colorado River Compact (CRC) to allocate 7.5 MAF of water to both the upper and lower basin states, or 15 MAF in total. (Mexico's "take" of 1.5 MAF was added in 1943.) Then I saw that the 2007 Interim Guidelines for allocations under water shortage conditions will reduce flows to lower basin states down to 7.167 MAF ("light shortage") or 7 MAF ("heavy shortage"). What blows my mind is that these sums, assuming upper basin and Mexican rights are left intact only reduces withdrawals -- under "heavy shortage" -- to 16 MAF in total. This doesn't make sense to me, given the Colorado's long term average total flow of around 14 MAF.

Current agreements, in other words, continue to assume there's more water there than exists! That's a recipe for conflict or disappointment, some time in the future.

Bottom Line: John McCain was right. The CRC needs to be renegotiated into percentage shares (to allow for annual variations) to prevent accounting dilemmas. THEN, the CRC needs to be amended to allow water trading among states on -- better -- among holders of appropriative rights to make sure that the scarce and totally depleted waters of this river are put to highest and best use.

8 comments:

  1. David, perhaps your argument for what should be renegotiated here pertains to a redistributive matter, rather than matter of efficiency or not? A division between upper and lower basin's was made. I believe the 1922 agreement was that the lower basin would receive, at a specifically selected gauging site, 75 million AF during each ten-year stretch (quite different than 7.5 every year). [I don't know when the latter interpretation arose.] Yes, there are interesting consequences, such as the differing values of storage to lower and upper basins, but if property right assignments are forever debatable (as you and a great many others are doing here), then decision makers try to change their endowments rather than focusing on managing within their means. Yes, the original Colorado compacts were predicated on wrongful assumptions about the size of the pie, but the apportionments of both water supply and supply risk were addressed completely, just in a different way than you'd prefer. Maybe what is really needed here is stronger federal rulings against state barriers to interstate water marketing, rather than unending contention about the moving target of correct entitlements. What would Ron Coase say?

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    1. @RG -- Yes, you're right on the 75MAF/10 years, but I'm not sure of how "apportionments of both water supply and supply risk were addressed completely" when there is not enough water to give both sides 75MAF over 10 years. Correct me if I'm wrong, but is there some way of sharing the shortfall, i.e., 10 off each UB and LB if the average is 62.5 MAF? And even if there is, does it only trigger after 10 years of waiting to see if the average is unmet?
      I agree, of course, on more water trading. The issue -- that Coase might point out -- is who gets to be a seller and who's a buyer if there's not enough water to "meet obligations"?

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    2. "addressed completely" because the plain requirement was that the Upper Basin (UB) deliver 75m at the Lee's Ferry point. I don't believe that anything was codified about the UB being guarenteed 75m too. My interpretation of the 1922 terms was that the Lower Basin got the water security they wanted (in light of intended reservoirs) and the UB understood the ramifications. So, if there's only 100m, then UB gets only 25m. Otoh, if there's a really bad single year, then the Lower Basin might get nothing that year. When I first read that long ago, I thought it was intriquing but smart. The LB got long-term security and water, and the UB got the ability to work around bad years. Makes sense given the downstream reservoir-building opportunities.

      I don't recall how accounting was planned. Why not a running decadal total that must always be at least 75m?

      Regardless of the accounting method, if the UB fails to deliver, then its off to the US court system just like the many other interstate water compacts, yes?

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  2. David, Ron - I wrote a really great response to this, then lost it as a result of some sort of user-clicking-wrong error. Trust me, it was way more thoughtful than this, so just imagine me being really bright and insightful as I try to muddle through this a second time.

    Ron, the Compact has the 10 year, 75 maf running average language built in, though with Glen Canyon Dam to regulate deliveries it's less important now, but it also has the guarantee of 7.5maf to the Upper Basin.

    The really interesting bit here is Ron's Coase comment. In fact, the Compact tried to be Coasian, but was written poorly. Article III(a) guarantees both the Upper and Lower Basins "the exclusive beneficial consumptive use of 7,500,000 acre-feet of water per annum", but it also includes the must-deliver-at-Lee-Ferry 7.5maf requirement. So there's a lack of clarity if the total available isn't enough to meet both criteria. The property right assignment was done poorly. In answer to Ron's "off to the US court system", I've been interviewing water managers across the basin for my book, and the widespread view is that no one wants to head off to court because of the uncertainty of the outcome and the significant downside risk to both basins of losing the fight. Their forefathers learned that lesson 50 years ago with the Arizona v. California fight, and they do not want to repeat it.

    I'd agree with David that a simply shift to percentages is one reasonable solution, but it's not the only one. Doug Kenney's suggested another that's freezes Upper Basin use at current levels (well below 7.5maf) in return for a Lower Basin guarantee not to make a compact call if deliveries at Lee Ferry drop below 7.5maf. And there's a lot of discussion now about building the sort of trading mechanisms David loves, including the ability to move water across state boundaries.

    What's more interesting to me is not the specifics of any a priori solution that David or Ron or I might propose, but the process by which the parties around the basin come up with a solution. It really requires building new basin-scale governance mechanisms, and it's gonna be fun to see what they come up with. Or, speaking as a person drinking Colorado River water as I write this, not fun if they screw it up.

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    1. @John -- Great comment. Thanks for the insights. I agree that both sides fear risk of loss in courts, which *should* encourage them to reform the mechanism, except that they see that as a risk as well. It seems to me that either (1) Interior will force reform (e.g., new governance mechanism) in the same way as Fed Australia did or (2) a crisis will expose a hole that will be litigated, probably with poor results.

      I'd prefer (3) percentages (as of use now or rights), and trading, since that's the best you can hope for with variable flows and changing uses...

      ps/sorry about lost comments. I get that once per week at least, on the internets :(

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  3. David - I spent some time last year with a visiting Australian guy doing a compare-and-contrast analysis of the Colorado Basin. He kept pressing me on this remarkably simple question along the lines of your "1" - why doesn't the U.S. federal government just step in and impose reform measures? I had a hard time answering beyond a vague sputtering "But we don't do it that way here", and I've been thinking a lot about it ever since.

    In the 2007 Shortage Sharing Agreement (which I actually think was a really important step forward as process, despite its modest achievements in terms of actual acre feet), the feds essentially threatened to impose solutions unless the parties negotiated a mutually agreeable solution of their own.

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    1. Yes... I think there's some invisible line on state's rights that Interior is unwilling to cross (although it's been obliterated in so many other instances). I'm not a legal eagle, but there are state disputers (CA-AZ, FL-GA-AB and TN-GA) that have gone to federal courts. Then there's the debate over "waters of the US" that now extends to seasonal waters... Maybe ask Gabriel Eckstein?

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    2. The short of it – the federal government could step in but only if Congress authorized it to do so. Essentially, waters that cross a state line are subject to the Commerce Clause of the US Constitution. That clause allows the US Congress to regulate anything (including navigation, water management, commerce, etc.) that could or does cross state lines. However, while Congress has taken the lead in water quality issues (did so in late 1960s and early 1970s with CWA, SDWA, etc. after decades of failed state initiatives), it has been quite reluctant to step into the realm of water quantity. IMHO, there are two reasons for this hesitancy: 1) fear of rebellion by the states reacting to what they perceive as federal government overreach; and 2) our species’ (and Congress’) inclination toward reactionism rather than proactive problem solving. Consider the fact that we still today have no national water policy in the US, even though its been attempted some half-dozen times.

      As a result, water quantity has long been left to the domestic laws of each state. Even interstate water management is more often pursued through interstate agreements (called compacts) rather than Congressional leadership. These compacts are negotiated by the relevant states and only thereafter, reviewed and approved (rubber stamped?) by Congress (the Compact Clause of the US Constitution requires Congressional consent for all such interstate agreements).

      Note a third challenge: Congress is composed of numerous Easterners who couldn’t care less about Colorado River water management, as well as Westerners who seem merely amused by the ongoing battle between George, Alabama, and Florida over the ATC/AFC basins dispute. It’s a big country. In fact, in our nearly 240 year history, Congress has stepped into an interstate dispute only twice – the 1928 Boulder Canyon Project Act, and 1990 Pyramid Lake/Truckee-Carson Water Rights Settlement Act (some contend that the 1902 Rio Grande Project Act may be a third example).

      Could the US Dept. of Interior step into the Colorado River fray? Not without Congressional authorization. Does Congress have the authority? Yes. Does it have the courage to do so? Ummmmmm …

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