Colorado River Basin: Proposed Cuts and Legal Dynamics

Colorado River Basin: Proposed Cuts and Legal Dynamics

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The Colorado River Basin and its flows sustain approximately 40 million people. Last summer, the U.S. Department of Interior (DoI) declared a drought emergency, and instructed the surrounding states to create a plan to reduce consumption. Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming were left to figure out the details on sharing and conserving the basin’s water. Having failed to reach a consensus, last Tuesday DoI released a draft environmental impact statement outlining two alternatives for apportioning two to four million acre-feet (AF) of required cuts. These proposals, one assigning cuts based on the prior appropriation doctrine and the other assigning shortage percentages equally, apply to lower basin states and have complex consequences. Regardless of the outcome, DoI’s final decision later this summer will usher in the latest chapter in a long and turbulent history of western water law. Understanding the legal dynamics at play help convey the complexity of these longstanding water challenges.

‘The Basin States’ & The Colorado River Compact of 1922

The ‘Law of the River,’ as it is colloquially known by water policy experts in the West, comprises an immense body of law that shapes the use and stewardship of Colorado River water. At its foundation, the Colorado River Compact of 1922 apportions water between the ‘Upper Basin’ states—Colorado, New Mexico, Utah, and Wyoming—and the ‘Lower Basin’—Arizona, California, and Nevada. The terms of the compact require the Upper Basin to release 7.5 million acre-feet (MAF) of water from Lake Powell yearly for “beneficial consumptive use” in the Lower Basin. Although relatively straightforward on paper, years of economic development, increased demand, and climatic changes have strained this language to new heights and pushed the Compact parties toward the brink of legal conflict.

The complexities don’t end there. The founding hydrological data that informed the Compact’s terms was gathered in an exceptionally “wet” year. At the outset, then, the Upper Basin was bound to deliver 7.5 MAF of water yearly based on inaccurate projected rates of replenishment. And while the Upper Basin splits its share amongst the states using a ‘percentage of streamflow’ calculation, accounting for drought conditions and adjusting its division proportionately, the Lower Basin apportionment method relies on a flat-MAF division scheme that fails to adjust for dry periods. What’s worse, the Compact is silent on whose entitlement, if anyone’s, is to bear the burden of evapotranspiration losses as water travels to its end users. These issues of interpretation breed increasing tension as climate change continues to threaten the longevity of the river system.

The Upper Basin & The Upper Colorado River Commission

As previously mentioned, the Upper Basin is required, rain or shine, to deliver 7.5 MAF each year to the Lower Basin states at Lee’s Ferry, where the Colorado passes through Glen Canyon Dam and into Lower Basin jurisdiction. This mandate drove the Upper Basin to chase the same rapid economic development occurring in California and the other Lower Basin states, lest they lose out on this precious resource for their own benefit. Following ratification of the original Compact, concern in the Upper Basin quickly mounted that unclaimed water to the north would instead be consumed by the booming agricultural industries sprouting up in California’s Imperial Valley and other fertile regions throughout the Lower Basin. Thus, the Upper Colorado River Basin Compact of 1948 established the Upper Colorado River Commission (UCRC), an interstate agency assembled to ensure the equitable allocation of water among Wyoming, Colorado, Utah, and New Mexico. Upper Basin entitlements are divvied according to streamflow percentages, ensuring that all states bear shortage burdens proportionately.

Today’s climate realities are tempering the Upper Basin’s zest for development. During this period of prolonged drought, UCRC efforts have focused on incentivizing cutbacks in use through programs like the System Conservation Pilot Program. Revitalized from a smaller scale pilot in 2015, this program would allocate $125 million of federal funds from the Inflation Reduction Act to Upper Basin water users on a per-acre-foot basis. Although, old animosities still lie at the margins; water officials in the Upper Colorado today similarly object to the original Compact inequities that drive Lower Basin growth on the Upper Basin’s conservation efforts.

The Lower Basin & DoI

DoI exercises immense authority to apportion water among Lower Basin states. In 1928, the Boulder Canyon Project Act authorized the Interior Secretary to construct Hoover Dam and related public infrastructure on the Colorado River. The Act also vested the Secretary with the sole authority to apportion water and impose necessary shortages through contracts with Arizona, Nevada, and California. In 1963, the Supreme Court in the landmark decision Arizona v. California affirmed this broad construction of secretarial authority; among a myriad of other procedural and technical issues, the Court affirmed the Secretary’s role as “water master.”

But importantly, California retained extensive insulation from such shortages through subsequent political maneuvers. In exchange for supporting the passage of the Colorado River Basin Project Act of 1968 (CRBPA), California secured receipt of its full 4.4 MAF share of Colorado River water, regardless of shortage, before Arizona receives even a drop. Among other projects, the CRPBA also authorized construction of Arizona’s Central Arizona Project (CAP), a 336-mile canal system that delivers Arizona’s Colorado River entitlement to central and southern Arizona water users. Although California’s support for CAP construction was pivotal to Central Arizona’s future growth, Arizona and Nevada now lack the requisite leverage in the Lower Basin to curtail California’s hegemonic water use. Just last month, California refused to join the six other basin states in a joint proposal that would voluntarily reduce over 2 million acre-feet.

Additional Federal Interests

The CRBPA also tasks the Secretary with preparing long-range operating criterion for the Colorado River reservoir system. Specifically, the Secretary must manage Lake Powell and Lake Mead, the respective water storage vessels for each subbasin, by roughly balancing the water levels in each. This obligation exists not only to foster certainty in state water portfolios from year to year, but also to protect federal interests in extensive, federally-funded infrastructure and delicate fish and wildlife ecosystems within the river system.

As reservoir levels tumble to record lows, the risk of “deadpool” looms, a scenario in which there is no longer sufficient water to turn the massive turbines that generate hydropower for sale throughout the region. The Western Area Power Administration (WAPA), the federal agency marketing electricity produced at Glen Canyon and Hoover Dams, has been forced to turn to the wholesale power market to offset its customers’ losses as a result of hydropower shortfall. Due to heightened costs of power on the open market, this move has upset the federal checkbooks that have long used power revenues to repay construction costs, conduct annual dam maintenance, and fund environmental programs protecting endangered fish.

Protecting these federal interests has placed additional strain on state relations as well. The Secretary’s duty under the CRBPA to balance storage levels in both reservoirs has consistently allowed the Lower Basin to rely on additional capacities not available to the Upper Basin states. The outcome is a system of allocation that is no longer equitable in times of drought and climate change, as Lake Powell, the Upper Basin storage reservoir, is continually depleted to honor both the Lower Basin’s apportionment by Compact as well as Interior’s own interests.

Indian Water Rights & Future Settlements

Yet another formidable coalition laying claim to the Colorado are indigenous tribes. There are twenty-nine recognized Indian tribes within the Colorado River Basin, many of whom were appropriating water much earlier than even the basin states themselves. Because western water law follows the ‘prior appropriation’ doctrine, a regime recognizing the first water user as enjoying priority over later claimants, senior tribal water rights are among some of the most valuable in the West. Some experts estimate the full resolution of all tribal water rights could comprise one-quarter of the Colorado’s historic flow, once fully resolved. Quantifying tribal water rights will prove crucial to future certainty in state water portfolios, whose existing infrastructure can be utilized for delivery to tribal reservations. At times, states are also at risk of water reallocation from their own apportionments to address tribal needs.

The Supreme Court first recognized implied tribal water rights in Winters v. United States, holding that Congress, in establishing each Indian reservation, also reserved sufficient water for the tribes to establish a “permanent homeland.” Many tribes lack the delivery and treatment infrastructure necessary develop this right, however. Securing funding necessary for realizing these rights often occurs through complex negotiations with the Interior Secretary and state entities, resulting in a tribal water rights settlement.

The Biden Administration recently disbursed $580 million to fifteen tribes to successfully settle their claims, a move bringing increased certainty to western water law, but also additional pressure. On the one hand, understanding who has rights to Colorado River water gives negotiators increased flexibility as to where to find it; the Gila River Indian Community in Arizona, for example, has recently agreed to help prop up levels in Lake Mead by conserving up to 750,000 acre-feet over the next three years in exchange for federal government payouts.

But some settlement negotiations haven’t proven so successful. The Supreme Court is set to hear oral arguments this term in Navajo Nation v. Department of the Interior, a case in which the Navajos allege the federal government breached their trust responsibility to adequately safeguard their tribal water rights. However the outcome, the alarming reality is that an already over-apportioned river among the states is stretching to incorporate additional parties with large quantifications. The good news is that the tribes are receiving what is theirs by right, at long last; the bad news is that these water rights may come too little, too late.

The U.S.-Mexico Treaty of 1944 & the IWCC

The potential dimensions of a Colorado River conflict range from the domestic to the international. The Colorado River stops short of the Gulf of California, sprawling into the Colorado River Delta after flowing between the Mexican states of Baja California and Sonora. Because Mexico was not a party to the original Compact, their right to Colorado River water wasn’t legally recognized until the U.S.-Mexico Treaty of 1944. The International Boundary and Water Commission facilitates the parties’ compliance with and negotiations under the Treaty, which generally requires the U.S. to provide 1.5 million acre-feet of water each year, subject to modifications in times of surplus and shortage.

Relations have remained diplomatic through subsequent amendments to the Treaty’s provisions. In September 2017, Minute 319 provided that the U.S. contribute $31.5 million for conservation projects and environmental restoration within Mexico. Pursuant to an earlier Treaty amendment, Mexico was also reauthorized to the use of Lake Mead for water storage in times of surplus, a critical tool in propping up levels in Lake Mead.

April 2023 Supplemental Environmental Impact Statement

Last week, DoI issued a draft Supplemental Environmental Impact Statement (SEIS) to modify near-term operational guidelines for Glen Canyon and Hoover Dam. Following a 45-day comment period, a final action plan is expected later this summer.

The SEIS proposes three ‘action alternatives’ for the Secretary’s consideration: a ‘No Action’ Alternative, an unlikely outcome which would retain current shortage guidelines, Alternative 1, and Alternative 2. Alternative 1, in apportioning shortage based on prior appropriation, defers to California’s dominance as the longstanding water hegemon; Alternative 2, in apportioning shortage based on an equitable percentage across all Lower Basin users, departs from the priority system to alleviate the burden of shortage that would primarily fall on Arizona and Nevada under Alternative 1. As we all await DoI’s final decision, these early indications should encourage heightened collaboration among the Basin states to secure a mutually favorable outcome without federal involvement.

If left up to the Secretary’s discretion and the states bring suit, a decades-long legal battle over the SEIS posits an unacceptable timeline in our increasingly arid river basin. Delaying necessary operative guidelines will infuse even greater uncertainty into the states’ respective water management portfolios. Furthermore, any interstate dispute over the SEIS before the Supreme Court would leave the fate of the river—and the interpretation of the original Compact’s ambiguities—in the hands of nine justices likely less-versed in western water issues.

Despite temporarily optimistic indications of good winter snowpack, such signs are a proverbial ‘drop in the bucket’ without state-level consumption reductions, conservation initiatives, and demand management strategies. As the western states continue building the ‘Law of the River’ through incessant negotiation and compromise, buy-in from all parties is as valuable an initial currency as any. Like water itself, it is imperative that Colorado River stakeholders are similarly fluid and responsive to protect the river system for present and future generations.


 

Climate Security in Focus is a blog series dedicated to exploring key elements of climate security that impact American interests both at home and abroad. The series aims to examine specific aspects of climate security issues in order to better understand climate policy challenges, facilitate conversation, and generate ideas.