Remarks at the PLAN Boulder Dinner

Boulder, Colorado

Sunday, February 2, 2003

In a 1982 book entitled Progress and Privilege: America in the Age of Environmentalism, author William Tucker defined progress as simply, "The process whereby each generation tries to make life better for itself and for the next generation." He went on to observe that:

There is no doubt that we environmentalists can sometimes be scolds, but reading Tucker’s words 20 years after they were written, I wonder if his view hasn’t changed some, recognizing, for example, that his rather narrow perspective on growth and progress discounts some of the most important things we can protect to make life better for the next generation.

For at least the last three years, Colorado has been in the grip of a serious drought.

In the public debate that has emerged from this natural phenomenon, some elected officials and others have called for more large dams. I believe that a review of the hydrology of the state’s rivers, the existing water supply infrastructure, and the economic, financial, and environmental consequences of building large new structures suggests that there are more effective and efficient options.

The current drought, which began in 2000 and has continued to the present, has been the most severe on record by several measures.

Stream flows in Colorado in 2002 have generally been the lowest in over 100 years and the tree ring data suggest that they are probably the lowest in 300 to 500 years.

In terms of multiple year stream flow deficits, the current drought is worse than the historic droughts of the 1950s and 1970s. While this drought has not lasted as long as the drought of the 1930s, it is not yet over and it has been more severe than any three-year period of the 1930s.

I will talk about future water management in the context of the drought and to set the stage, I'd like to begin with an observation by Wallace Stegner (from his book Where the Bluebirds Sings to the Lemonade Springs: Living and Writing in the West):

The consequences of this aridity are also manifested in the relative scarcity of aquatic and riparian areas in the West -- a scarcity that magnifies their significance to a wide range of native species. On average these areas constitute only five percent of habitat, but perform (in conjunction with a naturally varying hydrology) a diverse set of ecosystem functions. Sixty-five percent of the region’s species depend on this narrow sliver. This fact, when combined with the tradition of treating water as commodity in the service of a narrowly defined set of economic objectives, has lead to very significant ecological losses. The importance of these losses far exceeds the area of physical habitat that has been inundated, desiccated, or otherwise transformed. Every western river corridor is now highly developed. Of the 25 largest dams in the United States, over 90 percent are in the West.

In response to its highly variable stream flows, reservoirs have been part of Colorado’s water development strategy since the late 1800s. Today, Colorado has more than 7.5 million acre-feet of reservoir storage. About 25% of this capacity directly supports municipal water uses and this fraction is steadily growing, mostly as cities acquire agricultural water rights with their associated storage. In addition, there is the natural storage provided by Colorado’s principal underground aquifers. The Denver Basin aquifers contain approximately 150 million acre-feet of recoverable groundwater and aquifers elsewhere within the South Platte, Arkansas and Rio Grande basins contain over 15 million acre-feet.

The purpose for building reservoirs has been to capture excess runoff, which usually occurs relatively infrequently and in large volumes. Consequently, traditional reservoirs are fairly large and located directly in a stream channel. Apart from their well-documented environmental impacts, such large on-stream reservoirs have other major limitations. First, they are relatively costly to build and cannot be built incrementally in response to gradually growing demands. Second, as a river basin becomes more developed, additional runoff-capture storage produces ever-diminishing returns in terms of water supply yield, because available runoff occurs less frequently and storage carry-over periods become longer. Third, evaporation losses compound the diminishing yield problem, becoming a major limiting factor in reservoirs’ ability to provide relief both over extended drought conditions and for severe droughts that occur every few decades or less often. Finally, given the diminishing returns for new storage projects that would be fully integrated into existing systems, storage-yield ratios for projects designed to store water for drought protection are approaching, if not exceeding, 5-to-1. This means that for 100,000 acre-feet of additional firm annual supply, the reservoir would have to store over 500,000 acre-feet and would cost well over one billion dollars.

Dams have been the answer to a commodity-based management of our hydrologic systems. Their effects have been compounded by the capricious overlay of political subdivisions on natural systems. River basins are cut into arbitrary shapes by state lines and, in some case, international borders. The water resources in these subdivisions are then managed to meet limited objectives dictated by the political boundaries with little attention given to the system as a whole. Other divisions that are politically convenient, but otherwise unsound, also lead to fragmented management. At almost every level of government in the West, the various components of water (i.e., its characteristics and functions) are the responsibility of a different executive agency.

As former Governor Roy Romer observed at a University of Denver Law School symposium in 1989:

In 1977, when President Jimmy Carter unveiled his water projects "Hit List" (proposed federal dams that he had targeted for deauthorization) the political fall-out left him personally stunned and forever despised in the West. Virtually every elected official west of the 100th meridian, including members of his own party, attacked him savagely for his failure to understand western water and the political realities of a semiarid region. In retrospect, I think we can see that Carter understood the realities better than his critics. His problem was timing. The politics and economics of western water have changed.

But the questions remain about whether the water management institutions in the West, institutions that have their roots in the era when subsidized dam construction was seen as a means of transferring and, in turn, generating wealth, can themselves adapt to the new realities. In Rivers of Empire: Water, Aridity and The Growth of The American West, historian Donald Worster suggests that this region, a "hydraulic society" and at one time a colony within a nation, has fought a long, fierce battle to "get out from under" by expanding its resource base through dam construction, but instead of rising above colonial dependency, has been ensnared in its own "hydraulic trap" creating a rigidity that could lead to stagnation.

This inflexibility is to a large extent institutional, as Romer observed a decade ago. Escaping or avoiding the "hydraulic trap" will require the recognition of changing public attitudes, the economic realties of the late 20th century, and the fundamental importance of the role of riparian systems in the West.

But if new large dams are a trap, then where is the water? Colorado’s water economy has passed from its "expansionary phase" into what might be called its "mature phase," in which: 1) water users are linked by elaborate physical systems and are increasingly interdependent economically; 2) new supply options are limited; 3) costs of new supply are rapidly escalating; and 4) federal subsidies have evaporated. Moreover, people now value free flowing streams for their recreational and environmental worth. Applying a widely accepted rule based on the principle that an efficient and fair public policy decision is one that makes no entity worse off for the betterment of another, present day water supply expansion decisions based on large storage projects are almost always wasteful, inefficient, and unfair.

Colorado has a surprising abundance of water for a great variety of purposes, despite relatively low and unevenly distributed rainfall and a perception of water scarcity. This abundance is often obscured, however, by the inefficient way in which water is used. Many, if not most, water management utilities are making significant strides toward improving both their efficiency and system reliability. Nonetheless, while individual users, whether in cities or in rural areas, may be efficient from their point of view, at higher levels, like watersheds, the potential for improved efficiencies still exists.

Viewing water as scarce often propels people to embrace strong opinions on what they see as a clear relationship between water availability and regional economic growth. Most accept the paradigm of the garden – more water means more growth. Government institutions, political leaders, agricultural and business interests, and ordinary citizens all seem to believe deeply in this concept. Investments in water supply systems, whether for irrigation or municipal and industrial purposes, are justified on the basis of their positive impact on economic growth. Even those who challenge the benefits of growth usually do so while conceding that the water-growth relationship is immutable.

To be sure, in an urban setting water serves a utilitarian purpose and in agriculture it is essential. In cities it goes hand-in-hand with other services and amenities citizens expect; in rural areas it is used in abundance for irrigation. Few would contest the assertion that the availability of natural resources has a role in facilitating regional economic growth.

However, empirical data lead to a surprising, but irrefutable conclusion: investments in water supply systems do not have a noticeable impact on a region's growth. These counter-intuitive results suggest that the process of planning and financing water resources development, particularly in cases where a major share of the project funding must be generated locally, must be rethought. If water is of limited or insignificant value in stimulating growth, public expenditures for the expansion of water supply infrastructure must be very carefully reviewed, particularly given the ever increasing competition for capital funds and the growing public concern for environmental conservation and protection.

A paradox arises in dealing with the value of water. Political and public rhetoric asserts its enormous economic importance. This conventional view, however, contrasts with the reality that the resource exhibits a relatively low economic value. For example, resources devoted to water development, conservation or management for agricultural irrigation can justify a cost of only $25.00 to $75.00 per acre-foot (approximately $.08 to $.24 per 1,000 gallons). Compared with other liquids important in modern economies, the value of water is trivial. Gasoline retails in the U.S. at about $456,000 per acre-foot ($14,000.00 per 1,000 gallons), implying users are willing to pay 17,000 times more per unit volume than they will for irrigation water. In the municipal sector, although the value of raw water is greater ($.80 to $2.40 per 1,000 gallons), it seldom compares with the rhetoric surrounding it. What is more, the distribution of water use is exactly the reverse of its value; 80 percent to 90 percent of water diverted from natural systems goes to agriculture, the low value use.

Before considering new storage options, I believe that we should:

• Invest in conservation;
• Foster cooperation between the two largest user groups – cities and farmers through the creation of drought insurance, drought leasing or drought option agreements;
• Restore and enlarge existing storage facilities; and
• Use system linkages to distribute existing supplies more efficiently.

Further, I believe that future water supply management and development efforts should adhere to five basic principles of what might be characterize as "smart storage":

• Make full and efficient use of existing water supplies and usable return flows;
• Expand water supplies incrementally to utilize existing diversion and storage capacities better;
• Recognizing that market forces now drive water reallocation from agricultural to municipal uses, structure such transfers, where possible, to maintain agriculture, but in all cases, mitigate the adverse impacts to rural communities from these transfers;
• Involve affected publics and fully address the inevitable environmental and socioeconomic impacts of increasing water supplies; and
• Recognize the fundamental political and economic inequities and the adverse environmental consequences of new transbasin diversions and emphasize the most efficient utilization of existing supplies to avoid new transbasin projects.

Also important to remember is the complex relationship of man to water, or as the late economist Kenneth Boulding put it in his Water poem…

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