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Saving Water for Rivers

What American Western Water Managers Can Learn from Australia Geneva Faulkner LDAR 6686: Water in the West Professor Ann Komara 13 May 2013


Saving Water for Rivers: What American Western Water Managers Can Learn from Australia Geneva Faulkner Colorado River water is highly sought after, legally contested, polluted, regulated,

dammed, diverted for irrigation of the vast Californian Imperial Valley, and used to fuel the rapid expansion of sunbaked Southwestern cities. The 7.5 million acre feet appropriations

delegated to the Upper Basin and Lower Basin states in the 1922 Colorado Compact are no longer sufficient to meet increasing water demand in the west. 1

The property rights-based prior appropriation doctrine of allocating water in the

American West is an inappropriate and inflexible procedure of water allocation for

addressing current and looming water shortages in the West. How can western water

managers implement systematic changes in the Colorado River Basin that will prioritize the human and environmental right to water? Australia’s water permitting system and

innovative water management strategies provide a fascinating context in which to study western water rights. The Murray Darling River Basin in southeastern Australia has

experienced many of the same ecological problems in the Colorado River Basin. 2 The

Australian government’s response to the water crisis will provide a legislative and

programmatic framework for discussing water reform in the Colorado River Basin.

1 2

(Colorado River Compact, 1922) (Australian Government: Commonwealth Environmental Water Office)

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Stretching from the lush Rocky

Mountain headwaters to the parched delta at the Sea of Cortez, the Colorado River spans 1,450 miles and its basin covers 246,000 square miles of land. It irrigates about 2

million square miles of agriculture land and provides drinking water for 40 million

Americans, about 12% of the entire US

population. 3 The Colorado River historically

had highly variable flows. In its natural state it Source: National Parks Conservation Association

returned about 15.7 maf into the Gulf, which

averages to about 21,700 cubic feet per second. At its peak, the river exceeded 100,000

cubic feet per second (cfs) during spring and summer high flow events and dropped to less than 2,500 cfs during low flow months. In its dammed state, however, flows rarely exceed 35,000 cfs and rarely drop below 4,000 cfs. 4

The lack of variability of in-stream flows has compounded several mounting

ecological concerns in the Basin. The dry Colorado Delta, low water levels, sedimentation,

salinity, threatened and endangered species, and climate change have all contributed to the ecological destruction of the Basin.

The Colorado Delta used to be a true biological oasis featuring brackish, freshwater,

and saltwater wetland systems that housed thousands of species. 5 The delta is now dry, 3

(Baltz) (Kammerer) 5 (Sonoran Institute) 4

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and species that used to thrive in the wetlands have also vanished. Low water levels in Lake Powell and Lake Mead are threatening hydroelectric capacity and drinking water

supplies for the cities that most depend on Colorado River water. The Scripps Institute of Oceanography predicts that there is a 50% chance that hydroelectric will be functionally impossible at Lake Mead by 2017 and Lake Mead will be dry by 2021 if current use and climate trends continue unchecked. 6

Of the water that still makes its way through the Colorado River system, salinity and

sedimentation are becoming increasingly problematic. Manmade sources of salinity include leaching of coal materials, oil and gas production, consumptive use of high quality water, as well as municipal and industrial use of water. 7 Salts are becoming more concentrated in

the water as water levels continue to decrease. Also, due to the damming of the Colorado,

sediment can no longer be evenly distributed throughout the Basin. “The Colorado delivers

enough sediment to Lake Powell to fill 1,400 ship cargo containers each day. The dam traps it all, leaving the water below clear as air and starving plant and animal species in Grand

Canyon of the sediment they need for habitat and spawning.” 8 Increasing temperatures due to climate change will not be kind to the Basin. Snowmelt accounts for 75% of the

Colorado’s flow, which totals about 15 maf. A two degree Celsius temperature raise with no precipitation decrease could result in runoff decrease by 4-12%. The more likely scenario

is a 1-6% decrease in precipitation rates coupled with a 2 degree Celsius temperature raise.

6

(Mission 2012 Clean Water) (Mission 2012 Clean Water) 8 (Powell) 7

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If this scenario were to occur, the reduced snowfall and rain could reduce in-stream flows by 4-18% over the next 50 years. 9

Several of the environmental problems plaguing the Colorado River stem from one

important fact: the Colorado River is overallocated. Its management is based on the Law of the River, a complex set of laws, treaties, and court cases that govern the use of the river. 10

The Colorado River has been overallocated from the outset, as the annual flow of the river was overestimated at the time the Colorado River Compact was written. 11 Parts of

Colorado, Wyoming, Utah, New Mexico, and Arizona comprise the Upper Basin states above

Lee’s Ferry, Utah while the Lower Basin states are California, Nevada, and Arizona below Lee’s Ferry. The Upper Basin and Lower Basin were each allocated 7.5 maf per year with

1.5 maf remaining for Mexico. 12 These fixed allocations have remained in place to this day

and cannot be easily adapted to account for variability of in-stream flows during drought conditions, despite coordinated efforts between the Bureau of Reclamation and the Department of the Interior to develop interim guidelines for Lower Basin water shortages. 13

The perennial question of who gets water first in the west is decided by prior

allocation water law. The prior appropriation doctrine governing the river is based in old California and Colorado mining rights dating to the mid-nineteenth century. 14

In a rugged mining environment where staking claims were important to ensure

rights to mine, the “first in time, first in right” method of establishing rights was completely 9

(Mission 2012 Clean Water) (U.S. Bureau of Reclamation) 11 (Walkoviak) 12 (Colorado River Compact, 1922) 10

13 14

(Department of the Interior: Bureau of Reclamation)

(Tarlock, The Future of Prior Appropriation in the New West)

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reasonable. Prior allocation rights reward pioneering spirits and speak to principles of

justice. The central tenet of the prior allocation system for water rights is changing a public resource, water, into a private resource in perpetuity.

Prior allocation rights are quite simply private property rights, of which Americans

have historically been quite fond. “ [Prior appropriation] create[d] private rights in a

historic public resource, running water . . . by imposing minimal sharing rules through the beneficial use doctrine, providing at least the illusion of a clear allocation rule in times of shortage.� 15 The Doctrines of Beneficial Use, Abandonment, and Forfeiture are key elements of prior appropriation law. Through the Doctrines of Forfeiture and

Abandonment water rights can be stripped if the user is not putting the water to beneficial

use. 16 The prior appropriation doctrine has held strong throughout myriad court cases and

a handful of treaties, agreements, and acts over the last ninety years since the Colorado

Compact was adopted. This means that the prior appropriation doctrine has not significantly evolved to meet increased demand placed on the Colorado River Basin.

The Murray-Darling River Basin

reaches north into Queensland and

covers covering most of New South

15 16

Source: Sustainable Soils and Farms

Wales as well as parts of Victoria and

(Tarlock, The Future of Prior Appropriation in the New West) (Schempp)

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South Australia. Its principal rivers, the Murray and Darling, converge just north of the

border of Victoria and end their journey at the Southern Ocean. The rivers measure 2,097

combined miles in length with a basin that covers 409,835 square miles of arid Australian bush.

Unlike the Colorado System that drops over 10,000 feet over the course of its

journey, the Murray-Darling River Basin is characterized by a relatively shallow gradient.

Most of the Basin is below 650 feet and has extremely limited runoff and wildly varying instream flows. Around two million people reside in the Murray-Darling River Basin—about 9% of Australia’s population— and it contributes about A$22 billion gross domestic

product. 17 Though larger in basin size and length, the Murray-Darling River Basin shares enough climactic and ecological similarities with the Colorado River to ensure an interesting comparison in management practices.

Like the United States and other countries featuring river systems in arid regions,

Australia has battled extreme drought, overallocation of water, political struggles, lack of public awareness of water as a finite resource, and the complex web of problems that

accompany the management of a river system in an arid climate. 18 Unlike the United States

in particular, Australia has completely reworked the legal framework of water allocation

and now boasts what some consider the most sophisticated water allocation scheme in the world. 19

To appreciate Australia’s dramatic water law changes in recent years it is first

important to understand the riparian water law system on which Australian water law was 17

(Haisman) (Australian Government: Commonwealth Environmental Water Office) 19 (Huang) 18

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founded. Riparian water rights are derived from common pool resource allocation and

English common law. They allow property owners adjacent to any given water body to make reasonable use of the water. The rights of one owner are not considered more

important than any other user, and in times of drought water rights are determined based

on landowners’ amount of frontage to the water source. At the core of riparian water rights is the principle that water is a publicly owned resource, a fundamentally different cultural view that of American settlers. 20 It did not take long, however, for Australians to realize

that riparian rights are more aptly suited to areas that receive significantly more rainfall and areas that have less variability in river flows. By the early twentieth century it was

clear that the riparian system wouldn’t suffice and a revision of water law was needed. 21 The Water Act of 1912 was the answer Australians needed to ensure water

availability. While the New South Wales Water Rights Act of 1896 predates the Water Act, the Water Act was the first piece of comprehensive legislation that replaced riparian law

with a statutory framework of administrative permitting system. 22 The Water Act of 1912 was amended several times throughout the years until 2000 when it was replaced by the Water Management Act. The Water Act’s administrative system vested the Crown—

effectively the NSW government—the “use, control, and flow” of surface and ground

water. 23 Instead of using prior appropriation tenets of senior and junior water rights

granted in perpetuity, the Australian administrative system was based on a hierarchy of needs in times of drought. Users were allowed to water livestock and use water for

20

(Haisman) (Harris) 22 (Commonwealth of Australia) 23 (Haisman) 21

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domestic purposes but any other extraction or diversion depended on the granting of a license that allowed users to divert water from a lake, river, or aquifer.

The most important feature of these licenses, especially when analyzing Australian

water law in conjunction with Western water law, is the fact that these licenses were

temporary, with a limited duration. Not only were time limits attached to permits, but

permits came attached to a variety of other limitations such as pollution caps and flow rates, as well as limits to the size of irrigated land. 24

Despite Australia’s improved administrative permitting system, intergovernmental

strife persisted in the Basin largely resulting from the decentralized governmental

structure. The River Murray Waters Agreement of 1914 was passed two years after the Water Act of 1912. The River Murray Waters Agreement required intergovernmental

agreement between all Basin states in all water-related decisions. The requirement led to

intense disagreement between Basin states as each state tended to pursue its own agenda. The Murray-Darling Basin Agreement was adopted in 1982 as an attempt to rectify

inter-state disagreements. Its opening paragraph states that the purpose of the Agreement

is for the Commonwealth, New South Wales, Victoria, and South Australia to “promote and co-ordinate effective planning and management for the equitable efficient and sustainable use of the water, land and environmental resources of the Murray-Darling Basin.� 25 The

updated plan signals a shift in governance toward a more coordinated, cooperative effort in water management which also coincides with severe droughts that struck Australia in the

24 25

(Haisman) (Commonwealth of Australia)

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1980s and 1990s that resulted in over A$12 billion in damages, mostly in the agriculture sector. 26

Drought and increasing awareness of climate change-related riparian issues led the

Australian government to reform water law. While Australia has maintained their signature administrative water rights permitting system, the Australian government has introduced new initiatives, legislation, and programs to augment the permit system.

The focus of this paper is on a few key pieces of legislation, initiatives, and programs

to conserve water. At the heart of Australian water reform since 2000 is its centralized

management in the form of the Murray Darling Basin Authority. The MDBA was created in

2007 and is the principal government agency responsible for managing the Murray-Darling Basin in an integrated and sustainable manner. 27

The Water Act of 2007 established the MDBA and set forth a water market

regulatory scheme and established a management system for water entitlements that can be used to protect wetlands and streams. 28 The National Water Initiative of 2004

emphasizes intergovernmental cooperation and aims to create a regulatory, market

scheme to manage surface and groundwater that takes into account economic, social, and environmental factors. 29

As established in the National Water Market Initiative, Australia’s water market

scheme allows users to sell water rights—referred to as “trading” water rights—in

accordance with the type of water right they own. Many of the water rights in Australia are 26

(Australian Government) (Australian Government: Murray Darling Basin Authority) 28 (Australian Government: Murray Darling Baisn Authority) 29 (Australian Government: National Water Commission) 27

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not connected to the physical land, which means that the rights can be easily traded. 30

Water trading exemplifies microeconomic reform by ensuring that water resources are more efficiently allocated.

Under the water trading scheme, water may be returned to the environment via the

Commonwealth Environmental Water Holder, David Papps, and the Commonwealth

Environmental Water Office. 31 Environmental water is a key component of Australian

water reform. Recognizing the necessity of maintaining ecological health, Commonwealth

environmental water is managed by the Commonwealth Environmental Water Office and a network of environmental water advisory groups, state governments, river operators, scientific organizations, and other partners. 32 Through the efforts of the CEWH and

partners, about 60% of Murray-Darling water remains in the rivers which helps reduce salinity and algal blooms as well as increase native fish and bird species and improve wetland health. 33

The Murray Darling Basin Authority provides centralized management of the Basin

and holds enforcement powers to ensure that water resources are protected. The Act also requires that the MDBA prepares a Basin Plan, an integrated and strategic method for achieving sustainable in-stream flows in the Basin. 34

Two main principles can be distilled from Australian water reform policies:

centralized management and environmental consideration. These are guiding principles

that should be adopted to usher in a new era of management in the Colorado River Basin. 30

(Australian Government: National Water Market) (Australian Government: Commonwealth Environmental Water Office) 32 (Australian Government: Commonwealth Environmental Water Office) 33 (Australian Government: Commonwealth Environmental Water Office) 34 (Australian Government: Murray Darling Basin Authority) 31

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The United States hasn’t faced drought as severe as the Australian droughts of the 1980s— 1990s. Yet. Climate models predict severe drought in the west and water shortages will be inevitable unless water can be returned to the Basin to help maintain in-stream flows. 35 The central question of this paper asks: how can western water managers

implement systematic changes in the Colorado River Basin that will prioritize the human

and environmental right to water? While it may be extraordinarily difficult to rewrite the

prior appropriation doctrine on which western water law is based, certain revisions could be introduced over the span of fifty to seventy-five years that would result in significant changes in water administration in the west.

Western water reform should begin with the creation of a regional, basin-wide

management agency in the Colorado River Basin. Differences in individual states’

management priorities lead to a competitive attitude where each state tries to maximize its

allocation. Australian water reform was hampered by competing states’ individual interests until the creation of the Murray Darling Basin Authority. The key to creating a successful basin authority, as Australia has done, is to ensure scientific and political objectivity as

much as possible. The basin agency would be responsible for unifying divergent users and interests as well as developing water policy.

Central to riparian ecological health is the necessity for water to be returned to

riverine systems. Three changes that western water managers could implement are a water trading scheme, revision of the doctrines of forfeiture and abandonment, and a revision of the definition of beneficial use to include environmental returns as a beneficial use.

35

(Mission 2012 Clean Water)

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First, a water trading scheme is essential to create a market for water rights. Luckily,

water rights are already unconnected to land in prior allocation law, which means an

economic incentive is needed to “downgrade” water rights by selling them to organizations that will keep the water in riparian systems. The Commonwealth of Australia is partnered with myriad organizations that return water to streams, including local organizations in specific catchments. 36

Implementing a water trading scheme would almost certainly prove difficult in the

Colorado River Basin, as it is governed by the 1922 Colorado River Compact. Arizona,

California, New Mexico, and Colorado already have state-specific water trading programs, but they do not extend to the Colorado River due to its interstate governance through the Colorado Compact. 37 Extending these rights to the Colorado River would be a legislative

challenge, but one that could open up the possibility of environmental organizations and agencies buying water rights to return water to riparian systems.

Also critical to encouraging the returning of water to the Colorado River is a revision

of the doctrines of forfeiture and abandonment and the definition of beneficial use. As prior allocation law is written, the doctrines of forfeiture and abandonment are included to ensure that water is put to beneficial use and isn’t hoarded for future use. In the early

twentieth century when overallocation wasn’t such a pressing problem, the doctrines of forfeiture and abandonment made sense.

Settling the land required water, and those who could use the water received

priority. Overallocation is an enormous problem in the 21st century, however, and

doctrines of forfeiture and abandonment are no longer necessary. Abandonment of a water 36 37

(Australian Government: Commonwealth Environmental Water Office) (Citron and Garrick)

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right generally requires intent to not use the water right. Forfeiture is different in that it can occur regardless of intent to use the right if the right is not used within a specific timeframe, generally 5 to 10 years depending on the state. 38

Because of the threat of losing a water right if the water is not used, the doctrine of

forfeiture especially is a disincentive to conserving water. Revising or completely removing the doctrines of forfeiture and abandonment could remove the water conservation

disincentive by allowing users to leave their allocations in stream during periods where it is not needed without risk of losing the water right altogether.

The best way to directly address the problems associated with forfeiture and

abandonment is through explicit exemptions. Quite simply, the rules of forfeiture and

abandonment would not apply to a user who has decided to turn his or her water rights over to a water bank or organization that returns water to the riparian system. 39

Revising the term “beneficial use� to include leaving water in stream for ecological

purposes would allow users to forego using their allocations or portions thereof during times when the full allocation isn’t needed. Revising the doctrines of forfeiture and

abandonment as well as a revision of the definition of beneficial use could be easier steps to implement than a water trading scheme or a permitting system.

A water permitting system, such as the license and permitting system adopted in

Australia, would be extraordinarily difficult to implement in the United States in a prior allocation framework. Australia had the good fortune and foresight to implement an

administrative permitting system as early as 1912, before overallocation became such a

monstrous problem. While a permitting system in the United States would help shift water

38 39

(Schempp) (Schempp)

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use to users who need it most and thus help eliminate the “use it or lose it” concept that

underpins prior allocation water law. It would also be extremely expensive to administer and track permits, which is something the United States government would have to be willing to fund.

Even without the adoption of a full-scale administrative permitting system, a water

trading scheme coupled with revisions of the doctrines of forfeiture, abandonment, and beneficial use could begin to improve water volume in the Colorado River Basin. The doctrine of prior appropriation, the basis of water law in the American west, is an inappropriate and inflexible method of water allocation in the west. Even though

historically the prior appropriation doctrine has worked to ensure fairness and use of water, this method is not sufficient to address looming water shortages in the west.

The future of the Colorado River Basin rests in attending to the ecological needs of

the Basin. Using elements of Australia’s model of water management could prove useful to Western water managers in revising elements of the prior appropriation doctrine that has defined western law.

The Colorado River Basin is suffering a multitude of ecological and hydrological

issues that can be traced back to one problem: there simply isn’t enough water in the Colorado River Basin. Establishing a basin-wide agency responsible for sustainable

management of the Colorado River Basin will be vital in implementing other water policy.

Similarly, introducing water trading and revision of key elements of the Colorado Compact can begin to address these problems. It will take a concerted effort on the part of multiple

agencies, water users, and the United States government to solve water shortage problems Geneva Faulkner

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in the Colorado Basin, but this effort is essential in ensuring that Colorado River water is available for human and ecological needs for decades.

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Geneva Faulkner Water Paper