Seven western states — Colorado, Wyoming, Utah, New Mexico, Arizona, Nevada, and California — and Mexico rely on water from the Colorado River for irrigation for 5.5 million acres and drinking water for 40 million people. Their shares are apportioned under a compact negotiated in 1922. We now know, thanks to tree-ring science, that its framers wildly overestimated how much water the river contained on a reliable basis. And climate change is making things worse.
Some recent commentators have argued for revamping the compact. The lawyer in me shudders to think of the utter chaos that would ensue as states, tribes that were left out of the original agreement, and Mexico try to unwind settled expectations and create new ones.
In my view, the agreement announced on May 22, 2023, strongly repudiates the need to revamp the compact. Seven states were able to finesse an agreement that will ultimately result in significant changes to the legal documents collectively known as the Law of the River, without the need to begin again. The next step — a broader, longer-lasting overhaul of the compact — will be even more challenging.
Overallocated And Shrinking
The Colorado River, the lifeblood of the U.S. Southwest, faced the prospect of going dry if its two largest reservoirs — Lakes Mead and Powell — hit dead pool, the level at which no water flows through their dams. Several forces led to this catastrophic prospect.
Second, a historic drought that commenced in 2000 has caused water levels in the reservoirs to plummet by 75%.
Third, climate change has reduced the flow in the river by more than 1 million acre-feet. (One acre-foot is the amount of water required to cover an acre of land to a depth of 1 foot — about 325,000 gallons.) Evaporation off the surface of the reservoirs annually claims in excess of an additional 1 million acre-feet.
In 2022, the U.S. Department of the Interior broke this stalemate with a plea and then a demand for the states to do more, faster, to protect the river. Then, in April 2023, the agency released a draft supplemental environmental impact study that offered two alternatives — one more favorable to California, the other to Arizona. The message to states was clear: If you can’t reach a consensus, we’ll act to protect the river. Intense negotiations followed, leading to the May 22 agreement.
The new cuts center on California, Nevada and Arizona because they draw their shares of the river mostly from Lake Powell and Lake Mead. The states have agreed to reduce their consumption of Colorado River water by 3 million acre-feet by 2026, which represents about 14% of their combined allocations.
This pact temporarily protects water supplies for cities, farmers and tribes. The U.S. Bureau of Reclamation immediately accepted the proposal and committed to pay for steps that are expected to conserve 2.3 million acre-feet of water with money from the Inflation Reduction Act. For example, the Gila River Indian Community will receive $50 million from the Lower Colorado River Basin System Conservation and Efficiency Program in each of the next three years for improvements such as new pipelines.
It’s now up to California, Nevada, and Arizona to divvy up the remaining 700,000 acre-feet of cuts. I expect that water reallocation, with water moving from lower-value to higher-value uses, will play a key role. Water marketing — negotiating voluntary sales or leases of water — is a tool to facilitate that transition.
Most of the water involved in the recent agreement will be freed up by one party paying another party to use less — for example, cities paying farmers to conserve water that the cities can then use. That’s the essence of water marketing. The agreement will provide funding to irrigation districts, tribes and water providers, who will then figure out how to generate the savings each organization has committed to deliver.
Does the latest Colorado River deal mean that we are finally ready to talk openly about all the water that goes towards alfalfa and meat production? It's looking that way. https://t.co/zHBLXa3hvt
The next steps are for the states to begin discussions about replacing guidelines that currently govern the sharing of Colorado River water, which expire in 2026. These discussions will be more painful because federal funding will expire and cuts will be more severe. Thus far, the Upper Basin states — Wyoming, Colorado, Utah, and New Mexico — have not had to endure significant water use cuts. My hope is that the states will seize this three-year window as an opportunity to develop procedures and identify funding for major water reallocations.
Many legal arguments that individual basin states could present to a court rest on interpretations of vague or ambiguous Law of the River documents. The river can’t wait for the legal process to adjudicate gnarly, complicated claims made trickier by a century of statutory and case law embellishments. As I see it, negotiation and concessions leading to consensus are the only viable solution going forward.