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003lu6 communities, and subsequently was adopted by courts and legisla- tures. The appropriation doctrine operates on the principle of "first in time, first in right." In contrast with the riparian system of water allo- cation found in the relatively humid East, the appropriation doctrine involves no watershed or land-ownership limitations on the use of the water. As was established in the early Colorado case of Coffin v. Left Hand Ditch Co., 2 water can be removed from the stream and diverted from the watershed of origin for use elsewhere, even though none of that water returns to the original stream system. Out-of-watershed transfers are thus recognized as proper, so long as the water is put to a beneficial use. Future uses are not protected-application to a benefi- cial use is the central requirement for a final appropriative right. Given this basic principle, it is clear that protection of an export- ing area, county, or watershed is not characteristic of the appropria- tion system. Any efforts to protect areas of origin are therefore in derogation of underlying appropriation principles. III. THE AREA-OF-ORIGIN CONCEPT Despite the fundamental policy embodied in the appropriation doctrine favoring movement of scarce water resources to locations where they may be beneficially used, many states following this doc- trine have enacted some form of statutory restriction or limitation on interbasin transfers. Searching for an explanation for such statutory provisions, the National Water Commission pointed to the absence of an effective market for pricing water. J The Commission commented that areas of origin for natural resources other than water do not re- ceive such treatment, although severance taxes are in fact based on the notion of allocating a share of the wealth distributed by nature in the form of mineral deposits or timber stands to those who happen to live in the adjoining area." An often-cited illustration of the need for area-of-origin pro tec- 2. 6 Colo. 443 (1882). 3. In its final report. the Commission slated: Area-of-origin protection is peculiarly associated with water. Other resources are not similarly treated. probably because they are priced in conventional markets. For coal. oil. copper, timber, and other natural resources, the area of origin receives its "protection" in the fonn of taxes and revenues from the "eX-porl" of the resource. In the absence of a pricing system for the exporf ofwaler. area-of-origin interests have resorted to the political process to obtain "in kind" protection, that is, enactment of laws reserving water for the area's "ultimate requirements" or providing for recapture in the event of future need. As a consequence of this approach, safeguards for a water exporting area have usually been tied to future or potential water development in the area. NATIONAL. WATER COMMISSION REPORT, supra note I, at 323. 4. Another interesting parallel can be round in the statutes passed in the 1970's to provide special protection to local areas impacted by the rapid growth accompanying energy and mineral development.