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. The Honorable Gale Norton Page 6 of7 time adversaries can come together and fashion collaborative efforts to reach common ends. *** I mentioned before that the future of the Colorado River will be shaped by drought and population growth. We no longer have abundant surpluses and full reservoirs. The era of limits is upon us. While wet and dry periods are cyclical, recent data suggests more drought planning is required. We all know how much difficulty has been caused by the overly optimistic estimate of the annual flow by those who negotiated the Colorado River Compact 80 years ago. Other factors counsel the importance oftaking careful account of reliable scientific data, and projections about water supply. While the amount of water available is relatively fixed, demand in the urban and industrial sectors will continue to grow. Western states generally are growing at nearly double the national average. California expects a population growth of 15 million people in the next 20 years. More people use more water and the states will depend on the Colorado River for a major share of their water demands. To accommodate these new arrivals, we need to make the smartest and most efficient use ofthe limited supplies of the River. Innovative arrangements will need to be developed. For such arrangements to succeed, they must be mutually-agreed-upon transactions within each respective Basin, and fully consistent with the Law of the River. Arizona and Nevada provide one important model ofthe innovative use of off-stream storage. We will need to look for other such opportunities. The Metropolitan Water District=s negotiations with the Palo Verde Irrigation District are an example of innovative thinking. They are using conservation contracts and dry-year options to accommodate temporary needs. There will undoubtedly be new possibilities for conjunctive use of surface and groundwater supplies, where surplus water can be stored underground for future use. We still have significant opportunities to use water more efficiently, both in the cities and in agriculture. There are methods that can benefit urban residents, agricultural irrigators, and the environment in both the Upper and the Lower Basins. Environmental water accounts in some river basins have provided a predictable mechanism for assuring fish needs can be met. It is also important to recognize that economic incentives have an important role to play. Urban water users can often afford to help finance efficiency improvements that agriculture could not afford on its own. We need to encourage these efforts while protecting the viability of agricultural communities and maintaining instream values such as recreation, fisheries, and wildlife habitat. We have entered an era of constraint on the Colorado River-not only in water supply-but also in the fiscal resources available to us. Efficient use of limited resources will have to be the watchword. Because of the sluggish economy and the need to provide for our homeland security, tighter budgets are going to be a fact of life for some time to come. Partnerships can help us stretch our resources, and we welcome them. In conclusion, I want to congratulate all of you who have worked so hard to bring us so far in resolving issues of the Colorado River Basin. I urge you to bring the same energy and innovativeness to the pressing challenges that we still face. http://www.doi.gov/news/norton1.htm1 12/16/2003