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4 UDENWLR 290 4 U. Denv. Water L. Rev. 290 (Cite as: 4 U. Denv. Water L. Rev. 290) Page 15 nature, since a prediction of future demand served as a justification for a higher claim of entitlement in the Compact negotiations. Irrigation demand was the primary consideration in these predictions and calculations of present use. Early in the Compact negotiations, the Commissioners discussed an allocation formula based on irrigable acreage. Claims based on irrigable acreage provided some objective measurement of future demand and avoided pure speculation. The negotiators could not foresee the influx of population to the western United States, the magnitude of the shift from rural communities to urban cities, or the increase in resort, tourism, and recreational demands such as golf courses, snowmaking, and flat water and instream recreation. In the negotiations, the parties considered Denver's potential transbasin demand. However, the negotiators felt that southern Nevada's potential demands were negligible. [FN1351 Additionally, areas not discussed included Los Angeles and Phoenix. rFN1361 In the late 1970's and early 1980's, the Upper Basin States' concerns included the potential water demands of massive oil shale development and whether their Compact allocation would adequately accommodate such demands. Although a push to develop oil shale no longer exists, these changing economic circumstances illustrate that the Commissioners could not foresee future demands on the Colorado River. These changing conditions also underscore the wisdom of Delph Carpenter's desire to preserve a defmed share of the Colorado River in perpetuity for the Upper Basin, so that the Upper Basin could meet changing circumstances without interstate conflict or without a rush to premature water development simply to protect against claims in the Lower Basin. *322 Along with changing economic circumstances in the West has come a shift in environmental and recreation values. The Endangered Species Act has forced the reoperation of virtually every federal reservoir in the Upper Basin. Each facility, and the rivers above and below it, has generated significant recreation economies. These new demands on the system have lead some to question whether the huge reservoirs on the system will ever operate as the Compact negotiators intended-- fluctuating from full to empty as drought cycles come and go. Moreover, lawsuits filed by environmental organizations have asserted that the Endangered Species Act creates an overriding obligation and limitation on the operation of federal reservoirs, [FN1371 and even requires the delivery of additional water to Mexico to avoid jeopardy to listed endangered species in Mexico. [FN1381 D. I'flter,'l:las<in Water Transfers and Marketing was not 0'6'Rtaml'J.ated by the Compact Negotiations and is Illegal under the Lil'W"'Oftlte"R'tver Increasing demands in California and southern Nevada, combined with the continued underutilization in the Upper Basin of its consumptive use allocation, have encouraged proposals to sell or lease water between the Basins. Proponents of water marketing argue the Upper Division States should be able to sell or lease to Lower Basin entities their unused entitlements to the use of water from the Colorado River System, or private parties should be able to sell or lease water rights created under state law. Although proponents have made many proposals, the three most notorious proposals are the "Galloway Proposal," the "RCG (Resource Conservation Group) Proposal," and the "Roan Creek Proposal." In 1984, the Galloway Group, Ltd. entered into an option with the San Diego County Water Authority (a member agency of the Metropolitan Water District of Southern California), to lease 300,000 to 500,000 acre-feet per year of water released from future planned reservoirs on the White or Yampa Rivers in Colorado. According to the proposal, the Upper Basin under the Compact, and Colorado under the Upper Colorado River Compact, would debit the water released for use in San Diego to their respective allocations. The 1989 RCG Proposal sought to create three types of "water" for sale or lease from the Upper Basin to the Lower Basin. The first type of water ("Type 1 ") was undeveloped, unused water in the Upper Basin, currently flowing to and used in the Lower Basin. Type 1 water would include water the Upper Basin could, in the future, develop and consumptively use. The second type of water ("Type 2") was water stored in Upper Basin Reservoirs, for which there were contracts but no present use. This type of water was the same as Type 1 water, *323 except that Type 2 water was subject to contracts of potential users who had not yet developed their uses. An example of Type 2 water was water stored in Fontenelle Reservoir in Wyoming under contract to industrial users who had no current demand. The third type of water ("Type 3") was water presently consumed by irrigated agriculture in the Upper Basin. Thus, creating Type 3 water under the RCG Proposal required Upper Basin water users to dry up irrigated acreage, temporarily or on a rotating basis, and to forego present consumptive use for sale or lease in the Lower Basin. RCG proposed to create "pools" of Type 1, Type 2, and Type 3 water for sale or lease in the Lower Basin. @ 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.