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staff, Director Reilly had initiated a final review process that had taken 19 months. In what was <br />a shocking move for a Republican administration that had been solicitous of the Western <br />perspectives, in March, 1989, Director Reilly vetoed Two Forks on the grounds that the project <br />would violate section 404c of the C'lean Water Act. <br />By pass Flows <br />As the FERC licensing process at Kingsley Dam and Lake McConaughy dragged on, as <br />the struggle over Two Forks played. out, long standing water projects far upstream in Colorado <br />headwaters came up for permit renewals from the Forest Service. The facilities needing federal <br />permits included reservoirs and pipelines for Fort Collins, Greeley, and a local mutual irrigation <br />company, Water Supply and Storage. The reservoirs were located in the upper reaches of the <br />Poudre river, the largest tributary to the South Pla.tte. <br />Conflict over water as between federal environmental agendas and state users had been <br />simmering for decades all over the west. National forest lands in Colorado, within which <br />reservoirs and conveyance facilities were nested, had been aside by presidential proclamation, and <br />Congress had authorized the desigriation primarily to stop unregulated timber cutting that had <br />threatened water supplies. Howevf,r, Congress did not clearly address whether the government <br />had authority ever the water genera,ted in, and flowing through, federal forests. As of the early <br />1960s, the Forest Service had no clear instream flow policy and had never claimed water rights for <br />instream purposes. By the 1970s, vvhen Congress passed its spate of environmental legislation <br />specifically directing the Forest Service to protect the environment, the question of whether the <br />Forest Service acceptance of state vvater adjudications came to be sharply posed. When permits <br />for these Colorado mountain reservoirs on the Roosevelt-Arapaho National Forest came up for <br />scheduled Forest Service renewal c?n their normal 20 year cycle, the new legal context triggered <br />review and analysis under the Endangered Species Act. <br />Two issues drove the Forest Service's consideration of its water policy. 1) concerns about <br />winter storage drying up streams b elow high mountain reservoirs and the threat that constituted <br />for fish and wildlife habitat; and 2) and the loss of listed species habitat along the central Platte in <br />Nebraska brought to its attention by the FWS in consultations required by the ESA. By the late <br />1980's and early 1990's, the Forest Service began discussing the requirements for permit renewal <br />for facilities on the Arapaho/Roose;velt National Forest. Water users were told that they must <br />agree to open their gates to supply minimum winter stream flows to protect aquatic habitats. <br />(Neuman and Blumm 1999). <br />The Federal government can obtain water for federal use by either of two methods: 1) for a <br />federal reservation, the Federal reserved rights doctrine has been invoked; 2) uses for other (non- <br />federal) purposes, the federal government must proceed in accordance with the law of the state <br />within which the water is located. Federal agency attempts to employ its reserved water rights <br />doctrine has been seen by most in western water communities as an attempt to bypass state <br />sovereignty over water resources seriously threatening orderly and socially just administration of <br />water use under state law. In the la.te 19`h century, local agricultural and municipal water interests <br />33