9298

• UCREFRP Catalog Number: 9298
• Author: Water Education Foundation.
• Title: Colorado River Project
• USFW Year: 1999.
• USFW - Doc Type: Symposium Proceedings.
• Copyright Material: NO

WATER
MARKETING
ON TH E
COLORADO
RIVER

~ncreases the cost of the water. But the overriding goal
m any water manager's daily list of things to do is to
make sure that a water supply has certainty. A
speculative market may not promote the most
efficient use of that water supply to guarantee it will
be available in the future. Instead, it may promote
water hoarding as opposed to utilizing a supply in the
most efficient, economically realistic way possible.
This water bank is one that simply takes existing
excess water supplies, stores it in advance of a future
need without disrupting the priority system. The
priority system, of course, is one that we all rely upon
to give us certainty. It really is a quite remarkable tool
because it can do so many things without causing one
party to give up a water supply in the face of a
competing demand.
It works within the
concept of beneficial
use and, as a result,
everyone benefits
from it.
My belief is that,
to the extent private
entities want to
engage in competing
banks, they've got
two problems. One,
typically they're
dealing with a
smaller supply of
water and, two,
they're dealing with a short-term supply of water.
Both reduce its value. The Arizona Water Bank
Authority can take pots of smaller supplies of water
and pool them into a larger quantity of water for a
prospective purchaser, making that water supply more
valuable.
The other thing the Arizona Water Bank can do
that another bank typically could not is guarantee
delivery at some point in the future. When a party
who has purchased water through the water bank
makes a call on the system 10-, 20-, 30-, 50 years
from now, how do they know that recovery actually
will be feasible? The only entity that can do that is
the entity at the bottom of the pipeline that can
guarantee no higher ptiority user will take that water
supply and short circuit the recovery opportunity in
the future.
In that sense, the bank, as an Arizona state
authorized entity, stands in the position of assuring
that no senior user can take that water supply because
those demands have been met. The water bank is, in
fact, junior. It has stored the water without circum-
venting the rights of any senior right holder.

marketing at some
level and under some

We believe that water

mechanism is probably
inevitable on the

SYMPOSIUM
PROCEEDINGS
SEPTEMBER 1999

o

Colorado River.

- Michael Quealy

MICHAEL QUEALY,

AssISTANT ATTORNEY GENERAL, UTAH
Utah has been taking a progressive approach and
look at water marketing on the Colorado River. We
have not been very popular with some of our sister
Upper Basin states. We find often times nobody
wants to sit next to us at lunch or things like that. We
believe that water marketing at some level and under
some mechanism is probably inevitable on the
Colorado River system and that we at least ought to
start looking at the problem now and exploring ways
that it might come to pass.
Utah and the other Upper Basin states are also
currently facing serious constraints on their abilities
to develop their remaining apporrionments under the
Colorado River Compact. Examples are the Endan-
gered Species Act, salinity, reserved rights and other
federal constraints.
What I would like to briefly propose today is a
very skeletal outline that we in Utah have tried to put
together. It's very conceptual, it doesn't have a whole
lot of details, but at least it's something that we are
thinking about as far as an Upper Basin water bank.
During the past 10 years, there have been three
private proposals - Galloway, RCG and Roan Creek
- to market water from the Upper Basin to buyers in
the Lower Basin. All of these have failed because the
project proponents either, one, could not answer
pertinent legal questions associated with their
projects; two, could not overcome the political
opposition raised; or three, were unwilling to commit
the resources needed to defend their proposals in the
courts.
Despite what legal scholars argue, one side or the
other, my personal feeling on the Colorado River
compacts [both the 1922 and the Upper Basin
agreement] is that they are really silent on whether
you can market water or whether you can't. As I say,
legal arguments can and have been made on both
sides and they're probably good legal arguments. Bur
I really believe that it's a political question. If you can
solve the political questions about Upper Basin to
Lower Basin water marketing, the legal questions
tend to go away, or at least be mitigated to some
extent.
A brief description of a possible water bank that
would market water from the Upper Basin to the
Lower Basin, or even within the Upper Basin, could
include three types of water. Type one would be
undeveloped apportioned water, so if a state like Utah
had not been able to develop or would not be able to
develop its apportionment for a long, long time, that
would be one component of water. As Gary men-
tioned, that would probably fall into the sort of the