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ultimate buyer. WATER MARKETING ON THE COLORADO RIVER SYMPOSIUM PROCEEDINGS SEPTEMBER 1999 ~ Upper Division should be interested in selling water that they're not now using or selling excess water because there's no way to finance new development in the Upper Basin. Or, sell it because endangered species prevents development. Or, sell it because the money could be used for resource development, possibly including water. So a logical conclusion could be that inter-basin marketing is facially and financially attractive. Implementation of inter-basin water marketing would certainly encounter an abundance of difficulty and perhaps insurmountable legal barriers including the Colorado River Compact. It seems that the Compact includes provisions that do not authorize transfer. The apportionment to the Upper Basin is for use within the boundaries of those states comprising the Upper Basin as defined and no Upper Basin state can make or allow the use of its apportionment outside of those boundaries. When the Colotado River system water apportioned to but not consumed in the Upper Basin flows past Lee's Ferry, it becomes water available to the Lower Basin under the Com- pact. It becomes subject of not only that Compact but of other acts comprising the Law of the River. Further, the Compact provides that the states in the Upper Division shall not withhold water and the states in the Lower Division shall not require water that cannot reasonably be applied to beneficial use. So if the Upper Basin states cannot make beneficial use of the water in any part of the Colo- rado system, the Lower Basin is entitled to use it without charge. Neither the Upper Division states nor their water right users can control by contract the allocation of that water in the Lower Basin. Under Article 3(b) of the Upper Basin Compact, it is permissible for a state to exceed its apportioned use so long as that excess use does not deprive another signatory state of its apportionment. Thus, inter-basin water marketing by one state could deprive one or more of the other Upper Basin states of the opporrunity to make beneficial use of water. The state so deprived might have a cause of action against the leasing state for breach of compact. Some might view the views expressed here as very dogmatic just because New Mexico receives the smallest apportionment of the Upper Basin water and because New Mexico believes its apportionment will not meet its future needs. One item in the sale or lease of such unused apportionment is an assessment Nevada's perspective is that of the - Patricia Mulroy of the market for such water. There may be, in the Lower Basin, a market for intrastate water, sale or lease or even interstate marketing between Lower Division states. But given the Colorado River Compact and all the other potential barriers to marketing Upper Basin water to the Lower Basin, the perceived market may be only an illusion. PATRICIA MULROY, GENERAL MANAGER, SOUTHERN NEVADA WATER AUTHORITY Nevada's perspective is that of the ultimate buyer. We have probably been visited by every creative entrepreneurial interest in the area of water marketing that is out there today. What you're going to hear in my comments is that, in a way, Nevada has gone from a position of desperation and willing to do just about anything, to one that's a little more reasoned because it's beginning to see opportunities within the larger context. If you'll go back to the early '90s with me, we actually put out a call in the newspapers up and down the Colorado River and we said, "Come one, come all, anyone who is interested in selling water, we're willing to hear your proposaL" Believe me, they came. What we have found in the interim is that there are real limits of marketing opportunities. Let me start right with the beginning that I have somewhat of a sense of heartache, and I'm going to piggyback on what Dennis said. I had an opportunity to sit in on the Metropolitan Water District's strategic planning session Monday and I probably heard the two ends of the spectrum as it comes to water marketing. There were some very creative presenta- tions made and I was beginning to wonder if there was any difference between water and pork bellies because they were not being treated in any sort of a different fashion. Is the word marketing really the appropriate word? I could probably go around this room and no two people are going to give me the same definition of what a water market is. Everybody has their own definition in their own mind of what it constitutes. At the one extreme, we have the overly creative entrepreneurial interest that, let me be very blunt, adds no value, is siphoning the cream off the top, and is selling "paper water" at best, and nothing but a pot load of problems to the buyer at the other end. That's the extreme of the water marketing and I've heard those proposals. They add nothing. They're an unnecessary expense of public money and, quite candidly, would fly in the face of what any water manager would tell you is their fiduciary responsibil- ity to their ultimate customer - the homeowner, the