7020

• UCREFRP Catalog Number: 7020
• Author: Oamek, G. and S. R. Johnson.
• Title: Economic and Environmental Impacts of a Large Scale Water Transfer in the Colorado River Basin.
• USFW Year: n.d.
• USFW - Doc Type: \
• Copyright Material: YES

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ECONOMIC AND ENVIRONMENTAL IMPACTS OF A LARGE SCALE
1
WATER TRANSFER IN THE COLORADO RIVER BASIN
George Oamek' and Stanley R. lohnson2
ABSTRACT
The direct economic, and offsite environmental; impacts of a 400,000 acre foot water transfer
between irrigators in the Upper Basin of the Colorado River and urban users in the Lower
Basin was examined Results indicated that the transfer would result in considerable offsite
benefits, with minimal disruption to local agriculture.
INTRODUCTION
Recent legislative actions by Western states are evidence of their "coming to terms" with
pressures to use economic criteria in allocating surface waters. California, for instance,
opened the door for increased intrastate transfers by allowing individuals access to
unused capacity in conveyance facilities (1). The Colorado state legislature imposed a
S50 per acre foot tax on water exported from the state in excess of established
compacts, despite the fact that such interstate tranfers between individuals are
prohibited (2). In addition, the Western Governors Association sponsored research
which encouraged orderly voluntary tranfers of existing water rights as an alternative to
expensive water development programs (3). Even the traditionally conservative Bureau
of Reclamation has promised to "facilitate the transfer of water between willing buyers
and sellers" (4).
Two interested parties who could potentially be affected, and possibly benefit, from the
above institutional changes are the water users of Southern California and private sector
investors attempting to divert excess water from the Upper Colorado River basin to San
Diego. Southern California, especially member agencies of the Metropolitan Water
District (MWD), is facing the loss of nearly one-half million acre feet due to the
Central Arizona Project's (CAP) ability to draw Arizona's full share of the Colorado
River for the first time. This situation - plus growing northern California opposition to
a cross Delta facility, continued rapid population growth in their service area, and a
recent legal setback with diversions from the Mono basin - puts a great deal of pressure
upon MWD to find additional economical short and long term water supplies.
Hoping to profit from this situation is a consortium of private investors under the name
of the Galloway Group Ltd. Their controversial 1984 proposal was to impound from
300,000 to 500,000 acre feet of agricultural and other less perfected water rights from
the Upper Colorado basin, particularly Colorado's Yampa and White sub-basins, and
lease it to San Diego County Water Authority for an indefinite period (5). Although
apparently dead for lack of initial investment (6), the Galloway proposal might have
withstood the significant institutional barriers in its path if its backers had been willing
' Economist, CH2M Hill, 3840 Rosin Court, Suite 110, Sacramento, California, 95834,
[phone]
Professor of Agricultural Economics, Iowa State University, Ames, 50011, (515) 294-
3133