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<br />"Water is a unique <br /> <br />commodity. I think <br /> <br />it's dangerous to talk <br /> <br />about it in economic <br /> <br /> <br />terms without <br /> <br />acknowledging that <br /> <br />there's no substitute <br /> <br />good out there." <br /> <br />- Rita Pearson <br /> <br />Arizona DWR <br /> <br />14 <br /> <br />Water Marketing <br />Transfers - moving water from one <br />user to another - are seen as one <br />solution to meet future demands in <br />the Colorado River Basin. The 1922 <br />negotiators did not include language <br />about transfers in the compact, and <br />75 years later, it is water marketing <br />that generates the most debate about <br />revisiting and possibly revising the <br />compact and the law of the river. <br />"The decision to utilize a compact <br />for making the first cut at dividing <br />the water of the basin has had a <br />number of major consequences," said <br />Larry MacDonnell, former director of <br />the Natural Resources Law Center at <br />the University of Colorado School of <br />Law. "One of the more obvious is that <br />it's created a dynamic of upper vs. <br />lower basin. The other dynamic it <br />created is it put the states themselves <br />in a particularly important role with <br />respect to the allocation of the river. <br />I think the effect has been that the <br />states have viewed the water of the <br />river basin as ... kind of a patrimony. <br />That the states carry a special burden, <br />or a special mandate to wisely use that <br />patrimony for the best interests of its <br />own residents." <br />Although transfers between upper <br />and lower basin states have been <br />suggested, debate today centers on two <br />more likely transfers in the lower basin <br />- California's IID-San Diego County <br />Water Authority (SDCWA) proposal <br />and the Arizona Groundwater Bank. <br />Politically, these proposals have won <br />some support from other basin states, <br />but they await changes in current <br />Colorado River operations. Arizona <br />designed its proposal to require a <br />federal rule authorizing the transfers. <br />California officials are expected to <br />work out their own agreement over <br />water entitlements, but may come to <br />the federal government for approval. <br />If they don't work out their differences, <br />it is possible Babbitt could order a <br />change in California's water use. <br />Because the secretary serves as the <br />watermaster of the lower basin (the <br />upper basin states established the <br />Upper Colorado River Commission <br /> <br />in 1948 to oversee water use), the <br />federal government has more authority <br />over interstate transfers. "We think it's <br />pretty clear that the secretary can <br />make binding commitments to deliver <br />transferred water to the transferee as <br />unused apportionment pursuant to <br />an agreement between two states," <br />Johnson said. <br />This will, however, require the <br />development of new regulations. <br />A draft of lower basin regulations <br />developed by the Bureau in 1994 <br />concerning, among other things, <br />interstate transfers, was never adopted. <br />This year the Bureau is drafting a <br />narrower proposal to allow for <br />Arizona's groundwater banking <br />program (see page 16), and they are <br />expected to be adopted next year. <br />So far, the California intrastate <br />transfer and the Arizona groundwater <br />banking plan have generated political <br />support. However, only time will tell <br />whether these proposals win ultimate <br />approval and if the politics of the basin <br />will allow for other water marketing <br />plans to proceed. <br />"I don't think full-blown market- <br />ing is acceptable today. I doubt <br />seriously it'll be acceptable in the <br />future," said Arizona's Pearson. "I <br />think there is always going to be <br />some need for a regulatory framework <br />within which water can move. ... <br />Water is a unique commodity. I think <br />it's dangerous to talk about it in <br />economic terms without acknowledg- <br />ing that there's no substitute good out <br />there. You cannot simply exchange <br />one good for another." <br />Others disagree. For the future, <br />Debra Man, chief of planning and <br />resources at the Metropolitan Water <br />District of Southern California <br />(MWD), predicts the establishment of <br />a viable water market. "Water transfers <br />are not an item addressed in the <br />compact, and yet they will probably be <br />the single most important driving force <br />that will redefine our thinking in how <br />the compact, how the seven-party <br />agreement and how the decree be- <br />tween Arizona and California will <br />apply to the future," she said. <br /> <br />Western Water <br />