WSP02891

• File Number: 8407.400
• Description: Platte River Basin - River Basin General Publications - Nebraska
• State: NE
• Basin: South Platte
• Water Division: 1
• Date: 4/1/1983
• Author: Nebraska Natural Res
• Title: Policy Issue Study on Selected Water Rights Issues - Interstate Water Uses and Conflicts
• Water Supply Pro - Doc Type: Report/Study

approved by the Congress; funding, however, has
been delayed. In a demonstration of support for
the Narrows Unit, the Nebraska Legislature
adopted Legislative Resolution 26 on March 18,
1981 urging the appropriation of funds by
Congress to begin the project. The resolution
states that the project "will provide supplemental
water for several users along the South Platte
River in Colorado thus increasing return flows to
the river in Colorado and into Nebraska benefit-
ing downstream Nebraska interests....,,4

Interstate Energy Development - Coal
S I u rry

The question of the interstate division of
groundwater came up recently in the context of a
dispute between South Dakota and Wyoming
over a proposal to take groundwater from the
Madison formation, an aquifer underlying parts of
both states and Nebraska, for use in a coal slurry
delivery system. The State of Wyoming had
allowed issuance of a water permit to Energy
Transportation Systems, Inc. (ETSI) for water to
be used in the operation of a coal slurry trans-
portation project which would move coal from
mines in Wyoming to power plants in Oklahoma,
Arkansas, and Louisiana. The federal Environ-
mental Impact Statement on the proposed
project identified several areas of controversy
including "the possible groundwater impacts to
present and future uses of Madison aquifer
water" and "the transportation of water from an
area where readily available water is relatively
scarce to an area where it is abundant."5
The project would require a total of 20,500
acre-feet of water per year. Under this proposal
20,200 acre-feet would be obtained from the
Madison Formation and 300 acre-feet would be
acquired from local wells at pump stations along
the pipeline route. The major environmental
impact identified for the proposed action is that
the pumping of water of this magnitude for the
50-year life of the project would decrease the
water level in the Madison aquifer within an area
that would include the northern part of Sioux and
Dawes counties in Nebraska.6
An alternative water supply system which has
been proposed by ETSI would utilize the Oahe
Reservoir on the Missouri River near Pierre,
South Dakota, as the major water source for the
coal slurry project. As conceived, "It] here are two
options for implementing this alternative: (1)
Oahe Reservoir water could be purchased from
the State of South Dakota; or (2) Oahe Reservoir
water could be purchased from Water and Power
Resources Service,IBureau of Reclamation] a
federal agency."?
The South Dakota Legislature paved the way

2-2

for this alternative when it approved a multi-
million dollar agreement with ETSI, Inc. to provide
50,000 acre-feet of Oahe water annually for the
coal slurry pipeline. The agreement bars ETSI
from using water from the Madison Formation as
long as water from the Missouri River is available.
At a minimum, before South Dakota can sell the
water out of Oahe Reservoir to ETSI, the state
must negotiate a contract with the Bureau of
Reclamation which manages the reservoir. An
argument can be made, however, that South
Dakota cannot unilaterally sell the water out of
the reservoir.
The other option would be for ETSI to negotiate
a water service contract directly with the Bureau
of Reclamation. Both of these methods require
ETSI to obtain a water right from the state of
South Dakota. The states of Missouri and
Nebraska have expressed reservations to the
sale and diversion of water from the Oahe
reservoir fearing it would open the door to at-
tempts for similar diversions by other states.

Marketing Water Out of Federal
Reservoirs

The general position of the federal government
has been that it has control over the waters
stored in its own reservoirs but that as waters are
sold, state laws governing the use and diversion
of those waters apply and state permits must be
obtained where required. The legal authority for
the marketing of stored water out of federal
reservoirs appears to be based in part on Section
6 of the 1944 Flood Control Act. That authority,
however, is not unqualified. Section 6 provides
that,
The Secretary of the Army is authorized to
make contracts with states, municipalities,
private concerns or individuals, at such
prices and on such terms as he may deem
reasonable, for domestic and industrial uses
for surplus water that may be available at
any reservoir under the control of the De-
partment of the Army. Provided, that no
contracts for such water shall adversely
affect then existing lawful uses of such
water.8
Further support for this authority can be found
in the decision in Arizona v. California9, in which
the Supreme Court essentially said that "the
power to construct federal enterprises and to
store water includes the power to distribute that
water among the states in proportions designa-
ted by the federal government.1 0 I n that case, the
Supreme Court upheld the Boulder Canyon
Project Act of 1928, which created a compre-
hensive development plan for the Colorado