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U11"/N~ 10:IJ 'a801 SJ8 7279 UT ST WATER RES ~OOJ Q068 Obviously, all that could be marketed today is an option, or futures contract, for water to be delivered starting sometime after 2005. Even assuming such an agreement would be totally binding and uncontested by outside parties, my guess is that the value of such an option for the years prior to.the delivery date would be far less than S200/acre-foot, I won't dwell on the serious problems associated with marketing ~ water between states, and the additional ones which could be expected i~ an Upper Basin-Lower Basin scenario. Potential litigation is certainly a major onei another is the number of 'willing sellers' likely to come out of the woodwork once water marketing appears 'do-able'. We have consistently maintained the position that interstate water marketing must be handled state- to-state, rather than allowing private entities to negotiate independently with other private entities in other states. We believe this approach to be the only practical way in which equity can be achieved and transactions can be adequately administered. Indian tribes, however, have made it plain they believe they have water to sell, and the federal government has administratively assumed the position that recognized Tribes will be treated as states. Deliberations on Colorado River issues of basinwide importance, such as water marketing, are presently taking place within the ']-10' format -- representatives from the seven states and ten Indian tribes are Invited to all meetings. The jury is still out on how productive this process will turn out to be. There has been relatively little political posturing, which. is unusual with this large a group (attendence is usually 50+), but then again, this large a group rarely produces much of substance. Before closing, I must mention another factor I believe may influence the federal position on Upper Basin-Lower Basin water transfers .- federal land-use and environmental legislation, I might sound paranoid on this issue, but sometimes it seems as though these laws and associated regulations are being used ~ to force us in the Upper Basin to leave our water in the river and reallocate it downstream. There is no question that some people perceive environmental (endangered fishes, wilderness, wetlands) and water quality (salinity reduction) benefits would result from limiting future water use in the Upper Basin through marketing water to the Lower Basin, But in the West, water rights (including Compact allocations) are property rights. My position has always been that someone (including the federal government) who wants someone else's property must be prepared to pay whatever price it takes to execute a val1d c.ontract. I'm a firm believer in the Fifth Amendment. Finally, I am convinced that 'all things are pOSSible among people of good will'. At this point in time, it seems to me the approach the Lower Basin folks are taking to flesh out a water bank concept is a good one; we strongly support it. We'll not just sit on our hands, though. We will continue to investigate and discuss any and all reasonable proposals for addressing this and other important (but pretty sensitive) issues involving 'new looks at old problems' on the Colorado River.