Water Transfers and the Future of the West: Conclusions

This is the fifth and final part in a series presenting my research into the impacts of agricultural-to-municipal water transfers (Part 1, Part 2, Part 3, Part 4). In this post, I present some policy options for addressing the substantial burdens of water transfers that go too far or create cures worse than the disease. I then conclude with some thoughts on water use as a mirror for larger changes in the American West.

Private Property, and A Few Undesirable Responses

Besides mitigation protocols and structural changes in transfers, states might reduce undesirable impacts of AMI transfers by making them less appealing to municipalities in other ways. The first such method is to restrict transfers in size, use or geographic proximity to the area of origin. This would reduce the number of compatible buyers and sellers and reduce the amount of water cities could hope to glean from purchasing existing supply.[1] A restriction on distance separating city and farmer would, if calibrated correctly, keep more economic activity in the vicinity of the selling community and reduce economic impacts. This option, however, seems both unnecessary and undesirable. It is unnecessary because of the plethora of more appealing ATAs and mitigation protocols, and it is undesirable because it halts a voluntary market transaction arbitrarily and advances the interests of some farmers over others. Irrigators nearby to growing suburbs would rejoice as their water becomes more valuable, while those too distant from any city (not an unimaginable occurrence in the open West) would instantly lose their most valuable asset. Water law in the West has always prioritized equal private rights to use water regardless of type and place of use.[2] Direct restrictions on AMI transfers would violate this fair and egalitarian principle.

The New Mexico case referenced in this paragraph also inspired the writing of The Milagro Beanfield War. Image courtesy Goodreads.

The New Mexico case referenced in this paragraph also inspired the writing of The Milagro Beanfield War. Image courtesy Goodreads.

States might also interfere with private transfers by subjecting water reallocation to a review on behalf of “the public interest.” Many states in the West have a public interest criterion as part of their water resource governance, but what this entails in practice is rarely clear, and courts tend to exercise restraint when a claim of that interest being violated comes up against the doctrine of prior appropriation. Nevertheless, Idaho uses the criterion to ensure respect for the interests of “people in the area directly affected by the proposed use” and Nebraska requires a consideration of current and future “benefits of leaving water in the basin of origin.” New Mexico, meanwhile, once intervened to block a transfer out of a traditional Hispanic farming community, stating “it is clearly not so… that greater economic benefits are more desirable than the preservation of a cultural identity.”[3] This ad hoc determination of what transfers are and are not in the public interest leaves a lot to be desired and begs the question of adequately defining what the public interest is when it comes to a scarce and vital resource with competing uses in a society with diverse and often contradictory goals.Nevertheless, states with pure prior appropriation doctrines like Colorado could attempt to balance their water futures with a public interest statute that adds an additional layer of review to the water court or permitting process. Justifying a transfer as serving the public (presumably statewide) interest is a sizable further step beyond justifying no material injury to fellow water-rights holders and might dissuade urban water providers from pursuing controversial transfers; however, in public interest states, presumably, providers would need to justify alternative sources like new water rights in the same way.

If public interest statutes and technical restrictions seem hazy at best and undesirable at worst, there are some policy mechanisms that flagrantly exceed the call to promote equitable, consent-based solutions to water scarcity. The first is to establish the right of rural areas to “recapture” transferred water in the future. This poses such a serious risk to municipal outlays that it would constitute a practical ban on AMI transfers subject to the same objections as an outright one. The second would reserve certain quantities of water within a basin, a county, a ditch or even individual farms that cannot be transferred out of region. This places too great a restriction on a farmer’s assets and induces too much new supply development on the part of cities. Finally, states could directly limit urban growth or subdivision of irrigated lands.[4] This is indeed a popular proposal in rural areas that see cities “take” more and more water for themselves. Restricting growth has displeasing connotations of strongly limiting urban prosperity for the sake of rural culture, which surely is as inequitable as harming rural culture for a little more urban growth. Requiring denser, more efficient developments would decrease the amount of water cities need to purchase, and would allow cities to continue growing, but the remaining transfers would still carry third-party effects.[5] If the West truly wishes to promote equal access to water resources, regardless of type of use, then these sorts of measures are excessive, and states would be better off requiring compensation to rural areas, ensuring that AMI transfers are only a portion of urban acquisition portfolios (by encouraging domestic water efficiency and municipal water reuse), and promoting alternative structures for water transfers beyond the ubiquitous “buy-and-dry.”

 The Future of Water in the Growing West

We'd be best served by realizing that this isn't going away. In fact, just the opposite. (This is Scottsdale). Image courtesy Wikimedia Commons.

We’d be best served by realizing that this isn’t going away. In fact, just the opposite. (This is Scottsdale). Image courtesy Wikimedia Commons.

Some realities are apparent after examining the impacts of AMI transfers and the tradeoffs that they introduce. The first is that the urban West – the New West of sprawling but water-efficient Las Vegas, the canal-fed desert that is Phoenix and the countless teenage developments between Denver and Colorado Springs – is going to continue growing. Their arid locale has never stopped them from doing so before, and the marginal value of water to a desperate suburban water provider, replete with new-tap fees from developers, is high enough that suburbs will find the water for their constituents somewhere. Farmers, seeing commodity prices shrink and their own debts grow, and having a much lower marginal value for that water, will continue to sell to them. Meanwhile, if cities cannot buy agricultural water at a reasonable price, they will develop new supplies, further shrinking instream flows in a West that has only recently begun to appreciate them, bringing back the conflicts over large dams and increasing costs for every party involved, for less benefit. AMI transfers, warts and all, are both a necessary and desirable part of our shared growth future.

These transfers do not threaten the survival of the rural West – the Old West of Idaho potatoes, California vineyards and Washington apples. Agriculture uses so much water so inefficiently that it will survive, and some of the least-productive lands and most junior water rights will be the ones transferred to cities[6] so that farmers, weary from the struggle that so defines the Western ethos, can finally pay the bankers and retire. But some places will suffer dearly. Many already have. The removal of irrigation water from a community, clustered rather than evenly dispersed by municipal buying habits, takes away a place’s economic driver, its capacity for self-improvement and its sense of self-identity. Economics confirms that these impacts are locally severe but regionally insignificant and more than made up by urban growth and prosperity. To people in the communities at risk to third-party effects, these will no doubt sound like hollow reassurances. Rural places do not deserve our protection because of their inherent qualities, but because trading off their well-being for the growth of distant places is both unnecessary and unjustifiable. Agriculture can and must be compensated for the losses it will suffer- not in perpetuity, but as an aid in the transition from Old West to New. With the help of existing policy mechanisms, more land can remain productive, less can be subjected to invasive weeds, more rural businesses and governments can remain viable, and more rural communities can survive the loss of their keystone.

Retired beet fields and the closed mill in Sugar City, Colorado - poster child for large water transfers and a changed community.

Retired beet fields and the closed mill in Sugar City, Colorado – poster child for large water transfers and a changed community.

The demands on water west of the hundredth meridian will always be severe. It will continue to be that most contradictory of natural resources – so abundant as to be nearly free to use, so scarce as to create discord and violence as well as million dollar transactions, critical to our very survival but wasted in so many ways. As cities grow, they will have to become more efficient but they will have to acquire more water. As agriculture feeds those people, it will have to do more with less while retaining its own viability. As states look to secure the future of the resource and of their citizens, they will have to balance tradeoffs between municipal and agricultural needs, between consumptive uses and the environment, and between efficiency and equity. Agricultural to municipal water transfers are an application of these tradeoffs and of the characteristics of water in the West itself. How we choose to go about them reflects on our own judgments as a water-dependent society and serves as a marker for how the West chooses to live.

Thus endeth my review of the existing state of affairs on water transfers. My research now turns to the field to build on this knowledge. I think we need to know how the costs and benefits of buy-and-dry compare in real terms with alternative mechanisms like leasing a rotational fallowing. Fortunately, there’s something of a “natural experiment” in the Arkansas Basin of Colorado, one of the famous case studies of large water sales, where farmers are joining forces to lease out water from a large area, spreading the impacts over a wider area and keeping land in production over the long term. Stay tuned as I interview the key players and analyze economic and ecological data to make that comparison. Thanks for reading!

[1] Metzger, 61.

[2] Schorr, 25-31.

[3] Metzger, 61.

[4] Ibid.

[5] There is certainly a case to be made for better connections between land-use and water resource planning, but the argument goes well beyond the scope of this paper.

[6] Taylor and Young, 258-60.

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