The Value of Water

After several years of negotiating, on Feb. 18 this year three dozen disparate parties signed the Klamath Basin Restoration Agreement (KBRA) and the Klamath Hydro Settlement Agreement (KHSA). The two agreements, celebrated in Salem, Sacramento and Washington, D.C., are intimately linked by an indivisibility clause that disallows codifying one without the other.

Herein lies the first major problem with the two agreements. Dam removal should be a stand-alone deal, it should not be linked to a cumbersome and expensive Klamath water agreement. The four Klamath dams in question have nothing to do with upriver farming, they don’t provide flood control, they don’t even provide farmers with water. They only make electricity, in amounts that hardly register in the overall power production of the energy giant PacifiCorp, owner of the four Klamath dams targeted for removal.

But upriver farming has everything to do with whether or not fish downstream have enough water to survive. And it has everything to do with whether or not that water will be relatively clean and full of the oxygen that fish need, or poisoned by agricultural chemicals and lacking oxygen due to elevated levels of nutrients and ammonia as a result of unsustainable farming practices.

The conflict between farming and the Klamath’s dwindling salmon fishery — between upriver farm communities and downriver populations, such as Indian tribes and fishermen, that are dependent on a thriving fishery — is by now legendary. Two keystone events of nearly ten years ago catalyzed creation of the current Klamath settlement deals.

Iron Gate Dam. Photo: GREG KING.

Klamath Fish Kill of 2002

The Klamath River fish kill of 2002, which destroyed 68,000 adult salmon, the largest adult fish kill in U.S. history, was the result of farmers receiving too much water from the federal Klamath Reclamation Project. Why did they get so much water in such a dry year, when the federal Endangered Species Act should have required that more water remain in the river to protect federally listed Coho salmon?

In 2002 the Bush Administration, under able direction from the vice-president, leaned on federal administrators to deliver Klamath water to upper basin farmers even though the fishery was likely to suffer, and even though the federal Endangered Species Act should have prevented it. The Administration was unhappy about a four-fold reduction in water allocations to farmers that occurred the previous year, in 2001, when the federal Bureau of Reclamation acted to protect Endangered Coho salmon.

The response to the fish kill was focused. Many tribal members and conservationists who for years had fought openly and bitterly with farmers over water were compelled to negotiate more amicably. The farmers, likewise, were looking for a way to prevent another water cut-off. Which makes sense: farming is difficult and risky enough even when you do have enough water.

The result is the Klamath Basin Restoration Agreement and the Klamath Hydro Agreement: the water deal and the dam removal deal. Here I will focus primarily on the KBRA, because whereas the hydro agreement is deeply flawed — it allows too many years to pass before dam removal is to begin, if it begins at all; it lets PacifiCorp off the financial hook by saddling Oregon rate payers and California taxpayers with a $450 million obligation even though all estimates place the price tag for dam removal at $200 million or less; and it would indemnify PacifiCorp from liability due to its past practices on the river — the hydro deal could someday actually result in dam removal.

Toxic algae in Iron Gate Reservoir. Photo by GREG KING.

The KBRA: Worse Than Nothing? The Trinity Example

The Klamath Basin Restoration Agreement, on the other hand, could very well turn out to be worse than nothing. The existence and predominance of the KBRA in this setting illustrates that these agreements are not about dam removal as much as they are about water. To illustrate the point it makes sense to examine the case of the Trinity River.

At 3,000 square miles the Trinity is the Klamath’s largest tributary. Fights over Trinity water are legendary. Along with the Salmon River, the Trinity River provides the Klamath’s best remaining habitat for spring-run Chinook salmon, which nonetheless today teeter on the brink of extinction. And except for 30,000 acre-feet of water pumped each year from the upper Klamath basin to the Rogue River, in Oregon, the Trinity is the only tributary whose waters are diverted outside of the Klamath basin. And it’s a lot water — in some years more than 1 million acre feet is transferred annually to the Sacramento River en route to massive Central Valley agricultural operations and major cities. In 2006, 1.3 million acre-feet went east out of the basin.

In November 2009 California Governor Arnold Schwarzenegger successfully passed through the state legislature his $11 billion water bond measure that would build more dams and a peripheral canal that would more than likely further wreck the Sacramento-San Joaquin ecosystem, despite whatever restoration provisions that bond may contain. What went less noticed is that at around the same time the federal Bureau of Reclamation petitioned the State Water Resources Control Board for an extension to the year 2030 on certain Central Valley Project water rights permits, including seven on the Trinity River. According to the Trinity Journal, the permits were originally granted to Reclamation in 1959, but they were never developed. If utilized, these permits could result in an additional hundreds of thousands of acre-feet of Trinity River water heading annually over the ridge to be consumed by powerful agribusiness. This would devastate the Trinity River.

But the farmers need more water, right? Well, not really. Conservation measures, such as refraining from using sprinklers at noon on a hot day, and diversifying crops would do more to save water than sending more water to farmers would do to save agriculture.

Water as Gold

So there’s another angle to this story: the value of the water itself. California’s powerful agricultural interests and water districts are vying for water not just because they’d like more of it right now for their crops, but because water is a crop, it’s a futures commodity.

Already many farmers in the Central Valley Project are selling their water to cities, counties and municipal water districts rather than use it to grow crops. Lloyd Carter, a former Central Valley reporter credited with uncovering the bird deformities at the Kesterson National Wildlife Refuge in the mid 1980s, puts it succinctly in a video recently produced by the California Water Impact Network: “Water is cash,” said Carter. “And the water in the public treasury, which is the stored river water of California, belongs to the people of California. Because of a law that was passed in 1992, agribusinessmen are free to take their federal irrigation water and resell that water on the open market in California. So you can buy water from the federal government for $70 an acre-foot, and you can sell it for $350 to $400 an acre-foot to anyone who’s willing to pay that price. Water has become the new cash crop.”

And yet Carter might be understating the potential here. A couple of months ago a Central Valley farmer agreed to sell 14,000 acre-feet of water to the Mojave Water Agency in San Bernardino County for $5,500 an acre-foot, or a tidy $77 million. That’s Sacramento River water from the Central Valley Project, which of course in large part is Trinity River water. At these prices the annual diversion from the Trinity River could be worth upward of $5.5 billion.

Now let’s move back to the Klamath. The Klamath Basin Restoration Agreement would guarantee farmers 330,000 to 385,000 acre-feet of water every year. Notwithstanding Vice-President Dick Cheney’s Mussolinian achievement in 2002 — when he strong-armed federal administrators into delivering irrigation water despite the obvious threat to salmon and violation of federal laws — farmers in the upper basin have never been guaranteed water from the Klamath Reclamation Project.

Bluff Creek enters Klamath River. Photo: GREG KING.

Water for Farmers But Not For Fish

Nonetheless, under the negotiated KBRA settlement farmers are guaranteed water but the fish are not. There is no flow guarantee for fish in the KBRA. Why is that? Because the key sections of KBRA dealing with water allocation were essentially written by Paul Simmons, the Sacramento attorney for the Klamath Water Users Association, a powerful interest group whose members irrigate more than 200,000 acres in the Upper Klamath Basin. In 1984 Simmons graduated cum laude from Cornell law school, where he also served as editor-in-chief of the Cornell International Law Journal. He’s a partner in the national law firm Somach Simmons & Dunn, whose clients include dozens of municipalities and water districts that rely on water from the north and would no doubt be happy to see even more of it head their way.

Early in Klamath dam removal negotiations Simmons made certain that his clients would get their water before anyone else in the room got anything. Certainly there were many others who contributed to creating what would become the KBRA — with dam removal itself relegated to separate agreement — which created a “Christmas tree” deal totaling 300 pages of legalese, and containing far too many conflicting and unwieldy provisions. But the core of the deal was caste from the start when Simmons demanded a guaranteed water allocation for ag in order for talks to proceed, despite the fact that upper river farmers have nothing to do with the Klamath dams. They don’t get water from the reservoirs behind the dams, they don’t get flood control, and their power subsidy was phasing out.

But they did get the Bush Administration in their corner, and that was their trump in this game. The farmers were essentially able to get a seat at the table by hooking the proverbial thumb over the shoulder at a smirking Cheney and saying, “You either deal with us or you deal with him.”

Eliminating the Opposition

But of course, subsequently negotiators had to deal with the Bush Administration anyway. In 2007 Steve Thompson, appointed by Bush to manage the US Fish and Wildlife Service California-Nevada Operations Office, joined Simmons and certain tribal members in an organized assault on the two most able and outspoken groups in the negotiations at that time. Oregon Wild and Oregon WaterWatch were providing expert legal objections to the KBRA’s water give-away, as well as to it’s provision that would allow 50 more years of chemically intensive agriculture on 22,000 acres of the Klamath National Wildlife Refuge, which any ornithologist worth his field glasses would say shouldn’t be allowed at all. With assistance from a couple of key allies who work for the tribal governments that support the KBRA, Thompson and Simmons were able to orchestrate the removal of Oregon Wild and WaterWatch from the negotiations.

That left the Northcoast Environmental Center and the Hoopa Tribe as the only negotiators in the room, out of 26 remaining parties, that openly opposed many of the provisions of the KBRA.

The Value of Klamath Water

Take an average water year of, say, 370,000 acre feet delivered to Klamath farmers from the Klamath Reclamation Project. Add to that 100,000 acre feet or more pumped out of the ground annually with taxpayer subsidized pumps and delivery systems, and what do you think that water is going to be worth to a thirsty southland in 20 years? Even at a meager $400 an acre-foot that water could be worth more than $200 million. But that price is so 1999. What about in 2030? As climate change continues to dry up California’s battered water delivery system, and not coincidentally its watersheds — which is not only the prediction of all the climate models, but it’s happening right now —  the Sierra snowpack, which feeds California’s key reservoirs, may have all but disappeared. In response, the people in the south part of the state charged with finding more water are already looking northward. Water is California’s new Gold Rush.

At this point supporters of the KBRA will make one of dozens of reasoned, studied, rational arguments they’ve got for why concerns over the agreement are unfounded. They’ll say: Flows at Iron Gate can run lower than the current court-ordered minimum of 1,000 cubic feet per second (cfs) once dams are out, because the water will be colder and cleaner. Hopefully this is true, because if the KBRA goes into effect flows will definitely run below 1,000 cfs. Modeling used by tribal and government scientists to judge what the flows might be under the KBRA with dams out show the river running as low as 414 cfs in the driest years. Fish kill flows in 2002 were around 700 cfs. Point that out and they’ll say, oh, it’ll never go as low as 414 because we’re going to create a technical advisory team and a drought plan to prevent all of that. Which one hopes is true. But it’s important to remember that when negotiators recommended that the TAT and the drought plan be created before the KBRA is implemented they were ignored and even chastised, including by a couple of the big green groups in the room.

Certainly negotiators are in a tough spot. Beginning with the Bush Administration’s stranglehold over the early proceedings — kowtowing as they were to Big Ag and directly threatening another dangerously low Klamath River during salmon migration if farmers didn’t get guaranteed water deliveries — and then through subsequent negotiations in which the administration’s representatives expertly manipulated the meetings, it wasn’t easy even for the hydro experts at American Rivers and Trout Unlimited to craft a healthy, workable agreement. But that’s doesn’t excuse American Rivers, CalTrout, and Trout Unlimited, as well as negotiators for the United States, the states of California and Oregon, and three of the four tribes in the room, for agreeing to a guaranteed water delivery to farmers of up to 385,000 acre-feet. This was done without any public notice or review or input, and no public meetings, as one might expect to be mandated under the National Environmental Policy Act or the California Environmental Quality Act. None of the otherwise fine and useful restoration measures subsequently added to the KBRA will suffice to undo the damage of the ag water allocation should it result in another fish kill. And it very well could.

The Out-Of-Basin Transfer Provision That Isn’t

Back to the cash value of Klamath water. Supporters of the KBRA argue that such value is irrelevant because the KBRA contains an “out-of-basin transfer” provision that would prevent sending the water outside of the Klamath. Well, assuming that the out-of-basin provision survives legislation needed to codify the KBRA, as well as subsequent legislation that may arise as the West’s water crises deepen, what does the “out-of-basin transfer” provision say? It says this:

“The Parties (except state agencies with direct decisional authority over such transfers) shall make all reasonable efforts to oppose any additional out-of-basin water transfers from the Klamath River Basin.”*

Iron clad! Really, that provision doesn’t say anything, it doesn’t prevent anything. Yet when a tiny minority of two or three negotiators in the KBRA process insisted on stronger out-of-basin transfer restrictions, almost everyone in the negotiating room — half the green groups, three of the four tribes, the states and the feds and even the fishing groups — just sort of rolled their eyes and said live with it … and then they rolled over. They rolled over throughout this deal. They rolled because there are very powerful forces at the top levels of government and commerce who are allied to accrue water, and they’re good at it. Water today is the most valued commodity in the world. It is worth more than gold, more than oil, even more than food. It’s why upper Klamath River farmers have reportedly paid more than $1 million in legal fees since the beginning of KBRA negotiations, and it’s why the KBRA is such a dangerous agreement.

If a Central Valley farmer can earn $77 million for 14,000 acre-feet of water, then a million bucks might seem like a worthy gambit to farmers who stand to control the rights to hundreds of thousands of acre-feet of water. The upper Klamath River is already so extensively plumbed that there would be few impediments to sending water from the federal Klamath Reclamation Project over to the Pit River, which feeds the Sacramento River, California’s primary water supply. It’s of critical importance that those who care about the ecology of the Klamath River, especially its fish populations, realize this potential — and the potential of the KBRA, in general, to cause extinction of Klamath salmonid populations — and prevent it at all costs.

GREG KING is President and Program Director of the Siskiyou Land Conservancy. He can be reached at: gking@asis.com.

All photos Copyright © 2010 by GREG KING.

* Parentheses in the original.

 

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