Carving its way through the Grand Canyon, the mighty Colorado River has long been a symbol of the American West’s unbounded wilderness. In reality, the river is heavily engineered, managed and used. It peters out before reaching its delta. In most years, users’ water rights, the amount they are entitled to by law, actually outstrip the amount of water available.

“That catastrophe replays itself on a smaller scale all across the West,” said Leon Szeptycki, executive director of Stanford’s Water in the West Program, a joint program of the Stanford Woods Institute and the Bill Lane Center for the American West. “It was built into the legal system that if water flows downstream and you lose control of it it’s a waste of water.”

The use-it-or-lose-it ethos is compounded by growing populations, a changing climate and widespread drought. Among the biggest losers: fish and ecosystems dependent on stream and river flows. Current safeguards, such as the federal Endangered Species Act, mandate reductions in water diversions for human use, causing intense social and legal conflict between water users and federal regulators.

As part of a Stanford Law School practicum that Szeptycki taught in partnership with the National Fish and Wildlife Foundation (NFWF), student researchers set out to determine how Western states can increase reserves of environmental water, and allocate it to the highest priority ecosystems in dry times, while empowering water users to earn money. They analyzed laws and interviewed state agency officials to draft a report, due out later this spring. The paper synthesizes best practices into recommendations for increasing the number of water rights transfers to maintain healthy flows for ecosystems. The report is part of a larger effort by NFWF to identify barriers and opportunities for environmental water transactions in Western states.


A Dry History

As Americans settled the West, the principles of private rights to land and mining were applied to water. The system, codified by state statutes and judicial decisions, ensured that those who came first would always have their water rights satisfied, and that water would be seen first and foremost as a resource to exploit. “The Western water system is based on the principle that the most senior water rights should be satisfied before junior users get a drop,” said Szeptycki, professor of the practice with the Stanford Woods Institute. This system can clog the process of any kind of water transfer, selling rights to water, whether to protect the environment or bring water to thirsty cities.

By the 1960s, however, states began realizing that their water allocation systems were badly damaging ecosystems, wildlife and recreation. People started coming around to the idea that water left in streams had value too. Laws to protect stream flows followed. Eventually, states created legal tools to allow irrigators and other water users to transfer their rights for environmental and recreational uses, putting that water off-limits to other users.

System in Need of a Fix

Such deals often prove expensive and time-consuming because of the administrative processes required to review and approve them.

Short of completely overhauling water law – politically and legally unlikely – how can water regulators and users operate more effectively? Part of the answer can be found in Oregon.

Since the late 1980s, Western states have had wildly different experiences with environmental water rights transfers. Oregon, for example, approved about 2,000 transfers (1,700 of which were short-term deals), while Arizona approved none in that time. Perhaps unsurprisingly, states such as Oregon that have relatively easy procedures for short-term deals such as single-season forbearance agreements – deals that restrict a rights holder from withdrawing water for a season – end up having a lot of them.

In California and Colorado, rights transfers of five years or fewer are subject to the same review process as permanent transfers, with an average turn-around period of 480 days. The states’ expedited review processes for transfers of a year or less aren’t much better, taking more than four months on average. By comparison, Oregon strives to approve any rights transfer deal of fewer than five years in only 45 days.

Unlike permanent water rights transfers, short-term transfers are more likely to appeal to irrigators unwilling to give up control for the foreseeable future. These deals require less cost, scrutiny and data for approval. They allow state agencies and conservation groups to allocate water where it is needed in the short term, while avoiding the potential of paying to protect an ecosystem that becomes irrelevant as a conservation objective over time. Short-term transfers allow irrigators to decide whether to grow a small amount of crops in a drought year, or to sell their rights and make money that way.

Toward Solutions

Among the report’s preliminary findings:

  • Informal transactions, such as forbearance agreements, provide a great deal of flexibility without the burden of state review
  • The process for quantifying the amount of water that can be transferred to environmental uses is a major barrier to achieving deals. Some states require many years of data.

Elizabeth Hook, a Stanford Law School student who worked on the project, summarized the findings in one sentence: “Just provide the largest toolkit for deal-making that you can with clarity and streamlining of administration at all levels.”

“No state is the same,” said Kori Lorick, another law student who contributed research. “Each state has different stakeholders and different priorities – what works for one may not work for another.” 

Specifically, the report suggests states institute five promising legal tools:

-A framework of statutes, regulations and policies tailored to a broad variety of transaction types

-Streamlined, clear rules for short-term water leases

-Policies clarifying that informal, short-term water forbearance agreements are protected, and cannot be abandoned or result in the permanent loss of water rights

-More streamlined tools for measuring water use

-Permanent institutions, such as water banks, that can facilitate and manage short-term transfers of water rights for environmental purposes

“These recommendations form a potential building block for water scarcity solutions across the West,” Szeptycki said.

Support for the Water in the West research was provided by the National Fish and Wildlife Foundation. The full report is due out later this spring.

See Also

- The Environmental Fluid Mechanics and Hydrology Program at Stanford’s School of Engineering focuses on the movement of surface and groundwater and, jointly, with the Department of Environmental Engineering and Science, atmospheric-related topics. Read more…

- Stanford’s Environmental and Water Studies Summer Program focuses on strengthening knowledge about water and the environment with the goal of applications to problem-solving and research and development. Read more…