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Case Study of Whychus Creek, Oregon

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Case Study of Whychus Creek, Oregon Environmental Flow Restoration through Environmental Water Transactions: Case Study of Whychus Creek, Oregon 2017 Final Version for The Nature Conservancy Bruce Aylward Rachel O’Connor Portland, Oregon Acknowledgements This paper was prepared with financial support from the California Chapter of The Nature Conservancy. The paper draws on draft material prepared by the authors for the Water Sharing expert working group supported by Science for Nature and People Partnership (SNAPP), a partnership of The Nature Conservancy, the Wildlife Conservation Society, and the National Center for Ecological Analysis and Synthesis (NCEAS) at the University of California, Santa Barbara, including financial support from The Nature Conservancy and the National Fish and Wildlife Foundation. All errors and omissions remain the property of the authors. Authors Bruce Aylward, Ph.D., is a resource and environmental economist and Managing Director of AMP Insights. Bruce has a 30-year career in extension, policy, research and transactional work that includes experience in dozens of countries and a dozen western states. In the last 15 years he has carried out assignments in the major river basins of the western US, as well as the Okavango and Mekong Basins. Previously, Bruce led water market and water bank development efforts at the Deschutes River Conservancy in Oregon, served as Senior Advisor for the World Commission on Dams and carried out economic policy research at the International Institute for Environment and Development. Bruce was a convening lead author on Freshwater for the policy track of the Millennium Ecosystem Assessment. Rachel O’Connor is a Research Associate at AMP Insights where she carries out GIS and data analysis, water right due diligence and irrigation water assessments. Rachel completed her Masters Degree at the Bren School of Environmental Science & Management at the University of California where she was a Sustainable Water Markets Fellow. During and after her tenure at the Bren School Rachel worked with the freshwater team at the Texas Chapter of The Nature Conservancy on a variety of tasks developing a database of Texas water rights and linking paper rights to spatial data in ArcGISand mapping Texas water data. Environmental Water Transactions: Whychus Case Study i Contents 1. INTRODUCTION ......................................................................................................... 1 2. CONTEXT BEFORE TRANSACTIONS: WHYCHUS CREEK, OREGON ........................................ 2 2.1 GEOGRAPHY ................................................................................................................................... 2 2.2 SOCIO-ECONOMICS .......................................................................................................................... 3 POPULATION AND DEMOGRAPHICS ......................................................................................... 3 THE ECONOMY ................................................................................................................... 4 2.3 LAND: ZONING, OWNERSHIP AND USE .................................................................................................. 6 2.4 WATER RESOURCES ........................................................................................................................ 10 STREAMFLOW MEASUREMENT............................................................................................. 10 HYDROGRAPH AND WATER SUPPLY....................................................................................... 11 2.5 WATER RIGHTS ............................................................................................................................. 13 SURFACE WATER RIGHT ADJUDICATIONS AND PERMITS ............................................................. 13 THE WATER RIGHTS ABSTRACTS ........................................................................................... 14 SURFACE WATER RIGHTS AS ISSUED (THROUGH 1937) ............................................................. 15 WATER RIGHTS IN 1997 .................................................................................................... 15 WATER INFRASTRUCTURE ................................................................................................... 17 WATER RIGHT RELIABILITY .................................................................................................. 19 2.6 WATER USE .................................................................................................................................. 21 IRRIGATION WATER USE ..................................................................................................... 21 MUNICIPAL AND DOMESTIC WATER USE................................................................................ 22 ENVIRONMENTAL FLOWS AND INSTREAM USES ....................................................................... 23 3. ENVIRONMENTAL WATER TRANSACTIONS IN WHYCHUS CREEK ....................................... 24 3.1 ENVIRONMENTAL WATER TRANSACTIONS ........................................................................................... 24 3.2 STATE LEGAL/REGULATORY SETTING: HISTORY OF WATER MANAGEMENT IN OREGON ................................. 25 THE OPEN ACCESS ERA: SETTLEMENT PRE-WATER CODE ........................................................... 25 THE PRIOR APPROPRIATION ERA: DEVELOPMENT OF A WATER RIGHTS SYSTEM .............................. 26 THE ERA OF NEW SUPPLY: HYDROPOWER, FLOOD CONTROL, LARGE DAMS AND RURAL ELECTRIFICATION 26 THE ENVIRONMENTAL ERA: INSTREAM USE AND WATER CONSERVATION ..................................... 26 WHYCHUS AS EXPERIMENTAL CASE STUDY ............................................................................. 27 3.3 ACTORS AND PARTNERSHIPS ............................................................................................................. 29 3.4 STREAMFLOW TARGETS ................................................................................................................... 30 3.5 WHYCHUS CREEK WATER TRANSACTIONS ........................................................................................... 30 WATER RIGHT PURCHASE AND INSTREAM TRANSFER ................................................................ 32 WATER RIGHTS INSTREAM LEASE (AND DIVERSION REDUCTION AGREEMENT) ................................ 35 PIPING AND CONSERVED WATER .......................................................................................... 35 CHANGE IN POINT OF DIVERSION AND CONSERVED WATER ........................................................ 38 SOURCE SWITCH: SURFACE TO GROUNDWATER SWITCH ............................................................ 40 3.6 SUMMARY OF TRANSACTION PROGRAM.............................................................................................. 42 4. ENVIRONMENTAL WATER TRANSACTIONS PERFORMANCE .............................................. 45 4.1 STREAMFLOW IN UPPER WHYCHUS CREEK .......................................................................................... 45 STREAMFLOW .................................................................................................................. 45 STREAMFLOW VERSUS STREAMFLOW TARGETS ........................................................................ 46 Environmental Water Transactions: Whychus Case Study ii 4.2 ENVIRONMENTAL FLOWS TARGET ATTAINMENT IN UPPER WHYCHUS CREEK ............................................... 48 VOLUMETRIC ATTAINMENT OF STREAMFLOW TARGET .............................................................. 49 PERCENT OF DAYS ATTAINMENT OF STREAMFLOW TARGET ........................................................ 50 4.3 ENVIRONMENTAL FLOW SECURITY ..................................................................................................... 51 SENIORITY OF THE INSTREAM WATER RIGHT PORTFOLIO............................................................ 52 DURATION OF THE INSTREAM WATER RIGHT PORTFOLIO ........................................................... 53 PERFORMANCE AND REGULATION OF THE INSTREAM WATER RIGHT PORTFOLIO ............................. 54 ENVIRONMENTAL FLOW SECURITY AS OF 2016 ....................................................................... 56 4.4 ENVIRONMENTAL FLOW COST-EFFECTIVENESS ..................................................................................... 57 DETERMINANTS OF COST-EFFECTIVENESS ............................................................................... 58 MARGINAL AND AVERAGE COSTS ......................................................................................... 61 CONCLUSIONS ON COST EFFECTIVENESS ................................................................................. 63 5. APPENDIX: COST-EFFECTIVENESS METRICS .................................................................... 64 Environmental Water Transactions: Whychus Case Study iii Figures Figure 1: Whychus Creek and Watershed, along with ODFW Instream Water Rights (ISWRs)............. 3 Figure 2: Sisters Oregon (city website photo) .................................................................................. 4 Figure 3: Contribution to Deschutes County Economic Growth (2015) ............................................... 6 Figure 4: Land Ownership in Deschutes County ............................................................................... 7 Figure 5: Land Use Zoning in Deschutes County .............................................................................
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