Privatization and Control of U.S. Water Supplies

David J. Hayes

ress releases streaming out of the World Water system already has privatized much of the control of Forum held earlier this year in Kyoto decried water in the United States. State and federal govern- Pthe global “privatization” of water resources. ments’ direct influence over water rights is limited and Critics question whether it is prudent to entrust such a is typified by indirect and reactive regulatory require- vital public resource—water—to the handful of large ments under statutes like the Clean Water Act and the multinational companies that specialize in the water Endangered Species Act or, in the case of state offi- business. Will private companies price water out of cials, their ability to take public interest factors into the reach of ordinary citizens? Or decline to serve account when considering new requests for diversions. needy populations? Or simply disappear when times As a result, state water officials typically do not get tough and profits disappear, leaving the public have the authority to redirect water to the highest and without access to vital water supplies? And will pri- best use, to reduce groundwater pumping, and unilat- vate companies have any concern about the negative erally adopt new conjunctive use schemes that better impacts of water withdrawals on the environment? balance the use of groundwater basins and surface Most observers agree that the water privatization water supplies, or to easily reduce water diversions debate is a serious issue, particularly with regard to that are destructive to fish and wildlife resources. And the handling of scarce water supplies in the develop- although some quasi-governmental authorities have ing world. They assume, however, that the privatiza- primary control over important water supplies, such tion controversy has little relevance to the United entities increasingly are competing against each other States. Here, the vast majority of water supplies, and for access to such supplies. Irrigation districts, for ex- water systems, are operated by governmental or quasi- ample, may control large water supplies that are cov- governmental entities. In addition, in most areas of eted by urban water agencies. Both are quasi-govern- the U.S., providing water is a regulated activity, with mental entities, but they typically are driven by their governmental authorities obtaining water supplies, local constituencies, and not by some general notion water rates approved by public utility commissions, of the greater good. and treatment standards established in accordance The growing tensions involved in modernizing with federal Safe Drinking Water Act requirements. the development and management of water supplies, The situation is additive—most systems are operated in the context of a legal system that gives a deep bow by quasi-governmental entities and there is another to private control, is defining the battleground for layer of governmental oversight on top of that via rate water policy in the United States today. Strains are be- review, and so forth. The large multinational water coming evident, with conflicts growing in number and companies (Suez; Vivendi; RWE/Thames) have had intensity as private-based water rights and customs limited market penetration in the U.S. beyond buying bump against competing public policy interests in up some smaller water companies and beginning to more actively managing, and stretching, scarce water help operate (but typically not own) water systems supplies. These conflicts are particularly evident in under contract for a few cities. three key areas of water management: ag-to-urban Contrary to initial appearances, however, the U.S. water transfers, the regulation of groundwater use, water system is largely based on a privatization model. and the dedication of water for environmental needs. Although governmental entities are heavily involved Signs of these conflicts are emerging in all regions of in the water business in this country, state and federal the United States. They are particularly apparent in governments rarely hold water rights. As a general the fast-growing, semi-arid West, where the combina- matter, our legal system vests the primary control of tion of an exploding population base and countervail- water rights in individuals, organizations, and special ing pressures to maintain and protect instream flows use entities, and not the public at large. Water rights are stretching existing water supplies. None of these are broadly categorized as property rights; our legal emerging conflict areas can be appreciated, however, without first acknowledging and understanding the Mr. Hayes is a partner in the Washington, D.C., office of Latham largely privatized nature of our water rights system. & Watkins, and may be reached at [email protected]. Number 2 • Volume 18 • Fall 2003 • American Bar Association • Natural Resources & Environment • 19 “Privatization and Control of US Water Supplies” by David J Hayes, published in Natural Resources & Environment, Volume 18, No.2, Fall 2003 © 2003 by the American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. Water Privatization in the United States once constructed, the Bureau of Reclamation typically entered into water contracts with private parties (usually Western water law is based on the “first in time, farmers), allowing them to have contract rights (another first in right” concept. Private parties and local water version of private property rights) at a small fraction of users who first diverted water and put it to use typical- the actual cost of obtaining and delivering the water. ly created a vested right to continue to use such water (Contract terms typically are cost-based, with much of on a priority basis. The early settlers, miners, industri- the federal investment being written off as serving other alists, and farming cooperatives who showed ingenuity functions such as navigation, flood control or recre- in making use of scarce western water supplies were re- ation.) As a result, federal infrastructure investments warded with a water supply that they could call their typically have had the ironic impact of actually increasing own. Many generations later, their successors find that the value of “private” water rights (i.e., owned by pri- they have inherited a water right with enormous value. vate parties or by quasi-governmental entities that an- Eastern water law, in contrast, typically is based on ri- swer to limited constituencies). Plans to construct the parian water concepts, and relies more heavily on a Hoover Dam, for example, triggered water allocations shared resource concept, with landowners having a on the Colorado River and enabled the Secretary of the right to use the water adjacent to their lands, so long as Interior to enter into “permanent service contracts” for such water remains available for others who also share the delivery of large amounts of now-reliable water sup- the common water source. plies to nonfederal water rights holders. Although the western water rights system gener- While surface water supplies in the West were ously rewarded early water users, being carved up among private par- most western water supplies were ties and collections of private par- constrained by unreliable flows. Ex- ties (e.g., irrigation districts pensive infrastructure was needed, formed by farmers), many water much of which private parties could The U.S. water system is users in the plains states and the not afford to build. At the turn of Southwest also relied heavily on the twentieth century, President largely based on a underground water supplies for ir- Theodore Roosevelt championed rigation and domestic use. As with passage of the Reclamation Act of surface water rights, the govern- 1902 to do the job. Large dam- privatization model. ment typically enabled—rather building and irrigation projects fol- than regulated—the utilization of lowed. Federally funded projects groundwater pumping. Under changed the western water land- most state legal systems, overlying scape, from Hoover Dam to California’s Central Valley landowners were granted rights to pump groundwater Project to the Central Arizona Project, and much for use on the land unless the groundwater supply was more. Today, the Bureau of Reclamation is the largest immediately adjacent to, and clearly connected with, a water wholesaler in the world. surface water supply. Only with the passage of time, The U.S. Army Corps of Engineers undertook as and growing concerns of unsustainable pumping, has large an effort as the Bureau of Reclamation, fundamental- the legal system begun to adjust its thinking on ly changing how water is managed throughout the United groundwater. Arizona passed a comprehensive new States, from Florida’s Everglades, to our largest river sys- groundwater code in the early 1980s, helping to stabi- tems, the Missouri and Mississippi. Today, the Corps lize that state’s then-declining groundwater tables, but maintains more than twelve thousand miles of inland wa- other jurisdictions have been slow to enact similar, far- terways for navigation purposes and operates nearly four sighted statutory schemes. As discussed below, public hundred dams and reservoirs for flood-control purposes. water managers continue to confront significant chal- The massive federal taxpayer investment in water lenges in defining the limits of private rights over infrastructure could have fundamentally changed own- groundwater supplies and in coordinating pumping ership rights over project water and extended water patterns. rights to the taxpaying public, but it did not. The feds A discussion of our largely privatized water rights could have demanded, for example, that federal agen- system would not be complete without reference to cies, acting on behalf of the taxpayers, obtain the bene- urban water users’ standing in the water rights world. fits of new water supply opportunities provided by Historically, urban communities in the water-scarce federal investments in major water projects. Rather West had the same opportunity to obtain water rights than seeking a quid pro quo of new, publicly controlled as farming communities. For many years, however, water rights in return for public investments, however, water was not a major issue for smallish western settle- water rights developed under the Reclamation Act typi- ments. With a few notable exceptions, western com- cally were acquired under state law, so as not to override munities were content to identify and dedicate a the priorities of preexisting private water rights. And modest water supply for their needs. Indeed, under 20 • Natural Resources & Environment • American Bar Association • Fall 2003 • Volume 18 • Number 2 “Privatization and Control of US Water Supplies” by David J Hayes, published in Natural Resources & Environment, Volume 18, No.2, Fall 2003 © 2003 by the American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. western water law principles, they had little choice; as West is nominally owned by the public, it tends not to a general matter, traditional water rights are based on be managed or viewed as a public resource. Water water that can be put to beneficial use in the here and rights holders generally view the water they use as now, and not based on prospective future needs. As a being their own, and they stress the private property result, towns and cities expressed little or no objection nature of water rights. Water management agencies to the massive federal investments in new irrigation and western state legislatures generally accommodate water projects, thinking that their modest needs could the water users.” See R. Benson, Whose Water Is It? be met using traditional water supplies. Private Rights and Public Authority Over Reclamation Today, of course, the landscape has changed and Project Water, 16 VIRGINIA E.L.J. 362, 375 (1997). mega-cities have grown from Texas to California, out- Despite the potential for state law to assert public stripping the water supplies that fifty years ago seemed interests over private interests in water systems, federal ample. Even those few cities that made far-sighted in- legislation arguably has played a predominant role in in- vestments in major water supply sources, such as Los jecting additional public policy considerations into the Angeles’s surreptitious purchase of the Owens Valley, management of water supplies. More specifically, Pro- and San Francisco’s development of Hetch Hetchy, fessor David Getches at the University of Colorado has find themselves increasingly strapped for reliable water asserted that national requirements under the Endan- supplies. Most major urban centers enter the new cen- gered Species Act and the Clean Water Act have played tury having limited water rights of their own in a sys- a central role in facilitating a policy reform agenda for tem that long ago divvied up existing water supplies to water that includes “greater efficiency and conservation, other parties. Western cities are facing the reality that conjunctive use of groundwater, protection of instream the best water rights were sewn up early, with agricul- flows, more comprehensive planning, and inclusive pub- tural communities having access and control over the lic participation at the level closest to the resource.” overwhelming majority of water supplies. Getches suggests that “[t]he most impressive innova- tions . . . [have been] produced by federal regulatory pressure and locally based problem-solving efforts, Room for the “Public Interest”? often supported by federal participants.” See D. Getch- es, The Metamorphosis of Western Water Policy: Have Fed- Of course, asserting that our nation’s water sup- eral Laws and Local Decisions Eclipsed the States’ Role? 20 plies are “privatized” in the fullest sense of the term is STAN. L. REV. 3, 5 (2000). an overstatetment. Substantial blocks of water are con- Regardless of whether state or federal law has been trolled by governmental entities that seek to reflect more effective in introducing new public policy consid- broader public interests (including environmental in- erations in state-based water systems, there is no ques- terests) when procuring water supplies for their con- tion that, at root, most water supplies are controlled by stituents. Also, most state water law systems vest state private parties or by quasi-governmental authorities officials with the right to consider the “public interest” that collectively may represent a predominately private when evaluating new requests for diversions. The pub- interest. One such example is irrigation districts that lic interest exception to the privatization rule has been have, as their mission, the delivery of water supplies to used in some states to require that minimum flows re- private irrigators. The State of California is balkanized main in streambeds for the health of the environment. into more than 250 special interest water agencies, rep- State law systems also are beginning to acknowledge resenting discrete geographic areas that represent that recreational interests in waterways should be rec- widely varying needs and interests. ognized as a legitimate, public interest that should be The tension between this largely privatized water taken into account when adjudicating water rights. system and new, pressing water policy needs is leading In addition, of course, many state water systems to serious water conflicts that are arising throughout the are premised on the notion that the sovereign ulti- United States. Illustrating the emerging conflicts are the mately “owns” water resources in a state. Private par- controversies associated with the push to transfer some ties’ rights relate to the use—and not ownership—of water from ag to urban communities, the increasing ef- water; they are “usufructuary.” And the California forts to rationalize and coordinate surface and ground- Supreme Court recognized the public trust doctrine in water supplies, and the rising demands to give the the celebrated Mono Lake case, suggesting the public environment its due with respect to water supplies. interest in the integrity of a water body can trump pri- vate water interests. National Audubon Society v. Superi- or Court, 33 Cal. 3d 419, 658 P.2d 709 (1983). Ag to Urban Transfers As Reed Benson, a professor at the University of Wyoming, has commented, however, “state or public For historical reasons recounted above, the U.S. ownership of water has far more meaning on paper water system has vested the large majority of water than in practice.” He explained: “While water in the rights in the agricultural sector. Irrigation in the Number 2 • Volume 18 • Fall 2003 • American Bar Association • Natural Resources & Environment • 21 “Privatization and Control of US Water Supplies” by David J Hayes, published in Natural Resources & Environment, Volume 18, No.2, Fall 2003 © 2003 by the American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. West, for example, utilizes 80 percent to 90 percent of vances in water management expectations and ap- the total water supply in the region. From an overall proaches (e.g., drip irrigation, lined canals and water water supply situation, this is good news. It suggests metering) and the increased scarcity and related run- that relatively small transfers of water from ag to up in value of water supplies. urban use can address growing urban water needs. Also, can a water right that is based on irrigation And if such transfers can be accompanied by the appli- uses in a specific geographic area be transferred to a cation of new conservation practices on irrigated different use—an urban water application—in a differ- lands, such transfers can provide a “win-win” solution ent location, and perhaps in a different water basin? for the water-constrained West. Even better, if a lively These questions may not be easy to answer, especially water transfer marketplace can develop, economic where the underlying water right and legal system did principles and market competition can enter the pic- not anticipate such a transaction, or where water ture, enabling water supplies to move more freely to courts are given little guidance on how to address po- meet market needs. tential environmental impacts, third-party economic Promoting market-based water transfers is a key impacts, or other difficult issues sometimes associated to providing flexibility in moving water among users with ag-to-urban water transfers. without upsetting the well-established legal system Then there is the question of who, exactly, owns that governs water rights. Healthy water markets the water and has the right to transfer it. Even if an ir- have developed in a few jurisdictions—notably, Col- rigation district has the legal authority to control and orado—but as a general matter, transfer its water rights, what are ag-to-urban transfers have been its fiduciary responsibilities vis-à- slow to catch on. It has proven vis the farmers who use and pay for difficult to implement a modern the water? What if most of the market-based transfer concept in Courts have suggested that farmers object to a proposed trans- the context of a legal system that fer? And if an individual farmer is was developed in a different era, the standard of care for employing extraordinary conserva- for a different purpose. Because tion techniques that is freeing up water rights are generally kept in reasonable and beneficial use the water for transfer, isn’t he or “private” hands (albeit often in she the real party in interest in the the hands of quasi-governmental transaction? authorities that may represent is an evolving one. And how should the water be communities of farmers and other priced, and to whom should the water users), and because the legal proceeds flow? When irrigators are system typically did not anticipate receiving water that was heavily that such privately held water subsidized by governmental largess, rights could be transferred, a host of complications should they benefit from the spread between their sub- have emerged, retarding the emergence of vibrant sidized water price and an urban market price? water markets. Virtually all of these questions are being played By way of example, irrigation water rights typically out, very publicly, in the proposed mega-transfer of are defined with reference to the amount of water that Colorado River water between the Imperial Irriga- is being reasonably and beneficially applied to irrigated tion District (IID) and the San Diego County Water lands. Water that is “wasted”—that is, not reasonably Authority (SDCWA). IID farmers pay $15 per acre- and beneficially used—is not within the scope of the foot of water each year, while they propose to sell it water right. Likewise, in some states, the water must to San Diego for more than $250 an acre-foot per be used for its intended purpose (here, irrigation) in year for a period of thirty to seventy-five years. Is order for the priority water right to continue to attach. this type of transfer acceptable, when IID’s water Thus, when an irrigation district proposes to con- contract with the Department of the Interior spells serve some of the water that it traditionally has uti- out that the parties intended its water to be used in lized, and transfer it off the land to an urban user, the Imperial Valley? Is the price spread inappropri- questions may arise whether the “conserved” water ate as a matter of public policy, given the federal sub- that is being proposed for transfer is water that fits sidization of Colorado River water? If IID succeeds within the water right in the first place. Is it, instead, in conserving water, does the next highest priority water that is excess to the supplies that can be “reason- water user (here, the Coachella Valley Water Dis- ably and beneficially” used? To complicate matters trict), have first call on the water? Should federal or further, courts have suggested that the standard of care state authorities ensure that only water that is the for reasonable and beneficial use is an evolving one; subject of extraordinary conservation efforts be what qualified as sound water management principles a transferred, based on the fact that the water right few years ago may no longer qualify today, given ad- only extends, in the first place, to water that is being 22 • Natural Resources & Environment • American Bar Association • Fall 2003 • Volume 18 • Number 2 “Privatization and Control of US Water Supplies” by David J Hayes, published in Natural Resources & Environment, Volume 18, No.2, Fall 2003 © 2003 by the American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. used wisely and efficiently? Should the farmers who update its pricing structure when renewing contracts actually give up their water, or who undertake ex- for California’s Central Valley Project. As a general traordinary conservation measures to generate water matter, however, Congress and the federal water agen- for a transfer, have first call on transfer proceeds? cies have had little success in overcoming the strong What about the negative impact that the transfer interests that favor continued subsidization of federal might have on a farm-based rural community, in- water supplies. cluding the potential loss of jobs associated with, or supporting, the farming industry? How will these third-party impacts be handled? Do the holders of Conjunctive Management the water right have an obligation to the community? And what if the transfer has negative environmental In addition to ag-to-urban water transfers and ramifications (e.g., on the Salton Sea)? Who bears market pricing of water, smarter use of groundwater responsibility for those potential impacts? supplies is considered an essential tool to the better There are no clear answers to any of these ques- management of scarce water supplies. Currently, many tions, so it is no surprise that the IID/SDCWA underground aquifers are suffering from a “tragedy of transfer negotiations have been difficult, despite the the commons” as individual water users continue to widely understood importance of exercise unfettered rights to pump implementing the transfer. At groundwater. Even if they were to root, most of the complications stop pumping, their neighbors flow directly from the essentially would not. In the absence of a reg- private nature of the IID water Virtually every western state ulatory system to govern compet- right, and the tension created be- ing private pumping practices, the tween private interests and aquifer suffers and, ultimately, emerging public policy needs has struggled with how to everyone loses. (here, for California to conserve In addition to the damage that its Colorado River water and define the connection between can be caused by the unimpeded transfer some of its limited water mining of groundwater aquifers, supplies to urban users). Consid- a surface water right and the the upside benefits of conjunctive erable energy is being devoted to use are lost if groundwater and sur- this important subject in Califor- face water supplies are not con- nia and other states, and new right to pump groundwater. junctively managed. Aquifers can mechanisms and practices are serve as important storage facilities being developed to more effi- for water supplies. They can be ciently implement transfers recharged during wet periods, and among willing parties. Somewhere their use can be coordinated with in the mix, however, the public in- surface water supplies to maximize terest in promoting the development of a water mar- the utilization of whichever resource (surface or ket on the one hand, and in addressing third-party groundwater) is optimal under given circumstances. impacts on the other hand, needs to enter the pic- Virtually every western state has struggled with ture in an organized, thoughtful way. Otherwise, the how to define the connection between a surface water type of bitter controversy that has been flowing right and the right to pump groundwater. Groundwa- from the on-again, off-again IID/SDCWA transfer ter’s relationship to surface water supplies can be ei- will continue to be the order of the day. ther direct, or obscure, depending on relevant While encouraging water transfers is an important hydrogeology. Colorado and California, for example, mechanism for unlocking “privatized” water alloca- explicitly recognize that stream “underflows” are tions, updating government water contracts to reflect governed by surface water rights, but factual ques- the true value of water also has the potential to facili- tions regarding the surface/groundwater interface be- tate the development of water markets. Many govern- devil rights holders and decision makers in both ment contracts with water customers are keyed off jurisdictions. Likewise, most progressive jurisdictions public investments made many decades ago. These allow parties to store water in underground aquifers, cost-based contracts reflect significant subsidies that but such parties may bear the (difficult) burden of may have made good policy at one time, and may still showing that their recharge, storage, and withdrawal be justified in some cases, but which should be revisit- of such supplies does not negatively impact any other ed on a disciplined, systematic basis. Congress has surface or groundwater rights holders. made some tentative steps in that regard. The 1992 Continuing conflicts between surface water users Central Valley Project Improvement Act (CVPIA), for and groundwater pumpers are prompting many juris- example, mandated that the Bureau of Reclamation dictions to develop new regulatory systems that will

Number 2 • Volume 18 • Fall 2003 • American Bar Association • Natural Resources & Environment • 23 “Privatization and Control of US Water Supplies” by David J Hayes, published in Natural Resources & Environment, Volume 18, No.2, Fall 2003 © 2003 by the American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. constrain and coordinate groundwater pumping for the dangered Species Act. The following water year, benefit of the aquifer and its users. Arizona’s landmark Secretary Norton directed Klamath water to the ir- groundwater protection legislation remains the best rigators, with great fanfare, only to encounter an example. It established a regulatory system that regu- embarrassing, massive downstream fish kill a few lates pumping rights for non-grandfathered water months later. users and has thereby encouraged the development of The case law in water use versus the environment conjunctive use approaches in the state. California has “takings” cases is mixed, with courts typically focusing taken a less direct route to promoting conjunctive use on the nature of the water right during times of management, eschewing statewide legislation in favor drought. To date, most courts have concluded that Bu- of the promotion of regional groundwater manage- reau of Reclamation contractors have no claims for ment plans and the adjudication of pumping rights in compensation when they are shorted water that is specific basins. needed to address drought-related environmental In California, money has provided the grease to needs. In at least one case, however, a court has con- make the system work. The state legislature has au- cluded that a taking had occurred. Compare Klamath thorized more than $500 million between 1996 and Water Users Protective Association v. Patterson, 204 F.3d 2000 for local agency conjunctive use assistance, and 1206 (9th Cir. 2000) with Tulare Lake Basin Water Stor- some local agencies such as Kern County Water age District v. United States, 49 Fed. Cl. 313 (2001). Agency have developed highly successful—and lucra- In most watersheds, the push and pull of water tive—water banks. A privatized water system can move rights versus environmental needs plays out in a forward with the times, particularly when the private complex negotiation process, rather than in a court- parties or their representatives who control water sup- room. The multibillion dollar CAL-FED plan re- plies or water assets see new ways to increase the eco- flects a negotiated compromise that is intended to nomic benefits associated with their ownership right. address both the needs of water users and the needs That is what is bringing rapid improvement in con- of the environment by using public money to sup- junctive use opportunities in California. port, among other things, the creation of a pool of “environmental water” that will be used to address environmental needs, while protecting other water Water for the Environment supplies from further reductions. Likewise, the Ever- glades restoration plan represents a negotiated com- Perhaps the largest clashes between a largely promise that will address environmental needs, while privatized U.S. water system and broader public in- also protecting private water interests. The injection terests are playing out in the environmental context. of large public investments in both projects have pro- More clashes are sure to come as parties assert their vided a bridge to the new way of doing business. As property-based interest in water over and above noted above, monetary investments also provide key newly emerging understandings of the importance of incentives to water transfers and the introduction of maintaining water in streams and other water bodies other modern water management tools, such as con- for the benefit of fish, wildlife, and recreational in- junctive use plans. terests. Conflicts are exacerbated by the uncertainty In summary, our nation’s water sources are more of how public trust and public interest state water “privatized” than may appear at first blush. This pri- law principles, as well as federal law overlays, affect vate-based water rights system has served the country the scope of private water rights. Everyone is learn- well. New strains are developing in our largely priva- ing on the fly. tized system, however, as increasing demands on scarce The conflicts that have emerged in the Klamath water supplies trigger broad public policy interests in Basin in Oregon and California over the last couple accommodating new water users, in employing more of years provide the poster child of water rights/en- modern water management practices that require more vironmental conflicts. A severe drought hit the over- collective cooperation among water users, and in dedi- appropriated Klamath basin in 2001. Farmers had cating more water for environmental needs. contracts with the Bureau of Reclamation for water Conflicts are breaking out in all of these arenas as deliveries, but competing water needs for endan- private-based water rights holders either resist these gered resident fish in Klamath Lake, and in migrat- new realities, or struggle with how to address them in a ing salmon downstream in the Klamath River, manner that is consistent with their traditional water prompted the Secretary of the Interior to short the rights. Along the way, our state-based water rights sys- irrigators. The result has been the filing of a massive tem will be stretched, and tested, in new ways. Persis- “takings” suit by the irrigators, based on an assertion tence, creativity and, in some cases, strong monetary that the Bureau was obligated to deliver water to the incentives, will be needed to open the door for mean- irrigators, trumping environmental needs, as defined ingful change in a water rights system that was designed through Biological Opinions issued under the En- for a much different time than we live in today. 24 • Natural Resources & Environment • American Bar Association • Fall 2003 • Volume 18 • Number 2 “Privatization and Control of US Water Supplies” by David J Hayes, published in Natural Resources & Environment, Volume 18, No.2, Fall 2003 © 2003 by the American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.