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December 15, 2015

WATER RIGHTS? Is Change Inevitable?

For 150 years, water right holders in California have been king.  Riparian holders (those adjacent to natural waterways) and Pre-1914 appropriative right holders (those not on waterways, but who have rights to acquire water from waterways and pipe it for use) are considered senior.  Depending on which right is held, right holders are entitled to tap, draw, divert and store water with few restrictions.
The drought, which is considered ‘severe’ to ‘exceptional’ in as many as nine western states, is ravaging much of the West, particularly California where it’s extending into its fifth year.  The lack of available water is testing the state’s complex system of laws and districts in unprecedented ways, calling into question for the first time since 1914 how water rights are granted.
To address these issues, Western Growers held a workshop entitled, “Under Attack: Water Rights, Water Use” during the 90th Annual Meeting.
The panel consisted of five water experts: James L. Nickel, president and CEO, Nickel Family LLC; Judge Oliver Wanger, former United States District Judge; Thomas Berliner, partner, Duane Morris LLP; Grady Gammage, Jr., senior fellow, Morrison Institute ASU; and Ellen Hanak, director, Public Policy Institute of California Water Policy Center. Western Growers Board Member Stephen F. Patricio, president and CEO, Westside Produce, moderated the session.
Perhaps appropriately so, Nickel, a fifth generation farmer, started the discussion.  Patricio acknowledged that Nickel’s family is responsible for much of the water rights we know today with his great, great grandfather establishing family riparian rights on the Kern River in the 1850s.
Nickel said he used to think his families’ “water rights were absolutely golden.”  His current exchange contract allows for 100 percent water allocation in a non-critical year and 75 percent in critical years.  He lamented the fact that though there is more water in the system today than during the drought in 1977, over the last two years, the family has not received its promised 75 percent allocation.  Nickel said even in 1977 they received their minimum 75 percent allocation.  “Government contracts nowadays aren’t worth the paper they are printed on,” he said.  In addition to the drought, he blamed the loss of a “solid water supply” on the Endangered Species Act (ESA) and other regulations.
In his distinguished 20-plus year career on the bench, Judge Wanger handled nearly 100 water cases.  Wanger spoke of the progression of how water cases over the years transformed water rights expectations and how the federal government believes the courts overstepped their bounds.
Judge Wanger was explicit when he said the news on water rights is not good and “if there is uncertainty, then expect it to get worse.” His take away is simple: 1) the Delta is broken and can’t be fixed; 2) if you don’t store water and don’t build storage, you won’t have water for either humans or endangered species, leaving us with no alternatives, and; 3) millions will continue to be spent on studies instead of doing what the law says. “This is the reality we face.”
As moderator, Patricio asked the judge if what happened in California could also happen in Arizona.  Judge Wanger said it could happen anywhere there are endangered species, federal contracts or anywhere there is a basis for federal jurisdiction.
Gammage, representing Arizona interests, said the public is getting attuned to water use in a way that that they haven’t been before.  People have awakened to the fact that in the West, 75-80 percent of all available water is going to agriculture.  Despite the fact that they all drink and eat, that usage seems like an imbalance to them.  So he thinks we are going to see an increased emphasis on trying to protect water for non–agricultural purposes, whether it’s urban or environmental purposes.  Gammage said the real message for agriculture is, “You need to get ahead of that.”
Hanak addressed how water transfers are fundamentally linked to the water rights system expressing the concept that “water rights are a kind of property” that can be traded in different ways, even to provide water for the environment.  She said trading helps reduce the “cost” of droughts because water can be redistributed to the people and places that need it.
She said despite trading being a good option, it’s hard to trade water in California.  Shifting baselines make it difficult to know how much water someone has to trade from year to year and it’s hard to get approvals.  She said traders are also forced to jump through the same hoops every year, making the process very bureaucratic.  Hanak said the system would be more efficient if the information used was more transparent.
Berliner touched on a number of significant topics providing both negative and positive observations about water use in California and the West.  On the negative side, he acknowledged that government regulators are finding more ways to regulate the use of water through the ESA, the Clean Water Act and even through hydropower relicensing.  He emphasized that it no longer seems like the state and federal governments are working with water users when dealing with drought issues.  Berliner also pointed to the fact that urbanization is taking away prime agriculture land and that tribal water claims being made are a huge issue that will negatively impact Arizona, California and Nevada.
On the positive side, Berliner doesn’t think the government will be successful in changing water rights at its most basic level.  He said too many outside interests will fight legislators in Sacramento and make it impossible for that type of change to occur.  Berliner believes that the new groundwater regulation laws will eventually be viewed as a smart move.  He is encouraged by the new conversations about water use that are occurring and hopes that any water brought to California by El Niño won’t change that.  In the end, Berliner says there is a tremendous reason for optimism especially if the ag industry can come together and flood the halls of Capitol Hill.  He said the industry needs to embrace change and look at it as the cost of doing business.  We need to ask ourselves, “What’s the challenge?” and then just say, “We’ll figure out how to deal with it.”