Property owners and officials find ways around century-old laws as the West runs out of water

By Stephanie Elam, CNN

With a megadrought draining water reserves in the West, states are looking for alternatives to handle water rights, many of which were set more than 100 years ago when water supplies were far more abundant.

Back then, just posting a sign next to a water diversion was enough to be considered a right, one which could still be honored now. But the climate crisis is now straining those rights. There just isn’t enough water in California to satisfy what’s been allotted on paper.

For years, debate has raged in California about the best way to fix the water rights system for life in the modern era. Many of the senior water rights held in the state were set before 1914 when the permit system was established and when mining was big business.

“It’s an old water system that many perceive isn’t set up to deal with current climatic and hydraulic conditions,” Nathan Metcalf, a water rights attorney for California law firm Hanson Bridgett, told CNN. “It’s just not really set up to deal with climate change and the changing needs for water both from an environmental standpoint, and then there’s also the rub between agriculture and municipal.”

Recognizing the dour effect of climate change on the state’s hydrology, Democrats in California’s Senate have proposed using $7.5 billion in state and federal funds to “build a climate-resilient water system.”

Of those funds, $1.5 billion would be used to buy land with senior water rights from holders willing to sell them voluntarily in prioritized waters. The Democrats argue “fundamental changes” to the state’s water system are “needed to realign demand, supply, and the flexibility of the system.”

The proposal, which has yet to work its way through the legislature, would look to “retire water use incrementally from multiple water uses in a basin and across wide geographies” which would help provide clean drinking water while also improving fish habitats and wildlife refuge conditions.

“The problem with trying to regulate the senior water rights is that it’s a property interest, so you always run the risk of a takings claim by taking that property,” Metcalf said.

A takings claim could be brought by property owners against the government if it seizes private property for public use. Owners could also make a takings claim if regulations go too far in restricting their use of the land.

But Metcalf said there could be situations where it’s mutually beneficial for a property owner to cede his or her water rights.

“If it’s economically advantageous for both the farmer and the state to purchase those water rights to put to another use, I think that’s a possibility,” Metcalf said. “I could also see certain agricultural sectors being opposed to that because you never know when or how you’re going to use that water right in the future.”

Metcalf said the government could simply buy senior water rights, which might be an easier option than trying to regulate those rights, which often leads to years of litigation.

A novel approach

In Northern California, the State Water Board is trying something it has never tried before: a voluntary water sharing agreement for water rights holders in the Upper Russian River watershed in Mendocino and Sonoma Counties.

For months, rights holders met once a week to come up with an agreement in anticipation of another supply shortage. It’s an effort to avoid curtailments spurred by the severe drought conditions last year, which led to water demand outstripping supply.

“Conditions deteriorated so quickly, there weren’t really alternative options. We had to move forward with the curtailment process. We developed an emergency regulation,” said Sam Boland-Brien, a supervising engineer with the State Water Board. “That resulted in all kinds of surface water users … in the upper part of this watershed having to stop diversions.”

In fact, water levels got so low, “there was this really concrete risk that Lake Mendocino up near Ukiah was going to run empty,” Boland-Brien said, adding the storms rolling through in October last year kept the lake from running dry before the end of winter.

Coming too close to running out of water was the catalyst to find a better way to share water, he said.

The State Water Board said more than half of the total eligible water rights holders have signed up for the program, including municipalities along the river which hold the oldest rights in the watershed dating back to the late 1800s as well as local water districts and some larger institutional wineries.

The more rights holders involved, the better. By enrolling in the program, rights holders committed to a water use reduction of up to 20% to 30% for senior holders. Due to the oppressive drought, cities are also enforcing water conservation. Those water savings are incorporated into what can be shared with other rights holders in the community as well, Boland-Brien noted.

All the agreements create a pool of water available for more junior rights holders who would have otherwise had their water curtailed. Participants can also do further transfers or exchanges among each other, creating an added level of flexibility.

“What the program achieves is, it smooths out that ‘all or nothing’ aspect of the appropriative system,” Boland-Brien explained. He said a better-managed, voluntary system is more likely to get buy-in from rights holders than state regulatory actions alone.

“Those who still have water rights, produce a little bit,” Boland-Brien said. “They reduced their usage … so those that [have more junior rights] can make it through the irrigation season on a reduced amount.”

An emergency curtailment regulation remains in place as a backstop for those rights holders who did not join in the program. As water levels continue to drop, curtailments will kick in based on seniority.

The program went into effect July 1 and will expire at the end of the year, but there’s hope that it could be expanded into the future.

“The idea is that this would continue in future years and so each year there would be a slightly different mix of water supplies and people signed up so that even if you’re a junior some years, you could still benefit from the flexibility,” Boland-Brien said.

A court rules in favor of deviating from the law

The Upper Russian River program is in line with what Mike Young, a professor at the University of Adelaide and a specialist in water policy reform, says is needed to equitably handle water rights in drought-stricken areas, except, he argues, every rights holder needs to be included in any water-sharing program.

“Everybody has a percentage share of whatever is available and that goes up and down,” Young said to CNN. “Have boards that make decisions in the interest of everybody, and everybody has an incentive to make the system work. The board makes the final decision, and the profits are allocated to shareholders … You run a water accounting system that looks like your bank account.”

In Nevada, a fight over Diamond Valley’s groundwater rights ended up at the Nevada Supreme Court, which set a precedent when it ruled 4-3 the state engineer can deviate from Nevada’s water laws, which are based on water rights seniority, to regulate Diamond Valley’s water under a new groundwater management plan approved by those water users when supplies are depleting.

About four years ago, Young spent time with farmers in Diamond Valley, an area in Eureka County which relies heavily on groundwater; too heavily, Young said. According to the court’s ruling, “the Diamond Valley Hydrologic Basin is over-appropriated and over-pumped, such that groundwater withdrawals from the Basin exceed its perennial yield.”

“The thing about rivers and groundwater resources is they don’t lie,” Young said, adding in one day, he helped the farmers draft the new groundwater management plan.

“Someone’s got to write the rule book down and the problem is that America doesn’t have a decent rulebook for playing the game called water use,” Young said. He argues developing water accounting systems where the resource is scarce should be basic.

“Every irrigator in the west should have a water account that says how much water they may take from the system,” Young said. “Taking water that is not in your account is seen by everyone as bad as going next door and harvesting their crop.”

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