Environmental Defense's Tom Graff Testifies On Calfed–Bay Delta Authorization

Thank you for your invitation to testify today on S. 1097, the Calfed Bay-Delta Authorization Act. S. 1097 is a complex bill whose basic intent, as stated by its authors, is "To authorize the Secretary of the Interior to implement the Calfed Bay-Delta Program". Definitions proposed in the bill indicate that the Calfed Program includes "programs, projects, complementary actions, and activities undertaken through coordinated planning, implementation, and assessment activities of State and Federal agencies in a manner consistent with [a] Record of Decision (ROD) dated August 28, 2000, issued by the Federal agencies and supported by the State".

The fundamental questions S. 1097 presents to this Subcommittee and ultimately to the Congress as a whole and to the President are:

(1) Whether the Calfed Program should be authorized at all; and

(2) If it is to be authorized, should it be authorized "in a manner consistent with" the August 28, 2000 ROD.

These are important and difficult questions not only for California's Senators and Representatives, but also for Senators and Representatives hailing from other states of the Union, especially the Western Reclamation States. The answers Congress gives to these questions will have reverberations in physical terms, in economic repercussions, and in setting precedents on significant issues of natural resource management and of federalism, that will bear on the other 49 states almost as much as they will impact California and its resources and governance directly.

The Calfed Program, as it has evolved, has much to commend it. Most notably, although it has of course not operated without considerable friction among stakeholders and between the Federal and State Governments, almost irrespective of political party affiliation, its greatest strength is that it brings the Federal and State water project operating agencies and departments and the Federal and State natural resource management (and to some degree regulatory) agencies under one umbrella. Calfed pressures agencies to consult, to resolve differences, and to operate in a more consistent, coordinated, and cooperative manner, that addresses the interests of many stakeholders. Speaking narrowly from the environmental perspective, the birds of the Pacific Flyway and the migratory and resident fish of the San Francisco Bay Delta watershed generally are better off today than they were a decade ago, when Calfed was originally launched. This is in large measure a tribute to Congress' passage of the Central Valley Project Improvement Act (CVPIA) and especially in this body to the work of Senators Bradley and Garn in passing the 1992 omnibus water projects act. But it also reflects the operations of other federal laws, including the Endangered Species Act, the Clean Water Act and the Fish and Wildlife Coordination Act, all of which give Federal (and to some degree State) wildlife and environmental quality managers authority and tools to fulfill their mandates, working in cooperation with the water project operating agencies, who generally view their principal responsibility to be the delivery of water supplies to their contractors. Even if a Calfed program per se is not formally reauthorized by Congress, some version of it will surely continue. The merits of Federal-State and of operator-resource manager cooperation have been widely recognized, and all agencies recognize the importance of working together to resolve, or at least minimize, conflicts.

The much more difficult question, however, is not whether a Calfed program of some kind should proceed, whether with formal Congressional authorization or without, but rather whether the program that proceeds should be the one adopted by the Clinton and Davis Administrations on August 28, 2000 in the Record of Decision signed by Secretary of the Interior Babbitt and Secretary of Resources Nichols. Many in the environmental community have pinned their hopes on the 2000 ROD, have successfully worked to pass large State bond measures and funding authorizations based on the 2000 ROD, and have rightfully criticized significant decisions, particularly decisions by the Department of the Interior, that have cut back on environmental assurances promised in the 2000 ROD.

For Environmental Defense, however, whatever one's view may have been of the merits of the 2000 ROD when it was issued, it should be clear now, more than three years later, that basic assumptions underlying the ROD are no longer valid and that the fundamental political compromise that Secretaries Babbitt and Nichols forged – that appeared to give both the export contractors and environmental advocates expectations that Calfed would meet their needs – has proved to be unsustainable in the real world of stakeholder negotiations and of pressure on project operators and resource managers to deliver on these expectations.

The most fundamental assumption that has proved to be false was the one Secretary Babbitt made in assuming that there would be a minimum of $2.5 billion in Federal funds available to subsidize the Calfed program over just the first seven years of the program's life. In his view, this Federal share would have matched comparable State and user shares for a total of $7.5 billion. For an additional billion dollars of the $8.5 billion that the 2000 ROD contemplated would be spent in the first seven years, the ROD identified no source.

The second assumption that also has proved to be false was the remarkable expectation that water users would step forward to pay their fair share of the program's costs. For any veteran observer of the history of both the Central Valley Project and the State Water Project, it was of course obvious even in 2000 that the users had no intention of contributing significant funds to the environmental restoration objectives of the ROD. Indeed, their principal financial objective was to get taxpayers to pay not only for restoration, but as much as possible for mitigation of their own project environmental impacts, an objective on which they have made significant headway not only in the passage of State Propositions 40 and 50, but also in year-to-year Congressional and State funding of the so-called "Environmental" Water Account. It also should have been obvious then, as it is obvious now, that the users have no intention of paying for new surface storage projects either. Their goal again: Federal and State taxpayer subsidies justified, if they believe justification is needed at all, by specious arguments that the dams they hope and expect taxpayers will fund are environmental dams, that have no user benefits warranting significant contributions by project beneficiaries.

It is with respect to the federal funding issue that the contrast is perhaps greatest between the last Federal Administration and the current Administration. Secretary Norton's Water 2025 initiative and her Administration's recent successful conclusion of the package of agreements surrounding the California 4.4 Plan are real achievements, but they are not major departures from the efforts of Secretary Babbitt that preceded Secretary Norton's involvements. What is a departure was perhaps most graphically demonstrated in Administration testimony just last month before this Subcommittee's counterpart in the House of Representatives. Testifying on a group of bills to authorize Federal participation in a number of wastewater recycling projects, including a bill introduced by Rules Committee Chairman David Dreier, on which Federal cost-shares are generally limited to no more than 25 percent of the projects' costs, the Administration brusquely opposed all the projects (which Senator Boxer is co-sponsoring in the Senate). To quote the Administration testimony on just one of these bills, Congressman Dreier's H.R. 2991: "Any new project authorized at this time will place an additional burden on Reclamation's already tight budget, and could potentially delay the completion of other currently authorized projects. With the tremendous back log of existing Title XVI projects, we cannot support the addition of new projects at this time."

If there is no Federal money available to cost-share, at no more than 25 percent of their total cost, broadly beneficial and supported wastewater reclamation projects, for which there are local co-sponsors and supplemental funding lined up, what chance is there that the $8.5 billion program envisioned in the CALFED 2000 ROD will ever be funded at the Federal level?

The lack of assumed Federal funding for most purposes and the lack of assumed user funding for environmental purposes and for dam construction, however, are not the only major problems with the 2000 ROD. The other fundamental problem with the 2000 ROD was the expectation it created among the Federal and State water project export contractors that San Francisco Bay Delta exports could be substantially increased, without substantial adverse effects on the Bay, other water users, upstream and Delta interests, and the environment. Several of the more suspicious and paranoid, or perhaps far-sighted, advocates of these often overlooked constituencies were critical of the 2000 ROD from the start. The Farm Bureau, the Regional Council of Rural Counties, the Central and South Delta Water Agencies and Trinity River protectors, to name just a few opponents, either filed litigation or pursued active political opposition against the ROD or both.

Now, just three years after the ROD's issuance, their skepticism has proven to be fully warranted. This July, at a meeting in Napa attended by Federal and State project operators and Federal and State export contractors, but not by Calfed's leaders, by Federal or State natural resource managers, or by representatives of many other water interest or environmental groups, a Proposition was developed to increase Delta exports. According to its leading proponents, the Napa Proposition and associated projects authorized in the 2000 ROD would increase Delta diversions by a million acre feet per year or more. Definitely without any of the new proposed storage projects that the 2000 ROD singled out for feasibility analysis and mostly without significant financial investment in new projects of any kind, the Napa Proposition "created" a million acre feet for its stakeholder participants. Claiming that it was simply implementing the 2000 ROD, the Napa Proposition would allow State Water Project contractors (who are not subject to the acreage limitations established in federal law) unprecedented access to the Central Valley Project's water storage reservoirs. It would also accept as a liability of the Central Valley Project much of the more junior State Water Project's responsibility to meet water quality and environmental obligations in the Bay and Delta and beyond. In exchange, the most junior contractors of the Central Valley Project receive an additional water supply. And what operational flexibility and opportunity for coordination Napa determined the projects can muster are reserved exclusively for the exporters' benefit. All this, of course, would operate to the detriment of the other interests who were not invited to the Napa negotiations, including not only Bay, Delta, upstream, and environmental interests, but Trinity River proponents as well. Despite the United States' trust obligation to the Hoopa and Yurok Tribes, no promise was extracted from any CVP contractor that it would dismiss litigation against the United States, the Trinity River and the Tribes, even though CVP contractors would receive very substantial benefits if Napa were to be implemented. The oft-repeated mantra of the project contractors - "We should all get better together"- rings hollow indeed in Napa's aftermath.

So the fundamental issue this Subcommittee faces, as it considers S. 1097, is whether to authorize a program based on the 2000 ROD, for which little federal or user funding is likely to be forthcoming and which is expected by its principal stakeholder proponents to provide a million acre-feet or more per year of additional Delta exports.

When the question is posed in this manner, I believe the whole Senate, including the bill's sponsors, should oppose the bill. It ought now to be incumbent, especially on the Napa Proposition's drafters, to explain how the CVP and the SWP can safely and equitably increase their draw on the Bay Delta ecosystem and on northern California generally by over a million acre feet, how they can do it without significant new Federal and user funding, and how they can do it without adverse impacts on other communities and on the environment.

Environmental Defense challenges the contractors to make their case. If they cannot make their case, this is not the end of Calfed. But it should be the end of the unreasonable and unsustainable expectations of additional Delta exports that were created by the Calfed ROD and that are expanded and codified in the Napa Proposition.