Environmental Defense Calls for CALFED to Adopt Ecologically and Economically Sound Water Policies

Tom, MIR has done interviews with you before, but this time let's focus on the Bay-Delta and water supply, demand, and water management in California. Can you address, in the wake of Katrina, what the status of our levee system is and should be, and what priority insuring it's safety should be for our legislators and our governor?

I certainly think that Katrina and Rita and the tragic events of New Orleans and surrounding areas should make us take a very hard look at the priority, or lack of priority, that we've given to flood prevention – and particularly to the levees in the Delta and for that matter on the Sacramento and San Joaquin Rivers. The ones in the Delta, of course, are of particular interest to Southern California because they, at least some of them, are essential to keeping salt water out of drinking water and agricultural supplies and providing a pathway for water to move south from the Sacramento River System to the San Joaquin Valley and Southern California.

Let's turn to the CALFED and Bay-Delta Program. You've given testimony recently to the Little Hoover Commission on the governance of the CALFED Bay-Delta Program. Give our readers the essence of what you shared with that commission.

The Little Hoover Commission along with two other entities, KPMG and the Department of Finance, are doing a multi-faceted audit of the CALFED program on Governor Schwarzenegger's behalf, and I think that's terrific. This is really a unique opportunity for those who aren't water buffaloes day by day to take an overall look at the system. Our fundamental point that we hope all of those auditors look at is that CALFED – and, for that matter the state and federal governments – has not really treated water as a scarce resource. By that I mean, if a resource is scarce we ought to be thinking about putting a price on it that reflects its value and its cost to store and deliver and to mitigate for the environmental impacts of that storage and delivery. But that has not been the policy of either our state or our federal government. The twofold result is that we over-consume the resource and we do unnecessary environmental damage.

It seems difficult to ask elected officials to advocate a higher price for water for consumers and constituents. Can you elaborate on the politics of water pricing?

The reason I think it's so important to have the involvement of these independent auditing entities, including the Little Hoover Commission – which is really our state's preeminent expert on government organization and governance – is that we have an opportunity here to have those who are less politically constrained to tell it like it is. It is difficult for elected officials to tell the truth to their constituents, be they political constituents or, in the case of water agencies, their rate payers are economic constituents.

Is there any evidence that speaking truth to power will result in policy changes on our watch? Is that your assessment?

I think circumstances for positively influencing policy are reasonably good. For one thing, the federal government, for years and for many administrations, both Democratic and Republican, has pretty much withdrawn from the funding of Western water projects. Now, with the New Orleans situation, it's possible the Corps of Engineers might end up with a bit of a budget for levees. Even so, our politicians in Washington have not been successful – to the extent they've even tried very hard – in extracting money from the federal government for the CALFED program. I happen to believe that's good. The state has gotten by on these general obligation bonds, which are dubious in many ways, and now the ability to subsidize water use through taxpayer contributions is more limited than it's been in the past. So, it's a good time to say, "Hey, why don't we have the users actually step up and pay for some of this stuff?"

Exactly what users should be asked to pay what price?

Well, that's a good question, which is, in fact, very much under debate. The Schwarzenegger Administration is thinking about something called a "water resources investment fund," and they're looking to spread that around via connection charges. Our general view is that the charges ought to be volumetric, or that at least some of them ought to be. Water is consumed by the gallon or the acre-foot, and charges ought to be based on overall use. Now, of course that's controversial, particularly in the agricultural sector where some 75 to 80 percent of the state's water use takes place, but there's a whole lot of water use in that sector that, if the price were to reflect the actual costs, would be constrained. There'd be more conservation and more transfers.

Address why the water transfer/marketing framework to meet southern water needs never was able to work. What explains how our supply moves as it does from north to south?

Well, it's interesting. We have a report coming out called "Finding the Water: New Water Supply Opportunities to Revive the San Francisco Bay-Delta Ecosystem," and it actually talks quite a bit about transfers directly to the environment. I would actually disagree with the premise of your question. There have been substantial numbers of transfers, but I would qualify that by saying that it is not as free and unconstrained a market as would be desirable. The reasons are that there is a lot of stickiness, old legal constraints, community constraints, public trust concerns – some of them of course are valid – that make it difficult to treat water as one would other commodities that move freely in our society and our capitalist economy.

Elaborate on what EDF's report is going to say about new water supplies.

The big component is that the State Water Project and the Central Valley Project uncovered efficiencies three years ago in a private meeting at Napa. They found that operational changes and coordination of the two projects could create some substantial amounts of additional water. Our view is that given the public trust, given the multiple interests of those projects, and given their legal obligations to protect the environment, they should dedicate a significant piece of that increased supply to the environment. Alternatively, CALFED promised that there would be user fees for environmental protection and to fund the so-called Environmental Water Account. And then there are opportunities with new projects coming online such as the so-called San Luis Low Point Project, and if new storage projects are actually built, then it is another opportunity for water to be dedicated to the environment.

I will say this, though: even since we completed the report and I submitted the Little Hoover testimony, there has been a decision of the Court of Appeals in Sacramento, the Third District, that essentially throws out the environmental impact report done to support the CALFED program. The decision calls for an alternative that includes the consideration of exporting less water to the south and, further, that a supply of water to meet the combined needs for both the environment and consumptive water uses be identified and explained in a way that was not done in the CALFED record of decision, which basically hid where the water was going to come from. So I think we have a number of opportunities to be more transparent and promote alternatives that leave at least a little more water in the ecosystem.

Talk about the political significance of that court's findings and the political significance and risk and reward of transparency.

The interesting thing is that the lawsuit was filed by the Farm Bureau, the Regional Council of Rural Counties, and the Delta Water Agencies; they're very conservative organizations, so it's not an environmental lawsuit. So it creates a dynamic different than if Environmental Defense had filed the suit. We're still hopeful that the Schwarzenegger administration, given who the plaintiffs and appellants were, will decide not to appeal and will live with the decision and seriously consider both greater transparency and lesser exports.

Fewer exports brings what problems for south of the Tehachapis' jurisdictions?

One of the problems south of the Tehachapis is that for many years the Metropolitan Water District said that it wasn't interested in additional water. It got along great through the 1990s with much less water than it's taking today – literally half a million acre-feet a year less. Then, it was surprised by developments on the Colorado. The cutback by Secretary Gail Norton to 4.4 million acre-feet per year and the disappearance of surplus on the Colorado meant that the so-called soft landing that Metropolitan expected did not occur, and there is this big gap in Colorado River supplies that it's making up with supplies from the north. The pressure on Metropolitan really ought to be to speed up the transfers from the agricultural areas in the southeast corner of our state both to Metropolitan and San Diego.

I'm not sure there's really much urgency to do that as they've been quite comfortable it seems just taking more water from the north. Two of the last three years literally have been record years in exporting water from the Delta. Maybe it's not a direct consequence, but there's certainly a correlation between these last five years of very, very heavy exports and the crash of the Delta ecosystem.

What's your take on the current status of the CALFED program? Is it likely to be successful; will it meet the expectations of its partners and stakeholders?

I have a lot of confidence in the leadership of CALFED and the Department of Water Resources. I think the events in New Orleans have focused people's attention on the importance of keeping our infrastructure strong, and if there is a little more willingness on the part of the water users to accept that they're going to have to pay for some of the improvements in the system, or at least a significant portion of them, combined with a willingness in the politicians of both parties to tell their constituents some bad news, then I think there is still substantial promise of improvements. I do think the old way of promising everything to everybody and imagining that no one really would have to pay to deliver on those promises is not going to work anymore.

We're looking at a significant population growth in the 21st century here in this state. Comment on the capacity of our current levee system, on Hetch Hetchy, on the absence of what we once called the Peripheral Canal project. How will the state's infrastructure challenges be met going forward?

Well, those are many of the top, but not all, of the great infrastructure challenges. Of course, transportation, education, and many other systems also are going to be stressed by increasing population. In the case of Hetch Hetchy, the challenge there is that we're also stressed in terms of our recreational opportunities. There really is no excuse at this point given our technological prowess and the integrated water system that we have not just on the Tuolumne River, but in the state as a whole, to store water in a national park and in a valley that's nearly as amazing as Yosemite.

I think our infrastructure challenges are substantial in the case of water. Climate change is going to have a big impact as well. But they're surmountable if people are willing to accept the inevitability one way or another that they will have to pay for the benefits that they derive from that infrastructure.

Can we really rely on our levee system going forward? Is there not a need for a healthy conversation about an alternative infrastructure investment plan to assure the flow of water to the thirsty and growing south?

I think this is probably not very well known, but a bill pretty much unanimously passed the Legislature and was signed by the governor just a couple of weeks ago that sends the Department of Water Resources, aided by the Department of Fish and Game, to do a two-year study on what could be done about the Delta. I think that's a good thing. As you know it's very, very controversial in Northern California that a method to move water around rather than through the Delta gives the exporters of water a powerful tool, in terms of dominating California water policy over the years, a direct pipeline basically to the Sacramento River. So that challenge has to be confronted head-on.

I presume the Department of Water Resources will do that. Even if one contemplates an around the Delta alternative, then one still has to decide what is one going to do with the Delta itself. Will it go back to marshland as it was a century and a half ago and, if so, what are the compensation arrangements? What about all the urban development that has taken place there? It's a complicated situation and one that ought to be addressed, and to the credit of the Legislature and the governor, it is going to be addressed.