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Western drought funding pushes feds and states to cooperate

How the Interior Department decides who gets what water could make or break the historic funding, experts say

An irrigation canal providing water to farmland near Parker, Ariz., in 2021.
An irrigation canal providing water to farmland near Parker, Ariz., in 2021. (Bill Clark/CQ Roll Call file photo)

The climate and social spending package boosted funding levels for Western drought mitigation projects to an unprecedented level — one that water advocates in the region say the U.S. may never see again. 

But how the Interior Department decides who gets what water from the dwindling resources in the West, particularly in the Colorado River Basin that is facing a drought crisis, could make or break the historic funding, experts say. 

The budget reconciliation bill signed Aug. 16 by President Joe Biden provides $4 billion for Western drought and water projects. The money must be spent or locked into specific grants, contracts or financial agreements by Interior’s Bureau of Reclamation by Sept. 30, 2026. That boosts total funding for drought relief to $12.3 billion after the bipartisan infrastructure law provided $8.3 billion. 

And Congress is set to continue its focus on water in the West as House and Senate appropriators float more cash for programs like the WaterSMART grants, which they say will assist Western states with drought. The House also passed a bill that would include even more Western-focused authorizations, including $500 million to keep key reservoirs on the Colorado River, including Lake Mead and Lake Powell, from dropping to critically low levels. 

“I can’t recall a similar level of investment in Western water,” said Doug Obegi, director of the California river restoration, water division and nature program at the Natural Resources Defense Council. “But it’s kind of an inevitable conclusion for the Colorado River Basin.”

For the past two decades the river basin has been suffering its worst drought in about 1,000 years, according to scientists. Its reservoirs, which provide drinking water for over 40 million people and is used to irrigate 15 percent of the nation’s farmland, are at historically low levels. The two largest reservoirs in the United States, Lake Mead and Lake Powell, were at 28 percent and 26 percent of capacity, respectively, on Aug. 22, according to NASA’s Earth Observatory.

“[Besides] Colorado River, a lot of our western watersheds, like the Rio Grande and the Klamath, they’re all kind of facing a reckoning in terms of water availability, and just over the last 20-plus years, these systems have been just hammered by climate change,” said Alex Funk, director of water resources and senior counsel at the Theodore Roosevelt Conservation Partnership. “I think that drove Congress to action because the implications are huge and significant.”

But Washington has “kicked the can down the road” in addressing these problems, Obegi said, because Western states have become territorial over their water rights as the federal government attempts to curb water usage. Farmers, who have historically used upwards of 70 percent of the Colorado River Basin’s water, are butting heads with environmentalists, who are advocating for reducing the number of water-intensive crops. As a result, Western states are engaged in fierce fighting over who should get what water.

The Biden administration ordered some water reductions for Arizona, Nevada and New Mexico this month after the states missed a deadline for submitting allocation plans, but it also gave the states more time to work out a compromise before initiating more severe cuts. 

“There are a lot of times with water where you have to make choices, and you can’t satisfy everyone,” Obegi said. “Water that’s diverted out of a river can’t help the fish and wildlife that are downstream of that diversion.”

Seven-state deal

In an attempt to prevent water levels in Lake Powell from dipping further, Bureau of Reclamation Commissioner Camille Touton announced a deal with the seven Colorado River Basin states in 2019 that hinged on the states saving 2 million to 4 million acre-feet of water — as much as a third of the river’s flows — or the federal government would intervene. 

States that have already seen cuts in their allocations, like Arizona, are arguing they’ve done more than their fair share to tackle water shortages.

“It is unacceptable for Arizona to continue to carry a disproportionate burden for reductions for the benefit of others who have not contributed,” Arizona Department of Water Resources Director Tom Buschatzke and Central Arizona Project General Manager Ted Cooke said in a statement.

The new funding from Congress, although widely celebrated by Western states, is bound to highlight the issues that have been keeping the seven states in the basin from coming to an agreement. And a lot of it has to do with competing interests between farmers and environmentalists. 

“Mandatory cuts are disproportionately going to affect the agriculture sector, especially in the lower basin,” said Funk. “But our hope is that the $4 billion creates an opportunity to think creatively about the future of farming in the basin.”

Consumer demands

Daniel Keppen, executive director of the Family Farm Alliance, a Western nonprofit that advocates for small farmers, said that although many farmers are conservation-minded, they need water to meet consumer demands for food.

“It’s not like the farmers are the ones consuming the water,” he said. “That water is going into products that others are willing and want to purchase.”

But proposed solutions from farmers and environmentalists tend to be at odds. Farmers, for example, have been cooking up proposals for voluntary, compensated and temporary programs that incentivize reducing water use, Keppen said. But Funk argued that temporary incentive programs don’t fix the long-term drought issues.

Instead, Funk said he hopes the Bureau of Reclamation uses funding to promote creative solutions to water-intensive farming, like transitioning to a market for lower-water-use crops. But Keppen said that although farmers are typically open to trying new things if it improves the profitability of their operation, most producers are “bemused when certain outside environmentalists, urban interests and academics like to play the role of ‘social engineer’ and tell them what to grow.”

There is hope for compromise. The Family Farm Alliance helped create the Western Agriculture and Conservation Coalition (WACC), a collaborative effort aimed at improving the environment while protecting Western irrigated agriculture, which includes agriculture industry representatives as well as national environmental groups like The Nature Conservancy and the Environmental Defense Fund.

Although there’s interest in collaboration, the Bureau of Reclamation still has tough decisions to make over how to spend the money. As Obegi said, “You can’t satisfy everyone,” and many are already frustrated with the Biden administration for putting off federal involvement as part of the 2019 deal. 

“Prior to passing the Inflation Reduction Act, things were looking pretty bleak and the states were not coming together, and now without a framework from DOI, cuts are going to be made,” Funk said. “But the light at the end of the tunnel is this $4 billion in funding.”

Funk added that the unprecedented funding gives the Bureau of Reclamation an opportunity to look past temporary fixes and encourage creativity from states.

“I’m not saying this will solve all Western water problems,” he added. “There are a lot of unknowns at this point … it changes by the day. But there’s a collective desire to fix the system.”

“I hope this administration can handle feuds over what cuts,” added Keppen. “The funding is there. Now we need to make sure the agencies look for opportunities to partner with farmers, ranchers and water managers to make the projects a reality on the ground.”

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