Update on Reclamation's Water Management Activities

Remarks Delivered By:
John W. Keys, III, Commissioner, Bureau of Reclamation

Western States Water Council

July 15, 2005

It's an honor to be with you on your 40th anniversary. Thanks for letting me reminisce with you last night.

You've heard me say before what I'm about to say, but I'm going to keep saying these things--because they're still true. When I became Commissioner, four years ago, we at Reclamation went back to a focus on our core mission: delivering water and generating power, and doing what it takes to get that done; and looking to the future, to anticipate problems before they develop.

"Getting it done" means addressing changing water needs. And "looking to the future" means facilitating the development of ways that can stretch our water supplies.

The Bush Administration has emphasized cooperation with stakeholders, work in partnership, local decisions about local issues. And we have approached water management according to those principles.

As we have managed water, we have made state water rights paramount. And that will continue to be true.

We have invested heavily in our relationships with our partners, and we are seeing the investment pay off in increased certainty for water users.

I will talk about two issues I know you're interested in, and those are drought legislation and the developing ESA protocol. But I want to update you on some other Reclamation news that affects our work together.

Appropriations The Bush Administration's approach to funding water initiatives has been to leverage federal money by identifying how scarce fiscal resources can bring the greatest benefit and then by working with our partners.

President Bush's proposed fiscal year 2006 budget request was released in February, and the request for Reclamation was $946.7 million.

The budget enables us to meet Westerners' needs for water and power, and, at the same time, it works toward the President's goal to cut the deficit in half by 2009 and maintain the nation's dynamic economy.

The budget reflects our priorities in delivering on our core mission. It devotes substantial resources to the security and safety of dams and other facilities.

It supports critical investments that help us to work more efficiently. One major focus is on aging infrastructure--work here will enable Reclamation to increase the reliability and efficiency of our water and hydropower facilities.

The budget proposal includes a $35 million request for CALFED funding. It requests money to study storage in California and includes funding for the Environmental Water Account (EWA).

Another important focus for us is loan guarantees. We need to get money to those who have to do the work. We are working with Senators Domenici and Bingaman on the Rural Water Supply bill, which includes authorization for loan guarantees.

Congressional action on the budget is happening much more quickly than in previous years. The Energy and Water Development Appropriations bill has passed both House and Senate. The next step is for this bill to go to Conference.

We hope for a final bill before the start of the new fiscal year.

Reclamation's appropriation has been increased $30 million above the President's request by the House and $100 million by the Senate.

Before we leave the subject of money, I need to say something about new storage. I said earlier that our Administration stresses cost-sharing and leveraging federal dollars.

That goes for storage too. I believe that we do need more storage and will get it. But new storage has to be developed sensitively and conservatively, and it cannot come only at federal expense.

I was asked recently "What will the dam of the future look like?" My answer was, "Not a lot different on the outside."

Probably the biggest difference from the past will be the perspective with which we approach projects.

The idea of cooperative projects is here to stay--it has to be. Neither the federal government nor the localities can go it alone. Localities will have to look beyond the federal government as a sole source of funding. There is still an integral federal role, but as a cooperating partner.

We're also studying storage in the Yakima River Basin, at Black Rock. We understand the request for storage. We'll do the studies and see what the best answer is.

The storage system we have in place across the West has helped us through years of record drought, but we are looking at ways to improve it. I'll be testifying at the House next Tuesday on aging infrastructure. There are a lot of questions about how to handle aging infrastructure, but only some answers.

Drought Legislation We continue to look at ways to deal with drought.

I was pleased to testify Tuesday for the Department in support of S. 648, to extend Title I of the Reclamation States Emergency Drought Relief Act of 1991. Title I is set to expire at the end of September, and the bill would extend it until the year 2010.

Getting this extension is one of Reclamation's legislative priorities this year.

Title I is the mainstay of the Act. It provides authority for emergency measures to alleviate the adverse impacts of drought.

Title I allows Reclamation to undertake emergency assistance for drought relief. The Administration is supporting the bill because it allows Reclamation the flexibility to continue delivering water to meet contracts and requirements under the Endangered Species Act.

Title I benefits contractors at a time when many are financially challenged. It often helps smaller, financially-strapped entities like towns, counties, and tribes that do not have the financial capability to deal with the impacts of drought. In many cases, Reclamation is the last resort for these communities.

The bill respects state water rights and enhances the work we do with our stakeholders.

Title I provides for participation in water banks established under state law. It facilitates water acquisitions between willing buyers and sellers.

It also facilitates the acquisition of water for fish and wildlife on a nonreimbursable basis.

Although some parts of the West have had beneficial moisture this water year, there will continue to be long-term precipitation deficits.

Portions of the Pacific Northwest continue to be affected by the drought. Even though the allocation to junior users in the Yakima basin just increased slightly, they are still only at 40 percent. This level of supply could lead to severe economic impacts with significant crop losses.

Even though hydrologic conditions have improved somewhat, it would take us a long while to get back to normal even if the improved precipitation were to continue. For example, in the Colorado River Basin, run-off was above normal, but storage in Lake Mead and Lake Powell is only slightly more than half of capacity.

The good news is that the reservoir storage on the Colorado has served us well during five years of extensive drought.

The Governors of Washington, Idaho, and Montana have declared either full or partial statewide drought emergencies, and Oregon's Governor announced a drought emergency for specific counties within the state. The wet pattern that has affected the Northwest and northern Rockies since mid-March continues to improve the long-term drought situation across the region, but we aren't out of trouble.

Drought Action Teams Because drought has hit much of the Pacific Northwest so hard this year, Interior and the USDA have activated Interagency Drought Action Teams--this was just announced in a press release this week from Interior and USDA Secretaries Norton and Johanns and Idaho and Washington Governors Kempthorne and Gregoire.

The Drought Action Team initiative stems from a Memorandum of Understanding signed in 2003 as part of Water 2025 to bring federal resources to areas in need of assistance.

The Teams are working with state governments to address drought conditions in Washington and Idaho. If the need arises, the Teams will work with other states too.

Taking these actions now will help us to target our drought-relief assistance to farmers and ranchers in the critical months ahead.

ESA Protocol We are working with WSWC in developing an ESA protocol. We believe this protocol will help to coordinate efforts between state and federal governments. It's not finished yet, but things are looking good.

In the meantime, we can give you some insight into the Administrations views of the ESA. We want to head off, to the extent possible, conflict between species conservation, water management, and water rights administration.

States are indispensable partners, and we need to work out a system to maximize cooperation with state and local agencies, as is consistent with congressional intent when the ESA was enacted.

Implementation of the ESA should achieve timely conservation while minimizing social and economic impacts. In implementing the ESA, we want to minimize disruption of western economies, particularly those devoted to irrigation or ranching.

We want to manage water resources consistently with the conservation and recovery of species listed in the ESA and to preclude the need to list species in the future. Now, a huge step toward accomplishing this in the Lower Colorado River Basin is the Multi-Species Conservation Program agreement that was signed in April.

The MSCP provides ESA coverage for much of the Colorado River's lower basin for 50 years. It may be the most significant ESA agreement we've had. Its intent is to keep species from becoming endangered--to keep them off the endangered list. At the same time, it will allow water and power operations to continue to serve the needs of much of Arizona, California, and Nevada.

We know that there are many demands for water resources. For over four years, Reclamation has been promoting the idea of stretching water supplies. We believe that there are innovative ways to benefit species and provide for their needs.

In some circumstances, we can supplement water acquisition through management--such things as the timing of water releases. That could help us to limit acquisition of water for listed species conservation to what is necessary to address the species' needs where applicable.

Other management tools that we believe should be used include adaptive management mechanisms that include frequent reviews of management action. And we believe that state and federal efforts should be coordinated at all levels, including data review.

State-federal coordination can benefit listed species and protect water users in the process.

The innovations that can improve the implementation of the ESA - things like water marketing and water banks--are part of the approach that we have been promoting for the past four years. It's a comprehensive approach, and we see it in Secretary Norton's Water 2025 initiative.

Water 2025 Water 2025 addresses the problems of the increased competition for water supplies and the aging of infrastructure. We have made preliminary selections for the second year of our Challenge Grant program. We selected 43 projects, located in 13 states, which will receive a total of $9.9 million in federal grants.

We are very pleased with the results of last year's program. Projects selected last year are underway. Grants of $4 million are expected to return $30 million in improvements--a return greater than seven times the federal investment.

Projects will bring about improvements in monitoring and delivery, and market solutions such as water banks.

Opportunities still exist where water supplies can be managed more efficiently, water markets can be developed, collaborative solutions can be found, and new technologies can be researched.

We have made a few changes to this year's program. A new tool that we have added is the opportunity for systems optimization reviews.

This tool enables irrigation and water districts and other water delivery authorities to partner with us to analyze their delivery systems and optimize these systems for efficiency in water management.

Another new facet of Water 2025 is the Water 2025 Challenge Grant Program for Western States.

Eligible applicants include state governmental entities with water management authority located in the 17 Western States. Irrigation and water districts are not eligible, but may partner with eligible state applicants.

We expect to select 4 to 5 projects in late summer or early fall.

A total of $1 million in Federal funding is available for award.

We had many, many applications for a limited amount of dollars. We'll see what we can do for next year.

Conclusion All of us are lucky to have the team in place at Interior that we do. Secretary Norton knows more about water issues than any other Secretary I've worked with in 38 years at Reclamation. Her leadership has brought people together and been instrumental in progress that we've made so far.

Let me mention too what a great job Mark Limbaugh has done as Deputy Commissioner with Reclamation. Mark was nominated by President Bush to be Interior's Assistant Secretary for Water and Science and oversee Reclamation and the U.S. Geological Survey. He had his hearing yesterday.

We expect his confirmation to go quickly. And we will work quickly to fill the Deputy Commissioner's position when Mark leaves.

I also want to put in a good word for Tom Weimer. Tom's been the acting Assistant Secretary for Water and Science, and he's been nominated as Assistant Secretary for Policy, Management, and Budget. He also had his hearing yesterday.

At Interior, we use Secretary Norton's 4's as a guide to decision-making: Conservation through cooperation, communication, and consultation.

That's catchy. But it's much more - It's the way we do business.

We have accomplished a lot over the past several years by using these principles. I mentioned the Multi-Species Conservation Program, and we've made other, very significant progress on Colorado River issues. We believe we've brought about increased certainty for all water users in a way that is fair and that respects state water rights.

In 2003 and 2004, the group American Rivers listed the Colorado as one of the most endangered rivers in the United States. In 2005, the Colorado didn't even make the top 25.

And that was the result of lots of good work--the MSCP, the Quantification Settlement Agreement, the Adaptive Management Working Group for Glen Canyon, the spike flow last fall, the current development of shortage criteria. I could keep going, but you get the idea.

As we go about our work, here is the bottom line--For us, two principles are sacrosanct: first, state water rights are paramount; second, water acquisitions must be based on agreements with willing sellers.

It's important in this climate for states to seize the opportunity to determine their own destiny.

The Bureau of Reclamation has a long history of effective and responsive water management in good times and bad. WSWC has been there with us--we really appreciate the work've done.

We've gotten through some tough times together, and Reclamation continues to value the partnership that we have.