Four States Irrigation Council 58th Annual Meeting

Remarks Delivered By:
Michael Connor, Commissioner

Four States Irrigation Council
Fort Collins, Colorado

January 13, 2011

One of the great joys that I have in running the Bureau of Reclamation -- and I knew this beforehand, having some experience in the Department and then working on the committee that oversaw Reclamation and I had oversight responsibility when I was in the U.S. Senate.

But, I'm constantly amazed at the quality of people -- top to bottom -- in the Bureau of Reclamation. And I know we are a federal agency and I know we are a frustrating bureaucracy at time, but I think in the realm of frustrating bureaucracies, we do have a certain results-mindedness at Reclamation, and a focus on getting a problem solved that doesn't exist at all federal agencies. So, I feel very lucky to be asked to take the helm of the Bureau of Reclamation.

I'd like to thank Dave Ford and all of the folks here at Four States Irrigation Council for inviting me here and giving me the opportunity to spend a few minutes. A happy New Year to all of you; it seems like a long way back, quite frankly, probably the same for all of you, but the turn of the New Year and the holiday season as we're ramping up quickly in 2011.

But, nonetheless, Happy New Year. Today, for me is one of those glamorous, jet-setting days as the Commissioner of the Bureau of Reclamation. It was morning in Washington, D.C., lunch in Fort Collins, dinner will probably be some extravagant thing at the Denver International Airport. And when I get home at about one in the morning, tonight, what will really tell how glamorous it is if my wife leaves me a note that says, "Walk the dog, we didn't get around to it."

And so I may be traipsing off around the neighborhood at that point in time.

My point in expressing that sentiment about jet-setting is not to whine about it, quite frankly, actually I welcome getting out of D.C., even just for the day. And, in particular, I think it's very important that I come here to the Four States Irrigation Council Meeting; I didn't have the opportunity to make it here last year, I have yet to make it to three of the four States represented here and so I thought it important to get out of the beltway and come and see you all, even if it's just for a limited amount of time.

And, I was reflecting on this late last night/earlier today. Last night the president -- President Obama -- talked about the tragedy that occurred in Tucson. And he noted in the course of his discussion last night that Congressman Giffords at the time of the shooting and incident that took place in Tucson was practicing and engaged in the most fundamental form of democracy -- she was answering to and she was communicating with her constituents. And I don't equate my role to her role, but I do feel strongly that, as a political appointee for President Obama, and someone directed to take the helm with the Bureau of Reclamation that I do have a responsibility to get outside the Beltway to communicate with Reclamation's constituents; with you folks, and get a better understanding of the issues and just get a better relationship with all of you.

And the dirty little secret, that's to my benefit, is that I very much enjoy doing that. I grew up in New Mexico and spent a good amount of time in Colorado. I was equating -- relating to Peter (Soeth, public affairs specialist in Reclamation's Denver office) as we were driving up that when I was working in Denver as an engineer for GE, my wife -- before she was my wife, was a poor graduate student up here at CSU, so I knew the road between Denver and Fort Collins very well, I just didn't know that it had three lanes at the time that I was driving it.

So, this does not substitute for getting out on the ground in Kansas and Nebraska and Wyoming, but for today it will have to do. I'll give my talk; I look forward to an active Q&A. And I recognize the importance of Reclamation with respect to the four States, given the agenda that you have and the fact that we pretty much are involved in every one of the topic issues that you have.

I want to start and just give a quick update on some of the general programs and activities we have going on -- some of the priorities that we are placing on some of these initiatives in the Bureau of Reclamation during the President's administration.

Simply put, I think, I always try and put it down to a succinct set of talking points as to what we're trying to accomplish at the Bureau of Reclamation, and it's a pretty simple concept -- we're trying to promote certainty and sustainability with respect to the use of water resources.

And I could leave it at that, but over the last 18 months, since I'm come on board, the question I next get -- when it's a Q&A session or whether I'm walking out of giving a speech, while walking out of the room, is people say, "Well, what the heck does that mean?" You know, "What are you talking about with respect to sustainability?" It's a term that's thrown around a lot. And what I'm trying to get at when I talk about certainty and sustainability is that, one; we want to secure long-term access to water for all water users. Two, we want to make substantial progress in environmental restoration and limiting the conflicts associated with restoration, what I believe, for the most part, are shared values by a lot of different constituencies. And, three, we want to maintain our ability to serve power users for the long term, and give them certainty as to access for low-cost hydropower.

So, that's really the sustainability and certainty vision that we're seeking to achieve at the Bureau of Reclamation. And if we do that, my view is that we've gotten to a bottom-line result, which is Reclamation has done our part to maintain a strong foundation for economic activity, whether it be in the agricultural sector, whether it be in the industrial sector, or whether it be in the recreation-based sector. And that's our goal, to help provide stability and help do our part as we strive forward in trying to come back from where we are as a country with respect to the overall economy which, I think, we're making good strides in, now. But also to set the table, long term, and get some certainty out there for what people can do with respect to -- and rely on -- with respect to the expectations about the use of water.

So, how are we doing that? How are we promoting certainty and sustainability? Well, I'll just go through some of the programs and activities that we're doing and how we hope to accomplish the end result that I talked about.

The Recovery Act. It's still out there, although it was passed in, what was it, April of 2009? It's been a longstanding effort, and a tremendous challenge for Reclamation, to take what's an unprecedented influx of resources -- $950 million for the Bureau of Reclamation. It pretty much equates to our annual budget. Reclamation had to take that, in the midst of, the typical activity we have on an ongoing basis, and choose the projects that we'd do. We had to work the intended purpose of the Recovery Act, which is to immediately inject money into the economy, to look at opportunities. , We had to not only do our part to create jobs and to spur incidental economic activity, but also take advantage of the opportunity we had to address the long-term issues in the water policy area.

So, the good news is, we did what we were asked to do, what we were directed to do by statute. We had to obligate those funds by the end of Fiscal Year 2010, so we accomplished that and obligated about $904 million by September 30th of last year. The residual amount is items that we were allowed by statute to carry over for possible claims, for cost overruns, et cetera, and administrative costs. So, I think we made some good inroads in addressing some long-term policy issues, whether it be aging infrastructure, environmental restoration, new water supply, conservation and efficiency and some research needs that we have. So from that standpoint, overall -- and we're still seeing the benefits of this as we continue, we've obligated the money, but it's still being expended, particularly for some of these construction projects, and will be as we go through the rest of this year.

I view the Recovery Act as being a great success story for the Bureau of Reclamation. Overall, in the Four States Area -- Colorado, Nebraska, Wyoming and Kansas, we invested $35 million of those overall Recovery Act resources into projects in the Four States Area.

WaterSMART -- In February of last year, Secretary Salazar signed a secretarial order which set up the WaterSMART Program. It's our framework for a comprehensive program to promote conservation, efficiency, water markets, technology development and an overall better understanding of our water resources. And that's been an ongoing effort here and at USGS. We're hoping to step up in the monitoring activity in better understanding of water resource areas such as the Ogallala/High Plains Aquifer -- that type of thing.

So, it's a combination of on-the-ground actions, and its science and better understanding of our water resources and monitoring, and information allows us to manage better.

Over the past two years, Reclamation has invested about $1.5 million in WaterSMART grants in the Four State area. This is a program that, through the Recovery Act, we put in $40 million overall into WaterSMART grants. Over the last couple of years, I think we've had around $15 million to $20 million available for WaterSMART grants. It's a program, I think is continuing to build upon itself, and the good ideas and the proposals coming out from folks like you are, are just very, very encouraging.

In the Recovery Act, we had $40 million of funds available for WaterSMART grants and had something to the tune of $340 million in requests. Last year, as we were allocated in our 2010 funds, we had something to the tune of $17 million available for grants, and I think we had $89 million in proposals. So, in that situation, obviously there are a lot of good proposals that are not being funded, simply because we don't have the resources to put towards them. It's great for us to be able to advocate for this program, and we understand that there are a lot of great ideas out there where we can partner up with folks like you. We will continue to advocate for the program.

WaterSMART is also the framework for our climate change adaptation programs, and I want to talk a little bit about that. In reading the newspaper the last couple of days, it's become evident the impact of climate change on water resources. In the last day, I've read that 2010 tied 2005 as the warmest year on record. There's massive flooding going on right now in Australia after a decade of drought, which is always heard from Australia. Right now they've got very serious flooding issues that's being linked to a warmer climate, and the effect and the energy that exists in the ocean, and the precipitation and extreme events that it's causing.

And then I also read just yesterday that food prices over the last six years have increased over 120 percent, and the expectation now is that, based on the impacts of climate change and the impact on water resources, that it's expected that that will also drive food prices to an ever-increasing amount over the next decade. And it used to be that food price and drought and those types of situations greatly impacted people on a local area, but now the view is that it increasingly is becoming on a global scale.

That same situation, with respect to climate change adaptation, to me, is an area where we don't have to debate why it's happening or what relative values that we have and whether we should address the root cause, whatever it is. The fact is that there's really no dispute, that I know of, that there's increasing temperatures, overall, and that's having impact on water resources -- whether it be in the form of more rainfall and less snowpack; whether it's in earlier runoff, and whether it is -- I think there's probably still a little bit of debate, but there's a strong amount of evidence that we're having changing precipitation patterns. All of that's going on in this Great Plains region, too.

This is one of the areas, as opposed to the Southwest, though, where you've got a little bit of both. You've got some projections of increased precipitation, as well as some projections of decreased precipitation patterns, in the southern part of the Great Plains region. So, either way, they each have their own set of impacts, but the reality is that increases in temperature, evaporation, drought frequency, decrease in soil moisture -- all of those are going to exacerbate the water supply issues that exist in this area.

Adaptation is going to be the key. Whatever the root cause, we've got to deal with it. Adaptation, as I found in one of these articles I was reading, is defined as reducing and responding to the risk climate change poses to people's lives and livelihoods. So, I think that's a good example -- it's a good definition for us to build on, and understanding those risks is key and foundational from my perspective. We've got to get a better handle on how water resources management is going to change based on increasing temperatures. And if we do that, I think we not only are in a situation where we're protecting people's lives and livelihoods, we're adapting to the situation, we're managing water in such a way that, from an irrigation standpoint, from an agricultural standpoint, we can have a reliable and sustainable supply for the long term. That's the number one goal.

The number two goal, though, is to the extent that we do that and we're successful, and we may be successful -- more successful than in other places -- than I think we've set up the United States and our agricultural production and our ability to take a new role with respect to supplying the world with food and commodities, overall, that it needs. So, it's also not only an economic need that we have for our own protection in this country, but it's also an opportunity -- to the extent that we do it well and we provide not only food security for this Nation, but also address the increasing needs of the world as they deal with these same set of issues.

So, understanding risk is a starting point. Reclamation and the Corps of Engineers have published a new climate change adaptation report, entitled "Addressing Water Change and Long-Term Water Resources Planning and Management, User Needs for Improving Tools and Information." We released that report two days ago. It was done, not only as a collaborative effort between the Corps of Engineers and the Bureau of Reclamation, but it was done in complete and total partnership with the Western States and a lot of water-user organizations, et cetera -- really identifying the needs that still exist for more research, more information so that we can address these long-term planning needs that we have.

In addition, on the research front, we're working closely with stakeholders across the West to fund nation-wide studies to look at supply and demand and imbalances, to look at how those imbalances will change over time, given the impacts of climate change. The overall goal is to develop adaptation strategies -- not at our direction, but in partnership with the entities that are going to be affected most by those imbalances. Overall, we have 8 to 10 of the Basin-wide studies going on that we funded in the last 2 years, two of which are being conducted in the Great Plains region, including the Niobrara Basin in Nebraska which is, I think, just got funding last fall. So, that's an area where I think there's some serious overall water supply issues for a number of entities. They've all got together, put in a great proposal and we're happy to fund that effort to help people figure out long-term strategies.

Beyond WaterSMART, we're also paying a lot of attention to the issue of renewable energy and our hydropower resource. Earlier last year, in March, we signed a MOU with the Corps of Engineers and the Department of Energy, related to trying to implement and build on a sustainable hydropower initiative. There's broad support for that now. Fortunately we've gone from an early stage of the administration, where we were debating whether hydropower was a renewable resource to now having a widely-backed initiative to try and build on the existing hydropower resources. We're doing that in a couple of ways and we've got a couple of things going on.

We released a report last fall which we're calling "the 1834 report." This was Section 1834 of the Energy Policy Act of 2005, which required Reclamation and the Corps of Engineers to look at existing facilities and how they might increase hydropower resources at those facilities. It was a pretty cursory analysis. We decided to take another look, looking at the incent as it currently exists out there for renewable energy development, give it a little bit more rigorous review from a whole lot of different technical aspects. We published that report last fall; it's out for notice and comment right now. I think we just extended the notice and comment period, but overall it was kind of a mixed bag. We're looking at building on existing units -- or new units at existing facilities. I think we identified something to the order of 150-megawatts to 200-megawatts of generating capacity that -- based on this preliminary analysis -- would yield a cost-benefit ratio of greater than one. Some of those were pretty significant, and we've already moved out and are putting together the solicitations to see if people want to come in and develop and make proposals for developing hydropower resources at some of those facilities, even while the report gets finalized. We know there are some really great opportunities out there. Actually, I'd say a mixed bag, because we were hoping and expecting for a little bit more, a set of opportunities that would come out, but that's kind of where we are at this point in time. And we'll see, based on the review being done by a whole lot of other entities, whether or not that increases the overall capability. But our goal is to do an analysis that informs people, that identifies opportunities, work with the private sector and trying to build on those opportunities and see what we can't do as far as building a hydropower resource.

We're also doing a Phase II of that study, which is to look at low-overhead hydropower opportunities, I think that will be out in October. We've also done an operating efficiency study. We've been working with a lot of customers to identify where it makes economic sense to invest in efficiency projects that exist in hydrogenation facilities.

Overall, I'd say this is an area where we really want a lot of input and ideas from the folks we work with -- whether it's low-head hydropower opportunities in irrigation canals or whether it's the power community giving their input into the studies that we're doing and helping us build upon them and identifying even more opportunities out there.

So, I think we're at the study phase. We really want to ramp up into the on-the-ground activity phase, and so from that standpoint, I say we're open for business and open for ideas.

We've got a lot going on, such as the Indian Water Rights Settlements. I won't dwell on that too much but we've had some great successes there. We've had six new Indian Water Rights signed into law by President Obama. Most recently there were two in the Omnibus Public Lands Bill in March of 2009. Just a month ago, the President signed into law four more Indian Water Rights settlements that were pushed through Congress on a bipartisan basis as part of an overall package of bills that resolve, not only, four Indian Water Rights settlements and the pending litigation associated with those, but also the Cobell litigation that had kind of poisoned the relationship between the federal government and Native American tribes for about a decade, and also USDA litigation over discrimination and the historical with African-American farmers.

So, it was a great package to resolve a lot of these longstanding issues. We've got four more settlements at the Bureau of Reclamation -- three of which the Bureau of Reclamation is going to have a major role in constructing new infrastructure to deliver water to communities -- both Indian and non-Indian alike -- and oh, by the way, Congress provided -- not only just authorized those settlements, which is always a concern for a lot of Reclamation's constituents, because we have a competition for resources, but in this particular situation, Congress provided approximately $800 million over the long-term of direct funding over the next decade to implement those settlements. That's not all it's going to take to implement those four settlements, but it's a great down payment and it helps alleviate the strain on our budget.

Aging infrastructure is an incredibly important issue west-wide. It's probably, what I would say is the most common issue across every State, every region, et cetera -- it's something that we're all trying to deal with. Red Willow Dam, which I know is on the agenda later, is a primary example in the four States area where we need to have a good game plan to deal with the serious issues.

Our agenda combines several areas and we've got some new tools available. We've got the Loan Guarantee Program which was passed in 2006. We have struggled with getting this program up and going, but we're taking another run. We're having a dialogue with OMB about how we can get the loan guarantee program up and going and I hope we can make some progress with that in the spring.

We've got new aging infrastructure authority to provide resources and get a long-term repayment back on those, instead of the year-to-year repayment, treating them all as one-year maintenance costs. There was the aging infrastructure bill that was part of that Public Law 111-11. We've used that authority on a very limited basis up until this point. I think there's three instances that I'm aware of and though those were low dollar amounts, it was were very critical that we could enter into those loans with the irrigation districts and spread that payment out over a number of years.

We're going to have an active dialogue with OMB, also, about getting this program up and going.

In addition to that, we're trying to fend off additional and unnecessary costs. We're having a little bit of an issue with the National Commission on Levy Safety. They are trying to fold in Reclamation's canals and structures with a National Levy Safety program. While we would acknowledge the importance of that levy safety program, at the same time we think we've got a good, aggressive program with our stakeholders, with our contractors, to take care of the safety and maintenance issues associated with Reclamation canals. So, we've got a lot of great support and common views on this subject. I see Pat and Dan here with the Family Farm Alliance. I very much appreciate that we've partnered up, shared information and we've got some support from the Family Farm Alliance in pushing our views on how we can keep it our program, not have unnecessary costs put on with respect to Reclamation projects, and we'll see how all of this plays out over the next year.

And finally, invasive species are a very important part of our aging infrastructure and infrastructure maintenance portfolio. We're trying to do a lot more research, particularly on quagga and zebra mussels -- how to treat and how to deal and how to avoid getting them in the first place. That's been a significant issue in this region. As I found out, zebra mussels already were found in Cheney Reservoir near Wichita in 2004 and the adults were confirmed in 2007. And we've also got some identified now in Pueblo Reservoir. We've got a lot of other situations going on, in Colorado, Kansas and Nebraska, where we've identified mussel larvae. That's a major concern that we've got to get as aggressive as possible in dealing with.

So, we've used $4.5 million of our Recovery Act money to invest in monitoring efforts. Our game plan was to look at 150 priority water bodies and since it was of such concern across the west that we ended up partnering with the States and other entities and more than doubled the amount that's part of that overall survey.

So, we're going to highlight and be able to focus on those bodies of water where we think there's a real problem; we're going to continue to do the R&D efforts to find out good ways to treat systems where we have mussel issues and we know it's going to be a priority for the long term.

The last programmatic activities are river restoration and ESA recovery actions. Quite frankly, this has been kind of a core part of Reclamation's mission. And from my standpoint, if we don't deal with these endangered species issues, these overall river restoration needs, then we are not going to make progress in providing the certainty and sustainability with respect to water use. So, we look at it as a fundamental part of our mission. I know that no one needs to look further than the Platte River Recovery Program in this region to know that a lot of you view that the same. We think that's an incredibly important program; we've tried to be very proactive and supporting of resources for that program through our budget. I think we secured $12 million in 2010 appropriations to apply towards that program. We sought $12.7 million in 2011 -- as part of our 2011 budget -- to apply towards that program. We strongly believe we want to support the States who are parties to that agreement and ensure that ultimately we're not only providing habitat and protecting the whooping crane, least tern, piping plover and pallid sturgeon, but that we are also protecting the interests of water and power users who are dependent on the Platte River system. So, we'll see where we end up with respect to 2011. We have not gotten our appropriations yet, our budget, overall, for that year. That kind of got caught up in the election year happenings in Washington, D.C. It makes it harder to manage the situation and get money out on the ground and take care of a lot of projects -- not just the Platte River Recovery Program, but we look forward to hopefully in the next 6 to 8 weeks of 2011, getting resolved and then we will move aggressively, work towards getting that money out there and working their intended purpose.

And lastly, I just want to say, since I mentioned budget, with respect to 2012, we will be rolling out our budget in February. I can't say too much about that. I was very much encouraged about where we ended up in 2011 with respect to Reclamation's budget. We ended up in 2011 getting about a three percent increase in our budget, overall, at the Bureau of Reclamation while most agencies were being held at the same level as 2010, or even being reduced a little bit. So, I took it as a good indication of the administration's support for not only Reclamation, but water resource issues in general, in understanding the importance of that.

2012, we'll see what happens when we roll out the budget. I think overall, it is important to acknowledge -- and I think the President's done this himself and others within the Administration have done it, that I think the 2012 budget is just going to be a tightening of the belt and it's going to be a strong demonstration of the administration's commitment to overall deficit reduction. As now, as the economy starts turning around and hopefully some of those activities take roots, we've got to deal with the long-term issues that exist in the budget. And I think that's what you're going to see as we roll out the 2012 budget.

So, finally I just want to conclude by reflecting on the President's comments last night. And he asked us -- that's actually what he asked us to do, he asked us to reflect on the occurrences over the last week in an overall manner, make sure we align our values with our actions and remember that a civil and honest product discussion can help us face up to our challenges as a Nation.

I firmly believe that water resources are one of those challenges -- maybe not as urgent, maybe not as high profile as some of the other ones facing the country, but very important in the West. And the programs I mentioned all have issues in the implementation. They all sound great and we can provide resources, but how we do things on the ground in working with all of you is always a tricky business, it's always subject to some level of dispute.

Moreover, there are other conflicts that are ongoing, even in this four-State region. There is, obviously -- the ongoing issues associated with the litigation over the Republican River Compact and I know those are very important issues.

But, overall, I think the President was right on the mark. How we deal with those conflicts and disagreements -- not that we have them, because that's perfectly understandable that we have them -- but how we deal with them will determine how successful we'll be in leaving a better situation for the next generation.

And I certainly don't mean to be preachy and I don't mean to be professorial, because I can guarantee one of the other aspects of this job is I've learned a lot more in the last 18 months from folks like you all, who are out here living and breathing and experiencing these issues, every day than I will ever give back to any of you, but I was moved last night by the comments and the reflection about how we should be thinking about how we deal with one another.

So, in light of the events last week and the President's message last night, it simply seemed appropriate that I leave you with his words as opposed to my words.