What the Colorado River Crisis Means for the American West

0:00 Westin: This is a story about triage. The American Southwest, as we know it, was built on cheap, reliable water from the Colorado River. But for decades, the river has been shrinking. And this year, the fight over what's still left has come to a head. It's forcing a showdown over who cuts, who pays, and what life in the West costs when water is no longer a given. Bloomberg's Michael McKee has the story. -We know the situation on the river it's the worst it's ever been.

0:31 -Without water, there's no Imperial Valley. -We are indeed getting to be in a crisis situation. -This has been a very difficult year. -This is the Colorado River. At over 1,400 miles long, it provides water to 7 states across the Southwest. Starting in the Rocky Mountains, the river begins as snow, which melts and provides water to the upper basin, made up of Wyoming, Colorado, Utah, and New Mexico, and the lower basin, which includes California, Nevada, and Arizona.

1:02 The water makes its way to kitchen sinks and front lawns, but also crops and businesses and reservoirs, which generate power for the cities in the Western U.S. -The Lake Powell is very close to what they call the power pool. And that means that once the reservoir is below that level, it can't push the water through the turbines to create power. That's going to affect power supply. -Jennifer Gimbel is a water policy scholar and former Bureau of Reclamation official.

1:31 She says the river's legal framework was built in layers, beginning with a compact in 1922. But a lot has changed since then. -We have no safety net now. When all those other agreements were signed, there were still decent amounts of waters in the reservoir. -But no longer. This winter, the Rocky Mountains saw the lowest snowpack ever recorded, and less snow means less water downstream. Dan McEvoy is a climatologist at the Western Regional Climate Center, where he has been tracking snowpack levels across the West.

2:03 Why is snowpack so important? -Yeah, it's critical to pretty much all of the Western United States in terms of water supply, of course. So for many regions around the West, you know, anywhere from 50% to more than 70% of the surface water that's used for public consumption, agriculture, irrigation, all the surface water supply, most of that comes from snowpack that accumulates in the winter season, and historically has slowly melted through the spring and summer.

2:34 But that is changing, and we saw a big shift in how that occurred this year. This is a widespread event where we've seen some of the lowest snowpack on record going back 50 to 75 years or even longer. And so that's something that kind of developed throughout the course of the year. Then we had this really unusual March heatwave, and that triggered this really abrupt and really early snowmelt, leading to this really catastrophic situation in terms of snowpack as a whole across the Western U.S., and conditions are probably the worst in the Colorado River Basin right now.

3:09 -That lack of snowpack is now showing up in the system's balance sheet. Lake Mead, which hit its lowest level since it was filled 90 years ago, and Lake Powell are the two biggest reservoirs in the country. Both of their water levels have been declining for decades. This year, some of the rules governing the river are expiring, and with the 7 states unable to reach a long-term agreement, the federal government is stepping in to divide the waters.

3:34 -So now we're down to the nitty-gritty. Who gets it and who doesn't? And you have governor's representatives, and they're concerned about their constituents, they're concerned about the economy, they're concerned about food security, but there's only so much in the river. And as they just couldn't come to an agreement. In the lower basin, the reclamation is called the Water Master. They control the contracts. In the upper basin, we don't have a large federal reservoir, so we don't have a way to call for that water and have it delivered.

4:15 It's just a natural process. So each state is in control of its natural resources. -The Bureau of Reclamation recently-released plan covers the next two years, suggesting a 1.5 million acre-foot water usage cut annually for the lower basin, with Arizona getting hit the hardest. -We think there are fundamental flaws with the Final Environmental Impact Statement, the FEIS. We believe it's not following the law. It has significant problems. What the United States has put on the table simply isn't workable for Arizona.

4:49 -As the general manager for the Central Arizona Project, Brenda Burman oversees allocation of the Colorado River water to nearly 80% of the state's population. -The lower basin states, so Arizona, California, Nevada, what we've done is we've put forward a plan. And we did that before that document came out. And that plan is to create two years of stability on the river. These reductions that we're talking about, 760,000 acre-feet for Arizona, is something that our communities have been preparing for.

5:20 It's not something we think we can do every year, but it's something that we are prepared for in '27 and '28. You can't balance the entire smaller river on the shoulders of either CAP's customers or in Arizona, California, and Nevada. This is something that has to be shared by all 7 states who share the river. -How do you negotiate something like this? -Everybody gets in a corner because... because there just isn't enough river water. Farmers in California are probably feeling like, "Well, we've got it better "because we're what they call senior rights to Arizona."

5:56 But California is still going to have to take some cuts also. Looking at the upper basin, we've been taking cuts every year during this drought. -That old legal order is not abstract. The Colorado River supports $1.4 trillion of economic activity every year and jobs for 16 million Americans. -I sell this crop by the ton, by the pound. -One of those Americans is Andrew Leimgruber, whose farm in California's Imperial Valley has been run by his family for generations.

6:27 -We are the big target on the river because we are such a large user of water, but we're also the highest in priority. The way it works in the West, the first person to use the water beneficially, first in line. We have a system of laws in place that would have dealt with this crisis before it got to this point. Unfortunately, you know, Arizona has only been pulling water off the Colorado River since the late 1980s.

6:51 The CAP was only approved by Congress with Arizona agreeing that in times of shortage, they would be the first to be reduced and cut off. For the last two decades, Arizona has been taking their full entitlement, even though they didn't have the need for that water. We have strong standing water rights that have gone all the way to the Supreme Court. They've been adjudicated. They've been passed and processed. We have the law to stand on. If they can come in and take that away, that means there's no such thing as a property right in the United States.

7:22 -The impact reaches far beyond the Southwest. In the winter, much of the food that feeds American families across the country comes from desert farming regions like the Imperial Valley. -Most of the population thinks that the food that they buy at the grocery store shows up in the back. They don't know that it comes from a source, that it's produced. A lot of hands, and labor, and blood sweat and tears goes into producing all the bounty that we share in.

7:47 -Are you able to use less water? -There are areas where there is efficiency that can be gained. It just costs money. Utilizing systems like drip, overhead sprinkler systems, automated flood systems, tail water return systems, all these different uses of technology, but they're very expensive and costly. Unfortunately, the least expensive way to get water off of farms has been fouling. And fouling, around here we call it "the F word." It's extremely detrimental to our communities.

8:19 Fouling puts people out of work. -This was not a cheap installation, I would imagine. -No. This half-mile system that irrigates 180 acres was a half-million-dollar capital expenditure. To be sustainable, we also have to be economical and profitable as a business. The benefit, though, is with this system, I can produce more crop. -If the Imperial Valley shows the cost of cutting use, San Diego shows the cost of cutting new supply. With an abundance of water at its disposal from desalinization, the county's water authority plans to help ease pressure on Arizona and Nevada for a price.

8:55 How does this agreement with the other states work? -First, we have to get all of the lawyers in the room, and we have to get them to agree. We're looking to do things that have never been done before. -As the general manager of San Diego County's Water Authority, Dan Denham is overseeing the effort of turning water into a financial exchange. So you'll send water to the states in exchange for them using less water from the Colorado?

9:19 -We're going to exchange money for water, and that's... that's the basic construct behind it. It's the construct behind what we've done with the farming community in the Imperial Valley. It's allowed the Imperial Valley to make investments on farm efficiency projects while maintaining their high priority rights to water. We receive the water that, as I suggested, would have otherwise been cut by 50%. So similarly, Arizona and Nevada get water, and for the Water Authority, we get inventory off of our books.

9:56 Inventory off the books in the form of water means more flattening of rates out into the future. We can dampen the rate increases that have been really, really tough for us over the past 3 years. -Does it mean that those states will not have to cut back as much? -Yes. -Desalinization can create a new supply, but it can't put water back in the Colorado River. It shows what scarcity pricing looks like when the cheap supply is no longer enough.

10:27 -This water at the desal plant, the most expensive, costs $3,500 a unit. Some of the other sources that we have are $50 a unit. Some are $800 a unit. Some are $600 a unit. Altogether, it's $1,400 a unit, and that's what makes this more affordable if it's just the only option you have. -Desalination is expensive, but quite honestly, we have not paid what our water is worth to us. And so we need to make that adjustment in our minds.

11:02 -The next chapter of the Colorado River economy will be built around pricing scarcity, not abundance. It's clear that the basin region needs more than a temporary fix. States and the federal government need to work together to build a new operating system before Mother Nature forces one upon them. -It all comes down to dollars and cents and economics. -Hydrology is not going to wait for us. If there is a bad year next year on the river, the system will crash.

11:32 -We have a responsibility to our national economy. We have put massive amounts of water out there. It is time for everyone who benefits this river to step up.