Water rights are at the heart of protecting the Colorado River | FT Climate Capital

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This is salvation... run-off from a drought-busting winter downpour that came just in the nick of time for farms and cities across much of the western United States.

We realise we are on the brink.

We were looking at projections that really could mean dead pool, where the water isn't even high enough to be released from the reservoir. That would be really, really catastrophic.

So we're having an existential crisis in the Colorado River and the west in general, really. Climate change has effectively cut the river in half. There is frankly not enough water for everyone to do everything they want to do with it.

Around 40mn people rely on the Colorado River for water and hydroelectricity. But despite unseasonably high levels of rainfall this year, the reservoirs remain perilously low.

Before the welcome '22-'23 winter deluge, the worst drought in some 1,200 years saw levels at the river's main reservoirs around the Hoover Dam plummet to record lows. Lakes Mead and Powell are the largest reservoirs in the US. In 1999, both were nearly full. Little more than two decades later, only around a quarter of that reserve was left.

We have kind of reached the era of limits. And there's not any new supplies on the horizon.

The only solution that we really have control of on a regional scale is to leave water in Lake Mead and Lake Powell by reducing the amount of water we take out. It's super difficult because it means that someone has to go without water.

Seven states, at least 30 Native American Indian tribes, and Mexico all depend on and have rights to a share of the iconic 2,300-kilometre waterway. But driving a deal where everyone agrees to cuts is complicated because not all shares are equal.

I'm upstream in Colorado mountain country, near the source of the majestic river itself, to ask rancher, attorney, and former state water official James Eklund how some states ended up with greater shares of river water than others.

I'm a water lawyer, so I have a bias toward following the law as is written. And right now, the law is written with a priority system in place.

That priority system is dictated by the Colorado River Compact, an agreement that began just over a century ago. Original shares or rights were allocated on a first come, first served basis.

...irrigation to the Imperial Valley now.

Many of those first in line to file and win legal claims, like representatives from California's once arid Imperial Valley, have ended up with senior theoretically unlimited water rights.

The senior water rights stay in priority, meaning you can continue to divert water out of a stream like the one we're on here. Maybe you never have to curtail your use. If you've got a junior water right, you may not be able to open it very much or at all, depending on the water year and how much water is available. So the fact that we have most of our municipal users on junior water rights and most of our agricultural water is in senior water rights, that creates a public policy challenge for us.

The vast majority of the water extracted from the Colorado River basin, as much as 80 per cent, goes to agriculture.

But not all producers have secured the privilege of senior rights to dip into that majority share. Thousands of kilometres downstream, in the so-called Lower Basin state of Arizona, many irrigated farmers in Pinal County to the South of Phoenix have lesser junior rights. As a result, when the worst of that record drought hit, their surface water allotments were slashed by 87 per cent through 2022.

You can get cut to zero while everyone else still has all the water they have on their piece of paper. So there's a huge inequity there.

According to Arizona's top water official, the state's junior shares of Colorado River water have much wider consequences for issues like food security, well beyond the state's borders.

And folks don't know this. The Yuma area of Arizona, and that's in the southeast corner along the California border and border with Mexico, in the winter time, November to April, produce about 90 per cent of all the green leafy vegetables in North America. And they were going to potentially lose most, if not all, of their water as well.

Such drastic measures were part of emergency federal government proposals in 2021 to enforce the cuts needed to save the reservoirs at Lakes Powell and Mead from collapsing into dead pool. Since then, some states have thrashed out agreements to avert mandatory restrictions.

We lived in a time of uncertainty where we didn't know whether the federal government would take unilateral action that would depart from the law of the river, the priority system that we've lived by since 1922. They shook people up. And I see much more going on in terms of negotiations and willingness to entertain different ideas.

In May 2023, Arizona, California, and Nevada reached a compromise agreement to collectively cut about 13 per cent of water they take from the Colorado River. The city of Phoenix is investing in new facilities to recycle effluent into drinking water.

That big plant, when it's built out, will enable Phoenix to reduce its reliance on Colorado River water by 50 per cent. A huge strategy is to get water users to reduce the amount of water they're using outdoors, because that water cannot be reclaimed and reused, and then focus on maximising reuse.

In the countryside, improvements in irrigation efficiencies are also making a difference. According to a 2023 University of Arizona report, in recent decades, farmers across the Lower Colorado region, including California, were able to increase revenues by 30 per cent while cutting total water usage by 18 per cent.

But the hard fact remains. There is not enough water in the Colorado River to give every shareholder the amount they're entitled to.

The river has been overallocated. Some scholars say it's been overallocated from the start.

Failure is not an option for the federal government, and it's certainly not an option for states like Colorado. Who takes the first cut is a really tricky question. The first cut that needs to happen on this river system needs to be voluntary, temporary, and compensated.

If there's little or no water in the river, the piece of paper that says you have the better right doesn't mean anything. Everyone who benefits from the river needs to contribute to its protection.

Climate forecasts suggest that Colorado River flows will drop by up to 35 per cent from pre-2000 averages. It means that the downpour that broke the drought at the end of 2022 was just an exception that sports stakeholders a little extra time to find new ways to take less.