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Consensus and Conflict in Oregon’s Troubled Waters – a Tale of Four Basins

February 22, 2016

Much has been made of the need to balance protection of species and habitats with consumptive water needs, and the importance of patient collaboration among stakeholders to strike an equitable balance among competing water resource demands. There have been notably mixed results in these endeavors in the state of Oregon in recent months. This article briefly reports on news from four basins in Oregon: the Deschutes, the Klamath, the Malheur and the Umatilla. Each basin has a slightly different story to tell. For the first three basins the theme is common: severe water disruptions, restrictions, and rampant uncertainty – even apart from the effects of climate change and drought – will become continuing facts of life. In these basins there has been no satisfactory resolution of the conflict between existing uses and competing needs from listed species, Tribal rights, or resources stressed by unsustainable demand. The last basin mentioned in this article, the Umatilla, provides hope for a completely different story of collaboration, where new uses may arise conditioned by a creative mode of resource protection. Success in the Umatilla could yield a new era of productivity in Eastern Oregon, although even there that conclusion is now far from certain.

The Deschutes Basin

In the Deschutes, we find that despite years of stakeholder participation to create a viable habitat conservation plan (HCP) to protect salmonid and spotted frog habitat, one of the stakeholders has jumped ship. It recently filed a lawsuit under the Endangered Species Act to enjoin the operations the principal irrigation districts in the basin deemed harmful to the lifecycle of the spotted frog, and to force re-initiation of consultation under the ESA. If successful, the suit could greatly impair the ranching and agricultural economy of the Deschutes basin, and restrict future growth.

Actually, two lawsuits were filed in the United States District Court in Eugene, Oregon. One was filed by the Center for Biological Diversity in December 2015, against the Bureau of Reclamation[1]; the other, in January of this year, by WaterWatch of Oregon, against Reclamation and three central Oregon irrigation districts, copying principally the same facts as the CBD complaint.[2] The defendants among them own or operate three important dams in central Oregon: Crane Prairie Dam, Wickiup Dam and Crescent Lake dam. The plaintiff alleges that the spotted frog, listed as threatened under the ESA in August 2014, is the “most aquatic of native frog species in the Pacific Northwest, requiring water-based habitats for all of its life stages.”[3] The WaterWatch complaint states that the United States Fish and Wildlife Service “found that operation of dams in the Deschutes basin results in extreme water fluctuations which inundate and desiccate spotted frog habitat.”[4] Plaintiffs claim this is the case because the defendants are alleged to “maximize water storage in the non-irrigation season and to maximize water delivery during the irrigation season”.[5] In other words, the existing baseline of irrigation use in the basin is alleged to disrupt the natural hydrograph in which the spotted frog evolved. The complaints pray to enjoin “taking” of the frog by all defendants under section 9 of the ESA.[6] Plaintiffs also demand that Reclamation reinitiate consultation based upon section 7(a)(2) of the ESA[7], since the spotted frog was listed after the last consultation on federal action in the basin, in 2003.[8] WaterWatch claims that

Defendants are liable for the unlawful take of Oregon spotted frogs in the Upper Deschutes River Basin and Plaintiff is entitled to declaratory and injunctive relief requiring Defendants to operate the dams to ensure Oregon spotted frogs are not harmed by ensuring adequate, stable, and consistent water flows for all frog life stages.[9]

This case has potentially widespread and serious consequences because it is about providing “adequate flows” to ensure that a particular species is not harmed.[10] There is no allegation of specific dead animals (i.e., frogs actually killed by specified low flows caused proximately by defendants) – what is usually thought of as a prerequisite to a successful “take” case. There appear to be, rather, overall population conclusions drawn largely from studies supporting the USFWS listing decision.[11] Critical habitat has been proposed but not yet designated. Moreover, the facts of the case are drawn largely from the very bleak drought-induced low water seasons of 2014 and particularly 2015[12].

Reaction to the lawsuits was harsh and swift. The Oregon Water Resources Congress, whose members are largely irrigation districts, stated that “The actions of WaterWatch and CBD are destroying a multi-year collaborative, science-based effort (The Deschutes HCP) to meet the diverse water supply needs of Deschutes Basin – including specific projects that would actually protect and restore habitat for the Oregon spotted frog as well as easy ESA listed fish species.”[13] It is unclear what effect the lawsuits may have on the continuing efforts to get and implement grant and loan funding under the HCP and the collaborative enterprise in general, for which the Deschutes basin has long been noted. What is certain is that significant resources in the basin will now be diverted to the litigation.

The Klamath Basin

In the Klamath basin, after literally decades of work culminating in a series of settlement agreements among the United States, the Klamath Tribes, project water users, upper basin water users, and a hydroelectric power producer, lack of political support has resulted in the collapse of the entire process and the imminent restart of litigation.[14] Contention among Tribes, United States, and water users will likely be exacerbated, and the tentative threads of cooperation, and even trust, so patiently woven together over years of difficult collaboration and compromise will likely be dissolved and perhaps changed forever. The effect on ranching and agriculture in the Klamath basin will undoubtedly be severe, particularly if climate trends continue.

The Klamath Basin Restoration Agreement.The KBRA is effectively dead as of December 31, 2015. The KBRA expressly provides that it “shall terminate” if federal authorizing legislation has not been enacted by December 31, 2012 [subsequently extended until Dec. 31, 2015], and a cure is not achieved under the agreement’s dispute resolution procedures. Three signatory tribes, the Klamath, Karuk, and Yurok Tribes, previously initiated dispute resolution with the Klamath Basin Coordinating Council (KBCC), but the KBCC could not be expected to cause passage of the federal legislation needed to resolve the dispute at issue. Thus, as the KBCC has stated: “The Klamath Basin Restoration Agreement (KBRA) terminated on December 31, 2015 because the federal authorizing legislation was not enacted.”[15]

The KBCC has stated that “[t]he parties to the Klamath Basin Agreements will be consulting to determine the next steps they will take;” however, there is not appear to be any sign of movement or progress from the Oregon Governor’s office or any other settlement parties since the December settlement group meeting. Given the high political hurdles facing legislation needed to implement the KBRA, it seems unlikely that the parties would agree to reinstate the KBRA without substantial revisions to that agreement.

The Klamath Hydroelectric Settlement Agreement. PacifiCorp, the federal government, and the states of Oregon and California have recently agreed in principle to modify the KHSA to allow the dam removal process to proceed through the Federal Energy Regulatory Commission (FERC) to avoid the need for Congressional authorization of this component of the agreements. To amend the KHSA, however, will require concurrence by the other parties to that agreement, and it is as yet uncertain whether parties (including Klamath Project irrigation districts and various tribes) will agree to such an amendment.

Upper Basin Settlement Agreement. With respect to the Upper Basin settlement, while termination is not automatic or immediate, the termination of the KBRA sets in motion a process that inevitably leads to termination unless the Upper Basin settlement is amended.

The passage of federal legislation implementing the KBRA is one of the conditions necessary for the agreement to be made permanent. If the Secretary of the Interior determines that this cannot be achieved (i.e. because KBRA has terminated), the Secretary is to inform the parties of this determination by letter. There is no set timetable by which the Secretary must make this determination. However, once this occurs, the parties may then initiate Meet and Confer procedures to either amend the agreement or take other action necessary to make implementation possible. Given the termination of the KBRA, the obligation to “Meet and Confer” is likely to be a fruitless process. To succeed, either the Tribes must be willing to consider a substantial amendment that would sever the Upper Basin settlement from the KBRA or the KBRA parties must reinstate that agreement. Neither of these possibilities seems particularly likely.

The Malheur Basin

The main troubles in the Malheur basin stem neither from conflicts with listed species nor unmet tribal rights. They arise from matters equally complex and intractable in the world of water: declining aquifer levels caused by rates of pumping that exceeds the ability of the aquifers to recover. When surface water becomes unavailable due to low water years or drought, farmers and developers often increase groundwater pumping in order to make up for the lack of surface water supplies. Not infrequently new wells are drilled. Provided there is no hydraulic interference with streams[16] or other nearby wells, the practice in the past has been to approve applications for new groundwater wells. As a result of continuing concerns and complaints to the Oregon Water Resources Department (OWRD) about declining aquifers and impacts on senior, surface-water users, the department has proposed revisions to the Malheur Lake Basin Program.[17] If approved and implemented, the rules will severely restrict water use and development in a broad swath of arid Malheur County.

The rules, which must be approved by the Water Resources Commission to become effective, would create the Greater Harney Valley Groundwater Area of Concern (GHVGAC). The department described its need for the rules this way:

Current data, comprising substantial evidence, indicate that groundwater levels are declining in areas of the Greater Harney Valley Groundwater Area of Concern. Additional allocation of groundwater within this area may exacerbate these declines. A comparison between estimated annual recharge and previously allocated groundwater volumes indicates that groundwater is fully allocated in some areas of the basin. The Department is proposing to establish the Greater Harney Valley Groundwater Area of Concern in part of the Malheur Lake Basin, which will allow some pending applications to be approved if offset water can be provided, and limit future applications from being approved while a groundwater study is completed. Exempt uses will not be limited.[18]

It is possible that the Draft Rules, if made final, would constitute among the most detailed restrictions ever imposed on Oregon groundwater permitting in a particular region. The rules begin with the proposition that the total rate and duty of proposed groundwater use must be offset by “contemporaneous and voluntary cancellation or partial cancellation of an existing primary groundwater” right.[19] Thus one can get groundwater if one gives up groundwater, assuming there is no potential for substantial interference with nearby streams. If one does not have an existing groundwater right to surrender, the rules allow one to apply for water in the GHVGAC, if “there has not been a total of 7,600 acre feet of irrigation permits issued in the Northwest sub-area, and 1,300 acre feet of irrigation permits in the South sub-area.”[20] This limit invites a race to the agency. Perhaps anticipating this, the rules provide, “For the purposes of allocating water under this subsection, applications will be processed in the order they are received by the Department.”[21] Moreover, an issued groundwater right will be conditioned upon a study or model that determines whether water may be available or not in a particular location. The permit will be conditioned “to prohibit issuance of a water right certificate if the Department’s Harney Basin Groundwater Study results clearly indicate that the groundwater use is not within the capacity of the resource, is over appropriated, or causes injury to senior water users.”[22]

But even if you’ve gotten this far with your permit application, you’re not out of the woods yet. This is because any permit issued under the rules will require the development of an observation well to monitor groundwater usage in the applied-for, production well. Depending on the depth and other factors, observation wells can cost many thousands of dollars – perhaps even $10,000 or more. The department must specify where the observation well is to be drilled. It must be at the same depth as the production well and be completed within six months of the issuance of the permit. Then, if the groundwater levels in the observation well appear to have declined by ten feet or more over the course of the year, water withdrawal from the production well may be curtailed until the groundwater level has recovered.[23]

If implemented, the rules should be welcome by those concerned about declining groundwater levels, and those who are holders of senior surface water rights anxious about declines in surface water levels as groundwater pumping has increased. For those wanting to put new groundwater to use in the GHVGAC, the rules will require careful study to see whether a permit application makes sense, and a careful look at the budget to see if their plan is affordable. Some in Harney County deeply fear for the economic future of the county.[24] Hearings on the draft rules will be in Burns and Salem on February 24th and 25th of this year, respectively, and promise to be lively.

The Umatilla Basin

The substantial disputes in the Klamath and the Deschutes basins and the comprehensiveness of likely groundwater restrictions in huge portions of Malheur County, seem daunting. One may wonder whether certainty, stability and future investment in the development of Oregon’s water resources for consumptive use to feed and house a growing population is an illusory goal. This may seem particularly difficult in the face of a changing climate. One might well think resolution of water disputes is a fading dream until one hears the story of the Umatilla basin. There, water suppliers, water users, environmentalists, and the government have come together in a rare (and potentially fragile) coalition to support plan to use mitigated Columbia River water withdrawals for irrigating new land in the Umatilla basin.

A great deal of irrigable land in the Umatilla basin lacks available irrigation water. Yet the mighty Columbia River flows by, but is unreachable due to Division 33 rules of the OWRD, which are intended to protect listed species of salmon in the river. Those rules require that withdrawals from the Columbia River must be mitigated for to offset losses to target flows in that river.[25]

Under a creative plan developed to assuage concerns of environmental interests, the mitigation water for Columbia River withdrawals would come from the Port of Umatilla, the City of Umatilla and the City of Boardman (the water suppliers). They own water right permits to withdraw water out of the Columbia River for municipal use purposes. Collectively, this is a great deal of water, with the Port of Umatilla holding the vast bulk of the water rights.[26] Two separate paths have been envisioned. The first, involving the water suppliers, entails their using their water for authorized municipal use purposes to incrementally prove-up their permits in order to obtain certificates.[27] These certificates would then be transferred instream by time-limited transfers for the purpose of mitigating a new water right permit (or permits) to be issued to the irrigators for irrigation use.[28] In other words, the water suppliers’ water under their own water rights would not be leased or sold directly to the irrigators; it would be put instream to mitigate newly-obtained permits for Columbia River water to be used specifically for irrigation.

Thus the second path, involving the irrigators alone, calls for their filing one or more applications for new water right permits out of the Columbia River for their irrigation purposes. The applications would be conditioned upon the mitigation water coming from the water suppliers in step one, in order to pass muster under Division 33. Thus each component complements the other. The conditions on the permits have been the subject of lengthy negotiations with environmental interests. They are intended to be closely correlated to the mitigation being offered by the water suppliers, including resolving what happens to the permits at the end of the mitigation period of the time-limited transfers.

While the deal is far from certain, the amount of effort put in by all parties should give rise to optimism for its success. It is possible that such success could lead to rulemaking which would systematize ways in which one can mitigate for Columbia River withdrawals.

Conclusion

Four diverse basins are dealing with four diverse challenges. In three of the basins, the status quo has been completely upended, portending hard times ahead for both new and existing consumptive water uses. The long-term effort on an HCP in the Deschutes River basin has been jolted by spotted frog litigation filed by one of the stakeholders in that HCP process. The monumental effort in the Klamath basin to implement three separate settlement agreements has been thwarted by political failure to support it, forcing the beleaguered parties back to the court for still another chapter of litigation. Efforts to develop groundwater in the Malheur basin will be substantially blocked by new basin rules deemed necessary by the OWRD to prevent continuing groundwater declines. A ray of hope exists in the Umatilla basin where the promise of revitalizing irrigated agriculture in that corner of the state is real, though still at this writing short of being fully realized.

* The author wishes to disclose that he represents or has represented a number of clients in the regions discussed in this article, and is a member of the Oregon Water Resources Congress, cited later in this article.

[1] http://www.biologicaldiversity.org/species/amphibians/Oregon_spotted_frog/pdfs/OSFcomplaint.pdf (“CBD Complaint”)

[2] http://waterwatch.org/wp-content/uploads/2016/01/First-Amended-Complaint.pdf ("WaterWatch Complaint”). The defendant irrigation districts are: Central Oregon Irrigation District, North Unit Irrigation District, and Tumalo Irrigation District.

[3] WaterWatch Complaint, par. 16.

[4] WaterWatch Complaint, par. 32.

[5] WaterWatch Complaint, par. 29.

[6] WaterWatch Complaint, pars. 49-59; CBD Complaint, pars. 81-83. The take allegation relies on application of 16 U.S.C. §§ 1538, 1532(19) (prohibiting take of endangered species); 50 C.F.R. § 17.31(a)(extending take prohibition to threatened species).

[7] 16 U.S.C. § 1536(a)(2).

[8] CBD Complaint, pars. 75-79; WaterWatch Complaint, pars. 41-47.

[9] WaterWatch Complaint, par. 58.

[10] WaterWatch Complaint, par. 1.

[11] See e.g., WaterWatch Complaint, pars. 32-35

[12] See e.g., WaterWatch Complaint, par. 38; CBD Complaint par. 56.

[13] http://owrc.org/news/665. The HCP has been an on-going process for many years. “The irrigation districts are in the process of developing a Deschutes Basin Habitat Conservation Plan, which when completed, will recommend measures to improve the frog’s habitat. Six federal grants totalling $2.6 million, matched with $2.7 million from the irrigation districts and city of Prineville are being used to do scientific studies on the frog to develop the plan.” http://www.pamplinmedia.com/msp/129-news/288760-165626-waterwatch-files-lawsuit-over-spotted-frog.

[14] See the article in this newsletter more fully describing the breakdown in the Klamath agreements.

[15] Klamath Basin Coordinating Council, Klamath Basin Agreements: Status of the Klamath Basin Agreements, http://www.klamathcouncil.org/ (last accessed Jan. 7, 2016).

[16] Division 9 of the Oregon Administrative Rules lays out the guidelines and presumptions for determining when there may or may not be potential for substantial interference (“PSI”) with surface water sources. See generally, OAR 690-009-0010 et seq.

[17] The OWRD is working on an amendment to the Oregon Administrative Rules, OAR 690-512-0010 et seq. These are part of the set of so-called basin rules which the Water Resources Department creates for every basin in the State. They determine the beneficial uses allowable in the basins and typically state limitations and conditions on water use applicable to those basins.

[18] See http://www.oregon.gov/owrd/Pages/law/Department_Rulemaking.aspx , Division 512, Malheur Lake Basin Program, and link to Draft Rules ("Malheur Draft Rules").

[19] Malheur Draft Rules, 690-512-0020(4)(b). The right proposed for surrender must be free from a presumption of forfeiture and authorize an equivalent or greater rate, duty, and acreage than that of the groundwater right being applied for.

[20] Malheur Draft Rules, 690-512-0020(6)(b). The draft is accompanied by a map showing the locations of the areas referred to in the text.

[21] Id.

[22] Malheur Draft Rules, 690-512-0020(6)(c).

[23] Malheur Draft Rules, 690-512-0020(7).

[24] See, for example, this account posted last summer by OPB when OWRD signaled its intention to limit new wells in the basin: “Harney County Judge Steve Grasty said he was shocked by the decision to limit new wells. ‘I think the timing couldn’t have been more disastrous for this community on an economic and social basis,’ Grasty said. He sees limiting new agricultural wells as potentially squeezing cattle and hay producers. They’re already worried about other limitations that may come if sage grouse are listed under the Endangered Species Act. ‘The only economic development that we’ve seen in the last 10 years has been an increased number of pivots and hay production in this county,’ Grasty said. ‘I’m worried about these people, this place, about sustaining it.’” http://www.opb.org/news/article/harney-county-water-woes-no-new-groundwater-wells-/ .

[25] “If a proposed use is determined to be detrimental to the protection or recovery of a threatened or endangered species, the applicant may propose mitigation … The Director shall determine if the proposed use with mitigation offsets the detriment.” OAR 690-033-0220 (5)

[26] A portion of the Port’s water right is now being used and has already been committed to the so-called Regional Water System. The Port’s partner in the Regional Water System is the City of Hermiston.

[27] From ORS 537.620(4): “A municipality may partially perfect not less than 25 percent of the water authorized by its permit without loss of priority or cancellation of the municipality’s permit under this section.” “As used in this section, “municipality” includes a city, [and] a port formed under ORS 777.005 to 777.725 …”

[28] Like instream leases, at the end of the term of the transfer, the water right under a time-limited transfer reverts to its original use. However, a time-limited transfer differs from the instream lease in that it can be for any length of time, for example 10, 20, 50 or more years. It can also be customized so that when certain conditions occur, the transfer can be terminated. See ORS 537.348(2) and OAR 690-077-0010(31)

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