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Climatic Change anc} Water Law 4 INTRODUCTION FRANK J. TRELEASE University of Wyoming College of Law Water law could be defined as the foal statement of man's reaction to the aqueous element of his environ- ment. This rather unusual definition would be especially appropriate for present purposes because the view from this angle brings out a not always obvious constraint: man must shape his law to the environment as he perceives it. If his picture of the physical universe is false, he is not likely to get good results from a law based on the miscon- ception. A century ago, when judges thought that groundwaters were "vagrant, meandering drops" moving in "unknown and unknowable courses," according to "secret, changeable and uncontrollable forces," they de- veloped rules of law that would not be suitable for a modern hydrogeologist trying to manage withdrawals from a large groundwater basin with the help of a data bank and a computer model. But, of course, the modern administrator does not use the century-old law based on ignorance. The legislature has replaced it with a set of flexible controls that enable him to manage the water in accordance with the latest available scientific informa- 70 tion. The law, like other human institutions, has grown and changed in response to increases in man's knowl- edge. While one function of law is to give stability to institutions and predictability to the results of action, often the strength of the law will lie not in immutability but in capacity for change and flexibility in the face of new forces. This proposition has special significance for this paper. Today's water laws are based on certain implicit assump- tions about climate and water occurrence derived from observations of actual events. Our plans for water uses and projects are made in the light of predictions based on these observations. Yet the scientists on this panel now question those assumptions and predictions. Climate has changed in the past, and the climate we enjoy today could be replaced with a quite different one tomorrow. We plan our developments on notions of "normal" precipitation and "predictable" drought, but the data are sketchy, and statistical theory seems to indicate that our premises are shaky. We could come up against a drought that lasts longer or is more intense than any we have known; we could find that it is a "permanent" drought, a climatic
Climatic Change and Water Law change that represents a new normal and promises to persist indefinitely.* Legal questions inevitably arise: how will our water law work under such unforeseen conditions, and will we need to change it? One answer seems obvious. If the past can be shown to be an uncer- tain guide to the future, we would be wise to plan for the unpredictable. Law is, of course, a planning tool in itself (it encourages actions most of us deem desirable and discourages those deemed harmful), and the most valu- able consequence of a new realization of uncertainty might be that we would build into the law mechanisms for change and give our rights and institutions a flexibility designed to minimize dislocations when change in cli- mate occurs. We face one quite predictable change wholly unrelated to climate. With population growth, increased indus- trialization, and greater affluence, more water is going to be needed in the future than is used at present. This will create a "water shortage" just as much as would a drought, because shortage is a function of both supply and demand. An increased demand for a stable supply will produce much the same pressures as will a decreased supply. Since the unpredictable changes that are of pres- ent concern will produce (or aggravate) the same result as the predictable change, we may find hints on how to handle the unpredictable in the way in which we attack the predictable. When the demand for anything exceeds the supply, we have a common type of problem. Something has to give. We can attack the problem from either end. We can cure a water shortage by increasing the supply (at the time and place of demand) by building a dam and storing water during good times so it will be present during bad times, by importing water from some distant place where the supply exceeds the local demand, or by seeking a new source such as groundwater. Or we can reduce the de- mand by restricting the number of claimants (for instance, to riparian landowners), by prohibiting certain uses, by limiting quantities used, by increasing the price of water beyond the ability of some users to pay, or by buying out some existing user. For purposes of this paper, we will call the first type of adjustment the "engineering solu- tion," the second an "economic solution," although obvi- ously the choice to build or buy depends upon economic considerations. This process is what law is all about. Water law is a part of resources law, a part of all law, and while it may be complex, it is not necessarily mysterious. The object of all law was stated by Dean Roscoe Pound of the Harvard Law Schools: What we are seeking to do and must do in a civilized society is to adjust relations and order conduct in a world in which the goods *Most water law deals with allocation and management of a scarce resource. Although unpredictability could mean more water than expected and climate could change for the better, changes in this direction would create few legal problems worth discussing. 71 of existence, the scope of free activity and the objects on which to exert free activity are limited, and the demands on those goods and those objects are infinite. To order the activities of men in their endeavor to satisfy their demands so as to enable satisfac- tion of the whole scheme of demands with the least friction and waste has . . . been what lawmakers and tribunals and jurists have been striving for. This of course is the economist's principle of efficiency, Jeremy Bentham's golden mean of the greatest good for the greatest number, and the general desire of all men to derive the maximum benefit and satisfaction from their activities and their environment. The water laws that we hope will help us to reach these goals take many forms. Much water law deals with "water rights," the identifica- tion and regulation of claims to private use. Much of it is institutionalthe powers and forms of governments, agencies, and organizations that control and develop water resources. Much of what we now call environmen- tal law is a part of water law or is applicable to water- related activities. Water rights offer the easiest place to start. These are property rights, and their existence and specificity are a reflection of their place in the economic evolutionary scale. If a resource is so plentiful that it is not affected by man's actions toward it, we regard it as a "free good," a common pool in which all may participate. When claims upon it increase to the point that one person's use harms the other's or threatens the existence of the pool, or when shares in the pool become too small to be useful to anyone, man needs and enacts in one form or another laws that restrict the number of participants or that control or regulate their activity or that abandon commonality and carve up the resource into individual, identifiable, en- forceable, and transferable property units. WATER RIGHTS The orthodox classification of American water law starts with a division into the eastern doctrine of riparian rights and the western law of prior appropriation. We will take up the latter first, since appropriative rights were de- signed for a water-short area where there is not enough for all and are therefore much more structured and pre- cise than the riparian rights of the eastern humid areas, where the assumption has been that there is plenty of water, at least for the owners of the stream banks who can claim rights to their use. PRIOR APPROPRIATION The law of prior appropriation had crude beginnings in the California gold rush. Thousands of forty-niners crowded the diggings at the mouths of the Sierra canyons and staked "placer claims" on the alluvial benches and fans. They staked similar claims to the water needed to wash the gold from the gravel. Since there was neither
72 gold nor water enough for everyone, both were put on a "first come, first served" basis. Claim jumping was dis- couraged by Colt and Winchester. When the Great American Desert was found to be habitable, the first settler in a valley took first choice of the land and enough water to irrigate it, the second comer had to make do out of what was left. These self-made laws were recognized by courts and formalized by legislatures, and today prior appropriation is a quite civilized system of state grants of property rights, enforced and regulated by administrative agencies with substantial offices, rooms full of records, and squads of men in the field. One of the most important features of modern appropri- ation law is the permit system. Any person desiring to start a new water use must get a permit from the state. The permit may be denied if there is no unappropriated water in the source and if the new right, if granted, would conflict with existing rights. The permit may also be denied if the proposed use would not be "in the public interest." Using this power, water officials have chosen the better of two competing projects: they have denied permits for projects that do not comport with state water plans, and they have placed conditions and limits on permits in order to prevent serious environmental harm. An appropriation is a definite and identifiable piece of property. Its boundaries are marked by the quantity that may be diverted from the source, the place the diversion may be made, the use that may be made, and the date that tells when the right may be used. The quantity of water is expressed in terms of cubic feet per second, the rate at which water may be diverted from the source,2 unless the appropriation is one for storage, in which case the water allowed is expressed in total quantity in acre-feet.3 An appropriation need not be used on riparian land or even in the valley where the water originates.4 Most are for irrigation, but every type of beneficial use of water may have an appropriation to serve it: municipal use, manufac- turing, production of hydroelectric or steam power, min- ing, ore processing, recreation- beneficial use is not a closed category.5 This property can be sold, the use may be changed, or the place of use may be changed, provided that proper formalities are observed and approval is ob- tained.6 The rule of priority operates even in a normal year, not only in time of shortage. On an unregulated stream (one without storage dams) from which many irrigators draw water, all may open their ditches in the spring as the mountain snowpacks melt and the stream is high. As the flow decreases during the dry summer, the diversion works are shut off in inverse order of priority. The last ditch is first closed; the first need never be. The entire burden of the lessened flow falls on the junior appropri- ator. He loses all his water; the senior, none. Some have called this a harsh rule, but it should be remembered that the low flow is insufficient for all, and that equal shares for everybody would be sufficient for none. The rule of priority does guarantee a firm supply to all for whom the source is sufficient, and the senior irrigators can build a FRANK J. TRELEASE stable agriculture unmatched in humid climes. The junior appropriator is not unlike the farmer in a semihumid area who must take his chances on rain. If he can only count on spring flood water, he will grow one crop of wild hay and will not plant a late maturing crop like sugar beets. The senior may grow an orchard or a vineyard, the junior will plant corn, since he may gamble on the loss of an annual crop but not of a permanent investment. Since the low flow will accommodate so few users, storage is desirable to detain the spring flood for release in the late summer. The rule of priority also determines who will pay for the dam it is the junior appropriator who will get the benefit from it. In return for his invest- ment, he will often have a better right than many seniors, since his stored water will carry him late into the year when the base flow becomes insufficient for all but a few. For this reason, seniors will often join in a dam project in order to receive supplemental water to firm up their late season supply. Actually, there is a good deal of sharing among western water users. On many streams the latest projects are often the largest. The early small diversions were made with individual effort or small group investments, and when storage became a necessity, economies of scale called for large dams and long canals, which required government capital, often government subsidy. The large project usu- ally has a single priority for all who receive its water, so if there is a short supply, all will share equally, although operating plans or contractual arrangements may provide that municipal or industrial water receives a priority over irrigation, and irrigation over power. A noteworthy fea- ture of prior appropriation is that if storage can be pro- vided not only to save the spring floods for use later that year but also to save the surplus from good years for use in the bad years, the physical effect of priority disappears. There are no junior appropriators, and everyone has a firm right to a firm supplya state of equilibrium reached on many western rivers where the Bureau of Reclamation has built sufficient dams. As demands increase and new demands arise, they are accommodated within the system. If there is unappropri- ated water available during the period it is needed, the new user is for all practical purposes a senior appro- priator. If the supply may or may not be available but the risk seems worth the candle, he simply becomes another junior. If a year-round supply is needed, as for a factory or industrial plant, storage may be provided. But when all the supply is in use, when all the dam sites are used, or the costs of dams become too high, a new user must purchase the water right of a senior appropriator or of a junior with storage. He can do this, or course, if his new use will have a higher productive value than the existing use. In practice, this means that cities and industrial users, which can afford to pay more for water than can most farmers, buy out the water rights of agricultural users. Applying the rule of priority to the physical results of drought or climatic change may have some unexpected
Climatic Change and Water Law effects. It is not correct to think that drought will simply fall upon the most junior appropriators and wipe them out. In the long run, of course, the juniors will be those squeezed out, but many holders of senior and inter- mediate priorities may be affected. It will depend in part on the nature of the change, whether it takes the form of an extraordinarily "subnormal" water year, an "unexpect- edly long" series of low water years, or a ~~permanent~- change in climate that reduces the long-term yield to some new norm. In most subnormal years, the high water begins to drop at an earlier date than usual, and as the flow subsides each junior appropriator will "go out of priority" and must close his intake some indeterminate number of days earlier than he would have if the year had been within the "normal" range. On an unregulated stream, the odds will be changed on all the bets. The original marginal junior rights become untenable and forfeit, the moderately secure rights are now risky, and the relatively certain are smaller in number. If the sub- normality consists of unusually low base flows, the seniors who depend on late summer flows may get hurt the worst. If the drought flattens out the peaks and there is less high water than expected, then junior storage projects bear the brunt. Where large-scale storage has been built to equate the supply, the planners had in mind some combination of bad years to be hurdled. If that "design drought" were never exceeded, every right would be as good as any other; but if the dams are finally run dry, a substantial block of shares all of those that depend on the junior project will fail together. Variations in the pattern of multiyear drought will also change the incidence of hardship. The North Platte River, to take an example, is a fully regulated stream on which the annual and perennial fluctuations have been ironed out by two large projects with different priorities. The earliest, Pathfinder Dam, has low storage in proportion to the land it serves, while the more recent project, Seminoe Dam, has large storage but a late priority. A short-term drought with several years of very low flows would dry up Pathfinder but might be well within the carryover capac- ity of Seminoe, while a long sequence of mediocre years would hardly affect Pathfinder but would ruin the Seminoe project.7 The law of prior appropriation already has some provi- sions for flexibility that will enable the water users to cope with these rather assorted effects of long-term drought or climate change. Some make economic solu- tions possible. Even if self-interest does not keep fools from rushing in, the permit system enables state water officials to deny applications for permits if there is no unappropriated water available and thus limit the number of claims or prevent more from arising. To the extent that the junior appropriations serve marginal enterprises such as farms producing low-value crops, the simple operation of priority will result in the cessation of those water uses that society can best afford to lose. But there is nothing in the priority system that prevents early uses from being the less valuable or that ensures that the last are the least 73 valuable. An intermediate right now made more risky may support an investment for which the new magnitude of risk may be intolerable. And, of course, it is quite possible that in a water-scarce area all water is put to quite valuable uses. In these cases, the transferability of the appropriative right will provide the adjustment mechanism. Juniors with valuable uses will purchase senior rights. The holder of a shaky right may buy a storage right. The partici- pant in a project whose reduced share is insufficient for his needs may buy another share to add to it. It must be noted, however, that there are some restrictions on these processes. Some states place limits on transfers, all sub- ject them to the rule that the transfer and the new opera- tions under the changed water right must not injure other appropriators, and all must be approved by state water officials in what often turn out to be costly and long drawn-out proceedings. If the values that could be destroyed by drought are high enough to justify the costs of new works, and if those works are less expensive than the economic solutions, then prior appropriation will also be found quite well suited to engineering solutions to drought. The problems occur when there is not enough water in a particular place at a specific time, and moving water about in time and space is the normal job of prior appropriation. If excess storage capacity were desired as a preventive measure so that when the water was needed it would be available, the law allows high flows to be transformed into carryover storage, although the water officials may have to be con- vinced that the holdover is reasonable and the danger real.8 If new storage is needed as a rescue measure, the law's normal procedures are available. If a transdivide diversion is needed to bring water from a water-rich to a water-short area, in most states there are no restrictions on the necessary interbasin transportation. EASTERN WATER RIGHTS Riparian rights used to be the principal basis of water use in the eastern states, but this is no longer true. Today, riparian uses are overshadowed by the large abstractions of cities and other public suppliers with quite different rights, and the common law is overlaid or superseded by many regulatory statutes. It still has its importance, al- though often only as the background against which the new laws operate. The typical statement of the basic riparian law is that every landowner has a right to make a reasonable use of a stream or lake that flows through or borders on his land but that this right is qualified by We equal rights of other riparians to make a similar use.9 This vague generality is frequently stated by the judges but really tells us very little. When analyzed, riparian law turns out to be not so much a system of allocation of property rights as it is a combination of a laissez-faire rule that lets most riparians do pretty much as they please with the abundant water at hand and a "fire-fighting device" that gives a legal mech-
74 anism for settling the few disputes that do arise. It is very difficult to define the boundaries or limits of a riparian right with certainty or to state the specific action it per- mits, as we did with an appropriation. For this reason, most riparian law is framed not as property rules but as tort law rules that define a wrong and tell us not what the owner of the right can do but what others may not do to him.~° The first requirement of a violation of riparian rights is that the plaintiff must prove that the alleged violator has inflicted substantial ha upon the plaintiffs reasonable use. There is an old legal maxim, "the law does not concern itself with trifles," and suits to enforce a naked right to the natural flow of the stream are no longer favored. The minimum flow of a stream or the natural level of a lake will be protected, however, if a defendant destroys the values added to rural land by "living water" or the site values of lakeside properties. Second, the "equal rights" feature means that the law will try to accommodate as many rights as possible. One person's use will not be stopped as a violation of another's right even though it causes harm, if the harm can be avoided by some adjustment of the works or operations of one party or the other so that both uses can co-exist. In many of the riparian rights cases, the question of"reasonable use" really breaks down to the tough question of which party should reasonably be required to pay for the im- provement the person whose use must be improved or the person who gets the benefit of the improvement.~3 A corollary of the principles of equality and co- existence is the riparian rule of sharing. Since all users have equal rights, they must share the hardship when there is not enough for all, and each must make a propor- tionate reduction in his use.~4 But when co-existence of incompatible uses is impossible, when a reduced quantity would make an existing use inoperable or unprofitable, or when a new use takes the water supply from an existing reasonable use, the courts have almost universally pro- tected the existing user from encroachment by the in- novator. Some of the earlier cases said that the rule of equality foreclosed consideration of priority when deter- mining the reasonableness of an interfering use and that the interests of the two parties would have to be bal- anced.~5 But when a new use will destroy the values of land, investments, and enterprises based on a use of water, the new use seems quite unreasonable, and prior- ity seems to loom large in the balance. No matter what the courts say, their decisions quite uniformly protect the prior user and enjoin the destructive newcomer or make him pay for the harm he causes. This may often be a subliminal recognition of what the economists call the "Pareto compensation principle," or an unexpressed feel- ing that equity and justice, "reasonableness" if you will, require the gainer to pay the loser. At any rate, the courts have protected irrigators from manufacturers, manufac- turers from irrigators,~7 fishermen from bothi8 depending on who was there first and whether the ~ . , , ~ , ~ . latecomer Is enr~cn~ng n~mse~t at tne expense ot tne prior user. Even when all uses are for the same purpose, such ~ . . . ~ . ~ . ~ ,' . .~ i' .1 FRANK J. TRELEASE as recreational enjoyment of a lake, the courts have fa- vored the early bird, and when newcomers start to over- crowd the facilities, the judges put limits on use that prevent destruction of the aesthetic qualities of the wa- ter.l9 Riparian law theoretically limits rights to water to ripar- ian proprietors, but while "nonriparians" may have no rights to water they certainly make many uses of water. There are thousands and thousands of householders, farmers, dairymen, manufacturers, mine owners, food processors, and subdivision developers who have some- how acquired access across neighboring land to the streams and who pipe water from it. Since they cause no serious harm, they are not sued. They have no rights, no ground of complaint if a riparian causes harm to them by destroying their supply,20 but since water is abundant, many of them do not seem to fear such action. Some of them may have acquired a "prescriptive right" by long continued use and are now safe; others may have tried to buy rights to the stream as well as access to it. The success of this attempt may depend on the state in which the action took place. The courts of some states have permit- ted the sale of a riparian right to a nonriparian and allowed him to do with the water whatever the original riparian could have done.2i Other courts have said that a riparian right cannot be transferred so as to be effective against third parties.22 This means that the nonriparian is safe from suit only from the person he made his deal with, and he is totally safe only if he can buy his peace from every downstream riparian who might complain of his use and from every upstream riparian whose future use might harm him. This is a clumsy and expensive process, but it has been done. There seem to be no cases in which one riparian has tried to buy out another and claim a double share against the rest. On principle, however, the same considerations ought to apply. If a riparian right is transferable, it should be transferable to a riparian as well as to a nonriparian. Even if it is not, there is nothing to prevent a group of riparians from settling their differences by contract and agreeing between themselves what is each one's reason- able share or reasonable use of the water.23 The major diversions from eastern streams are now those of municipalities, public utilities, metropolitan water works, and rural water districts, not those of the little grist mills and woolen mills that competed with farmers during the formative period of riparian rights. Municipal water rights arise not from riparian law but by virtue of the superior position given to these agencies by legislatively granted powers to take waters by eminent domain. The city or its public supplier may condemn the rights of or negotiate arrangements with principal ripar- ians in advance, but often it merely builds its works, takes the water, and sits back to see who sues it. In such "inverse condemnation" suits, compensation or damages are paid to any riparian who can prove injury to his right or use.24 Very often nothing is paid because no serious damage has been done. The city does not literally take
Climatic Change and Water Law over and exercise the water right formerly held by the landowner, as it would with an appropriation; the riparian right still exists, subordinated to the city's right. In 10 of the 31 eastern states, the common law of riparian rights has been superseded or substantially mod- ified by the enactment of a statutory water code.25 Under all of these, a permit is required for all substantial and important uses of water, at least in problem areas. This gives state control at a very important point and could be used to prevent future conflict by denying permits to undesirable uses, to avoid disputes by inserting condi- tions in the permits that prevent the harm, or to resolve them in advance by specifying priorities. Not much of this has been done. Several of the statutes inject some priority in the picture by providing that in issuing the permits the authorities must protect vested rights and existing users. But with three exceptions the eastern permit statutes are limited to control of new uses and do not deal with the problem of drought or shortage. Most of the statutes are silent on the point of whether the permit rights are trans- ferable, and several laws specifically state that they are not. Flexibility of water use is provided by issuing short- term permits that will allow the state water officials to reallocate the water to new and better uses when the existing permits expire.26 This is an impressionistic picture of eastern water law, slapped on with a broad brush. Although it lacks precision and definiteness, it at least shows that under any system of eastern water law the cities are going to come out on top if unprecedented drought should occur or if the generous eastern streams should dwindle permanently. In a riparian state, the cities' rights, usually to a specific quantity fixed by the capacity of the works, would be served in full and the riparians would bear the full brunt of the shortage. They could suffer greater damages than before or new harms, but they would have no right to reopen the compensation suits or make new claims if the time allowed by statute to file such suits had expired. In the permit states, the administrators who readjust water rights are likely to prefer the cities over the irrigators who deplete the streams or the downstream power companies who claim the full flow. What if cities find that they are themselves in competi- tion for the same supply? A few such cases have already occurred, but each has been decided on a different basis, and no one can predict a general rule. A Massachusetts case was decided on priority; the city with the first claim had the better right.27 Two cities in upstate New York relied on authorizations from a state agency, and the agency was held to have the power to modify its grants and reallocate the water by administrative fiat.28 In the third case, two cities across a state line from each other on a small interstate stream were forced to share on the basis of riparian principles of reasonableness.29 If drought strikes well-used eastern streams subject to many riparian claims, we may expect many more lawsuits that require adjustments between existing users, enforce the rule of sharing between them, put a stop to nonripar- 75 fan uses, or impose restrictions on new riparian enter- prises. When a reduced supply is unsuitable for an enter- prise such as a steel mill or power plant, when a riparian has a need for a specific and steady rate of flow, or when a new user needs water for a highly valued purpose, there will undoubtedly be attempts at economic reallocation and transfer of existing shares, despite the difficulties of negotiations. The law of riparian rights is not very conducive to engineering solutions undertaken by the private sector. Storage of large quantities for long periods has been held an unreasonable use.30 Riparian rights must be exercised within the watershed of the stream,3i so transdivide di- versions become nonriparian uses, fair game for any fu- ture riparian use. Storage and importation of water may still be undertaken by cities and other public agencies, of course, and the principal municipal problem induced by a change in water occurrence will be that costs of buying out riparian rights will be magnified as those rights in- crease in value with the decrease in supply. In the permit states, the courts will have to fill in the blanks in the statutes that regulate the initiation of uses but that give no rules for distribution when there is not enough water for all. Priority, sharing, or administrative distribution are the possible choices. Only three of the statutes indicate which is to be followed. Mississippi has a simon-pure prior appropriation law on the western model.32 The Florida law gives an elaborate machinery for planning the distribution of water during shortages by reducing withdrawals, restricting some uses, suspending permits, and if things get bad enough to be called an emergency, the plans are scrapped and an official steps in to apportion, rotate, limit, or prohibit water uses.33 The Kentucky statute empowers state authorities to handle a drought or emergency by balancing the water rights and available water between uses and temporarily allocate it and restrict withdrawals to serve "the best interests of the nublic."34 These laws were enacted in times of plenty when it seemed easiest for the legislators simply to put all water in the hands of a wise administrator with directions to distribute it so that it would do the most good and best serve the public interests. We may find, however, that that wise administrator takes on some aspects of a dirty bureaucrat when he decides, as he must, that the Smith family's potato farm must dry up while the Joneses' vege- table gardens continue to prosper or that both families must lose their investment and be deprived of their livelihoods so that their water may be given free to residents and commercial establishments in the city, and that the Apex Plastic Company may continue to pay dividends, while the Acme Canning Company goes bank- rupt. GROUNDWATE R More than a century ago an English court was faced with a dispute between a mine owner who was de-watering his
76 mine and a nearby tanner whose spring dried up. Since the court did not know what was happening underground and could not figure out what rules should regulate groundwater, it ducked the issue by giving the overlying landowner complete freedom to act without liability.35 It did this by declaring that the water, like the rocks and minerals, belonged to the owner of the surface of the land, who might do as he pleased with his "property" (in this case, throw it away). Some American courts still follow this "English rule of absolute ownership." It should be noted that this ownership of water is not so absolute as it sounds, since a neighbor with a deeper well and a more powerful pump can suck it out from under another's land and make it his property. The rule gave landowners the go-ahead to develop, and since harms were rare and usually small, the rule worked fairly well. But the inven- tion of the high-capacity pump increased the capacity to inflict serious harm, and about the turn of the century many cities turned to groundwater for supplemental and unpolluted supplies. Their large withdrawals from small country plots left the old oaken bucket hanging high and dry in many neighboring farmyards. In a series of cases, all entitled "Smith v. City of Jonesville" or the like, many courts applied the "American rule of reasonable use."36 This is not so reasonable as it sounds, since the rule permits the use of the water on overlying land without regard to damage but holds it unreasonable to "transport water to distant places for sale" that is, use it for domes- tic and commercial purposes in cities. What it means, of course, is that the city must pay the farmer for deepening his well or bringing water from another source. It can be seen that neither of these rules of liability or nonliability creates water rights in the sense of allocating water. In nearly all of the cases it can be determined or inferred that there was enough water for both parties and the real dispute was over the facilities who should pay for a deeper well for the first user or his increased pump- ing costs. The first real attempt at apportioning the supply came in the western states when irrigators began to with- draw very large quantities. The California courts evolved the reasonable-use rule into the "correlative rights doc- trine": the user on overlying land has a better right than a person who takes the water to distant places, and as between themselves, the overlying owners have correla- tive rights, equal and proportionate shares.37 Most of the western states, however, following the lead of New Mexico, apply the law of prior appropriation to groundwa- ter and have a single water law and set of procedures for both groundwater and surface water or have separate surface and groundwater codes that implement the basic priority doctrine with somewhat different procedures.38 When man places different types of elements on groundwaters with different physical characteristics, not all of these doctrines will reach the most desirable result. One problem has arisen when water tables drop (or arte- sian pressure falls) as more and more wells are drilled, but total withdrawals remain within the recharge. The English rule and the correlative rights rule would proba- FRANK J. TRELEASE bly require all parties to bear their own costs as they follow the water deeper. As between agricultural uses, this equal treatment probably works well. Many appro- priation laws have express statutory provisions to the same effect that priority does not mean that earlier users may require water levels and pressures to remain the same. Very often the parties are not on an equal footing, however, because municipal and manufacturing users can pay more for water (and pumping costs) than can an irrigator. Under the American rule, and under some appropriation laws, the farmer cannot be driven beyond 1 . . ~ ~ . . , . ~ , ,, hiS economic reach, and some cities and industrialists would have to bear these expenses they impose on their rural neighbors.39 If withdrawals reach the "safe yield," the limit of re- charge, yet it is clearly desirable to maintain the source as an annually renewable flow, neither the English rule nor the American rule has any mechanism for limiting de- velopment by stopping the drilling of new wells. The California rule would operate to restrict overdevelopment by preventing the outsiders from drilling, but each over- lying landowner could have a well. Under prior appropri- ation law, overdevelopment could be stopped by simply denying applications for new permits. If the safe yield has been exceeded and it is desirable to reduce withdrawals, again the American and English rules offer no machinery for accomplishing this. The correlative rights rule would first stop those exporting from the basin, then prorate the available supply among the overlying landowners. Prior appropriation calls for shutting down the junior wells. This might not always work, since there is no assurance that, if a junior stops pumping, the water will move to a senior well. What may be needed is proration or rotation, perhaps giving senior- ity effect by allowing the earlier wells a larger share or longer pumping period.40 In some areas, recharge is so slight that the annual flow of benefits from it is small in comparison with those from the water in storage, and a decision may be made to "mine" the water, to extract the stock for present benefits just as we do with other nonrenewable resources such as oil or coal. The ownership rule places no restrictions on withdrawals in this situation. The reasonable use rule might be construed as requiring pumpers from deep wells who export the water for high values to compensate overlying low-value users when the pumping costs ex- ceed the agricultural values produced. But neither of these rules would prevent a race for the water and a disastrous exhaustion of the resource. The California rule might do so if the court were to hold that pro rata sharing could be interpreted to give each landowner the ownership of a specific quantity of the extractable water. Prior appropriation looks inconsistent with groundwater mining at first blush, since each new well will theoreti- cally injure the first one by hastening the exhaustion of the aquifer. But the courts have refused this literal view of priority and handle groundwater mining quite well. They have approved administrative schemes that place a time
Climatic Change and Water Lau, dimension on the water right and limit the rate of with- drawal and the number of water rights so as to prevent a race and keep the aquifer producing for a sufficient number of years to permit amortization of investment in water-using equipment and enterprises.4i WATER ORGANIZATIONS Every person is a water user, but very few have "water rights" to stream water or groundwater. An intermediary stands between most consumers and the source, an or- ganization that withdraws water in wholesale lots and distributes it at retail. The distributing agency has water rights that govern its relations with others who have rights to the source, but another type of law regulates its rela- tions with its customers. Urban organizations are usually different from rural, but each may be either public or private. The city dweller is typically served by a public utility company or the municipality itself; the irrigator by a mutual company or some fo~lll of public district. The public utility, or public service corporation as it is often called, is a private firm organized for profit, but one that holds special privileges granted by the state.42 It has a franchise to use the public streets for its pipes, it usually has a monopoly, and it has powers of eminent domain that enable it to acquire water and water rights by forced sale, if necessary, upon payment of just compensation fixed by a court. In return for these public powers it surrenders some of its freedom. In most states, a water utility must have a certificate of public convenience and necessity, a license to enter the business, granted by the state public service commission. It cannot choose its customers, it can be compelled to render service (within the limits of its water supply) to all consumers within its service area, it cannot discriminate between its customers by giving spe- cial rates to some, and it cannot discontinue service, even by going out of business because of unprofitability, with- out permission from the commission. Most important, its rates and charges are subject to regulation. Rates are fixed to cover operating expenses, including depreciation on its properties and a fair return on the value of the property devoted to public use. Today most cities and towns engage in a mild form of socialism and run the local water business as a municipal service.43 Like the public service company, the city must serve all persons and firms within the corporate limits on an equal basis at fair rates. Only a few states subject Me cities to public service commission regulation; in most, the citizen who feels abused must seek a remedy in court. Much litigation arises out of service to consumers outside the city limits. Generally, a city may supply such people and industries, but it cannot be forced to do so. If a city undertakes to serve some outsiders, it will not be allowed to discriminate against others similarly situated, but this obligation cannot be enforced to the point that service within the municipality is jeopardized. The city is gen- erally free to set its rates to outsiders by contract, at what the market will bear, and not infrequently the cities, 77 trading on their monopoly position, exact terms not ger- mane to water supply or distribution, such as require- ments that the residents of the area accept over city services or agree to annexation. The main rural water suppliers are Me irrigation com- panies and districts of the West.44 The earliest needs to combine capital and effort to build dams and large canals serving many farms were met by some form of the mutual water company, a corporation whose shareholders are also its customers. Its capital may be obtained from sale of stock or by borrowing, and its income is usually derived from an assessment on the shareholders based on costs of operation and maintenance. The mutual ditch is now largely replaced by the irrigation district, the rural equiv- alent of the local street and sewer districts in urban areas. The district is a public body, an arm of government, established by a vote of the residents and landowners within it. Formed by majority vote, it offers one distinct advantage over the voluntary company minority voters cannot opt out. It is usually financed by a bond issue; its income takes Me form of assessments against the im- proved property large enough to pay principal and inter- est on the bonds and cover current operating and mainte- nance costs. Since it is a public agency, its assessments are liens against the land and are collected like taxes. Many irrigation districts cover federal Bureau of Reclama- tion projects and do not build the works but collect for the Bureau the repayment obligations of the irrigators and the annual maintenance costs. A larger form, Me conservancy district, covers a wider area, can include cities and towns, and may collect small ad valorem taxes as well as assess- ments. In this fashion some of the costs of the project are borne by taxpayers in service and supply businesses that receive secondary benefits from economic activity in- duced by the project. GOVERNMENTAL, PUBLIC, AND ENVIRONMENTAL RIGHTS FEDERAL POWERS AND PROGRAMS Although the Constitution of the United States does not contain the word "water," the Founding Fathers pro- vided for a strong nation, and the powers they gave the federal government have enabled it to engage in many water-related activities and to undertake Me most exten- sive program of water resources development in the world. The national interests served by the federal water resources programs and laws are those inherent in the word "nation"the use of the country's waters for the free flow of trade and travel between its different sec- tions, the strengthening of the country hot h internally and in its relations with foreign nations, and the conduct of its national business. The Constitution gives the federal government powers to control commerce, provide for the common defense, make war, enter into treaties, control compacts between states, manage federal property, and
78 raise taxes and spend money for the general welfare of the country. All of these have been used to justify water regulation of water-resource developments. The most important source of federal jurisdiction over water arises from the power "to regulate Com- FRANK J. TRELEASE gram adds cost-sharing assistance to individuals and community groups for many types of water utilization, which may include individual irrigation systems and farm works. The Small Watershed Act fills the gap between these programs, which emphasize land treatment and merce . . . among the several States."45 It was early held small structures, and the program of the Corps of En- that"commerce" includes `'transportation," which in turn gineers, which emphasizes large dams on the main includes "navigation." The power to regulate navigation includes the power to control navigable waters, to im- prove their navigable capacity, to protect them with flood-control projects, or to destroy them by dams. Powers to obstruct or prevent obstruction lead to powers to license obstructions and to the power to generate electric- ity from the dammed water. The federal program based on this power is the most significant factor in modern American water regulation and conservation. Huge multipurpose projects combining features of navigation improvement, flood prevention, power production, irrigation, and recreation encompass entire river basins. The federal power over navigable waters reaches far upstream to the nonnavigable stretches and tributaries whose use could affect downstream navi- gation.46 The Constitutional provision giving Congress power to dispose of and regulate the territory and other property of the United States was used to justify the Reclamation Act of 1902,47 since that Act improved public lands and en- hanced the desirability of their settlement. The war power is not often used to justify water development, but in 1916 Congress authorized the construction of the dam that was to become the first unit of TVA, one of the purposes of which was to provide nitrates and other ammunitions.48 The treaty power governing the interna- tional relations of the country has led to agreements relating to the rivers and lakes that form the borders of the nation or cross its boundaries.49 Pursuant to these treaties, the United States maintains "agreed-upon international lake levels, constructs reservoirs on boundary rivers, and operates projects within its own territory" to carry out treaty obligations to deliver water to neighboring coun- tries. Today the general welfare power is perhaps most important. This is the spending power the power of the purse; it gives Congress authority to construct any water project that in its opinion will promote the general wel- fare. It is no longer necessary to demonstrate that a specific power such as navigability is being exercised, and a project may include for its own sake a feature of flood control, irrigation, production of hydroelectric power, supply of water to municipalities and industry, and protection of fish and wildlife habitat and water- based recreation, as long as some national purpose is served rather than a mere local advantage.50 In addition to physical projects, the United States has long had programs that encourage and assist water de- velopment and use by the private sector and by local governments and public agencies. The Soil Conservation Service channels technical assistance and machinery to individual farmers. The Agricultural Conservation Pro- _ streams. The Farmers Home Administration provides credit, grants, and technical assistance to rural groups for developing community water-supply and waste-disposal systems, while the Department of Housing and Urban Development contains the Community Resources De- velopment Administration, which gives planning, techni- cal, and financial assistance for the construction of new water and sewer facilities. The Department of Com- merce, through the Economic Development Administra- tion, provides financial assistance to governmental and nongovernmental projects that will stimulate employ- ment and increase income in depressed areas. The Bureau of Outdoor Recreation coordinates and develops programs under the Land and Water Conservation Fund Act for planning, acquiring, and developing outdoor rec- reation facilities; and the Bureau of Sports, Fisheries and Wildlife is a large water user in its maintenance of wet- land habitat and irrigation of wild and domestic range for ducks and other wildlife.5t One major feature of federal water law is its superiority over state law. Federal projects are not restricted by limitations imposed by state law.52 Their water rights are superior to private appropriations or riparian rights. If private rights must be taken over for or destroyed by a federal project, all the owner can demand is compensa- tion,53 and not even that if his rights attach to a navigable river and were always subordinated to the "navigation servitude," the federal overriding power.54 If drought and climatic change call for "engineering solutions" to prevent potential harm or to rescue cities, industries, and public activities that have already re- ceived the blow, these national powers and programs will probably provide most of them. The problems are likely to be national or at least regional in scope and will call for national solutions. More storage will call for huge dams, which only the federal treasury can finance. Transmoun- tain diversions and interstate or interregional transfers of water will call for federal powers to countermand local laws that establish in-basin preferences or attempt to fortify interregional jealousies. And when "importation from a water-rich area" reaches its ultimate dimension and the United States begins seriously to consider ap- proaching Canada for some of its surplus, the national powers over foreign affairs will be called into play. RESERVED RIGHTS, INDIAN RIGHTS By virtue of a series of cessions and treaties, the federal government at one time or another has been the owner of practically all the land west of the Alleghenies. Until
Climatic Change and Water Law fairly recently, the major policy behind the public land laws was one of disposal, and the United States gave away or sold as much as it could to settlers, miners, railroads, and states. Occasionally, it reserved land by withholding it from the operation of the land laws and used it for military reservations, Indian reservations, national parks, national forests, and wildlife areas. In 1908, the Supreme Court held that when the government set aside an Indian reservation it also reserved from appropriation enough water to accomplish the purposes of the reservation, enough to irrigate the land so the Indians could change from nomadic hunters to farmers and ranchers.55 Reserved rights are an exception to the rule of priority, they are dated as of the founding of the reservation (some tribes may have rights that go back to prehistory), they exist whether used or not, and they may be called into play at any time. They are measured by the quantity needed to irrigate all the arable land on the reservation,56 and perhaps, although this has not yet been decided, enough additional to develop all minerals and accomplish any other modern objective of the tribes. When they come to be used, these Indian rights will have the first or one of Me first priorities on many western rivers. They will, therefore, be the rights least affected by drought. In 1963, the Court held that these rights attached to other types of reservations.56 Many uses for parks or campgrounds will be minuscule, but some for wildlife areas or to maintain free-flowing streams in national forests may be large. Reserved rights add considerable uncertainty to off-reservation appropriations on the west- ern streams, and their eventual exercise will exacerbate the unsettling effects of any long-term water shortage. STATE S RIGHTS AND POWERS While state governments do not often engage in water- using activities or water-development projects that call for water rights like those of other entities, they have been assigned shares in interstate rivers. When total claims in all the states exceed the capacity of the stream, each state is given a share and the water is then distrib- uted to the water users under state law. The first interstate allocations of water were made by the Supreme Court of the United States, the forum for interstate disputes. Rival states on an interstate stream were said to be each entitled to an "equitable apportion- ment of the benefits of the river."57 In several western cases, the Court has allocated a specific share to an upper state, leaving the rest to a lower,58 it has forced the upper state to respect the priorities of projects in the lower state,59 and it has split the water on a percentage basis.59 In the east, it has limited the size of a new project in the upper state and required a cleanup of pollution and the release of a minimum flow for the maintenance of fisheries and sanitary flows in the lower state.60 Interstate compacts provide another method of appor- tioning interstate water. The Court has trimmed excessive 79 claims to fit the available supply, and it has enjoined or limited new projects in the upper state that would disturb the status quo in the lower, but it has not apportioned unappropriated water. When states wish to settle disputes by agreement rather than litigation or when they desire to fix shares in the unused water for future use, an agree- ment between them, made with the consent of Congress, is as binding as a decree of the Court.6i Interstate compacts have settled disputes, divided un- appropriated water into specific shares, approved specific projects, set up operating criteria for projects, and estab- lished commissions representing all the states (and some- times the United States) to handle some matters of future cooperation. When the first one, the Colorado River Compact, was negotiated, the representatives of the seven states involved could not agree on the share each state would receive for its water users, but they did clear the way for the Boulder Canyon Project (Hoover Dam and Lake Mead) by accepting the compromise suggested by Herbert Hoover, the federal representative at the confer- ence, that at least the water could be divided between the upper and lower basins, separated by miles of rocky desert. A dependable flow of 15 million acre feet (mat) per year was assumed, and 7.5 maf was assigned the states of Arizona, California, and Nevada for use below the Grand Canyon, and 7.5 mat to the upper basin states of Colorado, New Mexico, Utah, and Wyoming. This ar- rangement gave the upper basin states a fund of water immune from priority and allayed the main fear of the people that their eventual uses would be foreclosed by California's earlier development. The lower basin was given a large advantage by a provision that the upper basin would deliver 75 maf in each 10-year period, which places on the upper states all the risks that the flow will not meet the assumed average of 15 maf. The share of the upper basin was divided in 1949 by the Upper Colorado River Basin Compact, which gave each state a percentage of the basin's water. The lower basin states were never able to agree on such an intrabasin allocation; and, in 1954, Arizona sued California to de- termine their relative rights. The case was perhaps the largest lawsuit ever tried and was pending for 11 years. The Court did not use the doctrine of equitable appor- tionment; instead it found that in the Boulder Canyon Project Act of 1927 Congress, by provisions for the man- agement of water from Lake Mead, had allocated specific shares- 1.4, 2.8, and 0.03 mat, respectively to California Arizona, and Nevada.62 The holding that Congress had power to allocate interstate waters created a third method of so doing, but one that has not been used again. The states do not have complete control over the water in all cases. In some early suits, the United States asked the Supreme Court to make an allocation to it as well as to the states. This the Court refused, and the states' share, whether fixed by decree, compact, or Congress, must include (and accommodate) water rights for all federal projects, federal reserved rights, and rights of the Indian tribes.63
80 ENVIRONMENTAL AND PUBLIC RIGHTS Environmental law is sometimes thought of as something quite new and modern, but it has roots deep in the law. In the water field, eastern water law never completely aban- doned the natural flow ideal and still places heavy em- phasis on preservation of the aesthetic values of "living water" and lake view. The flow of navigable waters is protected from private interference with the "public rights," the right to use the water for travel and carriage of goods. On the smaller streams sportsmen and pleasure boaters now enforce the public trust to protect values of recreation and conservation in waterways once used by fur traders in canoes or for the log drives of lumbermen.64 Several states have extended the notion of public water to nonnavigable waters,65 and some of the permit statutes establish minimum flows, which means that the stream legally goes dry long before it is physically dry.66 Western water law was always founded on the notion of beneficial use, and in this century the permit statutes commonly insist that each new use must be "in the public interest." Officials are beginning to recognize that some- thing that causes more harm than it does good cannot be beneficial and cannot serve the public interest. Several western states now provide in one way or another for instream uses and minimum flows and the preservation of recreational, fishing, and wildlife values.67 These are the seeds from which the modern law of environmental protection has grown. Consciously or un- consciously the judges have always accepted the economists' maximization principle- the search for efficiency that combination of labor, capital, and re- sources that produces the greatest excess of benefits over costs.68 The law has not changed; only men's ideas of what are costs and benefits have changed. Benefits are those things that people value, and costs are things that people do not like to lose. Our ancestors, our fathers' we ourselves in our youth were willing to throw away as worthless some scenic, recreational, and environmental elements. Perhaps they were worthless because they were so abundant. Now what is left is far from abundant; it is scarce, partly because we have already thrown away so much of it, partly because there are now so many of us that we compete with each other for what is left, and partly because our opportunities for enjoyment have been broadened by the automobile and the modern highway. Whenever scarce resources are desired by many people, the law of supply and demand produces high values. The decisions we make today are not those that we would have made several years ago, because any time a formula is applied, the result will change if a different value of a variable is plugged into it. It is this change of values rather than a change in the formula that results in the protection given in the new environmental cases. The change did not come about easily. As substantial numbers of people became aware of environmental dan- gers and tried to get protection for values that they trea- sured, they found that their voices were falling on deaf FRANK J. TRELEASE ears. Not everyone shared their appraisal. In the early stages of the environmental movement, entrepreneurs and agency personnel did business as usual and dismissed environmentalists as `'kooks" and the movement as a fad that would soon disappear. Unable to get a hearing in the agency offices, the environmentalists went to court. Lawyers did what good lawyers always do and focused all their knowledge on the problem, used all their skills, and brought to bear all the techniques of courtroom and ad- ministrative procedure on their side of the dispute. The first real victory for the environmental movement came in the Scenic Hudson case, in which it was held that the agency making a decision must at least listen to the environmentalists' side.69 As the movement enlisted wider public support, Congress passed the National En- vironmental Policy Act of 1970. In the Calvert Cliffs case, agencies that attempted to brush off this Act were told that they must comply with it.70 In case after case, the Corps of Engineers, the Soil Conservation Service, and many other agencies that do not deal with water have been told that NEPA means what it says federal agencies must consider in detail the environmental impact of a proposed action, the alternatives that might avoid adverse environmental effects, and any irreversible, irretrievable commitment of resources. They must inject benefit-cost analysis into the decision-making process at an earlier stage and analyze every reasonable alternative to ensure that the project eventually chosen provides the best com- bination, instead of comparing costs and benefits of a project after it is formulated.7i The spectacular "environmental lawsuit" is likely to disappear. Agencies, administrators, and businessmen may have been hidebound, but they are not stupid. They will not continue to butt their heads time and time again against the same stone wall, never changing. They can learn and are learning that a decent consideration of the environment is a necessary part of the process of reach- ing a resource decision. As this lesson is learned, there is less and less need for long drawn-out lawsuits as more and more the environmental factors are heard and thrashed out at the agency level. LEGAL CHANGE TO MEET CLIMATE CHANGE NATURE OF LEGAL ADJUSTMENTS While it is probably true that most legislation is enacted because a bad situation has arisen and a remedial law is needed, still some is forward-looking, and many laws are designed to prevent harm from occurring. Whether we prepare for drought or react to it depends on the legisla- tive perception of need. Legislators and congressmen are busy men who deal with pressing current problems. They will react swiftly to today's disaster, but they will plan ahead to avert tomorrow's only if they are convinced that a real problem exists today. If it could be predicted with some certainty that within ten years the continental pre-
Climatic Change and Water Lau: cipitation would decrease by 15 percent and remain at that level, we might expect a surge of new water laws that would carry us into the new era with as little pain and disruption as possible. Since the best proposition that can now be set forth is that the climate may change, but we cannot fix the odds that it will, and that droughts of sharper intensity and longer duration than those we have known are possible but we cannot evaluate these pos- sibilities, then less immediate and forthright action may be forthcoming. One difficulty is that almost by definition our problem has some elements of unreality. Our concern is with unpredictable change. The problem is similar to some others we face: whether we should refuse to license atomic reactors because there is one chance in a million that one might explode, whether we should prohibit the manufacture and use of aerosol deodorants because there is one chance in 10n that they might destroy the world's ozone layer, whether we should ban a food coloring that induces cancer in mice and "might" induce cancer in men. The law handles matters like these all the time, prohibiting or imposing liability for high-risk enterprises even though damages might be small in each case and for low-risk enterprises when a single occasion could cause enormous damage, whenver the product of risk times harm is sufficiently frightening. Even if a climatic change occurs, an immediate legal reaction is not certain. There will still remain a question of perception. When will a gradual change be recognized as a drought? How long before a series of bad years will be sensed as a change in climate? In the third year of a drought will we be able to see that it is the third of ten? There is a real possibility that we will muddle through with our present laws. We have at least glimpsed what would be in store for us if these were used to handle change. Not all the consequences would be bad, but there are some dangers that uncontrolled action could worsen the situation and that sensible adjustments could be blocked or made unnecessarily difficult or expensive. Yet some laws at hand for handling shortages would do very nicely for drought. It is more likely that if a climatic change does occur the lawmakers will see the inadequacies of existing laws and will act to remedy the ills and patch up the damage. Even short-term droughts have done wonders for the cause of water law reform. Of course, it is quite possible that legislators might act in advance and be ready with laws on hand to handle drought and change when they occur. Since the im- provements needed are of the same nature as those de- sired for other purposes, the unpredictability of supply may be used to reinforce the movement already on foot to prepare for the predicted increase in demand. Much of what is needed is simply improved water law. Much improvement will take the form of following the example set by laws in force elsewhere, and much will simply continue existing movements toward better laws. Uncer- tainty of supply, if brought home to lawmakers, could accelerate a trend already in motion. 81 THE DIRECTION OF LEGAL CHANCE Since the solutions to legal problems created by less water are either engineering or economic, a law Mat facilitates these solutions must paradoxically combine features of both certainty and flexibility certainty to encourage investments in projects and flexibility to per- mit shifts of water between users and uses. In the field of water rights this is really not too difficult, and the western appropriation, a definite, easily enforced but transferable right, comes close to filling the bill. The security needed to finance Iong-term projects is there, and interim adjustments can be made between uses so that the most valuable survive and the least productive are discontinued. But these adjustments are not easily made, and unregulated trading in property rights some- times causes serious loss to third persons or harm to the public. So what is really needed to improve appropriation law is to tighten up yet speed up the regulatory process so the market can operate smoothly and quickly without these injurious side effects.72 One such effect is reflected in the rule that a change in use must not injure other appropriators. In practice, this means that an irrigator cannot sell his gross water right, his total diversion, since his crops do not consume all the water and downstream users are dependent on the ''return flow.', A hearing must be held, complete with conflicting expert testimony, to determine how much can be sold, and permission to make the change may be denied on guesses as to probable effects. If all rights were redefined from terms of diver- sion to terms of consumptive use, if formulas for caleulat- ing consumption were improved and applied automati- eally, if trials and experiments were allowed to determine the actuality rather than the probability of harm or no harm, the process would be vastly improved. Another needed addition would facilitate interim and short-term adjustments. Most changes and sales are of water rights, permanent property rights, good for water this year and every year. This fits many needs, but there is also need for sales of water as a commodity. One state recently attacked this problem by allowing the "leasing" of water rights.73 In a water-short year, a bean grower who anticipates a high price may buy the water of a potato grower who foresees a glutted market. A city faced with unusual drought may buy a season's supply to tide it over instead of a permanent right that will go unused in most years. Similar rights may be needed in many states. It is obvious that riparian law has little to offer. As supplies dwindle and demands increase in a riparian law state, withdrawals and consumptive uses will become more obvious and create more conflicts, more need will arise for adjustments and share fixing, and more eom- plaints will be made of nonriparian uses. In-place uses for the amenities and site values are bound to suffer. New users will cut deeper into supplies already in use and will find themselves facing suits more often. Storage and im- portation are risky, and attempts to purchase water, water rights, and freedom from lawsuits involve complex, mul-
82 tiparty, expensive negotiations. The lawsuit is too .,3ow and expensive to handle these conflicts on a large scale. As the field for new uses narrows, there is more need for administrative controls. Those states with permit laws have made a beginning, but drought would bring out the need for better identification of rights and determination of permissible action, more certain rules of who will get how much water in times of shortage, more stability of tenure and investment in water-control works and water-using enterprises. Nonriparian uses should be legitimatized, and limitations of uses to riparian land or single watersheds should be recognized as uneconomic and abolished.74 A better method of achieving flexibility should be found. The bureaucratic shift of water "to its highest and best use" by canceling and juggling permits has a surface appeal, but it must be remembered that laws regulate not water but people, who may be farmers, stockholders in a manufacturing company, or householders in a city. Water and money are for the most part interchangeable, and what we really mean by "shifting water from existing uses to better uses" is enriching some people and impoverish- ing others. When this is better understood, a change to a system under which the gainers pay the losers seems likely. Administrative action is usually needed only when we have "market failures," "externalities," and "social costs." A water market should be regulated to avoid these, but when it works, it works better and more efficiently than a government agency. The bureaucrat trying to de- cide the best use of water as between agriculture and industry will have to investigate, hold hearings, hire experts, finance a university study, and make findings. The manager of the Tootsie Textile Company and Farmer Jones, sitting at the bargaining table, can tell the answer in a minute by a glance at the bottom line of last year's books. All this, of course, would be a movement toward the western appropriative right. For some reason easterners do not like prior appropriation; for them it still has some connotations of a Wild West rip-off of the public domain. But in a modem controlled situation, priority is not a grant of special privilege, it simply means that the state, having granted the water to one person, will not grant that same water to another. On a fluctuating source, priority is a necessary element of a right, one that marks its bound- aries and limits new grants to water that is available in nature and not already committed to someone else's exist- ing use. Sometimes sharing of short supplies among simi- larly situated persons such as farmers may be desirable, and within a single project is possible, but even then the rights of the sharing group must be differentiated from those of other groups or users. Somewhat similar directions can be assumed for groundwater. In the eastern states, a long-term drought or change would be likely to cause a sudden strain on groundwater, since in many areas a move to it will offer the quickest and cheapest method of augmenting a dwin- dling surface supply. Safe yield, water table, and mining FRANK J. TRELEASE problems could move eastward as the effects of long- continued drought move underground. Unregulated de- velopment, if it occurs too fast, could require cutbacks in pumping and abandonment of wells. Decreased supplies and increased use will probably hasten the shift of law away from "ownership" rules to regulation of withdraw- als and allocation of shares. Economic solutions to groundwater shortage will call for some variation on the themes already played. The best form of groundwater right where the water is a "flow resource" is a rule of priority that divides the recharge into specific shares and that limits the number of shares to the available supply. If the water is a "stock resource" being mined, apportion- ment of a specific quantity of water to each claimant is probably the ideal solution. One legal change much advocated by economists is the improvement of institutional arrangements so as to enable a pricing policy to operate as an incentive to ensure utilization of water at the most efficient level.75 Most water can be withdrawn from the source for free: the western appropriator pays nothing when he opens his ditch; the riparian proprietor, the overlying landowner, the city can turn on a pump with no charge other than for electricity. But if water were properly priced, we are told, there would be more water to go around since waste would be avoided; and when the source diminished, the reduced supply would generate a higher price and water would move naturally to its highest and most economical use. The English have such "charging schemes" set up under which a landowner must pay for exercising his riparian rights or pumping from his own well, but the notion is not a popular one in America. More hope for water pricing as a solution to reduced supplies of water might be held out for improvement of the pricing policies of the distribution organizations that now sell water. Usually their prices are fixed with no concern for demand or encouragement of economy. Mutual irrigation companies assess their shareholders for current operating costs, irrigation districts levy assess- ments on the same basis plus debt service and retirement. Municipalities and metropolitan agencies similarly look to recapture of costs rather than to value of water in fixing charges, and public utilities seek a fair return on and amortization of their investment. Unless water is sub- sidized, it must pay the cost of producing it, of course, but it might be desirable to have this its minimum price and set the going rate so that demand at that level just equaled the supply. Pricing could function in this fashion whether demands increase or supplies diminish; water would serve its most valuable (efficient) uses. Before this could happen, most laws authorizing and regulating water- supply organizations would have to be modified. Federal water law might need to change very little. The United States is the world's largest engineering and con- struction firm and will probably supply most engineering solutions. The federal government has ample Constitu- tional powers for handling climatic change and drought. New federal projects and stepped-up programs will be
Climatic Change and Water Law needed for most rescue or preventive operations, since local and private measures will run into financing dif- ficulties and legal restrictions, such as against transdivide diversions.76 But except for project and action authoriza- tions and appropriations, little new federal law seems needed. If the nation wishes to prepare for the possibility of drought or change, it might be wise not to now build dams and facilities with excess capacity that might stand unused as monuments to folly but to eliminate much of the time lag usual in federal projects by having on hand a backlog of standby projects engineered on the basis of our best guesses, ready for immediate action when needed. From the national point of view, it could be found that some interstate decrees and compacts that allocate shares of rivers to states have confirmed or authorized uses that are not the best. If stream flows decrease, some states with specific plans for their shares of unused water may find the reduced amounts too small. A long-term drought c`'uld trigger attempts to renegotiate the compacts or seek congressional action to reallocate the water and redivide the rivers. It is not expected that this would be an easy process, and engineering solutions by importing water may be more attractive. A very difficult problem facing the West could be made doubly difficult by a decreased supply. When Indian reserved rights become fully exercised for irrigation and mineral development, a number of persons now using water off the reservation will suffer a loss of their water.77 There could be an extensive reduction in land values, income, and area prosperity. The dislocation could be intensified if white owners of water rights are squeezed from the top by native-American claims and from the bottom by reduced stream flows. Some engineering solu- tions are possible where storage could firm up both white and Indian rights. Economic solutions involving payment to Indians may not be available, since the Indians have had poor results from selling their lands and they may need water to maintain their cultural base and their homelands. Another possibility has been suggested: the United States should regard this as a national obligation and include compensation to displaced off-reservation users as a part of the cost of future Indian projects. Some object to this as payment for the return of stolen property and as increasing the costs of Indian projects, but it might make those projects more politically feasible, and it might be remembered that it was not the present water users but their father's father, or their predecessors in title, who ''stole" the Indian's water. Environmental pressure to save streams from develop- ment and preserve amenities may increase but may be offset by increased demands for withdrawal and storage. As man's demands increase and nature's supply lessens, all water will become more valuable. If population pres- sures and industrial growth send municipal and industrial demands skyrocketing, then some features at the lower end of the environmental scale, which are protected to- day, may be sacrified in the future. On the other hand, as less water and more development make free-flowing 83 streams more and more rare, the aesthetic, recreational, and ecological value of the remainder will shoot up, and we may tell cities and industries to tighten their belts, sharpen their efficiencies, and recycle their present supplies. This is an economic process, although not al- ways performed in the marketplace. While we pay for some recreational experiences and sometimes combine the interests of many into private organizations that can compete for water in a sense, we prefer that most of the matters we call ''environmental" be provided as a public good, and we seek legal solutions by political processes rather than economic solutions dictated by market forces. To sum up in a single sentence: If our climate should change for the worse, our water laws should change for the better. RE FE RE N C E S [Note: Most of the legal rules stated in this chapter are gener- alized statements distilled from a number of cases or derived from the trend of decisions. The citations in these notes are to typical, illustrative, or "leading" cases. Differences in fact situa- tion, variations in statutes of different states, and disagreements between courts of different states can add enormous complica- tions. Most of the cases cited here and many of the variations on these themes can be found in F. Trelease, Cases ~ Materials on Water Law, 2d ed. (West Publishing Co., St. Paul, Minnesota, 1974), a student textbook. The bracketed references to "Tre- lease" following the official citations are to pages in that book. The National Water Commission, established by the United States in 1968, was very sensitive to legal problems. Its report, Water Policies for the Future (Government Printing Office, Washington, D.C., 1973), contains much material relevant to this paper, and references to "NWC" are to that report.] 1. R. Pound, My Philosophy of Law, 182 (1941). 2. Quinn v. John Whitaker Ranch Co., 54 Wyo. 367, 92 P. 2d 568 (1939) [Trelease 63~7]. 3. Windsor Reservoir Co. v. Lake Supply Ditch Co., 44 Colo. 214, 98 P. 729 (1908) [Trelease 6749]. 4. Coffin v. Left Hand Ditch Co., 6 Colo. 443 (1882) [Trelease 78-89]. 5. Empire Water ~ Power Co. v. Cascade Town Co., 205 F. 123 iC A. 8th 1913) [Trelease 42~9]. 6. Farmers Highline Canal Co. v. Golden, 129 Colo.575, 272 P. 2d 629 (1954) [Trelease 202-217]. McPherson, Ragsdale, and Thompson, Improvement of Water Rights Through Unification, II Land & Water L. Rev. 326 (1967~. 8. Federal Land Bank v. Morris, 112 Mont. 445, 116 P. 2d 1007 (1941) [Trelease 69-70]. 9. Stratton v. Mt. Hermon Boys School, 216 Mass.83, 103 N.E. 87 (1913) [Trelease 69-70]. 10. American Law Institute, Restatement of Torts 2d, Tentative Draft No. 17 (1972). 11. Gehlen v. Knorr, 101 Iowa 700, 70 N.W.757 (1897) ETrelease 295-298]. 12. Collens v. New Canaun Water Co., 155 Conn. 477, 234 A. 2d 825 (1967); In re Martha Lake Water Co., 152 Wash. 53, 277 P. 382 (1929) [Trelease 26~278]. 13. Hazard Powder Co. v. Somersville Mfg. Co., 78 Conn. 171, 61 A. 519 (1905) [Trelease 298-303].
84 14. Evans v. Merrzweather, 4 Ill. 492 (1842) [Trelease 303-306]. 42. 15. Tyler v. Wilkinson, 24 Fed. Cas.472 (1827~; Gehlen v. Knorr, 43. supran.ll. 44. 16. Farrell v. Richards, 30 N.J. Eq. 511 (1879) [Trelease 320]. 45. 17. Macomber v. Godfrey, 108 Mass. 219 (1871) [Trelease 321- 46. 325]. 47. 18. Taylor v. Tampa Coal Co., 46 So. 2d 392 (Flat 1950) 48. [Trelease 274]. 49. 19. Thompson v. Enz, 385 Mich. 103, 188 N.W. 2d 579 (1971) [Trelease 286-290]. 20. Kennebunk Water District v. Maine Turnpike Authority, 145 Me. 35, 71 A. 2d 520 (1950) [Trelease 33~342]. 21. Lawrie v. Silsby, 76 Vt. 240, 56 A. 1106 (1904) [Trelease 352~57]. 22. Duckworth v. Watsonville Water ~ Light Co., 158 Cal. 206, 53. 110 P. 927 (1910) [Trelease 350~51]. 54. 23. Kimberly-Clark Co. v. Fatten Paper Co., 153 Wis. 69, 140 55. N.W. 1066 (1913~. 56. 24. Pernell v. Henderson, 220 N.C. 79, 16 S.E. 2d 449 (1941) 57. [Trelease 256, 357~62]. 58. 25. Delaware, Florida, Iowa, Kentucky, Maryland, Minnesota, Mississippi, New Jersey, North Carolina, and Wisconsin [Trelease 414-434]. 26. Maloney, Ausness, and Morris, A Model Water Code (1972~. 27. Somerset v. Dighton Water District, 347 Mass.738, 200 N.E. 2d 237 (1964) [Trelease 366]. 28. Syracuse v. Gibbs, 283 N.Y. 275, 28 N.E. 2d 835 (1940) [Trelease 369]. 29. Hackensack Water Co. v. Nyack, 289 F. Supp. 71 (S.D. N.Y. 1968) [Trelease 373]. 30. Herminghaus v. Southern California Edison Co., 200 Cal. 81, 252 P. 607 (19261. 31. Anaheim Water Co. v. Fuller, 150 Cal. 327, 88 P. 978 (1907) [Trelease 241-245]. 32. Miss. Code §§ 51-31-1 to 51-31-53. 33. Fla. Stat. Ann. § 373.233. 34. Ky. Rev. Stat. § 151.200~1). 35. Acton v. Blundell, 152 Eng. Rep. 1223 (1843) [Trelease 461-467, MWC 230-232]. 36. Forbell v. City of New York, 164 N.Y.522,58 N.E.644 (1900) [Trelease 461-467]. 37. Katz v. Walkinshaw, 141 Cal. 116, 74 P. 766 (1903) [Trelease 468-472]. 38. Alaska, Colorado, Idaho, Kansas, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, Utah, Washing- ton, and Wyoming [Trelease 475]. 39. Colorado Springs v. Bender, 148 Colo. 458, 366 P. 2d 552 (1961) [Trelease 510-520]. 40. Ore. Rev. Stat. § 537.735; Wyo. Stat. § 41-132. 41. Fundingsland v. Colorado Ground Water Commission, 171 Colo. 487, 468 P. 2d 835 (1970~; Mathers v. Texaco Inc., 77 N.M. 239, 421 P. 2d 771 (1966) [Trelease 484 193, MWC 238-242]. FRANK J. TRELEASE Trelease, 624-629. Trelease, 655-657. Trelease, 61() 647. U.S. Const. Art. III, Sec. 8. U.S. v. Rio Grande Irrigation Co., 174 U.S. 690 (1899). 43 U.S.C.A. §§ 371-615. Ashwander v. T.VA., 297 U.S. 288 (1936~. . Arizona v. California, 283 U.S. 423 (1931) [Trelease 69 703, 740-750]. 50. U.S. v. Gerlach Live Stock Co., 339 U.S. 725 (1950) [Trelease 825]. 51. NWC, Chap. 5, 111-204. 52. First lowa Hydro-Electric Cooperative v. F.P.C., 328 U.S. 152 (1946) [Trelease 71~727]. Fresno v. California, 372 U.S. 627 (1963). U.S. v. Rands, 389 U.S. 121 (1967) tTrelease 818-824]. Winters v. U.S., 207 U.S. 564 (1908) [Trealease 796-808]. Arizona v. California, 373 U.S. 546 (1963) [Trelease 799]. Kansas v. Colorado, 206 U.S. 46 (1907) [Trelease 659-662]. Wyoming v. Colorado, 259 U.S. 419 (1922) [Trelease 66 667]. 59. Nebraska v. Wyoming, 325 U.S. 589 (1945) [Trelease 671- 683]. 60. New J~rsey v. New York, 283 U.S. 336 (1931) [Trelease 677~81]. 61. Hinderlider v. La Plata River ~ Cherry Creek Ditch Co., 304 U.S. 92 (1938) [Trelease 683-686]. 62. Arizona v. California, s~4pra n. 52. 63. Nebraska v. Wyoming, supra n. 56. 64. Meunch v. Public Service Commission, 261 Wis. 492, 53 N.W. 2d 514 (1952) [Trelease 403-407]. 65. Minn. Stat. § 105.38 (1~; Burn s Ind. Stat. §§ 27-620, 27-621. 66. Iowa Code §§ 455A.1, 455A.22; Miss. Code §§ 5956-02, -04; Del. Code § 6102 (b). 67. Trelease 37, 41, 61-63. 68. Young ~ Norton v. Hinderlider, 15 N.M. 666, 110 P. 1045 (1910) [Trelease 139-154]. 69. Scenic Hudson Preservation Conference v. F.P.C., 354 F. 2d 608 (C.A. 2d, 1965) [Trelease 751-764]. 70. Calvert Cliffs Coordinating Committee v. A.E.C., 449 F. 2d 1109 (C.A.D.C., 1971) [Trelease, 764-795]. 71. U.S. Water Resources Council, Water and Related Land Resources: Principles and Standards for Planning, 38 Fed. Reg. 24778 (1973). 72. NWC 260-264. 73. N.M. Comp. Law § 75-40-1. 74. NWC 280-294. 75. NWC 247-259. 76. NWC 317~333. 77. NWC 473-483.