Sometimes it makes sense to pump water over mountain ranges at high cost, as when it is going to urban users who will pay well for it; sometimes it does not, as when the market is farmers who will take it only if they can pay just a fraction of its cost, or who devote it to purposes such as growing subsidized crops.
Sometimes environmental values can legitimately be sacrificed to produce hydropower, and sometimes the sacrifice is pointless. Sometimes improving a river for barge traffic has an economic payoff, and sometimes it is plain pork. Sometimes protecting a flood plain against a 250-year flood makes sense, and sometimes it does not.
These decisions can be made in two ways. The best is the market. Make users pay the full costs of the enterprise, and good and bad projects get sorted out very quickly. Second best, but still a lot better than nothing, is cost-benefit analysis, which, when honestly done, at least avoids the worst outcomes.
In their thirst to escape accountability, the dam builders wrecked both these mechanisms, and the consequences of this are with us yet. On average, water costs residents of the parched West about half of what is costs denizens of the well-watered East. Furthermore, Western rights to water are allocated by political rather than market processes. The result is that water costing the federal government upwards of $300 per acre-foot is pumped through open, unlined irrigation ditches, where much of it evaporates or seeps out because it is too cheap--to the farmer--to be worth the cost of protection. The Central Arizona project, partly the proud product of the efforts of Bruce Babbitt, then Arizona's governor and now the secretary of the interior, furnishes water to grow cotton, a crop requiring the equivalent of 30 inches of rain per year, in the desert. Cotton has also been in chronic surplus, so the growers have collected federal price support payments.
This distortion of incentives applies across the board. Navigation improvements are free to the users, for example, so demand is unconstrained. Environmentalist Robert S. Devine wrote in The Atlantic Monthly of standing beside the Columbia watching as 43 million gallons of water and $700 worth of electricity were used to lift a single 14-foot pleasure boat through one lock of the river.
A recent decision to de-license Edwards Dam in Maine is based on a 1986 law requiring that environmental factors be taken into account in the licensing process. Economic rationality, were it allowed to operate, would produce the same result. Edwards's electric power sells for three times the going rate on the spot market, and it has been profitable only because federal regulations force utilities to buy it.
Most water rights are not transferable, and urban and industrial users are not allowed to bid water away from low-value agricultural users. Instead, even more expensive projects are advocated. At the present time, there is plenty of water in the West to meet all economically feasible needs, including in-streamuses and environmental protection. Ninety percent of the water goes for agriculture, and minor shifts in pricing would be adequate to induce diversion to higher-value uses. Almost all current problems are due to defects in the institutional structure, not to the scarcities imposed by nature, and these defects are primarily the progeny of the great dam-building era.
Another serious price was exacted by the excesses of the dam-building era. As a by-product of the erosion of the decision-making processes and the indiscriminate adoption of all projects, whether good, bad, or indifferent, the institutions involved, ranging from the Congress to the agencies to the private players, destroyed their own credibility and legitimacy. (Marc Reisner describes a Bureau of Reclamation party where an engineer was given a rubber slide rule by his colleagues in ironic tribute to his skill at cooking the numbers.)
Institutionalized irrationality spread to the environmental movement as well. As Tellico illustrates so well, those who opposed the dams found that rational analysis was not a winning strategy. Logically enough, environmental advocacy stopped using it, and moved steadily away from conservationist tradition, which stresses that using nature and respecting it are perfectly compatible, and toward a generalized pantheism. In particular, environmental argument has come to rely on the Endangered Species Act as an all-purpose weapon. The ESA starts from dubious scientific and philosophical premises and progresses to muddy definitions that can be twisted to support any results, with the result that the ESA analysis has turned into the environmentalist equivalent of a rubber slide rule.
A Canyon Filled With Water
Which brings us back to Glen Canyon. The Colorado River wends for 1,450 miles from the high Rockies of Colorado to the Pacific Coast in Mexico, second in length only to the Mississippi among the rivers of North America. It carries the snowmelt of the Rocky Mountains through a vast, dry land, and the Colorado and its tributaries are the principal source of surface water for seven states, including Wyoming, Colorado, Utah, and New Mexico (the Upper Basin states), and Arizona, Nevada, and California (the Lower Basin states).
These states, plus Mexico, have fought over the river for many years, and the Colorado is subject to a body of regulation called the Law of the River--a thick layer of court decisions, interstate compacts, and federal law--that determines who gets to use how much of it. The fundamental document is the Colorado River Compact of 1922, dictating that the Upper and Lower Basins each get to use 7.5 million acre-feet per year, with Mexico getting 1.5 million acre-feet.
Hoover Dam is the cornerstone of the effort to harness the Colorado. Its basic purpose was and is to provide water to Southern California, including half the water used by Los Angeles and San Diego. The flow of the Colorado varies greatly, and only a huge dam with huge storage capacity can smooth out the variations and make the supply reliable. As with every other water source in the West, though, upwards of 80 percent of the Colorado's water goes for agriculture, not for the cities or for industry.
But while the purpose of Hoover was well-defined, Glen Canyon's purpose is considerably more difficult to discern. It is defended as necessary to deliver water to the Lower Basin states at the formal transfer point of Lee Ferry, Arizona, as required by the Colorado River Compact. But this is not how it is actually operated. A National Academy of Sciences panel that studied the dam in 1986 found that water delivery requirements might be relevant in theory but had no practical effect on operations. It called Glen Canyon a "cash register dam," which means it was designed to produce revenue from hydropower to defray the costs of uneconomical upstream irrigation projects in the high plains and thus enable the whole package to pass the cost-benefit tests used under the tenets of River Basin Accounting.
Another defense is that Glen Canyon supplies water to irrigate cropland in the Upper Basin. Unfortunately, this is high plains cropland that no owner would have irrigated if forced to pay his own dollars. Information on how much land is involved, how much crop value the water produces, and how much it would cost to buy up the land and resell it without water rights is hard to come by. It is not clear that the recipients of the water pay even enough to support the operations and maintenance costs of supplying it. Some of this water also is used for the infamous desert cotton. So let us say, charitably, that this defense remains undemonstrated.
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