Water Banks, the ESA and the Public Trust Doctrine


Matt Jenkin’s article “Liquid assets” in the October 27th edition is a good introduction to Water Banking – a concept which westerners are likely to hear used increasingly if predictions of diminished water supplies resulting from climate change are accurate. But the article only scratches the surface of a subject which West-watchers will want to know a lot more about. And – because taxpayer funds are often involved in financing the operation of water banks as well as in some cases the water purchases themselves – it can be argued that everyday citizens need to better understand what is involved.

Fortunately, there is a goodly amount of information readily at hand. Most of the information on water banks aims to educate farmers and ranchers, many of whom have been encouraged by property rights extremists to view water banks as a socialist plot designed by government bureaucrats and environmentalists to undermine water rights. On the other side of the spectrum some river advocates view water banks as part of an attempt to turn what were intended as use rights into property rights that are not attached to specific uses. If water rights become like other property rights, these folks assert, the Public Trust Doctrine will have been all but destroyed with respect to water resources. From this perspective water banks are seen as part of a world-wide movement to privatize water resources.

Part of the confusion over water banks is the result of the fact that the term has been used to describe institutional arrangements that are radically different and which have different legal implications.

The water banks described in the Jenkins' article are of what we might call the classic variety:

Water banking in its most generalized sense is an institutionalized process specifically designed to facilitate the transfer of developed water to new uses. Broadly speaking, a water bank is an intermediary. Like a broker, it seeks to bring together buyers and sellers. Unlike a broker, however, it is an institutionalized process with known procedures and with some kind of public sanction for its activities.” (from: Lawrence J. MacDonnell,“Water Banks: Untangling the Gordian Knot of Western Water,” 1995).

In the current California program, for example, the State Water Resources Control Board is expediting temporary transfer of water rights from those willing to lease water to which they have a right (generally farmers) to those who want or need to purchase water during the current drought. The latter category includes farmers and municipalities. This arrangement does not appear to have implications for the Public Trust Doctrine.

But the term has also been applied (some argue inappropriately) to schemes designed to lease water for in stream uses. The Bureau of Reclamation’s Klamath Water Bank is of this type. In recent years the Bureau has used taxpayer funds to lease water from irrigators in order to meet the needs of threatened and endangered species – Kuptu and Tsuam (two species of sucker fish) and Coho salmon. In this way the Bureau and the Bush Administration have been able to meet flow and lake level requirements ordered pursuant to the federal Endangered Species Act without curtailing the irrigation deliveries which prompted protests and civil disobedience in 2001 gaining national attention.

It has also been argued that the recently proposed Agreement to settle water disputes in the Klamath River Basin would institutionalize the Bureau’s Klamath Water Bank, requiring ongoing expenditure of taxpayer funds to lease water from irrigators in order to meet the flow needs of Coho and Chinook salmon in the Klamath River during dry years. This proposal has been criticized for a number of reasons including undermining the Public Trust Doctrine.

The Bureau of Reclamation has also been involved in purchasing water for an Environmental Water Account authorized for the Sacramento-San Joaquin Delta by federal legislation. The “environmental water” is supposed to be used to provide for ESA listed species in the Delta without disrupting the irrigation water supply. However, it has been criticized as mostly benefiting corporate agriculture and as inconsistent with the state’s public trust responsibilities.

Since the Public Trust Doctrine was used over 20 years ago to restore water to Mono Lake, which the Los Angeles Metropolitan Water Agency had been diverting to fill bathtubs and swimming pools in the Los Angeles area, legal scholars have been debating how the ancient doctrine -- which had its origins in the Roman Emperor Justinian’s legal code -- might, will or should impact how water is used in the American West. Recently the scholars have explored the intersection of state water law and the Endangered Species Act with the Public Trust Doctrine and this has led to wildly conflicting suggestions. For example, there are scholars like Richard Roos-Collins at the San Francisco-based Natural Heritage Institute who want state regulators to use the Public Trust Doctrine to restore California rivers and streams and other lawyers who suspect the Public Trust Doctrine might enable those same regulators to ignore the needs of fish which are listed as threatened or endangered. Meanwhile the California Farm Bureau and others apparently would like to see the Public Trust Doctrine relegated to the dustbin of history.

These issues may soon come to a head in California where – in the midst of what may turn out to be the most significant drought in modern times - fishing interests are pushing the State Water Resources Control Board to apply the Public Trust Doctrine to the Sacramento-San Joaquin Delta and to the federal water project which pumps water from the Delta to corporate farms and California municipalities to the south.