Transcript

Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Our guest today is John Keys, commissioner of the Bureau of Reclamation. Also with us is Brian Stempeck, senior reporter for E&E Daily and Greenwire. Commissioner Keys thanks for coming.

John Keys: It's my pleasure.

Colin Sullivan: Now we know that the Bureau of Reclamation is most famous for building the dams out West, but can you tell us how, just briefly, the Bureau of Reclamation operates from day to day? What are your biggest responsibilities?

John Keys: Well the Bureau of Reclamation is responsible for water management in the West with those facilities that Congress has asked us to build. We have 348 major dams, 58 power plants, about 13 million acres of land that we manage on a daily basis. We have about 6,000 people located in strategic points around the western United States.

Colin Sullivan: Now your biggest challenge is trying to sort of balance fish, farmers, recreation, fishermen, environmentalists and Indian tribes as well. You had a quote recently where you said, "The days are gone when we can just go to the federal treasury and say give me the money." What did you mean by that?

John Keys: Well, that came in answer to a question of what will the dams in the future look like? I think if you look at the physical facilities, they'll look a lot the same, but if you look at the funding and the finance behind those facilities and the use of the water from the facilities you will see a different set up than just getting all the money from the federal government. You will see the state governments, the local governments, the irrigation districts and the environmental groups with an interest in the storage and a responsibility for the financing of those projects.

Brian Stempeck: Now you've also said that endangered species have to be one of the top priorities that you look to as you resolve some of the conflicts with the different dams out West. One of the major decisions we had recently was the Snake River decision, most recently, where the court said, "We're going to spill more water over the tops of some of these dams in Washington to provide water for the salmon." What was your reaction to that decision?

John Keys: Well, you have to put it into context with the different agencies that have facilities there. Reclamation facilities were not called upon to spill water.

Brian Stempeck: Right.

John Keys: Our facilities are above those Corps of Engineer facilities that are affected. If you really get to the bottom of it, the operation of our facilities was not affected by that decision. Now when the Corps has to spill the water you can't generate power with it. When you can't generate power with it, you don't make money, which Bonneville Power Administration does when they sell that power. We depend upon that revenue for the operation and maintenance of our facilities, our power plants and so forth. So directly, there was not an impact on the operation of our facilities. Down the road there could be on the financing of our operations.

Brian Stempeck: The judge took issue though in the decision saying that some of the estimates of the amount of money that BPA would lose by not billing this power were maybe too high. I think they said something on the order of $57 [billion], $67 million. How do you respond to that? I mean the judge took issue with a lot of those studies.

John Keys: Well I've seen estimates of the loss all of the way from $50 [million] to $150 million and I don't get into Bonneville's business, so it's their cost estimate. We mainly just operate and maintain the reclamation facilities above there.

Brian Stempeck: The judge also took issue with some of the biological opinions of the federal government and that's one of the issues kind of going forward they're looking at, is whether or not these biological studies that govern how the dams are managed are being done in the right way. Do you think they have been or do you think there need to be some revisions to those plans in the future?

John Keys: Well, we work very closely with the agencies that do the biological studies. In reclamation we depend on the National Marine Fisheries Service to work the biology of the anadromous fish. We work very closely with the Fish and Wildlife Service. They call upon us to take actions to help meet those biological opinions. In the Northwest we released 427,000 acre feet of water a year from our facilities to help meet that flow requirement below. We operate our facilities to release that water at the right time. They advise us on what it takes to meet the Endangered Species Act for our projects and we work very closely with those agencies.

Colin Sullivan: Now there are a number of water conflicts in the West, Klamath River Basin, Colorado River, Snake River, which one of these conflicts would you say is the most challenging?

John Keys: Boy, that's kind of like saying which one of your kids do you love the most? The Klamath was an extreme challenge when we first came into office. The Colorado River has been a challenge since 1922 or even earlier, but there's a lot of good happening in all of the cases that you talked about. The Klamath, when we came in there was no water being delivered to irrigation in the Klamath River Basin. We put together a plan for a water bank that takes a certain amount of water every year and sets it aside and says this water is going to be used to meet the Endangered Species Act requirements and then the remainder of the water, that has historically been used for irrigation, will be used for that and it's worked. This year we set aside 100,000 acre-feet of water in a water bank and we're using that water now to meet the Endangered Species Act requirements. The irrigators are operating their project, or we're helping them operate, but they're meeting the requirements from the hydrologic runoff in the basin. So we think that right now we're accomplishing both purposes.

Colin Sullivan: If we could talk about the Colorado River specifically, you're going to hold meetings next week with the upper river basin states and the lower basin states. What's the point of those meetings? They've been trying to come to an agreement on their own, do you think it's time that the federal authorities step in and try to solve that problem with the water management?

John Keys: I don't think we ever step in and solve a water problem without involving all of the parties that are trying to settle the issue. In this case, there are seven basin states that we will work with to try to develop a coordinated management of Lake Powell and Lake Mead and put together some shortage criterion. So that if we get into the drastic drought period that we have been facing for the last five to six years we have some guidelines of which way to go. On the Colorado, let me expand on that for just a second. Two years ago, in American Rivers' most endangered river list, Colorado with either No. 1 or No. 2. It didn't even make the list this year and I think you have to look at a lot of the good stuff that's going on on the Colorado River to see why that happened. The quantification settlement agreement is in operation. It is being successfully done with the state of California. We just launched a multi-species conservation plan for the lower basin that gives 50 years of protection, under the Endangered Species Act, for 26 species, $650 million program, 50-50 cost shared between the states and the federal government. We, just this last fall, did the spike flow in the canyon working with the adaptive management program on the Colorado through the Grand Canyon. There's a ton of good stuff going on on the Colorado River.

Colin Sullivan: But still, these states can't seem to get together on some sort of regional water plan. Do you think the Colorado Compact needs to be rewritten? Is that part of the solution?

John Keys: No, I don't think the Colorado Compact needs to be rewritten. You have to remember Mark Twain saying, "Whiskey's for drinking and water's for fighting." In the western United States that water is the lifeblood of all of those people. There are 27 million people that depend on the Colorado River for its daily water supply and any time there's a threat to that, of course it gets contentious. We will work with all seven of those basin states and other interests, the environmental interests, the industrial interests, the municipalities and so forth. We will work with them in putting the shortage criterion together. At some time will we have to demand some kind of compliance? I don't think it'll get there, but we will try to work with them first, to include all of their ideas and if that's not successful, we'll try to lead them into the right kind of idea to do it.

Colin Sullivan: Historically, just one historical question. Given the aridity of the West, why weren't shortage plans developed before now to deal with the Colorado River?

John Keys: You never had to have them before. In the lower basin they are using almost to their capacity of water, but none of the states other than California and Arizona had ever used their full of allotment of water out of the Colorado River. We're getting to the point where they are using their full entitlements and the flow of the river being fully allocated.

Brian Stempeck: I want to come back to the Klamath River Basin situation again.

John Keys: Sure.

Brian Stempeck: You were talking about this idea of having a water bank where you can take some of the water and appropriate it over towards endangered species, some of the water toward the farmers. That type of thing. But if you're able to do that, then why did you have a problem in the first place? I mean you had these interests all fighting over the water. Just saying that you have a bank and dividing up the water, does that really get rid of the problem? Some analysts will say there's not enough water to go around here. That's really the key issue.

John Keys: Well, a lot of our Western rivers, it could be said that they're over appropriated. Now in the Klamath Basin there was two things that happened before 2001 that kind of met head on in 2001. The first thing is, you did not have an adjudication of the water rights done. In other words, folks in the basin did not know how much water each one of them had. So you could not put a call on the river. A "call on the river" means the person with the highest priority gets his water, the other folks, if there's not enough left over, gets left off. So there was no adjudication and you couldn't do that. The second thing that happened is people quit talking. They were at the table trying to settle the thing and they just flat quit talking for awhile and when people don't talk things tend to go to heck pretty quick. They quit talking in 2001 and the answer was that there's not enough water this year, so they shut it down.

Brian Stempeck: What you see as the long-term solution for Klamath? You mentioned the water bank, there's a lot of collaboration going on right now between these groups and basically, like you said, getting people talking again. What do you see as the way to fix this if there is a drought again, if these problems do crop up again?

John Keys: We've got several things going on for long term. Conservation Improvement Program is one of them. Trying to find ways to work with the agricultural community to make better use of their water and free up some more water. The water bank, we talked about it being interim for 10 years to get a handle on it. We are looking at more storage in the basin. We are looking at some of those supplies in the basin that may not be needed for agriculture that could be made available for the fish.

Brian Stempeck: The other issue right now also in Idaho. You have a situation very similar to Klamath that's kind of popping up with the same kind of dispute between farmers and salmon. You see the same solutions? Can you learn lessons from Klamath and apply those to Idaho?

John Keys: I think you learn lessons in Idaho that you apply to Klamath and you learn lessons in Klamath you apply to Idaho.

Brian Stempeck: What are those?

John Keys: The water bank is an early water management tool that was developed in the '70s and the '80s in Idaho to help meet endangered species water requirements. We took that idea from Idaho and used it over in the Klamath. In the Klamath we are trying to perfect that in setting it aside every year and how to use it. Back in Idaho, a lot of the challenges there are associated with the Endangered Species Act, but there's also challenges with the ground water users in Idaho, with some of the streams being over appropriated. We're not proud of where we get our good ideas. If it's a good idea we'll spread it from state to state.

Colin Sullivan: The interior secretary, Gale Norton, recently rejected a request from upper Colorado River Basin states to reduce the amount of water released from Lake Powell. Do you agree with what she did it?

John Keys: Absolutely.

Colin Sullivan: Why? What's the rationale behind that?

John Keys: Well you have to go back and see the context of when she agreed to do a mid-year review. Last fall, when the annual operating plan for the Colorado River was put out we were in the depths at a five year or maybe six year drought in the basin and everything looked like it was going to get worse. Her setting a mid-year review said, hey, if it still goes bad, we may need to change how much water we're holding in the upper basin and letting go to the lower basin. As it turned out, it turned and right now we set at about 116 percent of normal on runoff in the basin. Had it stayed the same she would have probably changed the release from Lake Powell. As it turned out she didn't need to because the hydrology of the river says that at the end of this year Lake Powell will be up almost 50 feet from where it started. Lake Mead will be up almost 30 feet. If it's normal next year, by the end of next year, they will be equalized.

Colin Sullivan: Now, if the drought worsens, how does that scenario change? How does that equation change? Do you think it should change?

John Keys: What we are looking at, again, for next year, should it change, is another mid-year look. In other words does it need a midterm correction next year? We'll probably put that in the operating criterion for next year. Brian Stempeck: As we look broadly at the idea of water supply, what do you see as the role for Congress in this? Is there a need for legislation to provide more money and more of these water supply projects? You've been critical of some of the approaches from Senator Domenici and Senator Bingaman.

John Keys: Well I wouldn't say that I've been critical of Senator Domenici and Bingaman's approaches. We have worked very closely with both sides of the aisle with those two senators on rural water supplies, on desalination projects and so forth. What I would tell you is that there's more to the answer of our water management problems than just throwing money at them. The involvement of the different water users, getting new ideas in, trying to involve the different water users in the actions is, at times, as important as more money. Now, at some time in the future, it will take more money to make some of these work, but certainly to say that we've been at odds with Mr. Domenici and Bingaman, I don't think is quite right.

Brian Stempeck: You've also said though that we're kind of lagging behind when it comes to desalination technology and in making those types of investments. Can you elaborate on that and what needs to be done in that field?

John Keys: Well I don't know that we're lagging behind on the money, what we've said is that the desalination technology is at a plateau. For years and years the cost of desalting an acre foot of ocean water was in the thousand dollars an acre-foot range. It's now at about $650 an acre-foot to desalt an acre-foot of seawater. At that level, it's still just a little too expensive to be using for most of the uses that we have. If we can get that price below $600 an acre-foot it becomes competitive in those high value water areas in California. We are doing basic research. Senator Domenici is working with us on the Tularosa facility, actually putting on the ground a research facility to try to work with agencies and private industry to develop small desalt units that we can use out on the plains on brackish groundwater or that some of the larger cities, like Las Vegas, can go into California and participate in a desalt plant and then exchange the water with California out of the Colorado River. We're working very closely with Mr. Domenici and Mr. Bingaman on such a challenge right now. Colin

Sullivan: The Bureau of reclamation is also essentially an electric utility. It's the fifth largest electric utility in the country I believe. John Keys: Right. Colin Sullivan: Is there any thought to privatizing management of the utility operations specifically?

John Keys: Well, reclamation has 58 major power plants and if you look at the water year, if it's a low water year it's less, if it's a high water year it's more. But typically, we generate between $500 [million] and $750 million worth of power every year and it's marketed through Bonneville Power and Western Area Power Administrations. That is a valuable asset to the United States. The money from that goes into the reclamation fund in the treasury. Now we don't draw directly from that, but it is money that our United States uses to its best good. A privatization issue I think would have to be debated mightily in a lot of different areas, including the Congress of United States before that happens.

Colin Sullivan: But you wouldn't agree with that move? I mean you think the system works the way it is?

John Keys: My personal opinion is it's working very well the way it is. It generates power for our projects. It generates power for public supply and the return to the treasury is worth well above what it would sell for.

Colin Sullivan: OK. We're out of time. We'll have to leave it at that. Commissioner Keys thanks for coming.

John Keys: It's my pleasure.

Colin Sullivan: Join us tomorrow for another edition of OnPoint. Until then I'm Colin Sullivan for E&ETV