Mr. Hal Hughes

Senior Associate Editor
California Coast & Ocean
1330 Broadway, 11^th Floor
Oakland, California 94612

Dear Mr. Hughes:

Thank you for the complimentary Autumn 2004 edition of California Coast & Ocean. Ms. Izakson’s article in that edition - "What’s at Stake in the Klamath Basin" – offers up empathetic treatment of several sensitive Klamath River issues. However, the economics study cited by Ms. Izakson to bolster her conclusions is dangerously flawed, with associated limitations that must be understood. Also, Ms. Izakson’s repeated references to "power subsidies" enjoyed by Upper Basin farmers and ranchers requires further explanation.

The U.S. Geological Survey (USGS) economics report relied upon in Izakson’s article – containing alleged "amazing calculations" - is a highly theoretical exercise, based in part on information culled from "cold calls" and mailings sent to random respondents in four Western states. Participants in the USGS study were polled on past visits they made to the Klamath River, and then were asked if they would increase visits based on improvements noted in the river, such as enhanced water quality and angling harvests. Not surprisingly, respondents answered positively, and the report’s findings suggest that recreational visitation would increase under these circumstances. The study then balanced the theoretical economic gains associated with increased visits versus the costs for actions that were assumed to improve water quality and fishery conditions.

Although the USGS study clearly states "we have no quantitative information about the impact of the individual restoration activities on habitat or water quality," the "restoration" activities chosen included:

• Acquiring all farmland within the Klamath Project at an assumed price.

• Acquiring forest land along the Klamath River and tributaries.

• Increasing Trinity River flows by 500,000 acre-feet per year.

• Removal of some Klamath River hydroelectric dams.

The report concluded that the recreational benefits achieved by increased recreational use would far outweigh the costs of buying farms and forests, removing water supplies from California’s Central Valley and removing hydroelectric dams. Importantly, it provided no explanation whatsoever for how the radical "restoration" measures it proposes will improve the fishing and habitat conditions in the river.

It also fails to address the obvious impacts that would result from these measures. In the Upper Klamath Basin — even ignoring the callous attitude that would close down entire towns — what would be the cost of acquiring the residences, businesses, schoolhouses, and communities throughout the Klamath Project? What would happen to recreation benefits — as well as the many other benefits associated with the private farmland — when the farmers disappear? What happens to the national wildlife refuges? How will they receive water when irrigation districts that serve them are wiped off the map?

What Izakson and other advocates for the USGS report also appear to have overlooked is the study’s proposal to impose a long-term moratorium on fish harvesting in the Klamath-Trinity system. This ban would include an end to all harvesting by commercial fishermen, halting marine harvesting by tribal fishermen, and "sharp declines" in freshwater harvesting by tribal and recreational fishermen. The report – and Izakson’s article – fails to identify the number of jobs that would be lost from fishing or the resulting ripple effect to downstream communities. Merchants who sell gasoline, rent boats, and sell groceries to sport fishermen will be impacted by such a proposal, but these issues are ignored in the report.

This is but a small sampling of some very fundamental problems embedded in the USGS report, which has been challenged by several other western economists.

The Klamath Project was developed with an understanding that affordable power and water would support the local, rural community. Scottish Power is only generating power in the Klamath River because the federal government and Klamath Basin water users gave up their ability to develop their own facilities. In exchange for allowing Scottish Power to generate power, Klamath Project irrigators should continue to benefit with affordable power.

We object to the terms "preferential rate" and "subsidized rate", favorite characterizations of Klamath Project critics. The current contract is the product of negotiation among sophisticated parties that resulted in an acceptable agreement for all concerned. We believe that the current rate schedule is a reasonable consideration of the relationship between the Klamath Hydroelectric Project and the federal Klamath Irrigation Project.

Thank you for your consideration of our concerns.

Very Truly Yours,

Dan Keppen
Executive Director
Klamath Water Users Association