Guest Column

Eureka! A Working Compromise on Water Rights

By Edwin Dobb, Guest Writer, 8-31-08

	The North Fork of the Blackfoot. Photo courtesy of Trout Unlimited/ Montana Water Project

Wasson Creek now flows all summer long. That’s cause for celebration because the upper section of the small creek, located near Helmville, Montana, is home to a vital population of pure-strain westslope cutthroat trout that had been cut off from the lower section by seasonal irrigation diversions. For the first time in decades, cutthroat can migrate down to Spring Creek, which eventually joins Nevada Creek, which in turn empties into the Blackfoot River above a stretch where fisheries have been in decline. Keeping water in Wasson Creek increases the likelihood that the celebrated river that, thanks to Norman Maclean and Robert Redford, runs unimpeded and unpolluted through the American imagination will continue to be inhabited by real native trout.

That Wasson Creek is free-flowing again is due to the efforts of Trout Unlimited’s Montana Water Project (MWP), which was set up ten years ago to test an unusual strategy for increasing in-stream flow—leasing private water rights. Along with the Montana Water Trust (MWT), established in 2001, the MWP believes that one of the most effective ways to resolve disputes over water use is to employ incentives—ranging from outright cash payments to providing improvements like new wells and more efficient irrigation equipment—to persuade ranchers, farmers, and other landowners to voluntarily return water to streams. Both groups specialize in developing arrangements that serve conservation ends while in no way challenging or encroaching upon private property rights, a hybrid approach that not long ago few would have thought possible, especially in the historically contentious arena of water ownership.

And although leasing has its share of critics, the results have been encouraging. MWP and MWT have negotiated about three dozen leases in basins on both sides of the Continental Divide, from the Clark Fork, Blackfoot, Bitterroot, and Flathead to the Madison, Missouri, and Yellowstone. Besides increasing in-stream flow and improving fisheries throughout the region, they also are developing a promising model for stream restoration, one that stresses cooperation over confrontation, capitalizing on the interests of traditional landowners rather treating them as an obstacle. “Putting water back into streams is a new discipline,” says Stan Bradshaw, staff attorney for MWP. “We’re feeling our way along.” What they’ve found, Bradshaw explains, is that “how water fits into the overall ecosystem is more complicated than it seems.” That’s largely because the “fit” depends as much on lifestyles and longstanding habits as it does on cubic feet per second, fish counts, and water temperature.

Using water rights leasing to restore streams represents an unexpected convergence of two very different and often violently opposed schools of thought about natural resources. On the one hand are economists who believe that the solution to all environmental problems is the free market, which presupposes the privatization of natural resources, a notion that gives a lot of westerners the willies, to say the least. Nevertheless, in the 1980s the free marketeers began promoting water markets as a solution to the increasing number of bitter water disputes throughout the West. On the other hand are conservationists who, despite their belief that publicly held natural resources should remain that way forever, have grown dissatisfied with costly, protracted litigation and the one-size-fits-all hammer of regulation, which, in their view, too often yield more ill-will than desirable, enduring solutions.

Such dissatisfaction has set in among many people working on in-stream flow issues because water rights are so firmly established, both legally and culturally, that any attempt to return to pre-European settlement conditions would be futile. In the West, water law is based on the doctrine of prior appropriation, which means that the first person to use water in a beneficial way holds the right. Traditionally, the “first in time, first in right” principle applied to water diverted for mining and agriculture but eventually other uses were recognized as beneficial, in particular, to meet industrial and municipal needs. That led to the over-appropriation of many streams across the West, a problem that’s aggravated by drought, all the more so a drought that’s beginning to look like a long-term climate change. Attempts to legislate fixes—by limiting the amount of water removed for certain purposes at certain times of the year, for example—have been stymied, however, because any newly established water rights are always junior to existing rights, in other words, those who were “first in time.” The sixth-generation rancher trumps all who follow.

In Montana, whose Constitution clearly states that the surface water is owned by the public, some activists view the prior appropriation doctrine, especially now that so many streams and fish populations are suffering, as fundamentally unfair. Why should a rancher make money by leasing something that he doesn’t own? “I deeply grieve that we have to pay for what is essentially a public resource,” says Pat Munday, who’s been involved in conservation efforts in the Big Hole and upper Clark Fork watersheds for the past 20 years. On a philosophical level, Munday adds, he’d like to see a consortium of conservation groups file a lawsuit to set up minimum in-stream flows, forcing the state give as much weight to present-day ecological needs as to historic uses. But even if that could succeed, and succeed in time to make a difference—two very big ifs—the result might be not be entirely pleasing. Ranchers who don’t have enough water to ranch will be replaced by other kinds of landowners, with other notions of how open space should be used, including carving it up. “I’m not sure it’s in our long-range best interest to kick people off the land,” says MWP’s Bradshaw. “We need their help.”

Keeping ranching and farming families on the land was certainly on the minds of those who established the country’s first private leasing entity—the Oregon Water Trust (OWT). Two changes in the way surface water is managed made it possible. In the late 1980s, Oregon expanded its water code to include the well-being of fish and other aquatic life, outdoor recreation, and the protection of aesthetic values. In other words, keeping water in a stream was legally recognized as a beneficial use. The second crucial step taken by the state legislature was to pass a law permitting private groups to lease water rights, in particular, senior water rights. “First in time” became negotiable. With that, the stage was set. OWT formed in 1993, then began knocking on the doors of ranchers in watersheds that were environmentally degraded. Since then, the pioneering trust has completed water rights transactions with more than 200 landowners, keeping about 55,000 acre-feet of water in streams annually, water that otherwise would be diverted, while helping to restore almost 1,000 miles of Oregon’s creeks and rivers.

Other states in the Pacific Northwest have followed suit, setting up leasing initiatives via various administrative entities, including state and federal agencies, established conservation organizations like Nature Conservancy and Trout Unlimited, and stand-alone groups, such as the Montana Water Trust, whose sole purpose is negotiating water rights transactions. A direct descendant of the Oregon experiment, MWT was founded seven years ago by a young environmental lawyer named John Ferguson who had done pro bono work for OWT while living in Portland.  “I wouldn’t characterize myself as a free marketeer,” says Ferguson, who last year left MWT for private practice, adding that his primary interest was finding tools with immediate promise rather than fighting battles that may be unwinnable or, at best, interminable. What he observed in Oregon had convinced him “that collaboration fosters positive relationships, which are more effective over the long run.”

There was no want of opportunity. The Montana Department of Fish, Wildlife, and Parks had already identified a staggering number of state streams that were chronically dewatered—some 4,000 in all. Ferguson and his staff initially focused on creeks close to their Missoula headquarters, in the middle Clark Fork and Bitterroot basins. MWT’s first contract didn’t impress the skeptics of leasing—water flow in a section of Nine Mile Creek was increased by .2 cfs—but it underscored one of the operating principles of both MWT and TU’s Montana Water Project. As Laura Ziemer, MWP director, puts it, “A little water goes a long way.” Tributaries serve as the spawning and rearing grounds for mainstem fish populations, and small additions of water are often all that’s needed to provide favorable habitat. The lease on Wasson Creek, for example, restores only .5 cfs to in-stream flow, but it does so during spawning season, and that’s enough to enable trout to move freely up and down the creek—and, thus, help replenish the cutthroat fishery in the middle Blackfoot.

Another lesson from the Wasson Creek experience is that merely getting water into streams isn’t enough to reverse the decline in local fisheries. Spring Creek, for instance, which Wasson flows into, had long been damaged by livestock, turning it into a warm, sluggish stream that further isolated the cutthroat population in Wasson. Only after the banks of Spring Creek were repaired and other habitat improvements were made were the fish able to move freely down to the river. “That’s why we work with partners like the Forest Service and Fish and Wildlife Service,” says Barbara Hall, who recently took over as executive director of MWT. “So many factors affect the health of a stream,” she explains, “that we have to cooperate with other folks to be able to do the comprehensive restoration that’s needed.”

In all instances, the most important partners are the landowners. And because a particular landowner’s water rights exist within a complex web of senior and junior water rights, as well as informal water use practices that have been in place for generations and include neighbors and their interrelationships, the nature and degree of his cooperation depends as much on the socioeconomic features of the watershed as they do the biological and hydrological. Each transaction must be tailored to individual needs and conditions, which means that leases can entail permanent agricultural improvements, seasonal supplementation of critical supplies (hay, for instance), cash payments, or combinations of the three. While such flexibility obviously is needed, it also raises questions about the range of applicability and sustainability of leasing. “Unlike other markets,” Munday observes, “water leasing has adopted an extremely private case by case approach.” According to Munday, who also engages in the art of the possible, recently helping MWP negotiate a lease on a creek outside Butte, “No one has reliable data about what water is worth.” What it’s been worth to MWT, according to Hall, has ranged from $3 to $55 an acre-foot, and that, in her estimation, averages out to a pretty good deal. But as the value of streamside land increases, and more ranches are sold to people with no interest in ranching, the price of cold, clean water may rise so high that groups like MWT and MWP won’t be able to compete. When Montana passed legislation allowing private parties to lease water rights, speculators and developers weren’t excluded.

The prospect of a 400-house subdivision outbidding all others for water rights adds force to one of Laura Ziemer’s mantras: “Fish need ranchers.” It also underscores the urgency of the situation and, by extension, the need to bypass the courts in favor of immediate action. “We have to develop communities of interest,” Bradshaw says. “Otherwise, there’s no hope.” In other words, to save the resource that has caused more conflict in the West than any other, they must find ways to persuade people to cooperate, to trust one another, a circle that also includes themselves. And that requires untold hours of neighborly conversations in landowners’ front yards, doorways, and kitchens. Small wonder that many water rights agreements take years to negotiate. As Bradshaw, now an old hand at the process, puts it, “Nothing happens fast in stream flow restoration.”

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