Tribal Water Marketing in the Colorado River’s Future

Palo Verde Diversion Dam

November 24th marked the 100^th anniversary of the Colorado River Compact,[i] the framework that governs the vital water source among the Tribes and seven basin states (Lower Basin: Arizona, California, Nevada; Upper Basin: Colorado, New Mexico, Utah, and Wyoming) that rely on it. But the compact’s centennial marks a moment of extreme uncertainty for the river’s management.

In response to extremely low runoff conditions across the Colorado River Basin, on October 28, the Bureau of Reclamation and the Department of the Interior announced “an expedited, supplemental process” to reshape the operating guidelines for the Glen Canyon and Hoover Dams.[ii] These changes would aim to mitigate the effects of historic drought in the Southwest by reducing downstream releases from both dams. The adjustments would not only reduce reservoir levels at Lake Powell and Lake Mead but also change the timing and volume of downstream deliveries to Arizona and the Lower Basin states.[iii]

Against the backdrop of these potential changes, a little-known bill has advanced through Congress. The Colorado River Indian Tribes Water Resiliency Act,[iv] passed in the U.S. House of Representatives[v] and introduced in the U.S. Senate late last year by Senator Mark Kelly, would authorize the transfer of tribal Colorado River rights to non-Indigenous water users in Arizona for the first time ever. On November 16, the U.S. Senate Committee on Indian Affairs reported the bill out of committee for general consideration by the entire Senate.[vi] Given the timing, it will likely require re-introduction during the next session of Congress, but the bill nevertheless represents a signal of the changing dynamics in the management of the Colorado River—with significant implications for water users in the next 100 years.  

Colorado River Indian Tribes’ (CRIT) potential ability to lease its water rights to off-reservation users would be a significant departure from the first 100 years of Colorado River management. It would carry the benefit of giving CRIT more influence in the future of the river. The potential outcome behooves all those dependent on the Colorado River to consider what responsible use means in the coming decades of shortage.

A. CRIT need to have a prominent seat at the table in the future of the river’s management.

Although it did not permit Tribes to play a role in the Colorado River Compact, the federal government created the Colorado River Indian Reservation in 1865 for “Indians of the Colorado River and its tributaries.”[vii] This federally recognized grouping includes four distinct Tribes—the Mohave, Chemehuevi, Hopi and Navajo—whose roughly 4,300 members live along the river in both California and Arizona.[viii]

The U.S. Supreme Court confirmed CRIT’s rights, along with the rights of other tribes, to the Colorado River in its landmark 1963 Arizona v. California decision.[ix] Tribes within the Colorado River Basin have a right to roughly three million acre-feet of the river, approximately one quarter of the river’s annual flow as of November 2021.[x] CRIT have a long history of agriculture along the river, including production of alfalfa, cotton, and sorghum.[xi] They possess present perfected rights to the Colorado River mainstem based on a consolidated decree that was finalized in 2006.[xii]

In the face of the historic drought, and despite not being party to either the 1922 compact or the latest guidelines for managing the Colorado River in 2007, CRIT have agreed to abstain from their allotment of river water in exchange for financial compensation. For example, building upon a previous agreement from 2019, CRIT, along with the Gila River Indian Community, agreed to leave 134,000 acre-feet of their reserved water in Lake Mead in 2022—more than a quarter of what California, Arizona, and Nevada agreed to conserve from their much-larger allotments.[xiii]

B. Water marketing under the Colorado River Indian Tribes Water Resiliency Act would provide CRIT with unique leverage in Arizona and the Lower Basin.

Beyond the measures to conserve from year-to-year, tribal water marketing presents an opportunity for CRIT to play a larger role in how the Colorado River is allocated for years to come. In Arizona, although other Tribes have marketed water that they obtain from the Central Arizona Project as part of water settlements, CRIT have never been authorized to market federally reserved water rights in this context. Indeed, laws like 25 U.S.C. § 177 have been viewed as statutory impediments to tribal water marketing.[xiv]

The Colorado River Indian Tribes Water Resiliency Act of 2021 would be a gamechanger. By allowing CRIT to lease a portion of their Colorado River water rights, the law could provide a lifeline to Arizona cities and towns facing cuts to their allotments. The water rights of CRIT have a high priority in the “first in time, first in right” scheme that dominates the so-called “Law of the River.” In contrast, and because of the 1968 Colorado River Basin Project Act,[xv] water delivered via the Central Arizona Project (CAP) to southern Arizona water users has a much lower priority and faces substantial potential cuts amid the prolonged dry spell.[xvi]

The proposed law would allow CRIT, subject to the approval of the Secretary of the Interior, to lease a portion of the Tribes’ decreed allocation off the reservation to a user in a Lower Basin state for a term not to exceed 100 years, provided that CRIT have been using that water for a minimum of four of the five years immediately preceding delivery.[xvii] It would similarly allow CRIT to agree to store water off the reservation.[xviii] Importantly, the Tribes, and not the federal government, would receive the compensation due under any lease or storage agreement.[xix]

C. Marketing tribal water rights raises questions regarding future conservation along the Colorado River—but it’s a future where CRIT can potentially address their own priorities within the market.

The Colorado River Indian Tribes Water Resiliency Act would be a significant step forward in allowing CRIT to negotiate the future of their allocation and potentially benefit economically from their reserved right to river water. But the bill nevertheless raises questions about whether such marketing would promote sound management amid a century-long culture of total consumption.

CRIT leadership have noted that, under current law, CRIT cannot allocate its water allocation to off-reservation plant and endangered fish restoration programs in other areas of the river.[xx] If CRIT were to pursue such agreements, such action would keep water in the river to rehabilitate natural habitats. But under the likely economics of water shortage, CRIT could feasibly lease water to off-reservation agricultural, utility, and municipal users at a much better price. Nevertheless, the bill’s requirements for CRIT-leased water mitigate the possibility of taking excessive amounts out of the river.

CRIT’s new leasing ability could also change the Tribes’ role in water allocation and management in relation to other tribal water users in Arizona. Under the 2004 Arizona Water Settlements Act, the Gila River Indian Community and the Tohono O’odham Nation received allocations of Colorado River water via the CAP.[xxi] As mentioned above, under the Colorado River Basin Project Act and in a period of severe shortage, this CAP water would be among the first to be cut because it is third in priority to California, Nevada, and other Arizona allocations.[xxii] The dynamic could create a disparity among Tribes that have thus far been jointly committed to conservation. Currently unable to lease their water like CAP-receiving Tribes do, CRIT could in the future have greater leverage in the market compared to other Tribes in Arizona that are reliant, in part, on CAP water that is already quite expensive.[xxiii]