[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
   WATER FOR OUR FUTURE AND JOB CREATION: EXAMINING REGULATORY AND 
      BUREAUCRATIC BARRIERS TO NEW SURFACE STORAGE INFRASTRUCTURE

=======================================================================

                           OVERSIGHT HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                       Tuesday, February 7, 2012

                               __________

                           Serial No. 112-92

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov


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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
            EDWARD J. MARKEY, MA, Ranking Democratic Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Jon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV


                       Todd Young, Chief of Staff
                Lisa Pittman, Chief Legislative Counsel
               Jeffrey Duncan, Democratic Staff Director
                David Watkins, Democratic Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                      TOM McCLINTOCK, CA, Chairman
            GRACE F. NAPOLITANO, CA, Ranking Democrat Member

Louie Gohmert, TX                    Raul M. Grijalva, AZ
Jeff Denham, CA                      Jim Costa, CA
Scott R. Tipton, CO                  Ben Ray Lujan, NM
Paul A. Gosar, AZ                    John Garamendi, CA
Raul R. Labrador, ID                 Edward J. Markey, MA, ex officio
Kristi L. Noem, SD
Doc Hastings, WA, ex officio

                                 ------                                
      

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Tuesday, February 7, 2012........................     1

Statement of Members:
    Costa, Hon. Jim, a Representative in Congress from the State 
      of California, Oral statement of...........................    10
    Denham, Hon. Jeff, a Representative in Congress from the 
      State of California, Prepared statement of.................    81
    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona...........................................    14
        Prepared statement of....................................    16
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     7
        Prepared statement of....................................     9
    McClintock, Hon. Tom, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     3
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     4
        Prepared statement of....................................     6
    Tipton, Hon. Scott R., a Representative in Congress from the 
      State of Colorado..........................................    11
        Prepared statement of....................................    14

Statement of Witnesses:
    Bettner, Thaddeus, P.E., General Manager, Glenn-Colusa 
      Irrigation District, Willows, California...................    33
        Prepared statement of....................................    34
    Brown, Jerry, General Manager, Contra Costa Water District, 
      Concord, California........................................    39
        Prepared statement of....................................    40
    Gabaldon, Michael, Director of Technical Resources, Bureau of 
      Reclamation, Denver Technical Center, U.S. Department of 
      the Interior, Denver, Colorado.............................    51
        Prepared statement of....................................    53
    Gardner, Hon. Cory, a Representative in Congress from the 
      State of Colorado..........................................    17
        Prepared statement of....................................    18
    O'Toole, Pat, President, Family Farm Alliance, Savery, 
      Wyoming....................................................    19
        Prepared statement of....................................    21
    Semanko, Norman M., Executive Director and General Counsel, 
      Idaho Water Users Association, Boise, Idaho................    44
        Prepared statement of....................................    46

Additional materials supplied:
    Guy, David J., President, Northern California Water 
      Association, Statement submitted for the record............    82
    Keiser, Austin M., President, Grand Mesa Water Conservancy 
      District, Cedaredge, Colorado, Letter submitted for the 
      record.....................................................    12
    Midcap, Bill, Director of Renewable Energy Center, Rocky 
      Mountain Farmers Union, Denver, Colorado, Letter submitted 
      for the record.............................................     6
                                     



OVERSIGHT HEARING ON ``WATER FOR OUR FUTURE AND JOB CREATION: EXAMINING 
      REGULATORY AND BUREAUCRATIC BARRIERS TO NEW SURFACE STORAGE 
                           INFRASTRUCTURE.''

                              ----------                              


                       Tuesday, February 7, 2012

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to notice, at 10:00 a.m., in 
Room 1324, Longworth House Office Building, Hon. Tom McClintock 
[Chairman of the Subcommittee] presiding.
    Present: Representatives McClintock, Tipton, Gosar, 
Labrador; Napolitano, Costa, and Garamendi.
    Mr. McClintock. The hour of 10:00 has arrived, and the 
Subcommittee on Water and Power will come to order. I would ask 
unanimous consent that the gentleman from Colorado, Mr. 
Gardner, be allowed to sit with the Subcommittee and 
participate in the hearing.
    [No response.]
    Mr. McClintock. Hearing no objections, so ordered. We will 
begin with five-minute opening statements by myself and the 
Ranking Member of the Water and Power Subcommittee.

   STATEMENT OF THE HON. TOM McCLINTOCK, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McClintock. The Subcommittee on Water and Power meets 
today to consider what steps need to be taken to remove 
government-imposed impediments to the construction of new dams 
and reservoirs.
    The need for action can be summarized quite succinctly: The 
Bureau of Reclamation has built over 600 dams and reservoirs in 
the last century, but two-thirds of them were built in the 
first 60 years of its existence--more than 50 years ago. With 
one exception, Reclamation has not built any major dams or 
reservoirs in the last generation.
    And now, under this Administration, the Bureau of 
Reclamation is actually moving to tear down perfectly good dams 
to placate the most extreme elements of the environmental left. 
This shift of purpose is fast becoming a direct and imminent 
threat, not only to the prosperity of the West, but to our very 
ability to support our population. For example, California's 37 
million people now rely on a water system built to support a 
population of just 22 million.
    Last year, this Subcommittee focused on the release or 
diversion of billions of gallons of desperately needed water to 
meet absurd environmental regulations. But that's just part of 
the man-made drought that is gripping the West. The other part 
is the panoply of Federal regulations that makes the 
construction of new storage cost prohibitive.
    Last year, California had one of the wettest winters on 
record. So far this year, it has had one of the driest. Last 
year, billions of gallons had to be released simply because we 
had no place to store the surplus water. If the drought 
continues for another year, we will rue the decisions that 
denied us the additional storage capacity that would have saved 
that water.
    As we will hear, major projects have been hamstrung because 
of litigation and regulatory excesses stemming from 1970's-era 
legislation. Three years ago, this Subcommittee traveled to 
Colorado, which was in the grips of a chronic water shortage. 
There we learned that if the Two Forks project had not been 
blocked in this manner, they would have had no water shortage 
at all.
    Apologists for the status quo tell us the dams are too 
expensive. They blissfully ignore the fact that it is precisely 
these excessive regulations--having nothing to do with dam 
safety--that have needlessly and artificially driven up the 
cost.
    It is true that dams impede the migration of certain 
species of fish, a problem that is easily and economically 
addressed through down-stream fish hatcheries. Yet hatchery 
fish are often not included in ESA population counts, despite 
the fact there is no more genetic difference between hatchery 
fish and fish born in the wild than there is between a baby 
born in the hospital and a baby born at home. Indeed, it was 
the construction of dams that made possible the year-round 
cold-water flows so conducive to thriving fish populations. The 
dams tamed the environmentally devastating cycle of floods and 
droughts that once plagued these habitats.
    Nor will conservation measures such as recycling or 
rationing address our needs. As we will hear, there are limits 
to what conservation alone can do to address this shortage, and 
handing out taxpayer grants for toilet exchanges and rock 
gardens isn't going meet the next generation's needs. Title 16 
recycling legislation in the last Congress cost twice as much 
as imported water to the same regions.
    Conservation is what you do to manage a shortage. It is the 
government's responsibility to alleviate and prevent that 
shortage. That means that this generation must summon the 
common sense and resolve that the greatest generation used to 
build the infrastructure that we still rely upon today. That 
means returning to the sound principles of finance that 
produced this infrastructure: hard-nosed cost-benefit analysis 
and restoring the beneficiary pays principle that the actual 
users of these projects pay for them in proportion to their 
use.
    We have squandered enormous amounts of money and precious 
time proving that the policies of the 1970's do not work, and 
we are now facing devastating water shortages as the cost of 
that lesson. It is a generation whose folly resembles Edward 
Gibbon's description of ``decent easy men, who supinely enjoyed 
the gifts of the founder.'' Those days need to end now.
    It is time to open a new chapter in the history of the 
West, that a new generation recovered and restored the vision 
of abundance of its forebears and finished the job described by 
the founder of the Bureau of Reclamation as ``making the desert 
bloom.''
    With that I yield to the Ranking Member of the 
Subcommittee.
    [The prepared statement of Mr. McClintock follows:]

         Statement of The Honorable Tom McClintock, Chairman, 
                    Subcommittee on Water and Power

    The Subcommittee on Water and Power meets today to consider what 
steps need to be taken to remove government-imposed impediments to the 
construction of new dams and reservoirs.
    The need for action can be summarized quite succinctly: The Bureau 
of Reclamation has built over 600 dams and reservoirs in the last 
century, but two-thirds of them were built in the first 60 years of its 
existence--more than 50 years ago. With one exception, Reclamation has 
not built any major dams or reservoirs in the last generation.
    And now, under this Administration, the Bureau of Reclamation is 
actually moving to tear down perfectly good dams to placate the most 
extreme elements of the environmental left.
    This shift of purpose is fast becoming a direct and imminent threat 
not only to the prosperity of the West, but to our very ability to 
support our population. For example, California's 37 million people now 
rely on a water system built to support a population of just 22 
million.
    Last year, this Subcommittee focused on the release or diversion of 
billions of gallons of desperately needed water to meet absurd 
environmental regulations.
    But that's just part of the man-made drought that is gripping the 
West. The other part is the panoply of federal regulations that makes 
the construction of new storage cost prohibitive.
    Last year, California had one of the wettest winters on record. So 
far this year, it has had one of the driest. Last year, billions of 
gallons of water had to be released simply because we had no place to 
store that surplus water. If the drought continues for another year, we 
will rue the decisions that denied us the additional storage capacity 
that would have saved that water.
    As we will hear, major projects have been hamstrung because of 
litigation and regulatory excesses stemming from 1970's era 
legislation. Almost two years ago, this Subcommittee travelled to 
Colorado which was in the grips of a chronic water shortage. There, we 
learned that if the Two-Forks project had not been blocked in this 
manner, they would have had no water shortage.
    Apologists for the status quo tell us that dams are too expensive. 
They blissfully ignore the fact that it is precisely these excessive 
regulations--having nothing to do with dam safety--that have needlessly 
and artificially driven up the cost.
    It is true that dams impede the migration of certain species of 
fish--a problem that is easily and economically addressed through down-
stream fish hatcheries. Yet hatchery fish are often not included in ESA 
population counts despite the fact there is no more genetic difference 
between hatchery fish and fish born in the wild than there is between a 
baby born at the hospital and a baby born at home.
    Indeed, it was the construction of dams that made possible the 
year-round cold-water flows so conducive to thriving fish populations. 
The dams tamed the environmentally devastating cycle of floods and 
droughts that once plagued these habitats.
    Nor will conservation measures such as recycling and rationing 
address our needs. As we will hear, there are limits to what 
conservation alone can do to address this shortage, and handing out 
taxpayer grants for toilet exchanges and rock gardens isn't going meet 
the next generation's needs. Title 16 recycling legislation in the last 
Congress cost twice as much as imported water to the same regions.
    Conservation is what you do to manage a shortage. It is the 
government's responsibility to alleviate that shortage. And that means 
that this generation must summon the common sense and resolve that the 
greatest generation used to build the infrastructure that we still rely 
upon today.
    That means returning to the sound principles of finance that 
produced this infrastructure: hard-nosed cost-benefit analysis and 
restoring the beneficiary pays principle that the actual users of these 
projects pay for them in proportion to their use.
    We have squandered enormous amounts of money and precious time 
proving that the policies of the 1970's do not work, and we now face 
devastating water shortages as the cost of that lesson. It was a 
generation whose folly resembles Edward Gibbon's description of 
``Decent easy men, who supinely enjoyed the gifts of the founder.'' 
Those days need to end now.
    It is time to open a new chapter in the history of the West: that a 
new generation recovered and restored the vision of abundance of its 
forbearers and finished the job described by the founder of the Bureau 
of Reclamation as ``making the desert bloom.''
                                 ______
                                 

  STATEMENT OF THE HON. GRACE NAPOLITANO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Napolitano. Thank you, Mr. Chair. And I apologize; I 
have a full-blown cold, so stay away.
    I look forward and I really enjoy today's hearing. I have 
no objection to the hearing, because it is based on storage.
    Evidently, from the testimony I read, the hearing only 
looks at one side of the coin, which is the new surface 
storage. It, as you pointed out, doesn't look at groundwater 
conservation, the efficiencies like low-flush toilets, 
recycling, desalination, and of course, one major component, 
education.
    If we are looking for solutions to our water problems, and 
for certainty for our communities, we must have the full 
consideration of all options. All of them must be on the table. 
That includes storage and other alternatives, including 
increase of recycled water projects.
    The Bureau has constructed most of its nearly 200 projects 
prior to World War II, you are right. No argument about the 
impact Reclamation projects have had in the West. A combination 
of changing national priorities and local needs and the 
development of prime locations for surface storage projects 
have led us to look at different alternatives. Times have 
changed.
    The Majority will argue that the environmental regulations 
have hindered construction facilities in the West. That may be 
so. But then the world has changed. There is a bigger issue 
here, from moving from study to construction. I don't hear as 
much about public-private partnerships or other areas. Even if 
you move from study to construction, how can we guarantee these 
communities the billions of Federal-appropriated dollars that 
are necessary for construction, when of the $22 billion 
Reclamation has spent on major projects in the decades, only 25 
percent--or 5.2 billion--has been repaid? You are talking about 
40-year loans interest free at taxpayer expense. You are asking 
the taxpayer to subsidize additional burden.
    Any authorization of new storage projects will have to 
compete for funding in Reclamation's limited budget and add to 
the Federal debt associated with the water projects. The 
biggest impediment to dam construction is limited Federal 
funding.
    Again, I don't hear much on public-private partnerships or 
the bonding at the local levels, nor of other areas, Native 
American rights, the aquifer studies for recharge--we only hear 
the overdrafting wastewater treatment upgrades,--farm water 
runoff cleanup, and some of those areas that are of great 
concern to me.
    Water managers have already realized they cannot wait to 
compete for the limited--very limited--Federal dollars or the 
decades it will take to construct the facility. They need to 
solve their problems now. For some communities, the surface 
water storage, like Contra Costa Water District's Los Vaqueros 
Project, or the Metropolitan Water District Diamond Valley 
Reservoir, done at their own expense. Los Vaqueros 60,000 acre-
feet expansion will be on line this spring, project completed 
on time, on budget, with no litigation. Mr. Brown can speak 
more to the details of the Los Vaqueros Project.
    Water managers are looking for projects that involve 
limited Federal involvement. Less government, ladies and 
gentlemen, that can produce water on a faster, more timely 
scale. This can also be seen in the 53 water recycle projects 
Congress has authorized since 1992. And they have yielded 
approximately half-a-million acre-feet. New storage, when 
appropriated, is not impossible. And California alone has added 
5.6 million acre-feet in new groundwater and surface water 
storage in the last 20 years. And I will repeat, we have cut 
water usage in the Southern California area by conservation, 
recycling, and all of the above, using the same amount of water 
that we used three decades ago with three million more people.
    In this environment not all of the water needs in the West 
can or should be met by new dams or bigger dams. New storage is 
not always the answer. And the same can be said for water 
recycling or desalination. What works for one community may not 
work for others, and we must select the most effective and 
affordable solutions.
    The threat to our water supply is real. We face many 
challenges like climate change, decreased snowpack, increased 
demand, and the development of alternative water-intensive 
fuels like oil shale, and their need for water. To know the 
right solution for communities is to have all options on the 
table. Looking for just one surface storage does not provide 
our water managers with the baseline data they need to serve 
our communities.
    And for the record, Mr. Chair, I have a letter from the 
Rocky Mountain Farmers Union regarding the need to fund and 
prioritize aging infrastructure, and also the draft 
environmental impact statement on the Shasta expansion released 
yesterday.
    Now, thank you, Mr. Chair, and I look forward to this----
    Mr. McClintock. I assume you asking unanimous consent----
    Mrs. Napolitano. Yes, sir, I am.
    Mr. McClintock. In the record, without objection.
    [The letter submitted for the record by Mrs. Napolitano 
follows:]

[GRAPHIC] [TIFF OMITTED] T2805.003



    Mrs. Napolitano. Thank you, Mr. Chair. And again, I see in 
one of the statements that there is a reference to 
establishment of banks such as TIFIA. I have said that several 
times, I think we need a water infrastructure bank in the 
future to be able to do these projects.
    So with that I yield back.
    [The prepared statement of Mrs. Napolitano follows:]

    Statement of The Honorable Grace F. Napolitano, Ranking Member, 
                     Committee on Natural Resources

    Thank you Mr. Chairman.
    I look forward and have no objection to this hearing, with its 
emphasis on storage. This hearing, however, only looks at one side of 
the coin-it only looks at new surface storage. It does not look at 
groundwater storage, not efficiencies, not water recycling or 
desalination.
    If we arere looking for solutions to our water problems and for 
certainty for our communities, then we must have a full consideration 
of all options--including storage or other alternatives like water 
recycling.
    The Bureau of Reclamation constructed most of its nearly 200 
projects prior to World War II. There is no argument about the impact 
reclamation projects have had on the west. A combination of changing 
national priorities and local needs, as well as the development of 
prime locations for surface storage projects, has led us to look at 
different alternatives.
    The majority will argue that environmental regulations have 
hindered construction of new facilities in the west. There is a bigger 
issue here--from moving from study to construction--and that is cost. 
Even if you move from study to construction, how can you guarantee 
these communities the billions of federal appropriated dollars that is 
necessary for construction??
    It is also important to note that of the 22 billion dollars 
Reclamation has spent on major water projects, only 25% or 5.2 billion 
has been repaid to the federal government.
    Any authorization of new storage projects will have to compete for 
funding in Reclamation's limited budget AND add to the federal debt 
associated with water projects.
    The biggest impediment to dam construction is limited federal 
funding.
    Water managers have already realized that they cannot wait to 
compete for the limited federal dollars or the 10 or 20 years it will 
take to construct a facility. They need to solve their problems now. 
For some communities that includes surface water storage, like Contra 
Costa Water District's Los Vaqueros project, or the Metropolitan Water 
District's Diamond Valley Reservoir. The Los Vaqueros' 60,000 acre-feet 
construction is expected to be completed this spring, on time, on 
budget and no litigation. Mr. Brown can speak to more details of the 
Los Vaqueros project today.
    Water managers are looking for projects that involve limited 
federal involvement that can produce water on a faster scale. This can 
also be seen in the 53 water recycling projects congress has authorized 
since 1992.
    New storage when appropriate is not impossible, California has 
added 5.6 million acre-feet in new groundwater and surface water 
storage in the last 20 years.
    In this environment not all of the water needs in the west can or 
should be met by new dams or bigger dams. New storage is not always the 
right answer, and the same can be said of water recycling or 
desalination. What works for one community may not work for others, and 
we must select the most effective AND affordable solution.
    The threat to our water supply is real. We many challenges like 
climate change, decreased snowpack, increased demand and the 
development of alternative water intensive fuels like Oil Shale.
    To know the right solution for the community is to have all the 
options on the table. Looking at just surface storage does not provide 
our water managers with the baseline data they need to serve our 
communities.
                                 ______
                                 
    Mr. McClintock. Thank you. The Committee is joined by the 
Chairman of the Committee on Natural Resources, Congressman Doc 
Hastings of Washington, who I am told is celebrating his 
birthday today. For some very good reasons, we do not allow 
singing in this Committee.
    [Laughter.]
    Mr. McClintock. However, I do believe I speak for all of us 
when I extend the Committee's warmest best wishes to the 
Chairman, and recognize him for five minutes.

    STATEMENT OF THE HON. DOC HASTINGS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF WASHINGTON

    Mr. Hastings. Thank you very much, Mr. Chairman, for 
holding this meeting, and for the Ranking Member, I would 
suggest you take some hot water and honey and something else. 
That really does help.
    Mrs. Napolitano. I would like to have something else.
    Mr. Hastings. The something else is very good.
    Water supply certainty has a profound and direct impact on 
Central Washington, where the economy is heavily dependent on 
irrigated agriculture. This region, which I have the honor to 
represent, is home to two large Federal water projects, one 
anchored by the Bureau of Reclamation's Grand Coulee Dam. 
Together, these two projects irrigate more than a million acres 
of farmland, provide numerous recreation and flood control 
benefits, and provide over 21 billion kilowatt hours of carbon-
free, renewable hydroelectric power to customers throughout the 
West.
    Before these projects were constructed, this area was arid 
land where little but tumbleweeds would thrive. Today, it is 
one of the most productive and diverse agricultural areas in 
the world, providing more apples, pears, cherries, mint, and 
hops than in any other part of the country. Despite the 
successes of these projects and others in the West, they have 
been under constant assault from those with extreme agendas. 
Regulations and associated litigation have hijacked these 
projects, to the point where their very purposes have been 
compromised and the construction of new water storage to 
continue to meet the needs of those regions is nearly 
impossible to achieve.
    Water users throughout the West have been forced to stand 
by and watch powerlessly as increasingly burdensome Federal 
rules based on questionable science and never-ending litigation 
make it more and more difficult to continue to receive the 
water they need. Today we will hear from several witnesses who 
will describe a regulatory system gone awry. They will outline 
a painfully long permitting process that often takes longer to 
complete than actual project construction. In one example, 
permitting process required the examination of 52 project 
alternatives. To me, that sounds like more than a bit 
excessive.
    Our existing water supply is under strain and the demand is 
likely to increase. As bad as things are now, they are only 
going to get worse if the Obama Administration moves forward 
with their initiative to modify the Principles and Guidelines. 
The Principles and Guidelines provide standards that are 
critical in determining how Federal water infrastructure 
decisions are made and developed. Water users are justifiably 
concerned about this Administration's efforts to elevate non-
structural and environmental elements over economic and safety 
benefits in the planning phase of project development. This 
could undermine efforts to build new and rehabilitate old water 
infrastructure.
    My district is representative of much of the West; where 
water goes, jobs follow. On the flip side, when water does not 
reach farmers' fields or orchards, jobs are destroyed. 
Agriculture is Central Washington's leading employer, and is 
heavily dependant on a reliable water supply.
    According to the Washington State Department of Ecology, 
Washington's 1.7 million acres of irrigated crop land generate 
approximately $5 billion in crops sold each year, crops that 
feed America and the world. It is an area that is one of the 
most productive agricultural regions in the nation.
    It is this generation's turn, as the Chairman noted, to 
recognize our growing water needs and take steps to meet it. 
Conservation will undoubtedly continue to play a role to meet 
our future water needs, but it alone will not be enough. We 
must also embrace other water supply options, including 
building additional water storage. What America really needs an 
all-of-the-above-water supply strategy.
    And with that, Mr. Chairman, thank you for your courtesy, 
and I yield back.
    [The prepared statement of Mr. Hastings follows:]

          Statement of The Honorable Doc Hastings, Chairman, 
                     Committee on Natural Resources

    Water supply certainty has a profound and direct impact on Central 
Washington where our economy is heavily dependent on irrigated 
agriculture. This region, which I have the honor to represent, is home 
to two large federal water projects in the West, one anchored by the 
Bureau of Reclamation Grand Coulee Dam.
    Together, these two projects irrigate more than a million acres of 
farmland, provide numerous recreation and flood control benefits and 
provide over 21 billion kilowatt hours of carbon-free, renewable 
hydroelectric power to customers throughout the United States.
    Before these projects were constructed, this area was an arid 
desert where little but tumbleweeds would thrive. Today, it is one of 
the most productive and diverse agricultural areas in the world, 
providing more apples, pears, cherries, mint and hops than in any other 
part of the country.
    Despite the successes of these projects and others in the West, 
they have been under constant assault from those with extreme agendas. 
Regulations and associated litigation have hijacked these projects, to 
the point where their very purposes have been compromised and the 
construction of new water storage to continue to meet the needs of 
these regions is nearly impossible to achieve.
    Water users throughout the West have been forced to stand by and 
watch powerlessly as increasingly burdensome federal rules based on 
questionable science and never-ending litigation make it more and more 
difficult to continue to receive the water they need
    Today, we will hear from several witnesses who will describe a 
regulatory system gone awry. They will outline a painfully long 
permitting process that often takes longer to complete than actual 
project construction. In one example this permitting process required 
the examination of 52 project alternatives. To me, that sounds more 
than a little excessive.
    Our existing water supply is under strain and the demand is likely 
to increase. As bad as things are now they are only going to get worse 
if the Obama Administration moves forward with their initiative to 
modify the Principles and Guidelines.
    The Principles and Guidelines provide standards that are critical 
in determining how federal water infrastructure decisions are made and 
developed. Water users are justifiably concerned about this 
Administration's efforts to elevate non-structural and environmental 
elements over economic and safety benefits in the planning phase of 
project development. This could undermine efforts to build new, and 
rehabilitate old, water infrastructure.
    My district is representative of much of the West; where water 
goes, jobs follow. On the flip side, when water does not reach farmers' 
fields or orchards, jobs are destroyed. Agriculture is Central 
Washington's leading employer, supporting 160,000 jobs statewide, and -
is heavily dependent on a reliable water supply.
    According to the Washington State Department of Ecology, 
Washington's 1.7 million acres of irrigated crop land generate 
approximately $4.8 billion in crops sold each year--crops that feed 
America and the world. It is an area that is one of the most productive 
agricultural regions in the nation.
    It's this generation's turn to recognize our growing water needs 
and take steps to meet it. Conservation will undoubtedly continue to 
play a role to meet our future water needs, but it alone will not be 
enough. We must also embrace other water supply options, including 
building additional water storage. America needs an all-of-the-above-
water supply strategy.
                                 ______
                                 
    Mr. McClintock. Thank you. And it is the custom of this 
Subcommittee to receive opening statements from other Members 
who wish to make them.
    The Chair recognizes Mr. Costa.

 STATEMENT OF THE HON. JIM COSTA, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Costa. Thank you very much, Mr. Chairman, for holding 
this hearing. I think it is appropriate, given the challenges 
we face in the West and in California about our near-term and 
long-term water needs, and surface supply is one, as I have 
said for many years, of the many water tools that we have in 
our water management toolbox to solve our long-term water 
needs. It is how we have historically solved our water needs. 
There is not one magic solution. It is a combination of 
solutions.
    And I would like to keep my comments for the purpose of my 
opening statement somewhat focused on California, which I know 
best, having chaired the Policy Committee in the State 
Legislature, and having worked on water for almost 30 years.
    In California, we have what many of us believe is a 
somewhat broken water system. And many of the new Members who 
are not from California will hear more about that. The problem 
is that we have a water system that was designed for about 20 
million people. Today we have 38 million people. Estimated by 
the year 2030 we could have 50 to 60 million people living 
within the state. Our current water system is insufficient to 
satisfy our water needs for our urban cities, our agricultural 
communities, and to balance the needs to ensure that we can 
maintain healthy fisheries in an environment and an ecosystem 
that allows future Californians to enjoy it.
    I sense a common thread here. I mean all three of the 
opening statements talked about the need to use all the water 
management tools in our water toolbox. What gets difficult as 
we talk about surface storage supply this morning is where do 
we get the best bang for our buck.
    In California we have attempted to try to make efforts to 
assess which projects give us the best bang for our buck. The 
Bureau of Reclamation, under two Administrations now, President 
Bush's Administration and now President Obama's Administration, 
has studied three surface projects in California. Shasta 
actually--which was released today to be very feasible, 
economically, or to be a very positive potential, raising the 
dam 18 feet that would provide an additional 150,000 acre-feet 
of supply annually, plus the economic benefits at a cost of 
about $1 billion seem to be very favorable.
    We have also looked at enlarging Los Vaqueros, which is an 
offstream reservoir, for a second time that would extend its 
capacity.
    Temperance Flat, which the Bureau has been studying now for 
over 10 years, I think needs to do further investigation in the 
sense that I think the Bureau is limiting the potential 
benefits of this important reservoir. Because it is not just 
the water supply, but the ability to move water north and south 
that Temperance Flat affords.
    There are other benefits to this project that I don't think 
have been fully examined. I urge the Bureau to do a better job 
in looking at them.
    But let's talk about an assessment of needs. Clearly, we 
know that if we are going to maintain our agriculture economy, 
be able to provide more water for our cities, and deal with the 
other needs that are critical in California and in the West, we 
have to make an assessment of how much additional acre-feet of 
water do we need in California over the next 30 years. And then 
what is the most cost-effective way to get there?
    If we used common sense in that fashion, I think we would 
be better. Let's be realistic. Some projects are--
notwithstanding the cost factors, have more political 
opposition than others. I supported Diamond Lake that was 
mentioned in Southern California that has been constructed and 
built. I supported Los Vaqueros that has been built in Contra 
Costa County. Those are all good surface storage projects. 
Auburn Dam, that the Chair of the Committee supports, has a lot 
of opposition. There are reasons why some projects can deal 
with the permitting and the regulatory process easier than 
others.
    However, the permitting and regulatory system is 
burdensome. We ought to look at ways in which we can do a 
better job. Frankly, people who don't want a project for the 
sake of not wanting a project have lots of opportunities to 
hold up a project. And clearly, I hope this Committee will look 
at all of the aspects and factors as we look at surface storage 
supply being a part of our long-term solutions to providing 
water for not only California, but for the West. Clearly, we 
need to make the same kind of investments that our parents and 
our grandparents made in the 20th century. And I think that is 
the challenge we face today.
    I look forward to listening to the witnesses' testimony. 
Thank you very much.
    Mr. McClintock. Thank you.
    The Chair recognizes Mr. Tipton of Colorado.

    STATEMENT OF THE HON. SCOTT TIPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Tipton. Thank you, Mr. Chairman. I would like to 
particularly thank you for convening this important hearing 
today in terms of something that, for the West, is of critical 
importance since it is the lifeblood of our communities, and 
that is our ability to be able to store water.
    And I would like to be able to submit for the record a 
letter that I received from the Grand Mesa Water Conservancy 
District in Cedar Ridge, Colorado, that actually speaks to some 
of the issues that the Ranking Member had talked about, in 
terms of being able to work with existing structures.
    Mr. McClintock. Without objection.
    [The letter submitted for the record by Mr. Tipton 
follows:]

[GRAPHIC] [TIFF OMITTED] T2805.001

[GRAPHIC] [TIFF OMITTED] T2805.002

                                ------                                


    Mr. Tipton. I would like to note in particular on this 
letter that they do point out that it has been bureaucratic 
interference out of Washington, D.C. that is driving up costs, 
slowing up projects with a limited amount of time to be able to 
actually rehabilitate some of these reservoirs.
    And in this one particular case, we are putting at risk 
better than 3,800 acre-feet of water storage, and it is being 
lost mainly due to the cost of repairs being driven by the 
bureaucracy that simply make no sense. So I thank you for 
submission of that.
    Mr. Chairman, water storage is the precursor for multiple-
use water management in arid regions such as the Third 
Congressional District of Colorado that I represent. Achieving 
improved water storage meeting growing populations is met not 
only by best management practices, but also by the development 
of new water infrastructure.
    Prudent water storage can help aid agriculture, residential 
use, hydropower production, and environmental protection. The 
natural cycle of rivers in the West is one of boom and bust, 
surplus and drought. But with proper water storage, economic 
cycles do not have to be boom and bust. Recreational 
opportunities can be reliably provided, and water can be 
allocated where it is best needed to meet environmental species 
protection goals, and support our farm and ranch communities.
    As such, there is no need to see water storage as a 
partisan issue, or one that divides the interests of water 
users, but as the means by which the greatest good for the 
greatest number of water users can be met.
    It is my hope that today's hearing will be a productive 
step in highlighting some of the shortcomings of the existing 
water storage regulatory framework, and how it can be 
streamlined to better support jobs and communities that depend 
on the availability of water.
    Again, Mr. Chairman, thank you for conducting this hearing.
    [The prepared statement of Mr. Tipton follows:]

       Statement of The Honorable Scott Tipton, a Representative 
                 in Congress from the State of Colorado

    Thank you Mr. Chairman for convening today's hearing, and thanks to 
the panelists for being with us today to examine this very important 
issue. Water storage is the precursor for multiple use water management 
in arid regions such as the Third Congressional District of Colorado. 
Achieving improved water storage to meet growing populations is met not 
only by best management practices but also by the development of new 
water infrastructure. Prudent water storage can help aid agriculture, 
residential use, recreation, hydropower production, and environmental 
protection. The natural cycle of rivers in the West is one of boom and 
bust, surplus and drought. But with proper water storage, economic 
cycles don't have to be boom and bust, recreational opportunities can 
be reliably provided, water can be allocated where and when it is 
needed to meet environmental and species protection goals, and we can 
support our farm and ranch communities. As such, there is no need to 
see water storage as a partisan issue, or one that divides the 
interests of water users, but as the means by which the greatest good 
for the greatest number of water users can be met.
    It is my hope that today's hearing will be a productive step in 
highlighting some of the shortcomings of the existing water storage 
regulatory framework, and how it can be streamlined to better support 
jobs and communities that depend on the availability of water.
                                 ______
                                 
    Mr. McClintock. Mr. Garamendi?
    Mr. Garamendi. I would like to hear from the witnesses, so 
I will forgo my opportunity.
    Mr. McClintock. Thank you. The Chair recognizes Mr. Gosar.

STATEMENT OF THE HON. PAUL GOSAR, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ARIZONA

    Mr. Gosar. Mr. Chairman, thank you very much for convening 
today's hearing and providing me the opportunity to make a few 
remarks. While I would prefer the friendly confines of rural 
Arizona, I am glad to be back here in Washington, D.C. and 
building on our successes in this Committee.
    The Colorado River is a fundamental component of our 
regional economy. The over 20-plus major dams built on the 
Colorado serve multiple purposes such as maintaining a year-
round steady flow of water and a stable water supply; producing 
an abundance of clean, renewable hydropower production; 
providing recreational opportunities; and facilitating many 
environmental protections.
    Hydropower facilities like the Hoover Dam, the Parker Dam, 
and the Glen Canyon Dam are vital power resources for consumers 
in the Western states, keeping our electrical bills low and the 
economy growing.
    The Central Arizona Project delivers water to 80 percent of 
my state's population. The $10.3 billion agricultural industry 
in my state would not exist without the irrigation of over 
800,000 acres of agricultural land via our state's water 
infrastructure. Additionally, recreation and tourism industry 
related to the river supports nearly 800,000 jobs in the seven 
Colorado River states, including 82,000 jobs in Arizona. In 
other words--this infrastructure is our lifeblood and we need 
more of it throughout the West.
    Given the overwhelming benefits, one would think that the 
Federal Government would be focused on maintaining our current 
infrastructure and expediting the development of new surface 
storage. Instead, the Obama Administration is taking actions 
that compromises existing infrastructure and is standing in the 
way of development.
    For example, the Glen Canyon Dam, located in Northern 
Arizona, lost a third of its hydropower generation--over 400 
megawatts, or enough power for almost half a million homes--due 
to an environmental experiment. This experiment had an average 
economic cost of nearly $50 million per year, totaling more 
than $435 million for the 9-year study period. The cost of 
replacing that power the dam could have produced is borne by 
the customer, not my constituents.
    Last summer, this Committee held an oversight hearing on 
the potential job loss and economic impacts of proposed EPA 
mandates on the Navajo Generating Station. Beyond the thousands 
of good-paying tribal jobs, the Navajo Generating Station is 
critical to Arizona's water supply because it provides 95 
percent of the power for the Central Arizona Project, that 
infrastructure that delivers more than 500 billion gallons of 
Colorado River water to 80 percent of the state's population.
    By the Obama Administration's own report released last 
month, its mandates on the NGS would increase water rates for 
millions of Arizonans, ranging from 16 percent increased rates 
for agricultural users and Indian tribes to a 7 percent 
increase for municipal and industrial users. These estimates 
are all based on the assumption that the mandates will not 
force the plant to shut down, which is contrary to testimony 
heard directly from the plant owners in the House Natural 
Resources Committee.
    All these devastating economic impacts would be imposed on 
our weak economy for an uncertain environmental impact, per the 
Administration's own report. It is clear the Administration 
should abandon these nonsensical regulatory mandates and focus 
on policies that will stimulate our economy, not further damage 
it. The Federal Government needs to get back to working with 
people, not working against them.
    I look forward to hearing from today's witnesses. These 
hardworking Americans, the people on the ground dealing with 
the regulations and the bureaucrats that prevent them from 
doing their jobs to the best of their capabilities. And they 
have an important story to tell.
    I am committed to pushing policies that reduce the planning 
time, the regulatory permitting costs associated with the 
development of new Federal and non-Federal dams and reservoirs, 
and fighting unnecessary regulatory actions that compromise 
existing infrastructure. These efforts will reduce U.S. 
dependence on foreign energy production, ensuring a safe and 
stable water supply, and facilitating badly needed local job 
growth in communities throughout the West.
    Thank you.
    [The prepared statement of Mr. Gosar follows:]

      Statement of The Honorable Paul A. Gosar, a Representative 
                 in Congress from the State of Arizona

    First, I would like to thank Chairman McClintock for convening 
today's hearing and for providing me the opportunity to make a few 
remarks. While I much prefer the friendly confines of rural Arizona, it 
is good to be back here at the Subcommittee on Water and Power in 2012. 
I look forward to building on our subcommittee's successes from last 
year.
    The Colorado River is a fundamental component of our regional 
economy. The over twenty-plus major dams built on the Colorado River 
serve multiple purposes such as maintaining a year round steady flows 
of water and a stable water supply; producing an abundance of clean, 
renewable hydropower production; providing recreational opportunities; 
and facilitating many environmental protections.
    Hydropower facilities like the Hoover Dam, Parker Dam, and Glen 
Canyon Dam are vital power resources for consumers in the Western 
states--keeping our electrical bills low and the economy growing. The 
Central Arizona Project delivers water to 80 percent of my state's 
population. The $10.3 billion agricultural industry in my state would 
not exist without the irrigation of over 800,000 acres of agriculture 
land via our state's water infrastructure. Additionally, recreation and 
tourism industry related to the river supports nearly 800,000 jobs in 
the seven Colorado River states, including 82,000 jobs in Arizona. In 
other words--this infrastructure is our lifeblood and we need more of 
it throughout the West.
    Given the overwhelming benefits, one would think that the federal 
government would be focused on maintaining our current infrastructure 
and expediting the development of new surface storage. Instead, the 
Obama Administration is taking actions that compromises existing 
infrastructure and is standing in the way of development.
    For example, the Glen Canyon Dam, located in Northern Arizona lost 
a third of its hydropower generation--over 400 megawatts or enough to 
power almost half a million homes--due to an environmental experiment. 
This experiment had an average economic cost of nearly $50 million per 
year, totaling more than $435 million for the nine-year study period. 
The cost of replacing that power the dam could have produced is borne 
by the customer, my constituents.
    Last summer, this committee held an oversight hearing on the 
potential job loss and economic impacts of proposed EPA mandates on the 
Navajo Generating Station. Beyond the thousands of good paying tribal 
jobs, the NGS is critical to Arizona's water supply because it provides 
95% of the power for the Central Arizona Project (CAP)--the 
infrastructure that deliver more than 500 billion gallons of Colorado 
River water to 80% of the state's population.
    By the Obama Administration's own report released last month, its 
mandates on the NGS would increase water rates for millions of 
Arizonans, ranging from a 16 percent rate increase for agricultural 
users and Indian tribes to a 7 percent increase for municipal and 
industrial users. These estimates are all based off on the assumption 
that the mandates will not force the plant to shutdown, which is 
directly contrary to testimony heard directly from the plant owners in 
the House Natural Resources Committee. All these devastating economic 
impacts would be imposed on our weak economy for an uncertain 
environmental impact, per the Administration's own report.
    It is clear the Administration should abandon these nonsensical 
regulatory mandates and focus on policies that will stimulate our 
economy, not further damage it. The federal government needs to get 
back to working with the people, not against the people.
    I look forward to hearing from today's witnesses. These hardworking 
Americans--the people on the ground, dealing with the regulations and 
bureaucrats that prevent them from doing their jobs to the best of 
their capabilities--have an important story to tell.
    I am committed to pushing policies that reduce the planning time 
and regulatory permitting costs associated with the development of new 
federal and non-federal dams and reservoirs and fighting unnecessary 
regulatory actions that compromises existing infrastructure. These 
efforts will reduce U.S. dependence on foreign energy production, 
ensuring a safe and stable water supply, and facilitating badly needed 
local job growth in communities throughout the West.
    Thank you.
                                 ______
                                 
    Mr. McClintock. Thank you.
    The Subcommittee welcomes Mr. Gardner of Colorado, and is 
recognized for five minutes.

    STATEMENT OF THE HON. CORY GARDNER, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Gardner. I thank the Chairman for the opportunity to 
join the Committee in this important hearing, and thank Ranking 
Member Napolitano as well for the opportunity to be here.
    I represent Colorado's Fourth Congressional District, which 
is just the opposite end of the state from my colleague, Mr. 
Tipton, from Western Colorado. It is a district that was once 
represented by Wayne Aspinall, who served as Chairman of the 
House Insular Affairs Committee for a number of years, and 
whose passion it was to add additional water storage to 
Colorado and to the West. In fact, many of the projects that we 
utilize today to their full extent were created by this 
Congress and Wayne Aspinall, the U.S. Congress and Wayne 
Aspinall. And the work that we are continuing to rely on today 
is work that happened several generations ago under the 
leadership of people like Wayne Aspinall.
    By 2050, my home state of Colorado will need an additional 
one million acre-feet of water to meet all of our agricultural 
and industrial municipal demands. Conservation alone cannot 
meet these demands. We have an obligation to prepare this 
country's future generations by storing more water. This 
hearing is critical to understanding the Federal barriers that 
inhibit local communities and states from developing new dams, 
reservoirs, and storage systems.
    If you walk into the capital at Colorado, right in the 
middle of the rotunda there is a poem written on the wall. And 
to paraphrase the beginning of the poem, it says something to 
the effect of, ``Here is a land where history is written in 
water.'' And that is so true of all of our western states. If 
we are going to continue to thrive as a western economy, 
though, whether it is business or agriculture, every industry 
depends on an ample water supply. And if our economy is going 
to expand and create additional jobs, then we are going to need 
more water.
    The Fourth Congressional District of Colorado is 11th 
highest producing agricultural district in the U.S. Congress. 
Farmers and ranchers know the importance of water. Lack of 
supply has caused thousands of wells to be shut down, hundreds 
of thousands of acres to be dried up, and water to become 
increasingly more expensive. Many of the projects that have 
been on the books over the past several years could have 
avoided, if they had been built, some of the shutdowns that 
Colorado has experienced over the past several years.
    One project in particular that I would like to bring to the 
attention of the Committee is the Northern Integrated Supply 
Project, or NISP.
    NISP would construct a water storage reservoir off stream 
of the Poudre River in Colorado. This proposed project would 
ensure the river flows year round by diverting water to a 
reservoir during periods of high flow, and sending water back 
to the river during periods of low flow. The project is popular 
with the majority of those in Northern Colorado and 
Northeastern Colorado, but it is still stuck in the permitting 
process, the Federal bureaucracy. It has received a barrage of 
attacks from outside interests who think that it would harm 
agriculture. And yet, every single group in agriculture in 
Colorado supports the project.
    The opportunity we have with conservation cannot be 
understated. Conservation is an important part of our water 
needs. But it cannot complete the picture. We also need and 
will require additional water storage.
    I believe there is a three-pronged solution to our water 
needs in the West: storage, conservation, and partnership, that 
partnership that can exist between the Federal Government and 
the state and local governments. But that partnership should 
never be driven by the Federal Government, but instead driven 
by local water users and local solutions. But conservation 
cannot take the place--cannot replace--the need for additional 
water storage.
    And so I thank the Chairman for this hearing today. I thank 
the witnesses for being here today, and certainly appreciate 
the opportunity to participate in today's hearing.
    [The prepared statement of Mr. Gardner follows:]

       Statement of The Honorable Cory Gardner, a Representative 
                 in Congress from the State of Colorado

    Thank you, Mr. Chairman. I would like to thank Chairman McClintock, 
Ranking Member Napolitano, and my other colleagues on this committee 
for allowing me the opportunity to participate in this hearing.
    The issue before this committee today presents many challenges to 
all members of Congress and especially members from the west. Water is 
arguably our most valuable resource. By 2050, my home state of Colorado 
will need an additional 1 million acre-feet of water to meet all of our 
agricultural and municipal demands. Conservation alone cannot meet 
these demands. We have an obligation to prepare this country's future 
generations by storing water. This hearing is critical to understanding 
the federal barriers that inhibit local communities and states from 
developing new dams, reservoirs and storage systems.
    Water is an economic driver. In order to attract more growth to the 
western United States--either in business or agriculture--every 
industry depends upon an ample water supply. If our economy is going to 
expand and create jobs, it is going to need more water. As we work to 
attract more jobs to the West, the people who work those jobs are going 
to need water. If agriculture is to remain vibrant, it too must have 
water.
    My congressional district is the 11th highest producing 
agricultural district in the United States. Farmers and ranchers know 
the importance of water. Lack of supply has caused sales and leases to 
become increasingly more expensive. The additional water storage that 
Colorado requires can only be realized by rethinking the way the 
Federal government works. Whether through adverse permitting 
requirements, the NEPA process, ESA restrictions or costly litigation--
the federal government keeps pushing the problem down the road and 
inhibiting our states from doing what they need to do. If we do not act 
fast, many farms will suffer from agricultural dry-up costing jobs and 
ruining our communities. Throughout the West there are periods of 
dismal precipitation and prolonged drought. New water storage 
infrastructure can alleviate the burden placed on agriculture during 
these periods.
    One project in particular I would like to bring to the attention of 
the committee is the Northern Integrated Supply Project or NISP. NISP 
would construct a water storage reservoir off stream of the Poudre 
River in Colorado. This proposed project would ensure the river flows 
year round by diverting water to a reservoir during periods of high 
flow and sending water back to the river during periods of low flow. 
The project is popular with the people of the Front Range of Colorado. 
Yet, NISP is still stuck in the permitting process at the Army Corp of 
Engineers and continues to be delayed because of the regulatory 
barriers that water projects go through. Not to mention, NISP has 
received a barrage of attacks from outside interest groups. One of the 
most recent attacks was the rumor that it would hurt agriculture in 
Northern Colorado, yet every major agricultural organization in the 
state supports NISP moving forward. This hearing today will shed light 
on the misinformation that is circulating regarding water storage 
projects. Misinformation often leads to costly delays that 
simultaneously hurt our economic growth and deprive our people of the 
water they so desperately need.
    There is truly enough water for everyone and we can meet both our 
agriculture and municipal usages. I am tired of seeing farmers sell 
their water rights because of the scarcity in our water supply. We need 
to rethink the Federal government's role in water storage and redefine 
the missions of the various agencies from the Army Corp of Engineers, 
to the Environmental Protection Agency and the Bureau of Reclamation. 
If the state of Colorado was to build every water storage project on 
the books today, the state would still fall short our of expected 
future water needs. This needs to change. I am ready to get to work on 
this issue. I thank the committee for allowing me to participate, and I 
thank the witnesses for being here. I yield back the balance of my 
time.
                                 ______
                                 
    Mr. McClintock. Great, thank you very much. If there are no 
other opening statements, thank the witnesses for their 
patience, and we will now proceed with their testimony.
    That testimony in writing will be incorporated in full in 
the hearing record, so I would ask that the witnesses keep 
their oral statements to five minutes, as outlined in the 
invitation letter pursuant to our rules.
    We use timing lights here, as you may have noticed. When 
you begin to speak, you will have five minutes. It will be 
showing a green light. And, just like driving, when you get 
down to that yellow light, speak very, very fast, and at--when 
the red light hits we will take your picture and send you a 
ticket.
    I will now recognize Pat O'Toole, President of the Family 
Farm Alliance from Savery, Wyoming to testify.

             STATEMENT OF PAT O'TOOLE, PRESIDENT, 
             FAMILY FARM ALLIANCE, SAVERY, WYOMING

    Mr. O'Toole. Yes, sir. Thank you, Mr. Chairman and Ranking 
Member Napolitano. Thank you very much for this opportunity. 
And I have to tell you that this is such a great opportunity 
for all of us to look at one of the most crucial issues that 
there is, not only in the West, but for our country.
    We have submitted--the Family Farm Alliance, we represent 
farmers and ranchers in the 17 Western states. And our 
reputation is being problem solvers. We have listed a lot of 
what we think are solutions to this issue. But if you would 
allow me to just talk personally about some of my experience, 
our family ranches on the Colorado-Wyoming line. The fellow 
that--the great-grandfather that started the ranch in 1881 was 
right on the state line. And so I graze cattle and sheep in Mr. 
Tipton's district and feed lambs in Mr. Gardner's district. But 
I am a Wyoming resident, and I spent some years in the Wyoming 
Legislature.
    Our community had two--still has two--authorized projects 
that were on the--what was called the Carter Hit List in 1972, 
or in the early 1970s, and those projects were never built. The 
State of Wyoming and our community worked very hard to build 
storage, and we have so far built 25 percent of that original 
100,000 acre-feet. It saved us during the end of the last 
drought cycle, later water for irrigators. But we also created 
25 miles of fishery.
    And I think that the testimony that you all have made about 
the multiplicity of benefits for water is exactly where we need 
to go. And I don't--really, water is a non-partisan issue that 
we have to figure out, the great challenge that we have in our 
generation.
    I have been asked to participate in several processes on 
policy. One is called AGree. It is an eight-year project on how 
are we going to deal with food policy issues. And it has been 
chilling to have the best scientists and the best analysts tell 
us that we have to produce at least 70 percent more food in the 
next 40 years for a growing world and national population. It 
is the economic engine of our country.
    I know we all remember the debate about could we allow our 
manufacturing to go overseas. We allowed that to happen. If we 
don't gear up on infrastructure and a long-term vision, we can 
allow our agriculture to go the same way. And I think it is so 
crucial that committees like this, with all of the incredible 
expertise that you all represent take advantage of the 
opportunity to look at multi-use facilities that are strategic 
all over the West. Those of us in rural communities know they 
are there.
    And I have spent an awful lot of time working with our 
community on permitting issues. Our--in our testimony we talk 
about the 19-year permitting of the 25 percent of those 
authorized projects. It was a devastating process. And I would 
tell you, from a solution-based and experience base, we have to 
get all of the Federal permitters and all the state permitters 
in rooms together and solve these problems one by one and go 
forward, because what happens in the process is you have a 
round table of Federal and state agencies that permit 
individually without any kind of unification.
    In Wyoming, there was a visionary atmosphere 30 years ago 
where we came up with the philosophy of using non-renewables to 
fund renewables. That meant that oil, gas, coal, uranium, all 
the things that are produced in the great bounty of Wyoming 
funds renewables, which is water, wildlife--if you go to a 
Wyoming high school and graduate, you get a free ride to the 
University of Wyoming, because of those dollars being put into 
renewables.
    Water--we have our funding mechanisms, and yet we found 
ourselves--and still find ourselves--in the same situation, 
where we cannot move forward as quickly as possible. And those 
are state dollars. You know, they are used for years and years 
and years of permitting. I myself have sat in some of those 
meetings, and it was so frustrating, because it was obviously 
an intent to be an impediment.
    In Colorado, for example--and those of you that are from 
Colorado know that John Stulp, who was Commissioner of 
Agriculture, has spoken very articulately about the 500,000 to 
700,000 acre-feet of ag water that could go from ag to other 
uses in Colorado. That story is all over the West. And I would 
just tell you that when we made these decisions--and the 
Chairman referred to the Two Forks Decision--that meant that 
agriculture was the reservoir for growth for Denver. And that 
is what has happened, and that is what will continue to happen, 
unless we have the courage to go forward.
    I am here because my kids are working today. You know, I 
represent real people in a real situation that know about water 
storage and its benefits. And I applaud you all for having this 
very bold hearing. Thank you very much.
    [The prepared statement of Mr. O'Toole follows:]

     Statement of Patrick O'Toole, President, Family Farm Alliance

    Chairman McClintock, Ranking Member Napolitano and Members of the 
Subcommittee:
    Thank you for the opportunity to appear before you to examine 
regulatory and bureaucratic challenges that delay or halt the 
development of new water supply enhancement projects in the Western 
United States. My name is Patrick O'Toole, and I serve as the president 
of the Family Farm Alliance. The Alliance advocates for family farmers, 
ranchers, irrigation districts, and allied industries in seventeen 
Western states. The Alliance is focused on one mission--To ensure the 
availability of reliable, affordable irrigation water supplies to 
Western farmers and ranchers.
    Water users represented by the Family Farm Alliance use a 
combination of surface and groundwater supplies, managed through a 
variety of local, state, and federal arrangements. For the most part, 
however, our members receive their primary irrigation water supplies 
from the Bureau of Reclamation (Reclamation). In essence, we are 
Reclamation's customers. Western family farms and ranches of the semi-
arid and arid West- as well as the communities that they are 
intertwined with--owe their existence, in large part, to the certainty 
provided by water stored and delivered by Reclamation projects.
    My family operates a cattle, sheep and hay ranch in the Little 
Snake River Valley on the Wyoming-Colorado border. I am a former member 
of Wyoming's House of Representatives and I served on the federal 
government's Western Water Policy Review Advisory Commission in the 
late 1990's. I currently serve on the Advisory Committee for AGree, a 
new initiative that brings together a diverse group of interests to 
transform U.S. food and agriculture policy so that we can meet the 
challenges of the future. I also served over the past two years on a 
Blue Ribbon Panel intended to provide leadership for a project to 
support the development of the Natural Resource Conservation Service's 
(NRCS) Program and Policy Statement as a part of the process mandated 
by the Resource Conservation Act (RCA). The topic of this oversight 
hearing is not only tremendously important to the Family Farm Alliance, 
it also is immediately relevant to me and other Wyoming water users, 
and to farmers, ranchers and rural communities all over the West. I 
would like to start my testimony with an overview of the big-picture 
challenges Western farmers and ranchers face as they strive to feed our 
country and the appetite of a rapidly expanding world population. I 
will explain why it is preferable to develop new water infrastructure 
to protect our diminishing farm population over policies that encourage 
competing demands to transfer water away from agriculture. Certainty in 
Western Water policy is essential to the farmers and ranchers I 
represent, and that is why a suite of conservation, water transfers and 
other demand reduction mechanisms must be balanced with proactive and 
responsible development of new water infrastructure. This testimony 
will acknowledge the environmental impacts that can accompany new 
storage projects, but also point out that typical Westerners are 
strongly supportive of new projects, especially if those projects can 
minimize moving water away from farmers and ranchers. And finally, I 
will conclude with a discussion that suggests the proper role for the 
federal government to play- particularly the Bureau of Reclamation--
when it comes to participating in new storage projects in these cash-
strapped times.

Western Family Farmers and Ranchers Support Water Supply Enhancement 
        Projects
    Family Farm Alliance members rely on traditional water and power 
infrastructure to deliver irrigation supplies. Our membership has been 
advocating for new storage for over twenty years, and we have provided 
specific recommendations to Congress and the White House on how to 
streamline restrictive federal regulations to make these projects 
happen. Water conservation and water transfers are important tools for 
improving management of increasingly scarce water resources. However, 
our members believe these demand-management actions must be balanced 
with supply enhancement measures that provide the proper mix of 
solutions for the varying specific circumstances in the West.
    Supply enhancement should include rehabilitation of existing 
facilities and construction of new infrastructure. Rehabilitation 
measures should focus on maximizing the conservation effort through 
increased delivery efficiencies, construction of re-regulation 
reservoirs to minimize operational waste, and construction of new dams 
and reservoirs in watersheds with inadequate storage capacity to 
increase beneficial use and provide operational flexibility. Additional 
groundwater supplies should also be developed, but in a manner where 
groundwater use falls within the safe yield or recharge parameters of 
the aquifer. Conjunctive management of surface and groundwater supplies 
should be encouraged.
    The Board of Directors of the Family Farm Alliance in 2005 launched 
an aggressive and forward looking project that pulled together a master 
data base of potential water supply enhancement projects from 
throughout the West. Our goal was to gather together ideas from around 
the West and put them into one master data base. The types of projects 
contained in the resulting Western Water Supply Enhancement Study 
database are not imposing dams like China's Three Gorges project. 
Instead, they are supply enhancement projects that range from canal 
lining and piping, to reconstruction of existing dams, to integrated 
resource plans. There are also some very feasible new surface storage 
projects. The benefits from these projects include providing certainty 
for rural family farms and ranches, additional flows and habitat for 
fish, and cleaner water and energy.
    Along with basic information included on a CD-ROM, the database 
that was generated from the compilation of the survey has a Global 
Information System (GIS) element and includes pictures, maps and a 
description of up to 500 words for each project or proposal. GIS format 
technology is embedded that permits viewers to see a map of 17 Western 
states and then ``drill down'' to see map details of a project area.

The Importance of Protecting and Enhancing Reliable Agricultural Water 
        Supplies
    Agriculture holds the most senior water rights in the West and is 
considered a likely source of water to meet growing municipal and 
environmental demands. Unfortunately, severing water from agricultural 
land makes the land less productive. Period. Policy makers should be 
wary of putting additional, focused emphasis on agricultural water 
transfers, particularly in the context of growing domestic and global 
food security and scarcity concerns.
    Right now, we are in danger of losing a generation of farmers. 
Nationally, the median age of active farmers in America has never been 
higher, with the percentage of farmers under 50-years-old continuing to 
plummet. More than half of today's farmers are aged between 45 and 64, 
and only 6 percent of our farmers are younger than 35.
    Further, the number of farms is declining throughout the West. USDA 
attributes the decline in the number of farms and land in farms to a 
continuing consolidation in farming operations and diversion of 
agricultural land to nonagricultural uses.
    Meanwhile, Americans are paying a substantially lower amount of 
their disposable income on food. According to the World Bank, families 
in 28 other high-income countries pay 10.2 percent of their disposable 
income on food compared to 6.2 percent for families living in the 
United States. For the average American that's a difference of $3,820 
per year and represents real dollars that are available to purchase 
consumer goods other than food. A 2011 report by Cardno-ENTRIX examined 
the relative affordability of food in the U.S. as compared to 28 other 
high-income countries. That report found, on a percentage basis, other 
high-income countries spend about 64 percent more in disposable income 
on food and non-alcoholic beverages compared to the U.S.
    At a time when average Americans are feeling the pinch in their 
pocket books, the foundation of our country's ability to provide safe 
and affordable food and fiber is at risk. Ironically, it is because 
Western irrigated agriculture has been so adaptive and successful at 
providing plentiful, safe and affordable food that it is now 
jeopardized--nobody believes there can be a problem. The last Americans 
to experience food shortages are members of the Greatest Generation and 
their parents. For the most part, they have left us, taking with them 
the memories of empty supermarket shelves. When the issue has never 
been personalized, it's easy to be complacent.
    The U.S. needs a stable domestic food supply, just as it needs a 
stable energy supply. The post 9/11 world of terrorist threats makes 
the stability of domestic food supply even more pressing. Outgoing 
Secretary of Health and Human Services Tommy Thompson put it bluntly 
when he said, ``I cannot understand why the terrorists have not 
attacked our food supply, because it is so easy to do.'' Further, 
Thompson said he worries ``every single night'' about threats to the 
American food supply.
    This isn't just a matter of domestic security; it's also a global 
concern. Last year, the Global Harvest Initiative (GHI) released its 
Global Agricultural Productivity (GAP) Report, which measures ongoing 
progress in achieving the goal of sustainably doubling agricultural 
output by 2050. For the first time, the GAP Report quantifies the 
difference between the current rate of agricultural productivity growth 
and the pace required to meet future world food needs. The report 
predicts that doubling agricultural output by 2050 requires increasing 
the rate of productivity growth to at least 1.75 percent annually from 
the current 1.4 percent growth rate, a 25 percent annual increase.
    When water tied to domestic agricultural lands is transferred 
elsewhere, those lands will no longer be as productive. Policy makers 
need to understand how this limits our ability to feed the world.

The Argument for Emphasizing New Infrastructure, Not More Water 
        Transfers
    We often see bold general statements of water transfer proponents 
about the potential for agricultural water use efficiency to free up 
water that can be used for in-stream flows. However, those statements 
are usually followed up by a list of the factors that make it a 
difficult proposition. Those include re-use deficiencies when water is 
removed upstream in the system, water rights that protect water users 
from water being taken away if they conserve water, and transactions 
that move water between presumably willing buyers and willing sellers, 
but have the effect of taking land out of production. All of those 
issues are dealt with directly in a major report released last year by 
the Center for Irrigation Technology (CIT) at Fresno State. The report, 
``Agricultural Water Use in California: A 2011 Update'', refutes some 
long-standing beliefs about agricultural water usage and confirms 
others. The full report is available at http://www.californiawater.org. 
The CIT report and others have reached a similar conclusion: the only 
large potential for moving water from agriculture to other uses will 
come from fallowing large swaths of farmland.
    There is growing recognition that states and local governments must 
consider the impacts of continued growth that relies on water transfers 
from agriculture and rural areas and to identify feasible alternatives 
to those transfers. For example, a 2006 report released by the Western 
States Governors Association (WGA) states ``there is understandable 
support for the notion of allowing markets to operate to facilitate 
transfers from agricultural to municipal and urban use as a means to 
accommodate the needs of a growing population. While such transfers 
have much to commend them, third party impacts should be taken into 
account, including adverse effects on rural communities and 
environmental values. Alternatives that could reasonably avoid such 
adverse impacts should be identified.''
    The Family Farm Alliance is working with Western Governors 
Association and the Western States Water Council to develop a report on 
successful and unsuccessful agricultural-to-urban water transfers to 
determine how transfers can be accomplished in a manner that avoids or 
at least mitigates damage to agricultural economies and environmental 
values, while at the same time avoiding infringement on private 
property rights.
    There will be nothing done with water in the West without there 
being winners and losers. Cities may expect to buy water from farms, 
but that is not a long term solution as global food shortages make 
farming a crucial national need.
    A multitude of unique solutions exist for Western communities 
wrestling with growing urban water use. The Northern Colorado Water 
Conservation District is currently seeking to develop new offstream 
storage to protect agriculture as urbanization sweeps into Northern's 
traditional service area. Farmers in the Klamath Irrigation Project 
(CALIFORNIA/OREGON) are paid through an environmental water bank to 
temporarily fallow land or pump groundwater in place of using Klamath 
River water. On the other hand, unsuccessful implementation of Central 
Valley Project Improvement Act water transfer provisions in California 
suggests that water markets cannot be legislated.
    If we don't find a way to restore water supply reliability for 
irrigated agriculture through a combination of new infrastructure, 
other supply enhancement efforts, and demand management--our country's 
ability to feed and clothe itself and the world will be jeopardized.
    Improved conveyance and storage projects provide the best 
flexibility to manage and move water in the West. The retention of 
existing water supplies and the development of critically needed new 
supplies are of the utmost importance. Drought and population growth 
have accelerated the arrival of inevitable water shortages. Supplies 
are already inadequate for the growing demands, but very few plans 
exist to develop supplies to meet increasing needs. At the federal 
level, we are told that the big dam-building era is over. This may 
indeed be true, but it is also plainly and painfully true that there 
isn't enough water to meet the needs of agriculture, urban growth and 
the environment. Increased conservation and efficiency can help, but 
they are only part--a small part--of the solution. And buying and 
bullying water away from farmers isn't the solution either. Meeting the 
current and future water needs of the West will require a thoughtful 
combination of means, not the least of which is the creation of new 
storage.

Demand Management vs. Supply Enhancement
    Water conservation (i.e. ``demand management'') is often seen as 
the solution to water supply issues. In fact, in the past fifteen 
years, tremendous agricultural conservation efforts have been 
undertaken throughout the West, from installation of high technology 
drip irrigation systems in California's Central Valley, to tens of 
millions of dollars spent on improving on-farm water use efficiency in 
the Klamath Basin. On the other hand, relatively little progress has 
been made on the ``supply management'' end of things. While development 
has occurred on conjunctive management and groundwater banking 
projects--which will be discussed in more detail by some of my fellow 
witnesses--development of new surface storage projects have virtually 
ground to a halt in the past 30 years, especially if any sort of 
federal nexus exists for proposed projects.
    Western farmers and ranchers have long taken a progressive approach 
to water management. Farmers are already investing in upgraded 
irrigation systems. For example, between 2003 and 2010 San Joaquin 
Valley farmers invested almost $2.2 billion in upgraded irrigation 
systems on over 1.8 million acres of farmland. Those investments helped 
improve water use efficiency and food production and helped fuel 
portions of the rural economy at a time when water supply cuts were 
increasing unemployment. And, these sorts of efficient farm practices 
have led to increased economic value and production. A report by the 
California Department of Water Resources \1\ shows that the value of 
California farm products doubled during the 40-year period from 1967 
and 2007 while at the same time, applied water decreased by 14 percent. 
Other research by the California Farm Water Coalition showed that the 
volume of farm production between 1967 and 2000 rose approximately 89 
percent with only a two percent increase in applied water per acre. 
These indicators support assertions that farmers in general are 
improving water use efficiency in significant ways over time.
---------------------------------------------------------------------------
    \1\ The DWR report is available at: www.farmwater.org/
DWR_Econ_Efficiency.pdf
---------------------------------------------------------------------------
    While conservation is surely a tool that can assist in overcoming 
water supply problems, it cannot be viewed as the single answer to 
water shortages. For example, conserved water cannot always 
realistically be applied to instream uses, as it will more likely be 
put to beneficial use by the next downstream appropriator or held in 
carryover storage for the following irrigation season. Also, in urban 
areas, further tightening of water conservation measures, in essence, 
``hardens'' those urban demands. Some degree of flexibility must be 
embedded in urban water conservation programs to allow these areas to 
employ more restrictive water conservation measures during drought 
periods. Without having the ability to save water during drought 
periods via drought conservation measures, the resulting hardened 
demand will force urban water managers to more quickly look to secure 
water from other areas; namely, agriculture and the environment. So, 
clearly, mandated or ``one size fits all'' conservation programs are 
doomed to failure in light of the drastically different circumstances 
of water users across the West.
    Farmers and ranchers will continue to do all they can to save 
water. However, water saving cannot be expanded indefinitely without 
reducing acreage in production. At some point, the growing water 
demands of the West--coupled with the omnipresent possibility of 
drought--must be met. The members of the Subcommittee must understand 
that in the West, the water needed to meet these demands will either 
come from developing new water supplies. . ..or it will be taken from 
agriculture.

Environmental Impacts of Storage Projects
    Obviously, there will be environmental concerns associated with any 
new surface water storage projects. However, we believe it is possible 
to address those issues and move forward with storage projects that 
will ultimately have broad support from a number of different 
stakeholders. Individual surface storage proposals must be evaluated 
and the associated benefits and risks must be viewed in a net, 
comprehensive manner. While some storage critics focus on perceived 
negative impacts associated with new facility construction (e.g. loss 
of habitat, disruption of ``natural'' stream flow patterns, and 
potential evaporative losses), these perceived impacts must also be 
compared to the wide range of multi-purpose benefits that storage 
projects can provide. Also, although water is lost to evaporation in 
surface reservoirs that serve agricultural, environmental and urban 
uses, there is very little ``wasted water'' associated with moving and 
applying irrigation water. Water not directly consumed through evapo-
transpiration often serves other purposes, such as replenishing 
groundwater, buffering soil salinity and supporting riparian 
vegetation.
    Properly designed and constructed surface storage projects provide 
additional water management flexibility to better meet downstream 
urban, industrial and agricultural water needs, improve flood control, 
generate clean hydropower, provide recreation opportunities, and--
create additional flows that can benefit downstream fish and wildlife 
species.
    Some people and organizations oppose dams and Reclamation's proud 
history of dam construction as a matter of dogma. They have no 
flexibility in their position when it comes to surface storage. But 
experience teaches us that solving complex problems requires a great 
deal of flexibility. It also requires the collective efforts of 
reasonable, well intentioned people who may come at the problem from 
entirely difference perspectives. Surface storage isn't the solution in 
all cases, but dismissing it out of hand serves no good purpose by 
eliminating potential solutions to some vexing water supply issues.
    Creative, successful solutions can be found by motivated, 
unthreatened parties. The holders of water rights approach the Western 
water supply problem with much at risk, and with much to offer in the 
form of practical experience managing the resource on a daily basis. 
Incentives that create reasons to succeed will do more good for the 
environment in a shorter period of time than actions that rely on 
threats of government intervention.

Political Support for New Water Projects
    Colorado State University (CSU) in 2009 completed a West-wide (17 
states) that found--throughout the West--strong citizen support for 
water going to farmers and also strong support for building new water 
infrastructure. The report provides very interesting findings that 
underscore Western householders support for water storage projects and 
irrigation over environmental and recreational water needs in times of 
shortage. Three focus groups were used to develop a multi-faceted 
questionnaire. An Email invitation to an internet survey yielded 6,250 
municipal household respondents in 17 Western states.
    Among Western respondents to the CSU poll, the most popular 
strategies for meeting long-term needs are to build reservoirs and 
reuse water, whether it is on private lawns or public landscapes. The 
least popular alternative is to buy water from farmers. When addressing 
long-term scarcity, respondents preferred reservoir construction and 
reuse systems over other acquisitions and, in particular, are not in 
favor of water transfers from agriculture.
    This new information flies in the face of arguments made by some 
environmental activist groups and editorial boards of certain Western 
urban newspapers, who insist that the public shares their view that 
dams are outdated, monstrous aberrations that should be destroyed. The 
findings in this report should further convince our political leaders 
to ignore the naysayers and stand up for farming and new water supply 
enhancement projects.

Appropriate Role of the Federal Government in These Endeavors
    The federal government should adopt a policy of supporting new 
efforts to enhance water supplies and encouraging state and local 
interests to take the lead in the formulation of those efforts. Local 
interests have shown enormous creativity in designing creative water 
development projects; my fellow witnesses on this panel will provide 
you the best sense of the range of creativity that can be generated at 
the local level. While onstream storage should not be seen as 
unacceptable, offstream storage, groundwater banking, and countless 
other forms of water development should be encouraged as a matter of 
federal policy and law. Local problems call for local solutions.
    The existing procedures for developing additional supplies should 
also be revised to make project approval less burdensome. By the time 
project applicants approach federal agencies for authorization to 
construct multi-million dollar projects, they have already invested 
extensive resources toward analyzing project alternatives to determine 
which project is best suited to their budgetary constraints. However, 
current procedure dictates that federal agencies formulate another list 
of project alternatives which the applicant must assess, comparing 
potential impacts with the preferred alternative. These alternatives 
often conflict with state law. Opportunities should be explored to 
expedite this process and reduce the costs to the project applicant.
    The example of the permitting history of the Little Snake River 
Irrigation Water Supply Project, High Savery Dam and Reservoir--
attached to this testimony--best illustrates this matter.
    In addition, the current mitigation procedure for federal agencies 
should be reviewed to determine the feasibility of clarifying and 
standardizing mitigation requirements. Currently, requirements for one 
project become the standard for all subsequent projects. Since no two 
projects are the same, federal agencies tend to impose increasingly 
severe mitigation requirements on new projects. The end result is that 
applicants end up spending tremendous amounts of money for potentially 
uncertain mitigation.
    The example of the city of Buffalo, Wyoming,--attached to this 
testimony--illustrates the point. For 8.8 acres of wetlands impacts, 
the cost of mitigation amounted to approximately $1 million. This is in 
excess of $100,000 per acre. The primary reason for these costs was 
that the United States Army Corps of Engineers required a 5:1 ratio for 
wetland mitigation. The 5:1 ratio is not a scientifically based figure, 
but rather an arbitrary figure developed by the agency. After 3 years 
and significant expense, the city finally was forced to accept this 
ratio in order to proceed with the project.
    Another possible solution is the creation of mitigation banking. 
Under such an approach, applicants faced with excessive mitigation 
costs would be allowed to pay a reasonable sum per acre to a regional 
mitigation bank or set aside mitigation lands as a condition to 
implementation of their project. The federal government should 
encourage the creation and use of public and private mitigation banks.

1. The Bureau of Reclamation's Recent Role Relative to Advancing New 
        Storage Projects
    The Bureau of Reclamation's once active role in building new dams 
and reservoirs has diminished significantly over the last three 
decades. Construction of large dams, in general, has become virtually 
impossible in recent decades due to new societal environmental 
priorities, and related passage of numerous federal laws that create 
litigious uncertainty and tremendous regulatory obstacles for 
proponents of new dams.
    Shortly after the Alliance's data base was released (and submitted 
to the Congressional record in April 2005), the Bureau of Reclamation 
did submit a report to Congress that identified nearly one thousand 
potential hydroelectric and water supply projects in the Western United 
States that have been studied, but not constructed. The report was 
required by the Energy Act of 2005. The 2005 Alliance and Reclamation 
efforts show that, in most areas of the West, water resources are 
available to be developed. Environmentally-safe and cost-effective 
projects exist. They await the vision and leadership needed to move 
them to implementation.

2. Why the Bureau of Reclamation and Other Federal Agencies Need to 
        Improve Regulations and Streamline Permitting of New Projects
    The Family Farm Alliance believes that without new sources of 
water, increasing urban and environmental demands will deplete existing 
agricultural supplies and seriously threaten the future of Western 
irrigated agriculture. The often slow and cumbersome federal regulatory 
process is a major obstacle to realization of projects and actions that 
could enhance Western water supplies. Here are just a few reasons why 
Reclamation and other federal agencies (particularly fisheries 
agencies) need to find ways to streamline regulations and permitting 
requirements:
          Planning opportunities and purposes for which a 
        project may be permitted are restricted, which narrows the 
        planning horizon, and makes it impossible to plan for projects 
        with long-term benefits;
          The alternatives proposed for assessment by the 
        National Environmental Protection Act regulators are frequently 
        inappropriate, unrealistic, difficult-to-implement, and often 
        in conflict with state law. The permitting process stalls, and 
        costs increase to the project applicant;
          Federal regulators take a long time making decisions 
        on projects, and at times they seem unable to even make 
        decisions. As a result, projects are postponed and money is 
        wasted as additional studies and analyses are conducted;
          Applicants end up spending tremendous amounts of 
        money for potentially uncertain mitigation;
          Rather than doing things concurrently, conflicting 
        agency permit requirements can add time to the project planning 
        and implementation process and increases greatly the potential 
        for last-minute surprises that could endanger the proposal or 
        require significant additional work.
    We pledge to continue our work with federal agencies and other 
interested parties to build a consensus for improve the regulatory 
process.

3. Future Federal Funding of New Water Supply Enhancement Projects
     Even before the advent of the challenging economic times we now 
live in, we witnessed a progressive cutback in federal water supply 
funding. We understand that those who benefit from new water supply 
infrastructure should help pay for that infrastructure. However, policy 
makers need to understand that, for the most part, new water supplies 
are not being proposed to meet the expanding needs of agriculture. On 
the contrary, we are seeing a move in the opposite direction, where 
agricultural lands are going out of production and being lost to 
expanding urban development. Water that was originally established for 
agriculture and the communities it supports is now being reallocated to 
meet new growing urban and environmental water demands. The growing 
number of urban water users in the West and the public interest served 
through improved environmental water supplies should naturally be part 
of equitable financing schemes.
    Most water supply entities are willing to make investments to meet 
human and environmental needs, but they need to know up front that the 
federal government will honor its part of the bargain. This means that 
the federal government should enter into meaningful contracts that 
protect the expectations of the non-federal parties, and concepts like 
the ``No Surprises Rule'' under the Endangered Species Act must be 
validated and expanded.
    The President and Congress will prioritize whatever federal funds 
are available to meet existing and future needs. As for the rest of the 
capital, it must come either from state and local governments or from 
the private sector. If the federal government cannot fund the required 
investments, it should take meaningful steps to provide incentives for 
non-federal entities to fill the void, and remove barriers to the new 
ways of doing business that will be required.
    Local and state interests have shown enormous creativity in 
designing creative water development projects. For example, my home 
State of Wyoming has initiated its Dam and Reservoir Program, where 
proposed new dams with storage capacity of 2,000 acre-feet or more and 
proposed expansions of existing dams of 1,000 acre-feet or more qualify 
for state funding. Wyoming water managers and policy makers recognize 
that dams and reservoirs typically provide opportunities for many 
potential uses. While water supply is emphasized in the Wyoming 
program, recreation, environmental enhancement, flood control, erosion 
control and hydropower uses are also explored as secondary purposes.
    In this time of tight budgets and huge overseas spending, the 
federal government must adopt a policy of supporting new projects to 
enhance water supplies while encouraging state and local interests to 
take the lead in the implementation of those projects.

Conclusion
    Family farmers and ranchers require certain water supplies as a 
base condition of their existence. We cannot continue to wish away the 
reality that there is not enough water to meet our needs in drought 
years, and 20 years from now, if something is not done, every year will 
essentially be a drought year. We cannot continue long-term 
hypothetical processes that focus primarily on continued conservation 
and downsizing of Western agriculture.
    We believe that it is possible to meet the needs of cities and the 
environment in a changing climate without sacrificing Western irrigated 
agriculture. To achieve that goal, we must expand the water supply in 
the West. There must be more water stored and available to farms and 
cities. Maintaining the status quo simply isn't sustainable in the face 
of unstoppable population growth, diminishing snow pack, increased 
water consumption to support domestic energy, and increased 
environmental demands.
    Modern, integrated water storage and distribution systems can 
provide tremendous physical and economic flexibility to address climate 
transformation and population growth. However, this flexibility is 
limited by legal, regulatory, or other institutional constraints, which 
can take longer to address than actually constructing the physical 
infrastructure.
    The Family Farm Alliance wants to work with this Administration, 
Congress, and other interested parties to build a consensus for 
improving the regulatory process. The real reason the Alliance 
continues to push for improved water storage and conveyance 
infrastructure is not to support continued expansion of agricultural 
water demand (which is NOT happening in most places). Instead, we seek 
to mitigate for the water that has been reallocated away from 
agriculture towards growing urban, power, environmental and 
recreational demands in recent decades. If we don't find a way to 
restore water supply reliability for irrigated agriculture through a 
combination of new infrastructure, other supply enhancement efforts, 
and demand management--our country's ability to feed and clothe itself 
and the world will be jeopardized.
    We need to clearly determine how much new water is needed for new 
uses, and then find ways to support those uses in a sustainable way 
that doesn't hurt irrigated agriculture. New infrastructure is one such 
way; the construction of additional water supply infrastructure may 
allow more efficient management and enable greater cooperation between 
traditional and non-traditional water users.
    Western irrigated agriculture is a strategic national resource, and 
the role of the federal government in the 21st Century should be to 
protect and enhance that resource. Federal agencies have a role to play 
in infrastructure development, but interference with or duplication of 
state authorities must be minimized.
Attachment List:
        1.  Permitting History of the Little Snake River Irrigation 
        Water Supply Project, High Savery Dam and Reservoir
        2.  City of Buffalo, Wyoming Case Study

                    Attachment 1: Permitting History

       of the Little Snake River Irrigation Water Supply Project

                     High Savery Dam and Reservoir

Introduction
    Permitting is a major step in any project that requires federal 
agency action; it can be the most perplexing and confusing step in 
project development. Projects requiring federal actions must go through 
the National Environmental Policy Act (NEPA) assessment process, which 
in itself is not a permitting process but is of utmost importance 
concerning whether required permits will eventually be issued. Due to 
extensive/thorough NEPA screening requirements and alternative 
evaluations, projects often lose direction and focus during this 
process.
    NEPA was enacted in 1969 to promote informed decisions and public 
disclosure of federal actions. Through NEPA assessments other laws such 
as the Endangered Species Act, Clean Water Act, Fish and Wildlife 
Coordination Act, and the National Historic Preservation Act come into 
play. These laws and acts require permits or clearances from a number 
of agencies, and make coordination of the NEPA process the driving 
force for project permitting. This was especially true for the Little 
Snake River Irrigation Supplemental Water Supply Project.
    The following sections discuss major events that occurred during 
permitting of the Little Snake River Irrigation Water Supply Project 
and present conclusions and lessons learned from this process. The 
history and conclusions presented are a compilation of information from 
legislative reports, project studies and personal recollections.

History
    The Little Snake Irrigation Water Supply Project began as the 
Sandstone Dam Project and now is commonly referred to as the High 
Savery Dam and Reservoir Project. The Sandstone Dam Project began as 
mitigation for the Cheyenne Stage I, II and III projects and to provide 
additional water storage for industrial development. The Wyoming 
Legislature authorized the Cheyenne Stage I and II projects in 1979 and 
1980 and also instructed the Wyoming Water Development Commission 
(WWDC) to look at the feasibility of developing storage in the Little 
Snake River Basin to address in-basin agricultural, recreational and 
municipal needs.
    Studies were initiated to evaluate dam and reservoir sites in the 
basin and the Sandstone site was selected as the preferred site. In 
1984, the legislature authorized a project in the Little Snake River 
Basin to mitigate and alleviate any water supply shortages caused by 
the Cheyenne Stage I and II projects. Sandstone Dam was to impound 
52,000 acre-feet of water behind a 200-foot high structure. The 
reservoir would have had a 32,000 acre-foot annual yield with 12,000 
acre-feet allocated for irrigation and 20,000 acre-feet allocated for 
future industrial development.
    After several years of study, the permitting process for the 
Sandstone Project was initiated in 1986. An application for a Clean 
Water Act, Section 404 Permit (404 Permit) was filed with the U.S. Army 
Corps of Engineers (Corps), which initiated the NEPA assessment 
process. The project was of a scale that an environmental impact 
statement (EIS) was necessary; the Corps was the lead agency for the 
NEPA review and for preparation of the EIS. The draft EIS and 
biological assessment (for assessment of impacts to endangered species) 
were published in January 1988. Six action alternatives and the no 
action alternative were evaluated. The six action alternatives included 
four reservoirs, a ground water development alternative and a water 
conservation alternative. The preferred alternative, for the state and 
the sponsor, was the Sandstone Dam and Reservoir Project. All of the 
alternatives were sized to allow storage of 12,000 acre-feet of 
irrigation water and 20,000 acre-feet for future industrial 
development. A supplement to the Draft EIS was published in April 1989 
to support need for storage of 20,000 acre-feet for future industrial 
use. Work continued on the EIS process during 1989 and 1990.
    On December 14, 1990, the WWDC received notice from the Corps' 
Omaha District Office that they were recommending denial of the 404 
Permit for the Sandstone Project. Their denial was based upon the lack 
of an acceptable federal ``purpose and need'' for the 20,000 acre-feet 
of water reserved for industrial purposes. The WWDC and then Governor 
Sullivan disagreed with the decision and requested that the permit be 
issued. The decision was elevated to the Corps Division Engineer. In 
1991, the WWDC was notified that the Division Engineer upheld the 
District Engineer's recommendation that the 404 Permit be denied for 
the 52,000 acre-foot project. However, the Corps noted that it would be 
prepared to reopen consideration of the application if use of the 
reservoir yield could be clearly defined.
    During 1991, the Little Snake River Basin Planning Study was 
authorized by the WWDC and legislature. This study was completed in 
October 1992. One task of the study was to evaluate potential reservoir 
sites to determine whether any were capable of meeting the supplemental 
irrigation water needs in the Little Snake River Basin. At the request 
of the Savery-Little Snake Water Conservancy District (District), a 
downsized version of the Sandstone Project was included among the 
alternatives.
    The Commission recommended construction funding for a smaller 
Sandstone Dam and Reservoir project; this downsized version would 
possess a water storage capacity of 23,000 acre-feet, which would yield 
12,000 acre-feet per year of supplemental irrigation water. Legislation 
was approved during the 1993 session to provide $30,000,000 to 
construct the project. The project purpose, as defined by the 
legislature, was to serve as an agricultural, municipal and domestic 
water supply; the project was to also increase recreational 
opportunities, provide environmental enhancements, and serve as 
mitigation water for shortages caused by the Cheyenne Stage I, II, and 
III trans-basin diversion water supply projects.
    Additional studies were conducted in 1993 to determine the 
suitability of the Sandstone site. The report concluded dam 
construction at the Sandstone site was technically feasible. In 1994, 
the WWDC began the permitting process for construction of a smaller 
project, including a downsized Sandstone Dam and Reservoir project and 
several other potential alternatives. The downsized Sandstone Dam was 
the preferred alternative. Since the scope of the project had changed, 
the results of the draft EIS published in 1988 could not be used. The 
WWDC entered into an agreement with the Corps and contracted with Burns 
and McDonnell to complete a new third party EIS.
    The Corps advised the WWDC, District and valley residents in 
January 1995 that a 404 Permit could be issued only for the least 
environmentally damaging alternative. That summer the Corps indicated 
that the least damaging practicable alternative was a combination of 
two alternative reservoirs (Dutch Joe and Big Gulch); therefore, a 404 
Permit would not be issued for the Sandstone Dam alternative. The Corps 
had narrowly defined the purpose and need for the project as 
supplemental late season irrigation water supply. The Corps' definition 
conflicted with the Wyoming legislation that authorized funding for the 
project; the Wyoming Legislature stipulated that recreation, 
environmental enhancement, municipal water supply, supplemental 
irrigation, and mitigation for past and future trans-basin water 
projects were all legitimate purposes for the project.
    In August 1995, the WWDC director and project manager explained to 
the WWDC and Select Water Committee of the Wyoming Legislature reasons 
why the EIS was stalled, which was largely attributable to the lack of 
support for alternatives other than the Sandstone site. The WWDC and 
the Select Water Committee concluded that alternatives to the Sandstone 
Dam and Reservoir should be considered if there was a clear consensus 
of support for other alternatives. Public meetings were held in the 
Little Snake Valley in August, October and December 1995 for the 
purposes of discussing project alternatives. It was apparent that a 
majority of those attending the meetings preferred the construction of 
Sandstone Dam, since they believed that the Sandstone site would 
provide more multiple use benefits than the other alternatives. This 
majority also disagreed with the Corps decision not to include other 
project purposes, which were mandated by the legislature, within the 
Corps' purpose and need analysis.
    The WWDC supported the position expressed by a majority of the 
Little Snake Valley residents and directed the WWDC staff to further 
pursue changing the purpose and need section of the EIS to include 
state legislature's mandated purposes, particularly recreation. The 
lack of agreement between the state and the Corps, concerning the 
project's purpose and need, resulted in further delay of the project.
    In 1996, The WWDC contracted with Burns and McDonnell to complete 
an analysis of need for additional flat-water recreation in the Baggs, 
Wyoming area. The study concluded that there wasn't a need for 
additional flat-water recreation in the area. Other studies were 
commissioned to keep the project moving forward; but study results also 
did not support the Sandstone alternative. The Corps reaffirmed their 
position that the project purpose could only be for supplemental 
irrigation water supply. Further, the Corps indicated verbally and in 
writing that the project should provide 12,000 acre-feet of water on a 
firm basis 8 out of 10 years. The Savery-Little Snake River Water 
Conservancy District had requested a firm 12,000 acre-foot yield 10 out 
of 10 years.
    Adding to other problems, the Sandstone Dam alternative was the 
most costly project (about $48 million). The Dutch Joe alternative was 
nearly $10 million less costly. The High Savery alternative was the 
least costly at about $30 million. Environmental impacts were greatest 
at Sandstone but appeared to be significant at the Dutch Joe and High 
Savery sites as well. A meeting to discuss the project, attended by 
representatives of the Corps, other federal agencies, several state 
agencies, the Governor's office, representatives from the District, 
other representatives from Carbon County, the WWDC, and the Select 
Water Committee, was held on November 19, 1996. The Corps stated that 
given the available data, the Sandstone site could not be permitted 
because the Dutch Joe site was the least environmentally damaging 
alternative. They indicated that the High Savery Project might be 
permitted if it could be shown that impacts to big game winter range at 
Dutch Joe were more environmentally damaging than the wetland and 
stream channel impacts at High Savery. A meeting was held in Baggs on 
December 5, 1996 and the irrigators and Little Snake Valley residents 
supported a motion to change the project name from Sandstone to the 
Little Snake Water Supply Project. Work completed in 1995 and 1996 
resulted in a delay to the project but set the stage for the eventual 
construction of the High Savery Dam and Reservoir alternative.
    The permitting process was put back on track in 1997 and three 
alternatives were selected that would meet the specified need for the 
project, which was to supply 12,000 acre-feet of supplemental 
irrigation water to the users in the Little Snake River Valley 8 out of 
10 years. The alternatives studied were a downsized Sandstone Dam and 
Reservoir, Dutch Joe Dam and Reservoir, and High Savery Dam and 
Reservoir. High Savery became the preferred alternative. The final 
studies were completed during 1997 and 1998 and the Draft EIS was 
published in August 1998. The Fish and Wildlife Coordination Act report 
was also released in August 1998.
    Public meetings were held and comments were taken on the draft EIS 
in the fall of 1998. Disagreements between the WWDC, the WGFD, the U.S. 
Fish and Wildlife Service and the Corps on how best to address the DEIS 
comments delayed the completion of the Final EIS until October 1999. 
The U.S. Fish and Wildlife Service issued the Biological Opinion in 
July 1999 to satisfy the consultation requirements of Section 7 of the 
Endangered Species Act. In order that a Record of Decision (ROD) could 
be issued, work began in earnest in 1999 to mitigate the project's 
adverse environmental impacts. Numerous meetings were held with the 
Wyoming Game and Fish Department, WWDC, USFWS, Savery-Little Snake 
Water Conservancy District and Corps to resolve differences and 
finalize the plan.
    The Final EIS, completed in October 1999, identified the High 
Savery Project as the preferred alternative. Several comments were 
received but none were significant. These few comments were eventually 
addressed in the Corps' Record of Decision (ROD). However, the project 
was further delayed because the Corps was concerned about issuing the 
ROD and 404 Permit before cultural resource preservation and management 
issues were resolved.
    Efforts to comply with the National Historic Preservation Act, 
which protects cultural resources, were also underway at this time. A 
number of site visits, conference calls, and meetings were conducted to 
discuss cultural resource issues with interested Native American 
Tribes, the Wyoming State Historic Preservation Office (SHPO), WWDC and 
the Corps. There were a variety of tasks undertaken to satisfy the 
requirements of the Tribes and SHPO. Several cultural sites had to be 
evaluated and protection plans developed. One site required excavation 
and interpretation. This work was conducted during 1999 and 2000. A 
final Programmatic Agreement to protect and manage cultural resources 
on the High Savery Site, which took over a year to negotiate, was 
eventually signed in early December 2000.
    The plan to mitigate the adverse impacts to wetlands, uplands and 
riparian areas proved to be extremely controversial, which further 
delayed the project. Three drafts of the plan were completed and 
debated by all parties involved. In October 2000 a final draft plan was 
presented to the Corps by WWDC. This plan was finally approved in 
December 2000 after a meeting with the Corps at their District 
headquarters in Omaha, Nebraska.
    The ROD was issued December 14, 2000, approximately one-year and 
two months after the final EIS was released. The 404 Permit for High 
Savery Dam and Reservoir was signed December 20, 2000. These steps 
completed the permitting portion of the project and advanced the High 
Savery Project toward construction.

Conclusions and Lessons Learned
    It could be concluded from the Little Snake Supplemental Irrigation 
Supply Project (High Savery Project) history that 14 or more years 
might be required for permitting reservoir projects. However, that may 
not be correct. During the time the High Savery Project was being 
permitted several other reservoir projects within Wyoming were 
designed, permitted and constructed. Sulfur Creek Reservoir Enlargement 
near Evanston was initiated in 1984 and constructed in 1986. Design of 
the Twin Lakes Enlargement for the Sheridan water supply was started in 
1988, permitting was begun in 1992, and construction started in 1996 
and was completed in 1998. A 404 Permit application was submitted for 
the Tie Hack Dam and Reservoir Project above Buffalo in February 1994, 
the permit was issued in March 1996 and the project was completed in 
1997. A 404 Permit application was filed in November 1996 for the 
Greybull Valley Dam and Reservoir. The permit was issued in June 1998 
and the project was completed in 2000.
    We often learn more from mistakes than we do from successes; in 
this regard there are a number of lessons that can be gained from the 
Sandstone/Little Snake Supplemental Irrigation Water Supply Project/
High Savery Dam and Reservoir permitting process. The determination of 
purpose and need under federal guidelines restricts planning 
opportunities and purposes for which a project may be permitted. The 
state's acceptance of a project that yields less than a firm supply 
should be questioned. This acceptance results in less utility for the 
state and for the project's beneficiaries. A better approach would be 
to maximize the basin's available hydrology or at least meet the firm-
yield requirements of the sponsor. If the basin hydrology cannot 
provide the firm yield, the decision to construct the project should 
rest with the state and sponsor and should not become a reason for 
permit denial by the Corps. Further, the state should encourage its 
Congressional delegation to sponsor legislation that would allow the 
state's legislative and planning process to be considered in 
establishing purpose and need for construction of dam and reservoir 
projects.
    If Congress is unwilling to expand the state's role in establishing 
the purpose or need for a project, the project sponsor and the state 
must work within existing guidelines to maximize opportunities. Working 
within either existing or expanded federal guidelines would facilitate 
the NEPA analysis, from which all other permitting processes will tier. 
The 20,000 acre-feet of water storage for future industrial development 
that couldn't be definitively described in the early Sandstone Project 
was a permitting problem. There was no specific purpose or need 
described for the 20,000 acre-feet of industrial water. Therefore, the 
Corps felt that justification for building a reservoir having this 
extra capacity and additional adverse environmental impact was 
unwarranted. However, it is incumbent on the state and potential 
project sponsors not to lose sight of future demands for water that may 
only be addressed by constructing new dam and reservoir projects. The 
challenge will be to convince regulators, during the permitting 
process, that the benefits of constructing a proposed future project 
outweigh the adversities; consequently, there is a justifiable 
``purpose and need'' for the project.
    Developing a reasonable range of alternatives is also very 
important in project planning and the NEPA process. Alternatives must 
meet the need and purpose for the project and must be capable of being 
implemented. It is important to use the NEPA process to help determine 
the most appropriate alternative from the set of reasonable 
alternatives. Although the Sandstone Project started with a set of 
alternatives the one seriously considered was the Sandstone Dam and 
Reservoir alternative. When the Corps determined that the Sandstone 
alternative could not be permitted, the permitting process stalled 
because other alternatives had not been seriously considered. Even 
after the project was downsized to match the need, the State, District, 
and valley residents wanted to maintain the Sandstone alternative as 
the preferred alternative. This caused permitting delays.
    The permitting process did not proceed until a reasonable range of 
alternatives was developed. Once a reasonable range of alternatives, 
including the High Savery alternative, was developed, the project moved 
forward to a conclusion within an acceptable timeframe. In other words, 
the alternative site and project evaluations undertaken in 1996 put 
permitting back on track in 1997. The state successfully secured the 
permit to construct High Savery in December 2000.
    Cooperative efforts are important for moving projects through the 
NEPA and permitting processes. The WWDC and local sponsors should 
become cooperating agencies in the NEPA process if possible and if not, 
should be allowed to serve on the project EIS interdisciplinary team. 
The Corps wasted a great deal of time making decisions on the project 
and at times seemed unable to make decisions. These delays not only 
postponed the project, they resulted in wasted money. Disagreements at 
the state and local level also contributed to delays, and led to 
additional costly studies and analyses.
    Establishing working relationships with the agencies involved in 
the NEPA process and permitting is important to keep the project on 
schedule and to avoid costly delays and disagreements. It is impossible 
to eliminate all problems associated with permitting dam and reservoir 
projects, but good cooperation and communications between agencies and 
groups, with an understanding of each participant's expectations, will 
help in problem resolution.
    Dam and reservoir projects are complex and often controversial, a 
dedicated local sponsor or project proponent and a documented ``purpose 
and need'' are minimum requirements for success. The primary reason the 
High Savery Dam was permitted and constructed is the persistence and 
perseverance of the Savery-Little Snake Water Conservancy District and 
the residents of the valley. The sponsor's and the state's staying 
power prevailed in the end.

           Attachment 2: City of Buffalo, Wyoming Case Study

    The example of the city of Buffalo illustrates the enormous 
difficulties and expense associated with obtaining federal regulatory 
clearance requisite for constructing even small and non-controversial 
water projects. The mitigation associated with this project illustrates 
the unreasonable approaches being taken by federal agencies as a 
condition of obtaining needed federal permits. Within Wyoming there are 
rarely two projects which have the same or equivalent mitigation 
imposed on them. Rather, it appears that as time passes, each new 
project has more severe mitigation imposed on it that then becomes the 
standard for all subsequent projects. This mitigation ``ratcheting'' 
creates enormous costs and tremendous uncertainty as has been the city 
of Buffalo's experience.
    The Buffalo Municipal Reservoir Project is developing a small 
municipal supply storage reservoir in the Clear Creek Basin west of 
Buffalo. Buffalo's existing water supply is diverted from Clear Creek 
about 6 miles west of the city. After project completion, releases from 
the reservoir will supplement Clear Creek flow when the direct flow 
cannot fulfill Buffalo's water supply requirements. The project is 
being funded in part by the Wyoming Water Development Commission, a 
state agency.
    A Level 11--Phase I report was completed in March 1989. The report 
concluded that the preferred development option included a dam and 
reservoir at the Lower Tie Hack site on South Clear Creek, a tributary 
of Clear Creek. The recommended reservoir size is 2,425 acre-feet and 
the estimated cost of the dam and reservoir is $10,650,000. The 
reservoir will inundate approximately 60 acres in total, including 8.8 
acres of wetlands. In addition, the report indicated that installation 
of a $975.000 hydropower generation unit at the downstream end of the 
city's water supply pipeline could be economically advantageous. The 
hydropower unit is addressed as a separate project, but construction of 
both components is required if the total project is to be economically 
feasible. The report also noted that the feasibility of the project 
would depend on the successful transfer of Buffalo's existing 1933 
water right filing for 1,640 acre-feet from Little Sourdough Creek to 
the dam site. This transfer was accomplished in 1990.
    The process of permitting this facility began in the early summer 
of 1992. The arduous and expensive process of obtaining final permits 
was not completed for nearly 4 years. The Forest Service special use 
permit was issued on February 23, 1996, and the U.S. Army Corps of 
Engineers Section 404 permit was issued on March 5, 1996. During the 
course of the nearly 4-year long ordeal, nearly $1 million was spent in 
efforts directly related to obtaining the necessary federal permits.
    The mitigation for the 8.8 acres of wetlands has cost in excess of 
$1 million. The primary reason the costs for mitigation to the City of 
Buffalo were so high is that the US Army Corps of Engineers required a 
5:1 ratio for wetland mitigation. The 5:1 ratio is not a scientifically 
based figure, but rather an arbitrary figure developed by an individual 
within the agency. The City agreed to accept the ratio so that they 
might proceed with their project.
                                 ______
                                 
    Mr. McClintock. Thank you.
    We will now hear from Mr. Thad Bettner, General Manager of 
the Glenn-Colusa Irrigation District from Willows, California.
    Welcome.

   STATEMENT OF THAD BETTNER, GENERAL MANAGER, GLENN-COLUSA 
            IRRIGATION DISTRICT, WILLOWS, CALIFORNIA

    Mr. Bettner. Thank you, Chairman McClintock, Ranking Member 
Napolitano, and members of the Subcommittee. It is a pleasure 
to be here before you today. My name is Thaddeus Bettner. I am 
the general manager of Glenn-Colusa Irrigation District, the 
largest district in the Sacramento Valley, and one of the 
largest districts in the State of California. I am also a 
registered engineer in the State of California.
    Notwithstanding the seniority of our water rights, which 
date back to the 1880s, securing new storage is critically 
important to GCID and all water users in the Sacramento Valley. 
I want to focus on three issues in my verbal testimony today: 
one, why we need additional storage; two, our experience in 
working with the Sites Reservoir project; and three, going 
forward, how the Federal Government could help advance new 
storage projects.
    New storage is vitally important because the Central Valley 
Project, which we have one contract with, and our diversions 
are closely intertwined. Both the CVP and the State water 
project have lost storage capacity and yield, as well as 
operational flexibility. That yield and flexibility has eroded 
over time, due to increased contractual obligations, increased 
water demands to meet both the needs of endangered species, and 
also the Federal wildlife refuge system.
    Currently, the CVP is looking at four projects, as 
Congressman Costa said: Sites Reservoir, which I will speak of 
today; Shasta Expansion; Temperance Flat; as well as Los 
Vaqueros, all projects that we support.
    We do not need much in the way of additional storage or 
water supplies in the Sacramento Valley. But without new 
storage, the pressure on our existing supplies will continue to 
grow. The state's population, as already said today in 
testimony by Members, continues to increase, as well as the 
reallocation that the environment increases.
    As far as Sites is concerned, GCID is one of 7 local 
agencies that joined together in August of 2010 to form the 
Sites Project Joint Powers Authority, which is a cooperative 
agency, along with the Bureau of Reclamation and the Department 
of Water Resources. Growing concerns and the delays and costs 
associated with the Sites Project, as well as a need for a 
local voice, led to the formation of the Sites JPA.
    Since Fiscal Year 2002, Reclamation has spent approximately 
$12.7 million studying--Sites Reservoir study and feasibility 
study, and DWR has spent millions more in addition to that. 
Unfortunately, despite the significant expenditure of time and 
effort, we find ourselves in a place where it is difficult to 
articulate the benefits of the project and environmental 
context, and how the costs and how the benefits would be 
allocated within the project.
    Nonetheless, we do know that Sites--the 1.8 million acre-
foot total storage project for Sites would generate an average 
annual yield of 400,000 to 600,000 acre-feet of new water in 
both the dry and critical year, and in addition will generate 
nearly 900,000 acre-feet of additional storage in Shasta, 
Orville, Folsom, and Trinity Reservoirs through system 
integration. The slide that is up on your screen shows the 
different types of benefits that would accrue. And this slide 
shows, in the months through the months in October and 
September. So this would be the end of storage, or additional 
storage that would be added at the end of the water year to 
those different reservoir projects. So we see system 
integration as vitally important.
    In terms of how we reduced regulatory and bureaucratic 
barriers, I would like to highlight three. First, agencies with 
the environmental review process for new supply projects should 
be required to develop a simpler approach to alternatives 
analysis. In the case of Sites, Reclamation DWR investigated 52 
different project alternatives. However, we now have 3 
configurations that we are currently looking at. And 
incredibly, these were the same three configurations looked at 
in the 1960s.
    Second, NEPA should permit project costs to be considered 
in open fashion before the environmental review process is 
complete. We need to make certain that projects can make it 
through the environmental review process, have beneficiaries 
public and private, and someone can afford to pay for them.
    And third, lead Federal agencies should determine very 
quickly in the process how they are going to participate in a 
project. Will they simply be a project participant, or will 
they actually be constructing the project? In my mind, that is 
one of the most vital decisions that needs to be made early on 
in the process.
    Finally, we need to look at--Congress should explore more 
methods of highly leveraging limited Federal funding in order 
to do more with less. Specifically, Congress should authorize 
Reclamation to provide innovative financing similar to the 
TIFIA program. Under TIFIA, the Federal Government helps 
finance large-scale projects and helps to leverage local funds 
to build those projects. The water infrastructure version of 
TIFIA would greatly benefit a wide variety of large-scale water 
supply projects like Sites.
    I would encourage this Committee to give any such propose--
careful consideration to that proposal. And I will take any 
questions. Thank you very much.
    [The prepared statement of Mr. Bettner follows:]

          Statement of Thaddeus Bettner, PE, General Manager, 
                    Glenn-Colusa Irrigation District

    Thank you Chairman McClintock, Ranking Member Napolitano, and 
Members of the Subcommittee; it is a pleasure to appear before you this 
morning. My name is Thaddeus Bettner, and I am the General Manager of 
the Glenn-Colusa Irrigation District (GCID), the largest irrigation 
district in the Sacramento Valley and the third largest irrigation 
district in the State of California. GCID covers approximately 175,000 
acres in Glenn and Colusa Counties, and is located about 80 miles north 
of Sacramento. Our district contains a diverse working landscape 
including a variety of crops such as rice tomatoes, almonds, walnuts, 
orchards, vine seeds, cotton, alfalfa, and irrigated pasture. Just as 
important, we convey water to three Federal wildlife refuges totaling 
more than 20,000 acres, and also deliver water to more than 50,000 
acres of seasonally flooded wetlands. GCID is a Sacramento River 
Settlement Contractor and diverts water directly from the Sacramento 
River through the largest flat plate fish screen in the world. GCID's 
Settlement Contract was first entered into in 1964 and it resolved 
disputes with the United States related to the seniority of GCID's 
rights over those of the United States and, in fact, allowed the US 
Bureau of Reclamation (Reclamation) to obtain water rights from the 
State Water Resources Control Board for the Central Valley Project. 
GCID's water rights originated with a filing in 1883 for 500,000 
miner's inches under 4 inches of pressure, one of the earliest and 
largest water rights on the Sacramento River. Other Sacramento River 
Settlement contracts were also entered into among water right holders 
on the Sacramento River and Reclamation.
    Notwithstanding the seniority of our water rights on the Sacramento 
River, securing new storage is critically important to GCID, Sacramento 
Valley water users and the state as a whole. In this context, I want to 
focus on three issues: (1) why we need additional storage in the 
Sacramento Valley; (2) our experience working to advance Sites 
Reservoir, an up to 1.8 million acre-foot capacity offstream north-of-
the-Delta reservoir; and, (3) going forward, how the federal government 
can help advance new storage projects.

The Importance of Storage
    New storage is vitally important to GCID and all of Northern 
California because the federal Central Valley Project (CVP), which our 
water diversions are intertwined with, and the State Water Project have 
both lost water supply yield and operational flexibility. That yield 
and flexibility has eroded over time due to increased contractual 
obligations and increased water demands to meet the needs of endangered 
species and the state and federal refuge system.
    We do not need much in the way of additional water supplies in the 
Sacramento Valley, but without new storage, the pressure on our 
existing water supplies will continue to grow. The State's population 
continues to increase and the reallocation of water to environmental 
uses is expanding. This reality continues to play itself out, 
especially given that no new investments in the development of 
additional water supply or storage have occurred. For water users north 
of the Delta, in the area of origin, the ever-increasing demand for 
water, coupled with no new storage, represents a threat to the vitality 
of irrigated agriculture in the Sacramento Valley, our local 
environment including the protection of the Pacific Flyway, and our 
groundwater system which sustains our rivers, creeks and streams. A 
strong agricultural sector and healthy environment depend heavily upon 
a certainty of water supply. Disrupt that certainty, allow the strain 
on existing water supplies to persist, and investments in agriculture 
will not be as readily forthcoming. That lack of investment translates 
into a dim future for agriculture and continued instability in water 
supplies, which will threaten the economic health of the state as a 
whole.

The Sites Experience
    The North-of-the-Delta Offstream Storage (NODOS) investigation is a 
feasibility study being carried out by the California Department of 
Water Resources (DWR) and Reclamation, in partnership with local 
interests. The study emanates out of the CALFED Bay-Delta Program's 
Programmatic Environmental Impact Statement/Report Record of Decision. 
One of the alternatives under consideration includes three 
configurations of a dam and reservoir located about 10 miles west of 
the town of Maxwell, California, and otherwise referred to as Sites 
Reservoir.
    Since Fiscal Year 2002, Reclamation has spent approximately $12.7 
million on the Sites feasibility study alone and DWR has spent many 
millions more. Unfortunately, despite this effort and the many promised 
benefits that would result from the Sites project, we still find 
ourselves in a place where it is difficult to clearly articulate the 
benefits of the project, the costs, and how the project will be funded. 
The funding to date has allowed the agencies to complete a number of 
important reports, such as a project scoping report produced in 2002, 
an Initial Alternatives Information Report completed in 2006 and a Plan 
Formulation Report finalized in 2008. The agencies are scheduled to 
release a draft Environmental Impact Statement/Environmental Impact 
Report (EIR/EIS) under the National Environmental Policy Act (NEPA) and 
the California Environmental Quality Act (CEQA) and a draft Feasibility 
Report in the summer of this year, if the Administration approves the 
administrative draft in a timely fashion. However, the scheduled 
completion date for the final EIR/EIS and Feasibility Report is another 
year away, with a scheduled Record of Decision being issued by the end 
of 2013. We are hopeful that these dates can be met, but they will 
depend on funding to complete the work and the political will to make 
key decisions, at both the federal and state levels.
    While part of the delay is certainly due to the complexities 
associated with multiple state and federal agencies being involved in 
the project, other delays are attributable to shifting environmental 
requirements. For example, delays in completing the Sites project 
environmental review process are attributable in part to changes in 
operational conditions described in the Central Valley Project 
Operations Criteria and Plans (OCAP) Biological Opinions (BOs) in 2004/
2005 and then again based upon a Biological Opinion from U.S. Fish and 
Wildlife Service regarding the Delta Smelt issued in 2008. In both 
instances, DWR and Reclamation had to go back and remodel the project, 
based on the revised BOs. As Reclamation's Mid-Pacific Regional Office 
noted in a letter to ``Interested Parties'' in May 2009, ``Changes are 
continuing so rapidly that our studies and reports are not keeping 
pace.''
    This new information did not, in fact, change the fundamentals of 
the project. The fundamentals of the project remained sound, but the 
process stalled, in spite of the best efforts of Reclamation and DWR, 
further increasing costs and further delaying the availability of the 
many benefits a Sites Reservoir will provide.
    Growing concerns about the delays and costs associated with the 
Sites project as well as the need for a local voice, led to the 
formation, in August of 2010, of the Sites Project Joint Powers 
Authority (Sites JPA). The Sites JPA, which includes Glenn County, 
Colusa County, Reclamation District 108, Glenn-Colusa Irrigation 
District, the Tehama-Colusa Canal Authority, Maxwell Irrigation 
District and Yolo County Flood Control and Water Conservation District, 
was formed with the stated purpose of establishing a public entity to 
design, acquire, manage and operate Sites Reservoir and related 
facilities to improve the operation of the state's water system. The 
Project would also provide improvements in ecosystem and water quality 
conditions in the Sacramento River system and in the Bay-Delta, as well 
as provide flood control and other benefits to a large area of the 
State of California. The formation of local JPA's was included as a key 
provision in the 2009 California Water Package Water Bond legislation 
for the purposes of pursuing storage projects that could be eligible 
for up to 50% of project funding for public benefits.
    As the Sites JPA began working with Reclamation and DWR, the JPA 
took a common sense approach. The JPA worked with Reclamation and DWR 
to put together what we refer to as Foundational Formulation 
Principles. In other words, first identifying the needs of the water 
operations system and then designing the project that would meet those 
needs. We conceived a project that would be integrated with the system 
we already have, but one that would also operate effectively regardless 
of future operational changes, such as conveyance to south-of-Delta 
exporters. The JPA wanted to maximize the benefits associated with our 
existing infrastructure, and provide as much benefit as possible to 
both the existing state and federal water projects at the lowest 
feasible cost.
    We approached the Sites project with the goal of making the best 
possible use of limited resources, and in the end, we believe we have 
identified a project that is both affordable and will provide 
significant benefits. It maximizes ecosystem benefits consistent with 
the State water bond, which states that at least 50 percent of the 
public benefit objectives must be ecosystem improvements. Other 
benefits include water supply reliability, water quality improvements, 
flexible hydropower generation, recreation and flood damage reduction. 
In short, we approached the Sites project with the goal of generating 
water for the environment while improving statewide water reliability 
and regional sustainability in Northern California, and we believe we 
have achieved that goal.
    One of the greatest environmental benefits of the project is a 
greatly expanded cold water pool that would be created in upstream 
reservoirs. Flow modifications to manage river temperatures, habitat 
conditions and flow stability would be greatly enhanced with a 
constructed Sites Reservoir.
    A 1.8 million acre-foot capacity Sites Reservoir, for example, 
would generate an average annual yield of 400,000 to 640,000 acre-feet, 
in dry and critical years, and in addition would provide nearly 900,000 
acre-feet of additional storage in Shasta, Oroville, Folsom and Trinity 
Lakes during the operationally important months of May through 
September through the system integration and operation.
    Our experience with the Sites project has revealed at least three 
bureaucratic and regulatory challenges. First, the environmental review 
process that Reclamation is forced to deal with through existing 
federal law does not support the common sense approach that the JPA has 
attempted to pursue on the Sites project. Under NEPA, a great deal of 
time and money is expended on studies and analysis of multiple inferior 
alternatives to the original purpose and need statement, only to use 
the EIS process to eliminate these lesser alternatives and arrive back 
at the project that you originally proposed as the solution with the 
greatest benefit for the dollars expended.
    In the case of the Sites project, Reclamation and DWR initially 
investigated and considered 52 alternative reservoir sites before 
identifying Sites Reservoir as the preferred location for an offstream, 
north-of-Delta storage reservoir. That iterative screening process was 
completed in 2008, yet some have recently suggested that even that 
process was carried out too quickly and perhaps the agencies should 
have taken even more time to examine still other sites before narrowing 
the list to three separate storage configurations at the Sites 
location. Ironically, the three configurations being evaluated today in 
the EIR/EIS are very similar to the project originally envisioned in 
the 1960's.
    Second, although the Sites project would provide significant 
benefits in any operational environment, the environmental review 
process does not accommodate the real-world requirement that any new 
water supply project be flexible in, and responsive to, a constantly 
evolving regulatory environment. As noted above, any changes to the 
operating criteria for the federal and state water projects resulted in 
a requirement to develop new models to reflect those changes, when, in 
fact, the Sites project benefits remained constant regardless of the 
new demands for environmental water.
    Finally, under NEPA, the costs of alternatives are not considered 
until after the environmental review documents are completed. In our 
view that is just not a practical way to develop a project. In the case 
of water supply, you can end up with a project that no one can afford, 
sacrificing any opportunity for even incremental storage benefits. The 
process must consider project costs, both the total costs and how the 
project is going to be paid for, earlier in the process.

Recommendations for Advancing New Water Storage Projects
Reduce Regulatory and Bureaucratic Barriers
    In his 2011 State of the Union Address, and again in August 2011, 
President Obama called for further steps to enhance the efficient and 
effective permitting and environmental review of infrastructure 
development ``through such strategies as integrating planning and 
environmental reviews; coordinating multi-agency or multi-governmental 
reviews and approvals to run concurrently; setting clear schedules for 
completing steps in the environmental review and permitting process; 
and utilizing information technologies to inform the public about the 
progress of environmental reviews as well as the progress of Federal 
permitting and review processes.''
    All of these are worthy goals, but in water resources development, 
at least in California, there is little evidence that these goals are 
actively being implemented and turned into new practices.
    Our experience with the Sites project suggests the following steps 
to reduce regulator and bureaucratic barriers are worthy of 
consideration:
    1.  Statutory Directives._Adopt statutory directives for all 
relevant departments and agencies to work with the states and local 
water supply agencies to make it a priority to improve the efficiency 
of the regulatory and permitting processes associated with water supply 
projects. Attitudes are important in the agencies, and even without 
mandatory deadlines, statutory directives would encourage the agencies 
to make it a priority to streamline the environmental review process.
    2.  Statutory Deadlines._Establish statutory deadlines where 
appropriate for the completion of the environmental review process. For 
example, federal agencies should expeditiously review and approve 
administrative drafts that then can be publicly released as a draft 
Environmental Impact Statement (EIS). Once a draft EIS is released, the 
agencies should be required to establish a timeframe within which the 
EIS and even a Record of Decision will be finalized.
    3.  Greater Coordination._Require all federal agencies with a role 
in preparing and reviewing NEPA documents for water storage or water 
resources projects to coordinate their reviews concurrent with one 
another. Earlier and better coordination is essential to resolving 
conflicting standards and avoiding unnecessary project delays.
    4.  Alternatives Analysis._Agencies with a role in the 
environmental review process for new water supply projects should be 
required to develop a simpler approach to alternatives analysis. 
Streamlining this process can save money and time without sacrificing 
the legitimate need to thoroughly explore project alternatives or 
project sites that will cause the least negative environmental impact.
    5.  Costs._NEPA should permit project costs to be considered in an 
open fashion, before the environmental review process is complete. 
Currently, Reclamation relies upon Feasibility Studies to examine the 
costs and allocation of benefits. We need to make certain that the 
projects that make it through the environmental review process have 
beneficiaries, public and private, that can afford to pay for them.
    6.  Federal Role._Lead federal agencies should determine their role 
in a project as soon as practicable. In water storage projects, as with 
other major infrastructure projects, there is growing interest in 
public-private partnerships and non-federal water supply development, 
in general, that may rely upon a combination of public dollars, private 
equity, government-backed financing and the like. If Reclamation is a 
customer for the benefits of a project rather than the developer of the 
project that should also create an opportunity to further streamline 
the regulatory and environmental review processes.
    7.  Budgeting._Regulatory and environmental streamlining means that 
more funding resources may be needed upfront to enable agencies to 
accelerate the review process and establish realistic schedules. Our 
experience with Sites suggests that Reclamation's relatively modest 
budget requests over the years for the Sites study process, at a 
minimum, did not permit the study to proceed on an optimum schedule. 
This does not mean the agencies need to spend more overall, however. 
Limited funds should be prioritized to support completing the study and 
review process in a timely fashion.

Innovative Financing -Water Infrastructure Finance and Innovation Act 
        (WIFIA)
    Finally, Congress should explore methods of highly leveraging 
limited federal funding in order to increase its impact and, in effect, 
do more with less. Although federal funding for water infrastructure 
projects is already leveraged in the form of local matching 
requirements for federal grants, this leverage can be increased by 
developing innovative, market-based financing tools that provide 
significant financial savings for localities while shifting the bulk of 
financial risk from the taxpayer to the private sector.
    Specifically, Congress should authorize Reclamation to provide 
access to long-term, low interest credit assistance modeled after the 
highly successful Transportation Infrastructure Finance and Innovation 
Act (TIFIA) program, which has been operated by the Department of 
Transportation (DOT) since 1998. Under TIFIA, the federal government 
helps finance large-scale and costly infrastructure projects by 
leveraging each dollar of federal funding into $10 of credit assistance 
and $30 of infrastructure investments. The $122 million authorized for 
TIFIA, the level authorized in the last transportation reauthorization 
bill, has allowed the program to provide $1.22 billion in credit 
assistance and help finance $3.66 billion in transportation 
infrastructure improvements annually.
    The program provides eligible applicants with access to long-term, 
up to 40-year, financing at low interest rates. Currently, the TIFIA 
interest rate is 3.14 percent for a 35-year repayment period (the 
program provides for a five-year window after substantial completion of 
a project where no repayment is required). On large projects, like the 
Sites project, which is currently estimated to cost $3.2 billion, every 
saved tenth of an interest point would translate to millions of dollars 
in local savings.
    Under TIFIA, projects are selected by DOT for funding based upon 
the extent to which they generate economic benefits, leverage private 
capital, and promote innovative technologies, among other objectives. 
Projects do not need to be congressionally authorized to be eligible 
for TIFIA financing, however, under current law, TIFIA financing is 
limited to no more than 33 percent of total project costs. Efforts are 
underway to raise this ceiling to 49 percent of total project costs, 
and that is something that we would support in any similar WIFIA 
program authorization.
    The TIFIA credit program offers three separate forms of financing 
for eligible transportation projects. The program can offer direct 
loans that offer flexible repayment terms to cover construction and 
capital costs of a project. TIFIA can also provide loan guarantees to 
enable institutional investors, such as pension funds, to make loans to 
the project sponsor. Finally, TIFIA can offer lines of credit to 
projects to represent contingent sources of financing, in the form of 
direct federal loans, to supplement project revenues and make it easier 
for the project to attract financing from the private sector.
    Finally, I would simply note that TIFIA enjoys strong, bipartisan 
support and it is noteworthy that both the House and Senate versions of 
the transportation reauthorization bill, including the bill that was 
released last week by Chairman John Mica, recommends increasing the 
annual TIFIA authorization level from $122 million to $1 billion 
annually. Both bills similarly recommend raising the ceiling on TIFIA-
eligible financing to 49 percent of total project costs. This will 
allow the program to provide $10 billion annually in long-term, low 
cost credit assistance.
    Again, a water infrastructure version of TIFIA would greatly 
benefit a wide variety of large-scale water supply projects, like 
Sites, and I encourage the Committee to give any such proposal careful 
consideration.
    Thank you for the opportunity to testify. I look forward to 
answering any questions you may have.
                                 ______
                                 
    Mr. McClintock. Thank you for your testimony.
    The Chair now recognizes Mr. Jerry Brown, General Manager 
of the Contra Costa Water District from Concord, California to 
testify.
    Welcome.

          STATEMENT OF JERRY BROWN, GENERAL MANAGER, 
        CONTRA COSTA WATER DISTRICT, CONCORD, CALIFORNIA

    Mr. Brown. Thank you, Mr. Chairman, Ranking Member 
Napolitano, members of the Subcommittee. I would like to thank 
you for this opportunity to discuss what it takes to build new 
surface storage, and submit to you that my testimony can be 
equally applied to building any large water supply project in 
today's world.
    My first message is that the 100,000 acre-foot Los Vaqueros 
Reservoir completed in 1997 is a model for what it takes to 
build new surface storage. Following severe drought years in 
the 1970s and 1980s, the CCWD Board of Directors determined 
that CCWD could not wait for the State and Federal Government 
to solve its problems. In 1988, CCWD customers approved a $450 
million bond measure to build Los Vaqueros Reservoir.
    Even as an offstream reservoir, the project included 
measures to protect sensitive Delta fish species. The CCWD 
Board ensured that a net environmental benefit was provided to 
the Delta with this project. As evidence of the success, only 
one Delta smelt has been taken at Los Vaqueros in almost 15 
years of project operation, and CCWD's intake is in the same 
vicinity as the unscreened export pumping facilities.
    My second message is that the 160,000 acre-foot Los 
Vaqueros Reservoir expansion provides further evidence that the 
model works. Studies on the expansion were initiated as part of 
CALFED. In March 2004, 62 percent of CCWD customers voted in 
favor of the measure and to move forward with the expansion 
project.
    Reservoir expansion alternatives up to 275,000 acre-feet 
were examined in the final EIR/EIS, which was approved by both 
the CCWD Board and Reclamation in 2010. The CCWD Board decided 
to move forward on the initial phase of expansion up to 160,000 
acre-feet, and construction began in 2011. The initial phase of 
expansion is being funded by CCWD. The project also has the 
potential to provide benefits to other local water agencies.
    My third message, while there are added regulations and 
constraints as compared to previous areas of dam construction, 
successful implementation of large water projects is still 
possible. For LV and LVE, comprehensive public and stakeholder 
outreach was implemented. This goes way beyond websites, 
newsletters, legally required public hearings. Over 65 public 
meetings and hundreds of informal meetings were held with 
stakeholders to provide project information and to identify and 
address concerns. As evidence that issues were successfully 
addressed, only 60 comment letters were received on the draft 
EIR/EIS, and the final EIR/EIS was completed without legal 
challenge.
    Redirected impacts to others must be avoided, and affected 
stakeholders, including fish and wildlife agencies, need to be 
involved in the project development. CCWD and Reclamation 
developed a coordination agreement that ensures that operation 
of the expanded reservoir will not injure other CVP 
contractors, and that ensures CCWD's objectives will be met in 
a way that actually helps the CVP in its operations.
    More recently, CCWD has worked closely with East Bay MUD to 
jointly develop new drought supply solutions involving Los 
Vaqueros as an alternative to enlargement of the onstream 
Pardee Dam.
    Like many projects, there were numerous options for the 
expansion of Los Vaqueros, ranging from 160 to 500,000 acre-
feet. The sizes that moved forward were, one, affordable for 
the need; two, allowed further expansion at reduced cost; and 
three, avoided oversizing. There is no doubt that more is 
better. But more right now is not always best for right now. A 
275,000 acre-foot expansion for CCWD alone did not meet the 
good business practices test. A lot of that storage would be 
unused now, and it would be put--and it would put a financial 
burden on ratepayers.
    However, the 160,000 acre-foot reservoir was sized for 
right now. It is affordable. Its capacity will be used. It 
provides flexibility so CCWD can use some of that capacity to 
help other Bay Area water agencies. And it is easily expandable 
to 275,000 acre-feet. To be successful, a solid business case 
must be made, even if it means staging the project to deal with 
uncertainty.
    December 2014 is the current schedule for preparation of 
the Federal feasibility study for the reservoir expansion up to 
500,000 acre-feet. Recent studies have identified greater needs 
for surface storage, as well as opportunities for regional 
cooperation. Future expansion of Los Vaqueros is consistent 
with the co-equal goals of the Delta Plan. It meets the public 
benefit requirement within the California water bond. And CCWD 
is continuing to work with Reclamation and DWR to complete 
analysis necessary to identify the most cost-effective 
alternative for future reservoir expansion.
    I would like to thank the Committee for this opportunity, 
and I would be happy to answer any questions.
    [The prepared statement of Mr. Brown follows:]

 Statement of Jerry Brown, General Manager, Contra Costa Water District

    Chairman McClintock and Members of the Subcommittee:
    On behalf of the Contra Costa Water District (CCWD), I would like 
to thank the Committee for this opportunity to discuss what it takes to 
build new surface storage and submit to you that my testimony can be 
equally applied to building any large water supply project in today's 
world.
    CCWD serves water to over 500,000 people in eastern and central 
Contra Costa County. Among CCWD's customers are a number of large 
industries of national importance, including oil refineries, chemical 
plants and steel mills. CCWD diverts all of its water supply from the 
Sacramento-San Joaquin Delta in Northern California and delivers it via 
the Contra Costa Canal, which is owned by the U.S. Department of the 
Interior, Bureau of Reclamation (Reclamation) and was the first part of 
the Central Valley Project (CVP) built by Reclamation in the 1930s. 
CCWD is one of the largest Municipal and Industrial CVP water supply 
contractors and operates the Contra Costa Canal under a contract with 
Reclamation. CCWD has worked closely with Reclamation on both water 
operations and capital projects for over seventy years.
    Because CCWD is located in the Delta, at the hub of California's 
water supply system, CCWD is intimately involved in state-wide water 
planning, and has been an active participant in all the major Delta 
activities of the last thirty-five years, including the 1976-77 and 
1987-1992 droughts, the Bay-Delta Accord of 1994, the CALFED effort, 
and into the present era of the Bay-Delta Conservation Plan and the 
Delta Stewardship Council's Delta Plan.
    The experiences of CCWD over the past 20 years are evidence that 
new surface storage infrastructure can be built. Almost one billion 
dollars have been invested in new assets in the ground by CCWD during 
this timeframe. Most significantly and with regard to the focus of this 
hearing, in 1997, CCWD completed 100,000 acre-feet of new, off-stream 
surface storage at Los Vaqueros Reservoir, and is currently 
constructing the enlargement of that reservoir to 160,000 acre-feet. In 
addition, CCWD completed several Delta water quality projects on behalf 
of CALFED, and CCWD is replacing the four mile long, earth lined 
portion of the Reclamation owned Contra Costa Canal with a large 
diameter pipeline. That project will improve water quality, help 
Reclamation meet Delta water quality standards, and reduce the risk of 
floods in the Delta from a failure of the canal embankment that was not 
designed to meet current levee standards for flood protection and 
earthquake safety. Other projects successfully undertaken by CCWD 
include constructing significant upgrades and expansions of our water 
treatment plants, constructing two new Delta intakes with state-of-the 
art fish screens that improve water quality and reliability for our 
customers, and, together with Reclamation, constructing fish screens at 
our oldest water intake to the Contra Costa Canal at the western end of 
the Delta.
    CCWD has undertaken all these projects during an uncertain period 
when completing water projects in the Delta or its watershed has been 
extremely difficult. CCWD did not complete all of these projects alone. 
Our partnership with Reclamation, and with state agencies including the 
California Department of Water Resources (DWR) and the State Water 
Resources Control Board (SWRCB), has been instrumental in these 
accomplishments. CCWD and Reclamation have worked closely to achieve 
the construction and enlargement of Los Vaqueros Reservoir. CCWD and 
Reclamation are continuing the feasibility study for a further 
expansion of Los Vaqueros Reservoir, up to 500,000 acre-feet. A number 
of Bay Area water agencies have expressed interest in Los Vaqueros for 
their current and future drought storage needs. By building on these 
partnerships, CCWD believes that future storage projects can be 
successful.

The 100,000 acre-foot Los Vaqueros Reservoir was completed in 1997; it 
        is a model for what it takes to build new surface storage.
    Following severe drought years and associated periods of very poor 
Delta water quality in the 1970s and 1980s, the CCWD Board of Directors 
determined that CCWD could not wait for the state and federal 
governments to solve CCWD's problems. In 1988, CCWD customers approved 
a local bond for $450 million to build the Los Vaqueros Reservoir. 
Throughout development of the reservoir project, CCWD worked with other 
Bay Area water agencies to explore partnership opportunities, but these 
agencies were not able to commit to a partnership in the project 
implementation and CCWD moved forward with securing new water rights 
and constructing the 100,000 acre-foot reservoir on its own. As it 
turned out, the need for storage did not diminish and at the time the 
reservoir was being completed, CCWD, working with others in the CALFED 
program, found that future expansions of the reservoir could be 
accommodated.
    Water conflicts were just as chaotic at the time the original Los 
Vaqueros Reservoir was being planned and constructed as they are now. 
California was in the midst of a severe drought, delta smelt and 
winter-run salmon were being listed under the Endangered Species Act, 
and processes were underway to require additional flows for fishery 
protection in the Delta and San Francisco Bay. The primary purpose of 
the original Los Vaqueros Project was to provide a consistent level of 
high quality drinking water and adequate emergency storage in case of 
earthquakes, Delta levee failures, and other disasters. CCWD was able 
to turn that purpose into an asset during the permitting process. As an 
offstream reservoir, the project purposes also included design and 
operational measures to protect sensitive Delta fish species and the 
CCWD Board of Directors ensured that a net environmental benefit was 
provided for the Delta with this project. Since the reservoir has been 
operational, CCWD customers have enjoyed consistently high quality 
water and improved emergency readiness, all while CCWD contributes to 
improved Delta fishery conditions. As evidence of the significance of 
this point, only one delta smelt (a larva) has been taken at the Los 
Vaqueros intake in almost 15 years of project operations, and CCWD's 
intake is in the same vicinity as the unscreened export pumping 
facilities. A key point here is to recognize that, to be successful, a 
project must be developed to provide a net environmental benefit to 
ensure sustainability, as opposed to maximizing extraction without 
concern for impacts on the natural system.

The 160,000 acre-foot Los Vaqueros Reservoir Expansion will be 
        completed in 2012; it provides further evidence that the model 
        works.
    Studies on the expansion of Los Vaqueros Reservoir were initiated 
following the completion of the CALFED Record of Decision in May 2000 
with funding provided by Reclamation and DWR. In 2001, CCWD entered 
into the Los Vaqueros Memorandum of Understanding with several local, 
state, and federal agencies participating in the expansion studies to 
document the common understanding for open and transparent evaluation 
of project alternatives. In March 2004, 62 percent of CCWD customers 
voted in favor of Measure N and authorized the expansion project to 
move forward.
    While the reservoir expansion studies were ongoing, CCWD and 
Reclamation prepared an Environmental Impact Report/Environmental 
Impact Statement (EIR/EIS) to evaluate the stand-alone benefits of a 
new CCWD intake in the Delta to further enhance water quality and 
operational flexibility of an expanded Los Vaqueros Reservoir. The 
Middle River Intake Project was approved and construction was completed 
in 2010 with additional financial support from DWR and the SWRCB in 
recognition of statewide benefits from the new intake. Like the Los 
Vaqueros Project, CCWD's operations with this intake provided an 
additional reduction in CCWD's impacts to Delta fisheries through 
timing of operations that measurably reduced impacts and the screening 
of local agricultural intakes. The addition of a new intake also 
mitigated for impacts on CCWD water quality which would be incurred due 
to a reservoir outage during a multiple year construction period while 
the reservoir is enlarged.
    Reservoir expansion alternatives up to 275,000 acre-feet were 
examined in the Final EIS/EIR prepared jointly by CCWD and Reclamation 
in 2010. The larger reservoir alternatives were determined to improve 
water quality, provide drought supply, and protect Delta fisheries. 
However, decisions on local agency partnerships continued to lag behind 
statewide decisions on Delta conveyance solutions while local and state 
funding remained limited. The CCWD Board of Directors decided to move 
forward on an initial phase of expansion up to 160,000 acre-feet and 
construction began in 2011. Although the initial phase of expansion is 
being funded by CCWD to improve drought supply and water quality, the 
project also has the potential to provide benefits to other local water 
agencies. CCWD is continuing to work with potential local water agency 
partners in the initial expansion project to explore short term and 
long term opportunities to improve drought supply. As with the Middle 
River Intake and the original Los Vaqueros Project, the operations with 
the expanded reservoir also provide benefits to Delta fisheries.

What it Takes to Build Large Water Projects: listening to and adjusting 
        for the interests of partners and stakeholders, not redirecting 
        impacts, providing net environmental benefits, and having a 
        strong business case.
    Over the past two decades CCWD has found that, while there are 
added regulations and constraints as compared to previous eras of dam 
construction, successful implementation of large water projects is 
still possible. The hurdles may seem insurmountable, but it is possible 
to get permits and approvals, identify funding, and construct projects 
on schedule and within budget. Some of the key elements that have been 
part of CCWD's ``recipe for success'' are described below.
    Broad Stakeholder Involvement. CCWD developed comprehensive public 
and stakeholder outreach plans at the early stages of project 
development. The approach goes way beyond web sites, newsletters, and 
legally required public hearings. For the Los Vaqueros Reservoir 
Expansion Project, CCWD held over 65 public meetings and hundreds of 
informal meetings with stakeholders to provide project information and 
to identify and address concerns. It is not sufficient to simply hold 
public meetings without addressing the issues raised: the meetings were 
used to hear concerns and develop solutions that were then incorporated 
in the project to address those concerns. CCWD formed both a Customer/
Stakeholder Feedback Group and an Agency Coordination Work Group to 
keep key stakeholders and agencies informed well ahead of the release 
of the Draft EIS/EIR. CCWD spent many hours developing relationships 
with the media, legislative staff, water agencies, environmental 
groups, and other stakeholders to resolve issues. The evidence that 
issues were successfully addressed is that only 60 comment letters were 
received on the Draft EIS/EIR for the project (a large fraction of 
which concerned the desire for more bicycle trails in areas unrelated 
to the project), significant opposition was avoided, and the Final EIS/
EIR was completed without legal challenge.
    CCWD also focused on building and maintaining strong working 
relationships with local, state and federal agencies throughout the 
development of the reservoir and Delta intake projects. These 
partnerships provided access to state and federal funding when possible 
but they also enhanced coordination with the CVP and State Water 
Project customers. As a result of the partnerships, CCWD and 
Reclamation worked together to develop a coordination agreement that 
ensures that operation of the expanded reservoir will not injure other 
CVP contractors and that ensures CCWD's objectives will be met in a way 
that actually helps the CVP in its operations. This agreement was 
instrumental in building trust and creating a project that did not just 
ensure no harm to others, but actually provides benefits to others.
    More recently CCWD has worked closely with the East Bay Municipal 
Utility District (EBMUD) to jointly develop new drought supply 
solutions involving Los Vaqueros Reservoir that are included in their 
December 2011 Draft Revised Program EIR for EBMUD's Water Supply 
Management Program 2040 as an alternative to enlargement of the on-
stream Pardee Dam.
    Avoidance and Mitigation of Environmental Impacts. CCWD found early 
on that modern water projects need to go beyond avoidance of impacts 
and basic mitigation techniques. CCWD develops projects that avoid 
redirected impacts to others and invites the affected stakeholders to 
review project analyses well in advance of publication of a Draft EIS/
EIR. This transparency and technical collaboration results in the most 
creative and effective project design. Again, it is not sufficient to 
simply show the analysis to others: listening to their concerns and 
addressing them in a way that is satisfactory is essential. The 
previously mentioned coordination agreement with Reclamation is an 
example: it started as a way to directly address concerns of potential 
harm but actually concluded as a way to provide mutual benefits. Where 
impacts cannot be avoided, such as inundation of habitat due to 
reservoir inundation, CCWD developed comprehensive mitigation 
strategies to enhance regional habitat assets and provide habitat 
corridors to maximize environmental benefits. CCWD worked closely with 
the fish and wildlife agencies, independent environmental experts and 
environmental and land use stakeholder groups to apply practical 
experience as well as the latest scientific information.
    Making a Strong Business Case. Like many projects, there were 
numerous options for the expansion of Los Vaqueros Reservoir, ranging 
from 125,000 acre-feet to 500,000 acre-feet. Each size range fit a 
particular need or set of needs and had its own costs. The sizes that 
moved forward 1) were affordable for the need; 2) allowed further 
expansion at reduced cost to a higher level; and 3) avoided unused 
capacity. These are important factors. There is no doubt that ``more is 
better'' but ``more'' right now is not always best for right now. A 
275,000 acre-foot expansion for CCWD alone did not meet the ``good 
business practices'' test: a lot of that storage would be unused now, 
although it would put a financial burden on ratepayers. However, the 
160,000 acre-foot reservoir was perfectly sized for ``right now'': it 
is affordable, its capacity will be used, it provides flexibility so 
that CCWD can use some of that capacity to help other Bay Area water 
agencies on a short or long term basis, and it is easily expandable to 
275,000 acre-feet. The simple fact is that opposition to a project is 
generated when a proponent cannot make a good business case, or a 
project alternative that does the same job at lower cost with fewer 
impacts is available but not selected. To be successful, a solid 
business case must be made, even if it means staging the project to 
deal with uncertainty.

Future Expansion of Los Vaqueros Reservoir up to 500,000 acre-feet
    The Los Vaqueros MOU was recently extended through December 2014 to 
coincide with the current schedule for preparation of a Federal 
Feasibility Study for reservoir expansion up to 500,000 acre-feet. 
Recent studies have identified even greater needs for surface storage 
as well as additional opportunities for regional cooperation. Future 
expansion of Los Vaqueros Reservoir is consistent with the co-equal 
goals of the Delta Plan (it is included in the Draft Delta Plan) and it 
meets the public benefit requirements of the proposed California Water 
Bond currently planned for November 2012. CCWD is continuing to work 
with Reclamation and DWR to complete engineering, operations, 
environmental, and economic analyses necessary to identify the most 
cost-effective alternative for future reservoir expansion.

What is Required to Move Forward on Future Reservoir Expansion
    Moving forward with the next stage of expansion will require 
adequate funding for completion of the Federal Feasibility Study, 
decisions on Delta conveyance, regional cooperation and participation 
in project development, partnership and cost share agreements, 
continued outreach and stakeholder coordination, resource agency 
engagement and support, and strong leadership and advocacy. Patience, 
endurance, and hard work will continue to be required given the long 
lead time for major surface storage projects.
                                 ______
                                 
    Mr. McClintock. Great. Thank you for your testimony. The 
Chair is pleased to yield to the gentleman from Idaho, Mr. 
Labrador, to introduce our next witness.
    Mr. Labrador. Thank you, Mr. Chairman and Ranking Member 
Napolitano, for convening this important hearing today. I want 
to welcome my good friend, Norm Semanko, who is the Executive 
Director and General Counsel for the Idaho Water Users 
Association. And I welcome him today and thank him for 
testifying at this hearing.
    Today's topic is a high priority of our state. Reducing the 
burdensome regulations that the Federal Government has imposed 
is critical to the vitality of our nation. The American people 
continue to be strapped by the bureaucracy and the many layers 
of protocols and other hindrances that continue to cause our 
Federal deficit to skyrocket. I commend the Chairman for 
convening this hearing today so we can shed some light on 
existing statutes that should be modernized. I believe that 
protecting our environment can be done in a manner which 
doesn't impede our economic growth. It is time that we improve 
our regulatory structure so that we can continue to prosper as 
a nation.
    And I look forward to listening to your testimony today.

   STATEMENT OF NORM SEMANKO, EXECUTIVE DIRECTOR AND GENERAL 
      COUNSEL, IDAHO WATER USERS ASSOCIATION, BOISE, IDAHO

    Mr. Semanko. Thank you, Chairman McClintock, Ranking Member 
Napolitano, members of the House Water and Power Subcommittee, 
and certainly Congressman Labrador, thank you for the great job 
that you continue to do representing Idaho, water users 
included. And thank you all for the opportunity to be here.
    When you look back in Western history, the Federal 
Government was not a barrier to water development. It was a 
catalyst. First came the Carey Act in 1894, encouraging private 
investment in water storage and delivery projects. Then, 
beginning in 1902, Reclamation commenced building water 
development projects across the West. These water projects led 
to homesteading and important developments in the West, and 
promoted the economic development of the West.
    Today, however, the emphasis in Reclamation projects has 
shifted from construction of dams and reservoirs to the 
operation and maintenance of existing Federally owned 
facilities. Without new sources of water, increasing urban and 
environmental demands will deplete existing agricultural 
supplies and seriously threaten the future of Western-irrigated 
agriculture drying up farmland and the rural communities 
dependent on the agricultural economy.
    Increasingly, state and local governments, as well as 
private interests, are stepping forward to advance the 
possibility of new storage projects. Unfortunately, Federal 
environmental laws such as the Clean Water Act, the Endangered 
Species Act, NEPA, and others continue to be used to threaten 
previously developed water supplies and to prevent any future 
water development for countless farms, ranches, and cities, and 
not just in the West.
    One key concern voiced by water users in the West relates 
to the administrative policy-making occurring within EPA and 
the U.S. Army Corps of Engineers that will make it even tougher 
to accomplish what is already a daunting challenge.
    For example, EPA Region IV is implementing new guidelines 
that focus on proposals that contemplate developing additional 
storage capacity due to projected future demands. These 
guidelines were developed to inform local governments and water 
utilities of the actions EPA expects them to take ``in order to 
eliminate or minimize the need for additional capacity before 
consideration of a water supply reservoir project on a stream 
or river.''
    Before EPA considers a water supply reservoir as an 
alternative to address the need for additional water capacity, 
the water utility must take actions to ensure that, to the 
maximum extent practicable, they are implementing sustainable 
water management practices. While these guidelines have been 
adopted only by Region IV, we don't know yet if similar 
standards will be proposed for the Western United States.
    The Endangered Species Act provides numerous barriers 
significant enough to doom a water project. In most cases, only 
the courts can intervene. And in the past, many have used the 
courts for the very purpose of scuttling a particular project. 
In the California Bay Delta, as well as the Klamath Project in 
Oregon and California, the ESA was used to physically shut off 
water to irrigated agriculture and other water users to protect 
ESA-listed fishery resources, using science that has been shown 
by the National Academy of Science in both cases to be 
questionable.
    In my home state of Idaho, 487,000 acre-feet of Federally 
developed water supplies have been supplied annually in an 
attempt to meet river flows downstream annually to comply with 
Federal Endangered Species Act requirements with little if any 
benefit to listed salmon stocks.
    More Federal and state, local coordination is needed in 
order to progress--for progress to be made on projects that 
enhance water supplies to meet unmet demands. In settling the 
cases of the past, there have been onerous requirements put on 
water users. We are hoping for a different outcome in Idaho.
    Our state is taking the leading role in pursuing the 
possibility of new water storage projects in cooperation with 
the Corps of Engineers. The Idaho Water Resource Board has 
authorized studies of both raising Arrowrock Dam on the Boise 
River and building a completely new dam, Galloway, on the 
Weiser River, both tributary to the Snake River. The Arrowrock 
raise, which would nearly double the existing storage space to 
600,000 acre-feet, would provide additional water supplies for 
the growing Boise region, as well as needed flood control space 
and environmental enhancements. The Galloway Project, which 
could provide as much as one million acre-feet of storage, 
could provide important benefits for downstream fish, while at 
the same time freeing up water in other parts of the Upper 
Snake River Basin for other important needs.
    Looming on the horizon for both of these Idaho projects is 
the ESA. The Boise River includes a dubious designation for 
bull trout critical habitat, all but guaranteeing a tricky 
section 7 consultation with the Fish and Wildlife Service. And 
for the Arrowrock raise, downstream and fish listings will 
require additional section 7 consultations with National Marine 
Fishery Service.
    For more than 100 years, Western water policy has stood out 
as one of the modern era's great successes. Sound Federal 
policies are needed going forward that will encourage and 
enhance continued investment in new water supply enhancement 
projects, rather than risking diminished domestic food 
production and weakened urban and industrial growth. Western-
irrigated agriculture is a strategic and irreplaceable natural 
resource, and we must continue to protect and enhance it.
    Thank you for the opportunity to testify today.
    [The prepared statement of Mr. Semanko follows:]

 Statement of Norman M. Semanko, Executive Director & General Counsel, 
           Idaho Water Users Association, Inc., Boise, Idaho

    Chairman McClintock, Ranking Member Napolitano, and members of the 
House Water and Power Subcommittee, my name is Norm Semanko and I am 
here on behalf of the Idaho Water Users Association (IWUA). I am the 
Executive Director and General Counsel of IWUA, and I appreciate the 
opportunity to provide testimony today on the important topic of the 
need for new water storage and the development of new water supplies in 
the Western U.S. and the many regulatory challenges we face in trying 
to build new water projects today.
    IWUA is a statewide, non-profit association dedicated to the wise 
and efficient use of water resources. IWUA has more than 300 members, 
including irrigation districts, canal companies, water districts, 
municipalities, hydropower companies, aquaculture interests, 
professional firms and individuals. Our members deliver water to more 
than 2.5 million acres of irrigated farm land in Idaho. We are 
affiliated with both the National Water Resources Association and the 
Family Farm Alliance.
    When you look back in Western history, the federal government was 
not a barrier to water development--it was a catalyst. First came the 
Carey Act in 1894, encouraging private investment in water storage and 
delivery projects, in exchange for the patenting of up to a million 
acres of federal land in each state. This led to several successful 
projects, including the construction of Milner Dam on the Snake River 
and two other private dams that together provide water to approximately 
400,000 acres of irrigated ground in the south central region of Idaho.
    Then, beginning in 1902, the federal Bureau of Reclamation 
(Reclamation) commenced building water development projects across the 
West. In Idaho, the early projects included Minidoka, Arrowrock and 
Owyhee Dams, to name just a few. Most of the large water storage 
facilities we currently depend upon for our water supplies in the West 
came about as a result of Reclamation's construction years.
    These water projects led to homesteading and important settlements 
in the West, and promoted the economic development of the West. 
Reclamation has constructed more than 600 dams and reservoirs including 
Hoover Dam on the Colorado River and Grand Coulee Dam on the Columbia 
River.
    Today, Reclamation is the largest wholesaler of water in the 
country, bringing water to more than 31million people, and providing 
one out of five Western farmers with irrigation water for 10 million 
acres of farmland, producing 60% of the Nation's fresh vegetables and 
25% of its fruit and nut crops.
    Reclamation is also the second largest producer of hydroelectric 
power in the western United States. Reclamation's 58 powerplants 
annually provide more than 40 billion kilowatt hours generating nearly 
a billion dollars in power revenues and producing enough electricity to 
serve 3.5 million homes.
    The total Reclamation investment for completed project facilities 
is approximately $11.0 billion. The Family Farm Alliance, a Western 
irrigated agriculture advocacy organization whose Advisory Committee I 
serve on, has estimated that over $60.0 billion in economic benefits 
are provided to the U.S. economy annually as a result of the irrigated 
agriculture and dependent rural economy developed in the West, with $12 
billion of annual economic value provided by the initial $11 billion 
investment in Reclamation projects.
    Today, however, the emphasis in Reclamation programs has shifted 
from construction of dams and reservoirs to the operation and 
maintenance of existing federally-owned facilities. Reclamation's 
redefined official mission is to ``manage, develop, and protect water 
and related resources in an environmentally and economically sound 
manner in the interest of the American public''.
    Reclamation's efforts to develop and manage water today are 
centered on water conservation and improved management in stretching 
existing supplies to meet the many burgeoning water demands of growing 
cities and environmental laws and regulatory requirements. Reliance on 
our aging water storage facilities, many built at the turn of the last 
century, has never been more acute. But shrinking federal budgets due 
to efforts to reduce the national debt have and will continue to all 
but eliminate the traditional federally-constructed water storage 
project.
    Yet, as a result of increased demands for existing water supplies, 
interest in new storage projects continues to increase at the local and 
state level to replace these lost supplies. Without new sources of 
water, increasing urban and environmental demands will deplete existing 
agricultural supplies and seriously threaten the future of Western 
irrigated agriculture, drying up farmland and the rural communities 
dependent on the agricultural economy. Increasingly, state and local 
governments, as well as private interests, are stepping forward to 
advance the possibility of new water storage projects.
    Unfortunately, federal environmental laws such as the Clean Water 
Act (CWA), the Endangered Species Act (ESA) and the National 
Environmental Policy Act (NEPA) have been, and continue to be, used to 
threaten previously developed water supplies and to prevent any future 
water development for countless farms, ranches and cities, and not just 
in the West. Even in the Southeastern U.S., where significant droughts 
have in some years all but dried up water supplies for cities, farms, 
energy providers and the environment in the past, these federal laws 
are being used to control, if not eliminate the construction of water 
storage facilities vital to the economic and environmental survival of 
the region.
    We also understand that there can be significant barriers to local, 
state and private development of additional storage in our Western 
watersheds as a result of the implementation of federal laws and 
regulations.
    My testimony will focus on three major areas of concern on 
potential barriers to the planning and development of new water storage 
facilities in the West and how we can work to reduce or eliminate these 
barriers:
          Federal regulation under the Clean Water Act and the 
        Endangered Species Act;
          Administration environmental policies and processes; 
        and,
          The changing federal role in water infrastructure 
        development.

Clean Water Act
    One key concern voiced by water users in the West relates to 
administrative policy making occurring within the Environmental 
Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) 
that will make it even tougher to accomplish what is already a daunting 
challenge: the obvious need to develop new water supplies to meet the 
growing water demands.

Anti-Storage Bias
    For example--EPA Region 4 (which covers the Southeastern U.S.)--is 
implementing new guidelines that focus on proposals that contemplate 
developing additional storage capacity due to projected future demands. 
These guidelines were developed to inform local governments and water 
utilities of the actions EPA expects them to take ``in order to 
eliminate or minimize the need for additional capacity before 
consideration of a water supply reservoir project on a stream or 
river.'' EPA will also use these guidelines to evaluate water demand 
projections for new or significantly increased public surface water 
withdrawals or public ground water supply wells which are being 
reviewed through the National Environmental Policy Act or EPA programs.
    The Clean Water Act permit process requires a clearly stated 
project purpose, which for water supply reservoirs includes a projected 
demand analysis to support additional water capacity needs, and an 
analysis of alternatives. Before EPA considers a water supply reservoir 
as an alternative to address the need for additional water capacity, 
the water utility ``must take actions to ensure'' that, to the maximum 
extent practicable, they are implementing ``sustainable'' water 
management practices, which consist of effective water management, 
water pricing for efficiencies, water use efficiency measures, and 
watershed approaches.
    According to EPA Region 4, these measures ``are designed to help an 
applicant eliminate the need for, or reduce the impacts to aquatic 
resources from future water facility expansions including the 
construction of water supply reservoirs.'' The EPA guidance further 
states: ``Any applicant for a reservoir project will be expected to 
conduct an extensive analysis using this approach in developing their 
water demand projections and alternative analysis and provide a 
thorough discussion of reservoir needs after analysis of these 
measures.''
    While these guidelines have been adopted only by Region 4, we don't 
yet know if similar standards will be proposed for the Western U.S. In 
August 2010, Colorado Governor Bill Ritter sent a letter to EPA 
Administrator Lisa Jackson describing the cooperative/collaborative 
efforts regarding the Chatfield Reservoir Reallocation Project, which 
involved numerous interests representing municipal, environmental and 
agricultural entities and would result in an additional 20,000 acre-
feet of storage space for consumptive uses in the Denver metro area. 
Although the U.S. Army Corps of Engineers supported the proposed 
reallocation plan, in June EPA Region 8 staff stated they would deny 
it, and recommended that the ultimate decision be elevated to higher 
levels in Washington, D.C., even though the preferred project 
alternative was simply a reallocation of flood space to active storage 
within an existing storage facility.
    ``I am greatly concerned that a disagreement between two federal 
agencies could result in denial of a project so important to Colorado 
and fifteen of our communities,'' Gov. Ritter wrote Administrator 
Jackson. The governor also asked that EPA proceed with ``a thoughtful 
and transparent process that does not prejudge a project but instead 
balances important civic and environmental needs.''
    In a turn of events during October of 2010, the EPA Region 8 
Administrator announced that EPA was now ``comfortable with the 
approach taken by the Corps in the preliminary draft CWA 404(b)(1) 
analysis''. While this was good news for project proponents, it took 
months of hard work and direct action by the Colorado Governor himself 
before EPA stood down from their initial position of no new water 
storage. Many projects with similar benefits may not be so lucky.

Water Quality Standard Setting
    Setting water quality standards is usually a state responsibility, 
and EPA should not usurp that important role. Updating water quality 
standards, especially for nutrients, could prove both controversial and 
costly, as ``numeric'' nutrient pollution standards have not been 
universally used and/or accepted. Yet, EPA has shown a preference for 
such standards in Florida and other states where they have taken a more 
aggressive role, despite the absence, in many cases, of any proven 
nexus between the regulated parameters and the identified designated 
water body use being protected.
    Significant progress has been made since enactment of the landmark 
Clean Water Act and Safe Drinking Water Act almost forty years ago. The 
enhanced quality of our surface waters and the greater safety of our 
drinking water are testaments to decades of environmental protection 
and investment. Of course, other challenges remain, and EPA has 
indicated that it intends to ``work more aggressively'' to reduce and 
control pollutants that are discharged from industrial, municipal, 
agricultural, and stormwater point sources and nonpoint sources. Agency 
actions along these lines could become significant impediments to any 
new water resource development projects.

Endangered Species Act
    The ESA provides numerous barriers significant enough to doom a 
water project. In most cases, only the courts can intervene, and in the 
past many have used the courts for the very purpose of scuttling a 
particular project. In the California Bay Delta, as well as the Klamath 
Project in Oregon and California, the ESA was used to physically shut 
off water to irrigated agriculture and other water users to protect 
ESA-listed fishery resources, using science that has been shown by the 
National Academy of Science in both cases to be questionable.
    In my home State of Idaho, 487,000 acre-feet of federally developed 
water supplies have been supplied annually in an attempt to meet river 
flows downstream annually to comply with federal endangered species 
requirements, with little, if any, benefits to listed salmon stocks. 
This water could have been used to produce crops, recharge our 
aquifers, or provide for growing cities and industries.
    While we need to develop more water storage in the areas of the 
West where the ESA drives conflict, pitting competing demands against 
each other for the same water source, that very statute could also be 
used to prevent the development of water supplies necessary to meet its 
own requirements for additional streamflows for listed species.
    More federal, state and local coordination is needed in these 
circumstances in order for progress to be made on projects that can 
enhance water supplies to meet unmet demands. On the Santa Ana River in 
Southern California, for instance, the U.S. Fish and Wildlife Service 
recently ``settled'' an ESA-driven court case challenging the Service's 
decisions over critical habitat (habitat deemed necessary for the very 
survival of a species listed by the ESA as threatened or endangered) 
for the listed Santa Ana Sucker.
    In settling the case with the environmental plaintiffs, the Service 
greatly expanded critical habitat in the area of the river that 
included many miles of essentially dry river bed located directly below 
the Seven Oaks Dam, a Corps facility authorized to protect this area 
from high river flows during flood periods. The water districts in the 
area, which have seen reductions in water supplies imported from the 
California Bay Delta due to ESA restrictions, have been developing 
their own in-basin water supplies by perfecting water rights on the 
Santa Ana River resulting during a flood event. The districts are 
applying to the Corps for a change in release patterns from the Dam in 
order to store flood waters in the groundwater aquifers under their 
water right for later use in the basin.
    According to the Service, the area was deemed critical habitat to 
protect gravel recruitment to downstream spawning areas in the river, 
again using science that is less than robust. In order to move that 
gravel, streamflows would need to exceed levels that would cause 
serious flood damage downstream on the Santa Ana River, where millions 
of people live--Orange County, California--contradicting the very 
purpose of the federal flood control project and negating the 
development of crucial in-basin water supplies by flushing water away 
from the water districts' water storage project.
    In Idaho, our state is taking the lead role in pursuing the 
possibility of new water storage projects, in cooperation with the 
Corps of Engineers. The Idaho Water Resource Board has authorized 
studies of both raising Arrowrock Dam on the Boise River and building a 
completely new dam, Galloway, on the Weiser River, both tributary to 
the Snake River. The Arrowrock raise, which would nearly double the 
existing storage space to 600,000 acre-feet, would provide additional 
water supplies for the growing Boise region, as well as needed flood 
control space and environmental enhancements. The Galloway project, 
which could provide as much as one million acre-feet of storage, could 
provide important benefits for downstream fish while at the same time 
freeing up water in other parts of the Upper Snake River Basin for 
other important needs.
    Looming on the horizon for both of these Idaho projects is the ESA. 
The Boise River includes a dubious designation for bull trout critical 
habitat, all but guaranteeing a tricky Section 7 consultation with the 
U.S. Fish and Wildlife Service for the Arrowrock raise, while 
downstream anadromous fish listings will require additional Section 7 
consultations with the National Marine Fisheries Service for both 
projects.
    The heavy-handed approach taken by the Service on the Santa Ana 
River, and the potential for similar confrontations across the West, 
will continue to threaten water supply enhancement projects unless 
cooperation and collaboration can be instituted as the new paradigm. 
Many times, endangered aquatic species can be managed and protected 
without resorting to the scientifically unjustified reallocation and 
inefficient use of water originally developed for irrigation and urban 
uses. Collaborative efforts such as habitat conservation plans or other 
resource management tools can protect species and water supplies, but 
it takes willing parties, and a cooperative attitude, to work together 
outside of the courtroom to accomplish these goals.

Administration Policies
    The often slow and cumbersome federal regulatory process is a major 
obstacle to realization of projects and actions that could enhance 
Western water supplies. We must continue to work with federal agencies 
and other interested parties to build a consensus for improving the 
regulatory process, instead of using administrative channels that 
create new obstacles.

Watershed Planning
    The EPA has included, through its strategic planning process, 
provisions that drive the development of state watershed implementation 
plans. We are concerned with how these plans may impact existing and 
ongoing watershed planning efforts being conducted at the state and 
local levels, many of which include plans for new storage facilities. 
Thousands of watershed councils exist throughout the West and they are 
engaged in a variety of water conservation and environmental 
restoration projects which could be derailed or delayed by the 
imposition of new federal planning requirements.
    Water users are active participants in these efforts and have a 
large stake in ensuring that these regional projects continue. It is 
unnecessary and a waste of public resources for EPA to develop and 
impose new watershed planning programs, especially if storage 
components are affected by federal top-down planning efforts. In 
addition, EPA needs to be cognizant of the difference between water 
quality regulation under the Clean Water Act and water resource 
management which is conducted pursuant to state law.
    Also, the current process of rewriting the federal Principles and 
Guidelines, now known as Principles and Requirements, by the 
Administration through the Council on Environmental Quality (CEQ) will 
impact future storage projects by enhancing the ``value'' of 
environmental impacts and mitigation. Many times, environmental process 
and mitigation requirements already account for between 30% and 50% of 
a water supply development project's total cost, and by adding 
additional emphasis on environmental impacts these new ``requirements'' 
can drive a project's cost beyond affordable levels.
    In a time when our nation is struggling to return to the path of 
economic prosperity, we cannot support the creation of a new federal 
watershed planning program, particularly for those states that have 
existing, productive watershed programs in place. Federal participation 
should be channeled through existing state programs, rather than 
creating uncertainty through cumbersome new federal requirements which 
threaten to derail important water quality and water conservation 
projects already underway. And the principles for analyzing water 
projects from the federal perspective must not inflate the costs of a 
project by overvaluing environmental impacts.

NEPA Reviews
    NEPA is used throughout the federal government whenever a federal 
decision is made committing resources to a water project, including 
awarding a CWA permit for construction under federal and state laws. 
NEPA has traditionally been implemented in a very ``stove-pipe'' sort 
of manner, with each federal agency addressing the process individually 
for the same project, and with very little coordination or 
communication.
    In implementing NEPA in a manner that can allow water projects to 
move forward, the federal agencies need to do a better and more 
consistent job of defining and characterizing cumulative impacts for a 
project. As it currently stands, the characterization used by agencies 
to define cumulative impact is many times unreasonably subjective, 
sometimes leading to superfluous challenges to the NEPA process that 
can delay the process and increase costs.
    These agencies must eliminate redundant environmental review 
processes. Projects subject to NEPA analysis should only have to 
proceed through the environmental review process once. For example, if 
NEPA is completed on a water resources infrastructure project by one 
agency (e.g., the Bureau of Reclamation) then a second process should 
not be imposed by another agency on the same project (e.g., the Corps 
of Engineers when they consider an individual Clean Water Act Section 
404 permit). Many times the alternatives proposed for assessment by 
federal NEPA regulators are inappropriate, unrealistic, difficult-to-
implement, and often in conflict with state law.
    In addition, federal agencies not directly involved in a project's 
NEPA process often end up attempting to ``veto'' the final analysis 
Record of Decision at the eleventh hour, causing untold days and weeks 
of delays and additional costs involved in resurrecting a defensible 
project. This approach is inexcusable as these agencies are all part of 
one federal government and should act accordingly, coordinating efforts 
and concerns from the beginning of the process, not at the very end.
    On December 7, 2011, CEQ released draft NEPA guidance that outlines 
the following principles for agencies to follow when performing NEPA 
environmental reviews:
          NEPA encourages simple, straightforward, and concise 
        reviews and documentation;
          NEPA should be integrated into project planning 
        rather than be conducted after planning is complete;
          NEPA reviews should coordinate and take appropriate 
        advantage of existing documents and studies;
          NEPA reviews should use early and well-defined 
        scoping to target environmental reviews to appropriate issues 
        and avoid unnecessary work;
          Agencies should develop meaningful and expeditious 
        timelines for environmental reviews; and
          Agencies should target their responses to comments to 
        appropriate issues raised.
    While the overall philosophy embedded in the above principles seems 
appropriate, it is difficult to see how the proposed guidance will 
actually change the status quo. There appears to be nothing in the CEQ 
draft guidance that is likely to have any impact on how agencies 
approach their NEPA responsibilities. A more direct linkage to 
``pilot'' NEPA efforts could give stakeholders and Congress a way to 
set goals, track successes and showcase innovations in implementing 
these principles, but short of clearly identified and coordinated 
efforts that include benchmarks and outcomes, these principles may or 
may not be heeded by the agencies.

Innovative Financing
    As I indicated earlier in this testimony, the traditional federally 
constructed and funded water supply project is no longer practical or 
affordable, given the need to reduce the nation's debt. States, local 
government and private interests are increasingly stepping forward to 
fill the void. But that doesn't mean the federal government cannot be a 
partner in supporting water supply projects in the future. State, local 
and private entities can and will step up to pay for future water 
development projects, but the cost of federal requirements for such 
projects must be reduced to affordable levels.
    If the federal government and Congress are no longer willing or 
able to fund the construction of water supply development projects, 
then they should not expect the local beneficiaries to pay for 
expensive mitigation and environmental enhancement components usually 
required by federal agencies in permitting construction of these 
facilities.
    Obviously, the federal laws that govern environmental oversight and 
permitting will not be rolled back anytime soon; therefore, the federal 
government should work to develop additional tools that can be helpful 
in financing these projects to meet local, state and federal needs and 
requirements. Innovative financing tools, such as longer-term, low or 
no-interest loans and loan guarantees to enhance and leverage 
additional private financing, can be useful in expanding the 
availability of funding for water storage projects.

Conclusion
    For more than 100 years, Western water policy has stood out as one 
of the modern era's great successes. Water supply developments took 
large areas of the West that were considered uninhabitable and made 
them so, while producing an agricultural economy envied by the rest of 
the world. Today, we still enjoy the fruits of the investments our 
forefathers made in water storage and delivery infrastructure. Our 
challenge will be how we meet the continuing challenges of maintaining 
these aging facilities, the needs of growing populations (both water 
supply and food production), and the ever-increasing environmental 
requirements and restrictions of federal laws and regulations.
    Sound federal policies are needed that will encourage and enhance 
continued investment in new water supply enhancement projects, rather 
than risking diminished domestic food production and weakened urban and 
industrial economic growth. Relying on agriculture to be a ``shock 
absorber'' to soften or eliminate impending water shortage is not smart 
planning. Western irrigated agriculture is a strategic and 
irreplaceable national resource, and we must continue to protect it by 
developing additional sources of manageable water supplies to meet 
future demands.
    Thank you for the opportunity to testify today.
                                 ______
                                 
    Mr. McClintock. Great, thank you for your testimony.
    Our final witness is Mr. Michael Gabaldon, Director of 
Technical Resources for the Bureau of Reclamation from Denver, 
Colorado to testify.

 STATEMENT OF MICHAEL GABALDON, DIRECTOR, TECHNICAL RESOURCES, 
          U.S. BUREAU OF RECLAMATION, DENVER, COLORADO

    Mr. Gabaldon. Thank you, Chairman McClintock and Ranking 
Member Napolitano, and members of the Subcommittee. I am 
Michael Gabaldon. I am the Director of Technical Resources for 
the Bureau of Reclamation out of Denver, Colorado. And thank 
you for the opportunity to testify today. My written statement 
has been submitted for the record, and I will summarize a few 
points and emphasize others in my verbal testimony.
    Reclamation is a water supply agency. We provide water, 
irrigation water, to more than 10 million acres, and drinking 
water to more than 31 million people on an average year. We 
have 245 million acre-feet of storage, of surface storage, in 
our inventory. And that is in about 350 reservoirs throughout 
the West.
    As stated in my testimony, Reclamation is still actively 
studying surface water storage where it makes sense. In fact, 
we have 19 storage feasibility studies going on right now 
underway in the West, and those are in various stages of--in 
the process. More are in the Pacific Northwest region, some are 
at the appraisal level, not requiring congressional action. 
Others are feasibility studies with long legislative history. 
No one really knows how many of those are going to get to 
actual construction; a lot of additional steps are still 
required, are still ahead of those studies, not least of which 
congressional action for the ones that are found to be 
feasible. As stated on page two of my testimony, most of the 
easy projects were built a long time ago.
    And, as the Subcommittee is very aware, the bar has been 
set pretty high for projects today, as we have already heard. 
What is known is that Reclamation management and recreation 
activities result in an annual impact to the national economy 
of about $55 billion, which supports nearly about 416,000 jobs 
every year. Not bad for an agency that only has $1 billion of 
appropriated funds.
    Reclamation is the largest water supplier in the country. 
We are proud of the traditional mission, and we see it 
continuing in the long term. Reclamation's mission today 
includes many new priorities. To illustrate that fact I would 
point out that since 1990 Congress has enacted just 13 
Reclamation surface storage studies or construction projects. 
But in the same period Congress has added to Reclamation's 
assistance portfolio 53 locally owned water recycling projects, 
12 rural water projects, 13 river restoration projects with 
their own specific legislation, a national drought relief 
program, and a national desalination program, and various other 
authorities.
    Reclamation is up to the challenge. But it is a testament 
to the fact that real-world water managers and their 
representatives in Congress believe in a number of different 
ways to get water to people who need it. Surface storage is 
just one piece of the puzzle. I know that some members of the 
Subcommittee, as well as my fellow witnesses here today are 
keenly interested in four large surface storage projects 
underway in California. Several of them have been mentioned 
already: the Upper San Joaquin River Basin Storage Project; Los 
Vaqueros expansion north of the delta storage; and Shasta Dam 
enlargement.
    I have talked to staff at our Mid-Pacific region on those 
projects, and have--some of our technical staff in Denver are 
playing a very direct role on those studies. I will try to 
answer as many questions about those studies as I can, but my 
day-to-day job is in Denver.
    I will also point out I am an engineer, I am registered 
both in New Mexico and Colorado. I have worked as an engineer. 
I started my career with the Bureau of Reclamation at Ridgeway 
Dam as a construction engineer. I have been--I have designed 
some elements of the Animas-La Plata Project. I have worked on 
dams at Ochoco Dam in Oregon, and also the Minidoka replacement 
powerplant. So I am very familiar and very aware of storage and 
how important storage is to our portfolio. I am not a NEPA 
process expert or a planning expert. So, in some cases, as 
questions come up in those areas I may have to respond to 
questions for the record.
    To sum it up, Reclamation is committed to surface storage 
where it is practical, where it is physical, legal, and 
financial conditions make sense for that storage project. It is 
part of our past, it is very much part of our past. It is very 
much part of our present and our future. And we are happy to 
talk to the Subcommittee today. Thank you.
    [The prepared statement of Mr. Gabaldon follows:]

Statement of Michael Gabaldon, Director of Technical Resources, Bureau 
    of Reclamation, Denver Technical Center, U.S. Department of the 
                                Interior

    Chairman McClintock, members of the Subcommittee, I am Mike 
Gabaldon, Director of Technical Resources at the Bureau of Reclamation 
(Reclamation) in Denver. I am pleased to provide the views of the 
Department of the Interior (Department) on the role of new surface 
storage in Reclamation's water resources planning.
    Understanding what goes in to creating new Reclamation surface 
storage requires an understanding of Reclamation's history. Reclamation 
was authorized with the signing of the Reclamation Act of 1902 by 
President Theodore Roosevelt. The Act's first words created a source of 
funding within the U.S. Treasury, and declared its purpose to be ``the 
examination and survey. . .and the construction and maintenance of 
irrigation works for the storage, diversion, and development of waters 
for the reclamation of arid and semiarid lands in the said States and 
Territories. . .''. With the enactment of the Reclamation Act, the 
United States set about the creation of dozens of projects that 
ultimately did far more than just provide water for irrigated 
agriculture. Power supplies, municipal water, new economies and 
eventually whole cities grew up around Reclamation projects in places 
like Boise, Idaho; Spokane, Washington; Las Vegas, Nevada; Casper, 
Wyoming; El Paso, Texas and many other places.
    For decades during the early 20th century, Reclamation surveyors 
and engineers scoured the 17 western states for the best dam sites, 
working to bring water to as many farms as possible. Wide distribution 
of the public domain was a goal established earlier by the Homestead 
Act of 1862, which had offered virtually free land to families in 
parcels of 160 acres. The language of the Reclamation Act of 1902, 
before subsequent amendments, provided wide discretion to the executive 
branch to withdraw land, study and construct projects. With an emphasis 
on rapid growth and development, Reclamation labor and contractors 
built or modernized nearly half of our current dam portfolio in the 
first 38 years of Reclamation's existence, with 231 dams complete or 
under construction by 1940.
    In Reclamation's early years, Congressional interest in projects 
was intense and development proceeded briskly. However, limitations in 
technical understanding and different societal priorities at the time, 
resulted in little or no consideration being given to environmental 
impacts, or the rights of native Americans. As a result, many of the 
early Reclamation projects brought unintended consequences that would 
be mitigated and litigated for decades, continuing into the present 
day.
    With enactment of the Federal Water Project Recreation Act in 1965 
(Public Law 89-72), the process of authorizing and constructing large 
Reclamation dams changed dramatically. Section 8 of the Act stated, 
``Effective on and after July 1, 1966, neither the Secretary of the 
Interior nor any bureau nor any person acting under his authority shall 
engage in the preparation of any feasibility report under reclamation 
law with respect to any water resource project unless the preparation 
of such feasibility report has been specifically authorized by law. . 
.''. The rate of Reclamation projects authorized had ebbed and flowed 
over the years, but with enactment of PL 89-72, projects now required 
more Congressional action before proceeding. Some began to think that 
Reclamation's heyday was over, and with the enactment of the Recreation 
Act, after 1966, all surface storage projects would require individual 
Congressional authorization before proceeding, a requirement that 
continues to remain in force.
    Today, with more than 100 years of additional Congressional 
direction on top of the 1902 Act, the current mission of the Bureau of 
Reclamation is to manage, develop, and protect water and related 
resources in an environmentally and economically sound manner in the 
interest of the American public. Reclamation still studies, constructs 
and maintains large surface storage projects, when authorized by 
Congress, and in fiscal year 2012, Reclamation has a construction 
budget of more than $180 million for a variety of projects. But surface 
storage in the construction budget has been joined by dam safety, and 
the modernization or repair of infrastructure built years ago. For many 
reasons--political, economic, social--the construction of traditional 
surface storage projects is undertaken on a much more limited basis 
than in decades past. And new societal priorities and advancements in 
scientific knowledge support increased focus on ecosystem restoration, 
adverse impact mitigation, efficient management, rural water, 
wastewater reclamation, and conservation. These priorities have become 
central parts of the Reclamation mission today, and some of them yield 
significant quantities of new water supply in a very cost efficient 
manner.
    There are roughly three dozen Reclamation dam projects 
i, project features or other storage facilities across the 
West that were authorized by Congress but, for one reason or another, 
were never funded or constructed. The stories vary, but the most 
frequent reasons center around economics or an inadequate potential 
water market associated with the given facilities. In other cases, 
environmental, safety or geologic challenges came to light during a 
project's development, and rendered its construction, completion or 
operation unfeasible. Political opposition often contributed, leaving 
the facilities ``on the books'' awaiting further action, but with 
external events and new priorities passing them by.
---------------------------------------------------------------------------
    \i\ Narrows Dam and Reservoir, Charleston Dam and Reservoir, East 
Mesa Flood Detention Dike, McDowell Mountain Tunnel, Orme Dam and 
Reservoir, Powerplant, Pumping-Generating Plant, and Canal, San Pedro 
Aqueduct, San Pedro Pumping Plant, Lower Colorado River Water Salvage 
Project, Moapa Valley-Muddy Creek Project, Virgin River Dam, Dikes, and 
Reservoir, Auburn Dam, Folsom South Canal (not fully completed), County 
Line Reservoir and Folsom-Malby Conduit not completed, Allen Camp Dam 
and Resevoir, Lookout Diversion Dam, Swifts Corral Dam and Reservoir, 
Paiute Dam and Reservoir, Paiute-Lead Lake Canal, Allerman Canal 
Enlargement and Extension, Watasheamu Dam, Reservoir, and Powerplant, 
Carson Canal, West Fork Dam and Reservoir, Palmer Lake, East High Canal 
with regulating Black Rock and Michigan Prairie Dikes, Crooked River 
Diversion Dam, Harper Dam and Reservoir, Yoder Dam and Reservoir, North 
Side Unit Pumping, Sexton Dam and Reservoir, Teton Dam and Power and 
Powerplant, Dayton Dam and Reservoir, Animas Mountain Dam and 
Reservoir, Loma Extension Division, Norwood Tunnel, Larrabee Dam and 
Reservoir.
---------------------------------------------------------------------------
    In Washington State, Reclamation and the Washington Department of 
Ecology studied the Black Rock Reservoir surface storage site for 
nearly five years during the 2000s, with the aim of securing existing 
irrigation supplies, improving fish habitat and meeting future 
municipal and industrial needs. In the end, construction costs 
approaching $8 billion, a poor cost benefit ratio, and concerns about 
seepage that could mobilize contaminants at a nuclear waste facility 
rendered the Black Rock Reservoir site infeasible. Reclamation, in 
partnership with Washington State, continues to evaluate other water 
supply strategies, including surface water storage options, in the 
context of an integrated plan for the Yakima River basin.
    In California, the Auburn Dam surface storage reservoir was studied 
and actually entered construction, but has never been completed. It was 
authorized in 1965 as a multi-purpose facility by Public Law 89-161, 
and after the completion of studies and design, Reclamation commenced 
construction in 1972. In 1975, a magnitude 5.7 earthquake occurred 
about 50 miles northwest of the dam site near the state of California's 
Oroville Dam. Reclamation halted construction and eventually concluded 
that while the Auburn facility could be re-designed to withstand likely 
seismic activity, the resulting costs exceeded the Congressional cost 
ceiling, and dramatically changed the project's economics. As of this 
date, Congress has not passed legislation to amend the project 
authorization or increase the cost ceiling. And the California State 
Water Resources Control Board cancelled Reclamation's water rights 
permits for the project in 2008.
    As indicated, not every proposal for new surface storage pans out. 
Nevertheless, Reclamation has not abandoned surface storage proposals, 
or the role of surface storage in a diverse portfolio of water 
management solutions. We continue to study them in areas where 
conditions are viable, and Congressional authorization exists, and 
where the prospective environmental benefits outweigh the impacts.
    In May of 2011, Reclamation's Mid-Pacific Region provided a 
briefing to staff of this Subcommittee regarding four surface storage 
studies underway in California which, as currently configured, could 
provide 3.75 million acre-feet of new storage if they are authorized, 
funded and constructed. They are a raise of the existing Shasta Dam; 
expanding the existing Los Vaqueros Reservoir; construction of a new 
off-stream facility north of the Delta (NODOS, known locally as Sites 
Reservoir); and the construction of a new on-stream facility on the 
Upper San Joaquin River. The studies, authorized under separate 
legislation, were funded historically as part of the joint state and 
federal CALFED Bay-Delta Surface Storage Investigations Program \1\and 
federally under the California Bay-Delta Restoration Program in the 
President's budget request for the past seven years. Work will continue 
in the current fiscal year to bring the studies closer to completion.
---------------------------------------------------------------------------
    \1\ http://www.water.ca.gov/storage/
CALFED%20Progress%20Report%202010/index.cfm
---------------------------------------------------------------------------
    Each of the California studies is taking place in an environment of 
relentless operational and environmental change, with new biological 
opinions, litigation of those biological opinions and court-ordered 
analysis under the National Environmental Policy Act, considerations 
about climate change, and widely varying hydrologic challenges inherent 
in California water. As of today, Contra Costa Water District has 
nearly completed a small expansion of Los Vaqueros Reservoir, and 
continues to study an even larger expansion for the future. In 
addition, the Mid Pacific Region has just released a Preliminary Draft 
Environmental Impact Statement and Draft Feasibility Study Report for 
enlarging Shasta Dam. Public draft reports for a new off-stream storage 
facility in Northern California are expected within the year. While 
complex and time consuming, Reclamation believes that the expertise it 
provides in these studies remain an extremely important contribution to 
California's long-term water future. We are committed to seeing the 
studies through to completion.
    At the same time, Reclamation has underway 12 studies \2\ of major 
river basins in the west under the WaterSMART Program, authorized by 
the SECURE Water Act in Public Law 111-11. All of these major Basin 
Studies will consider structural and non-structural options to supply 
adequate water in the future. This will include consideration of 
potential new surface storage needs, as directed in the Act at Section 
9503(b)(4)(e).
---------------------------------------------------------------------------
    \2\ http://www.usbr.gov/WaterSMART/bsp/studies.html
---------------------------------------------------------------------------
    New Reclamation surface storage has come on line in Colorado with 
the filling last year of Ridges Basin Dam/Lake Nighthorse, built 
pursuant to Public Laws 100-585 and 106-554. These laws adapted the 
overall Animas-La Plata (ALP) project, envisioned years prior, into a 
negotiated settlement of water rights claims by the Southern Ute Indian 
and Ute Mountain Ute Tribes in southwest Colorado. The ALP is designed 
to supply an average of more than 111,000 acre-feet of water to four 
user entities including the tribes in Colorado, and three more in New 
Mexico \3\ via a pipeline currently under construction that will supply 
water around Shiprock, NM. The capacity of Ridges Basin Dam/Lake 
Nighthorse is 120,000 acre-feet.
---------------------------------------------------------------------------
    \3\ http://www.usbr.gov/uc/progact/animas/faq.html
---------------------------------------------------------------------------
    New Reclamation surface storage is also online in southeastern 
California, with completion in 2010 of the Drop 2/Warren H. Brock 
surface storage reservoir about 30 miles east of El Centro. In 2005, in 
cooperation with Imperial Irrigation District, Coachella Valley Water 
District, San Diego County Water Authority and Metropolitan Water 
District of Southern California (MWDSC), Reclamation completed a study 
that identified several potential alternatives to improve system 
efficiency on the Lower Colorado River, and this project was the 
preferred option. In December 2006, Section 396 of Public Law 109-432 
directed Reclamation to ``design and provide for the construction, 
operation and maintenance of a regulated water storage facility...at or 
near the All-American Canal.'' \4\ With funding provided by Southern 
Nevada Water Authority, MWDSC, and Central Arizona Water Conservation 
District, in exchange for water credits, work began in 2008 and was 
finished on time and under budget. The 8,000 acre-foot facility 
conserves previously non-storable flows estimated to be 70,000 acre-
feet per year on average. In 2011 it beat expectations, conserving 
121,000 acre-feet.
---------------------------------------------------------------------------
    \4\ http://www.usbr.gov/lc/region/programs/drop2reservoir.html
---------------------------------------------------------------------------
    Clearly, surface storage projects still happen, but many of the 
best sites have been built. And as explained above, they compete for 
funds with dozens of other Congressionally-mandated priorities. New 
storage projects proceed to completion on a more limited basis than in 
decades past. However, we believe that the diversity of 21st century 
water challenges in the West calls for a diversity of solutions, 
including surface storage projects, that are appropriate, 
environmentally and economically sound, and in the interest of the 
American public.
    This concludes my written statement. I am pleased to answer 
questions at the appropriate time.
                                 ______
                                 
    Mr. McClintock. Thank you for testimony. We will now begin 
with questioning, and I will yield five minutes to myself to 
begin.
    Mr. Semanko, we heard from the Ranking Member that the 
problem isn't excessive regulation in building new dams, it is 
simply lack of money. What is your view of that?
    Mr. Semanko. Well, I think, Mr. Chairman--thank you for the 
question--I think it is a combination both. Certainly in Idaho 
we have seen leadership from the Idaho Resource Board working 
with our Federal partners. And I think both the Ranking Member 
and Mr. Gardner talked about public-private partnerships and 
about Federal-state-local partnerships. And that is what we 
need, going forward. We have always had that in the West. That 
is why I wanted to point out the Carey Act, because originally 
Congress's goal was to encourage the private sector to invest, 
then the Federal Government stepped in----
    Mr. McClintock. Isn't that the way we used to finance dams? 
There would be a revenue bond either issued by the state or by 
a local entity, or money would be funded by the Federal 
Government, and then that money would be repaid by the users of 
these facilities in proportion to their use?
    Mr. Semanko. Mr. Chairman, absolutely. And over the years, 
the----
    Mr. McClintock. Do you think we need to get back to that 
process? For example, the Ranking Member rightly criticized the 
use of taxpayer funds to subsidize these projects. Again, they 
used to be paid for entirely by users. In fact, Title XVI is 
paid entirely by taxpayers, which is probably the reason why we 
see these projects coming in, averaging twice the cost of 
imported waters, because the people that are actually using 
that water aren't actually paying for it, it is being paid for 
by general taxpayers.
    Mr. Gabaldon, you said that there are 19 studies moving 
forward right now of dam sites. How many are you actually 
building right now?
    Mr. Gabaldon. Those are--the 19 that I mentioned are 
studies.
    Mr. McClintock. How many are you actually building?
    Mr. Gabaldon. We are not building any of those 19.
    Mr. McClintock. You are not building anything right now. 
That is the problem, is you guys spend countless dollars and 
endless time studying, and you are now spending absolutely no 
time or funding to actually construct these facilities.
    But let me ask you this. How many dams are you studying 
currently for removal?
    Mr. Gabaldon. We are--as far as the original question, we 
are recently finished a couple of projects, of storage 
projects, the Animas-La Plata that I mentioned. We filled that 
last year----
    Mr. McClintock. Yes, that is the only one this generation 
that is a major reservoir built by the Department of 
Reclamation. Now, answer my question, please. How many dams are 
you currently studying for removal?
    Mr. Gabaldon. For removal we are looking at Klamath 
removal. The other project that I am aware of that is looked at 
for removal purposes is the one up in the Olympic Peninsula, 
Elwha Dam.
    Mr. McClintock. And, by the way, are either of those for 
safety purposes?
    Mr. Gabaldon. The one--no, no.
    Mr. McClintock. No, of course not.
    Mr. Gabaldon. No----
    Mr. McClintock. Mr. Bettner, California currently has one 
of the lowest precipitation levels on record, which is quite a 
change, as I mentioned, from last year, when we had one of the 
wettest years on record. During that period, did Reclamation 
spill a lot of water, simply because of a lack of capacity?
    Mr. Bettner. Yes. The answer is yes. I can't give you a 
definite amount from the last two years. I know for one example 
this year, even though it is dry, Reclamation is currently 
releasing about 100,000 acre-feet to provide water to--for 
temperature control, for winter run. That water is being lost 
to the ocean right now. If we had a project like Sites, we 
could actually pick up that water and we would be reusing it in 
this dry year. So we see some benefits, even in a dry year, for 
new reservoirs and system reoperation.
    Mr. McClintock. If the current drought continues, what do 
you--how do you anticipate this lost water to impact the people 
of your region?
    Mr. Bettner. Our region, there will be--some of our water 
users will experience a cut on the west side of the Sacramento 
Valley, and it would probably mostly accrue to users south of 
the delta.
    Mr. McClintock. Mr. Semanko, I know that Idaho is studying 
several new water storage projects. How is the Endangered 
Species Act going to affect those projects?
    Mr. Semanko. Terribly, I am afraid. We have a--I don't know 
how else to say it--a bogus designation of critical habitat on 
the Boise River. The bull trout are not really threatened. Our 
Governor is leading the way in working with Fish and Game and 
U.S. Fish and Wildlife Service to see if we can get those fish 
delisted. But if that critical habitat designation stays in 
place, we are going to have a hard time.
    And also, the downstream flow requirements for fish make it 
very tricky, and section 7 consultations will be required for 
both the Galloway And the Arrowrock raise, so they will be 
very----
    Mr. McClintock. And don't these dams also provide an 
enormous array of environmental benefits?
    Mr. Semanko. Mr. Chairman, absolutely. Recreational, 
environmental, fisheries, local fisheries, wetlands--if you 
took those projects out, you would eliminate Lake Lowell, all 
of the recreation that is throughout the Boise and the Payette 
Basin. So, yes, absolutely.
    Mr. McClintock. Great, thank you. The Ranking Member is 
recognized for five minutes.
    Mrs. Napolitano. Thank you, Mr. Chairman. To Mr. Gabaldon, 
in a recent news article it was mentioned that the--with the 
exception of Animas-La Plata, a project in southwestern 
Colorado, Rec has not built any large dams and reservoirs over 
the last generation. Is this accurate?
    Mr. Gabaldon. As I stated before, the Animas-La Plata, we 
also have the Drop Two Reservoir on the Colorado River. That is 
another project, and that is a project that we worked with the 
Sierra, Nevada Water Authority along with metropolitan----
    Mrs. Napolitano. And while you are at it, will you tell us 
what--I am sorry to interrupt, but my time runs--what is the 
water savings and what was the Federal expense on that one?
    Mr. Gabaldon. Federal expense? The funding was put up by 
those entities I was just mentioning, Southern Nevada, Central 
Arizona Project.
    Mrs. Napolitano. So zero to the taxpayer.
    Mr. Gabaldon. Zero to the taxpayer in that case, yes.
    Mrs. Napolitano. And the savings in water?
    Mr. Gabaldon. Savings of water, we anticipated about 80,000 
acre-feet, 70,000 to 80,000 acre-feet per year. Last year it 
actually yielded about 100,000 acre-feet of water.
    Mrs. Napolitano. And compared to traditional dam projects, 
how does that compare?
    Mr. Gabaldon. Compared to traditional----
    Mrs. Napolitano. Cost versus yield.
    Mr. Gabaldon. Animas-La Plata is 120,000 acre-feet of 
water, and that cost half-a-billion dollars. So, I mean, just a 
comparison there.
    Mrs. Napolitano. OK. Then the third question would be if it 
produces that much, what message should we get from the 
comparison of one project locally without Federal money, versus 
a Federally funded project? What is the takeaway message on 
that?
    Mr. Gabaldon. As I stated in my testimony, I think the 
takeaway message is that the Bureau of Reclamation, we are 
still in the business of looking at everything we possibly 
could do to get water, conserve water, stretch water--new 
technology to storage, to conservation, to water conveyance. It 
is all part of that----
    Mrs. Napolitano. All of the above.
    Mr. Gabaldon [continuing]. As was mentioned earlier.
    Mrs. Napolitano. All of the above?
    Mr. Gabaldon. All of the above.
    Mrs. Napolitano. And how much water has been brought 
online, due to the Reclamation's various conservation actions? 
And how does this compare to a traditional dam project? And I 
am talking about WaterSMART.
    Mr. Gabaldon. WaterSMART? The Secretary's goal for 
WaterSMART is 490,000 acre-feet of water for 2012. So, just to 
put that in perspective.
    Mrs. Napolitano. Mr. Brown, Los Vaqueros Reservoir was also 
one of the projects identified in CALFED, And is currently 
being studied by Reclamation. Recently you have moved forward 
to expand the facility yourself. Why?
    Mr. Brown. Well, primarily because the 160,000-foot raise 
is what we needed to meet our customer needs And provide Bay 
Area reliability.
    Mrs. Napolitano. OK, but you are moving forward to--was it 
the funding issue, also?
    Mr. Brown. Well, the amount of money was $100 million for 
the extra 60,000 acre-feet, and that is what we were able to 
afford with our rate payers paying.
    Mrs. Napolitano. Thank you. To any of you, I have not heard 
anybody mention Native American water rights, and how that 
would affect anything concerning this topic.
    Mr. Semanko. I might--Ranking Member, I might offer that 
not very many years ago, in 2004, Congress approved the Nez 
Perce Water Rights Agreement. And a key part of that was 
assuring that there were water rights available both for the 
Native American tribes and for other folks. And, as part of 
that agreement, there was a recognition that we may need 
additional storage going forward, and that additional storage 
may actually provide supplies for everyone across the board. 
You don't have to fight over the pie if you have other pies and 
cakes and cupcakes for everyone. So that was a key part of that 
agreement approved by Congress in 2004.
    Mrs. Napolitano. But many of the traditional tribes do not 
get to be at the table, unfortunately, and that is what I am 
finding out.
    Now, the percent of recycled water, I agree, to us in 
California--to me in California it is very critical. Does 
anybody figure out how much percentage it may take to put at 
the table with the rest of the other efficiencies to be able to 
create more water? And I am talking about real water, not paper 
water.
    [No response.]
    Mrs. Napolitano. Anybody?
    Mr. Brown. In our service area, about 10 percent of our 
demand is met with recycled water. And we are an advocate of 
cost-effective recycling. Not all recycling is good recycling. 
There is some that--discharges that are already being 
beneficially used by their downstream users. So it just depends 
on the project, and it depends on the use.
    Mrs. Napolitano. And also--and one of the things I have 
learned is sometimes the water runoff from the farms is also 
contaminated with pesticides and fertilizers, which does more 
damage to the rivers and areas.
    Mr. Semanko, the Nez Perce Settlement also allows for more 
waterflows for fish, not just ESA?
    Mr. Semanko. Ranking Member, that is exactly right. The 
487,000 acre-feet was the agreement to settle their claims in 
the Snake River Basin adjudication and to provide some 
assurances under the Endangered Species Act. That was the 
subject of the consultation with the Bureau of Reclamation And 
NOAA fisheries. Yes, very much so.
    Mrs. Napolitano. So it wasn't just ESA. Thank you, Mr. 
Chair----
    Mr. McClintock. The gentlelady's time has expired. Mr. 
Tipton.
    Mr. Tipton. Thank you, Mr. Chairman. I appreciate the 
Ranking Member bringing up the Animas-La Plata Project. And, 
Mr. Gabaldon, when that project was built, that is probably one 
of the last--it was stated to be one of the last big projects 
to be built. Wasn't that fulfilling the commitment that we had 
made to fulfill Indian water rights in the State of Colorado?
    Mr. Gabaldon. Yes, it was. It was a settlement agreement.
    Mr. Tipton. To be able to do that. Wasn't that project 
downsized?
    Mr. Gabaldon. It was downsized.
    Mr. Tipton. Significantly to Animas-La Plata Lite.
    Mr. Gabaldon. Yes.
    Mr. Tipton. In your estimation, for Animas-La Plata, the 
McPhee Project over Montezuma County, being able to store that 
water, wasn't that beneficial, in terms of some of the 
commentary that we have heard in regards to the Endangered 
Species Act, to be able to actually maintain river flows?
    Mr. Gabaldon. I don't know. I am trying to think of the 
plumbing in my head. I am not sure how that would have affected 
the river flows, so I would have to answer that question for 
the record.
    Mr. Tipton. Some of the releases--I live there. That has 
actually been the case, in terms of what we have been able to 
see.
    I am a little curious, Mr. Gabaldon, in regards to the 
Bureau of Rec had partnered with CSU, Colorado State 
University, spending $229,000. And the objective of the study 
was to provide information to our state agencies and water 
users about the potential of agricultural water transfers to 
address increasing urban needs.
    I am just--it seems to me that is common sense. We saw 
Denver growing, as Mr. O'Toole noted. Why were you spending 
money on such a study?
    Mr. Gabaldon. I am not familiar with that study. Again, I 
will have to answer that one for the record. We often spend 
money just to study to look at what the best alternatives are 
in some situations. That is probably the case here. But, like I 
said, I will have to get that for the record.
    Mr. Tipton. OK. And would it be unreasonable--and, Mr. 
O'Toole, you might want to jump in on this as well--1950, 1960, 
the U.S. Census noted that we had 130 million Americans. Mr. 
O'Toole had spoken to the need to have increased agricultural 
production to the tune of 70 percent to meet the growing 
worldwide population. But just in our country we have grown 
from 130 million Americans to better than 300 million Americans 
right now. Every one of them probably wants to take a bath, or 
going to need one. And we are going to have to be able to have 
water to be able to grow those crops.
    Wouldn't it be a sensible solution, when we have, as the 
Chairman had noted, great snowpack years in California like we 
had last year, and even in Colorado, to be able to store more 
of that water, just to be able to plan for the future?
    Mr. Gabaldon. Absolutely. It would be fantastic if we could 
do that. As I stated earlier, we would need congressional 
authorization to build those projects, to raise dams, et 
cetera. So--and I stated earlier I am an engineer, I have built 
dams. So I would more than--would like to see more of those.
    Mr. Tipton. You are an engineer. And a lot--you build 
things, you want to be able to make them work. Do you see ways 
to be able to streamline this process? Because we heard a 
variety of testimony that was going on in terms of redundant 
regulations, road blocks that are being put up, increasing 
costs.
    I have a great concern in my district for our farm and 
ranch community, for senior citizens on fixed incomes. We are 
unnecessarily increasing water costs, which becomes a back door 
tax increase on struggling Americans that are trying to be able 
to provide for their families. Do you have some recommendations 
on how we can streamline this process?
    Mr. Gabaldon. There is--the processes are founded in law, 
founded in regulations. It has been mentioned earlier the 
Endangered Species Act, the Clean Water Act, NEPA, et cetera. 
Those are the law, that is the law of the land. We need to 
comply with them, just as----
    Mr. Tipton. But as you noted, there are regulations in 
there that can certainly be addressed from administrative 
levels.
    So, Mr. O'Toole, would you like to jump in on this?
    Mr. O'Toole. Yes, sir. And let me say in the last month I 
took a trip through the Navajo Nation from Cortez, Colorado 
down through--into Arizona, and have met with the head of 
farming for the Navajo Nation. They have now the capability to 
go from 70,000 to 110,000 acres of irrigated land. It is all 
infrastructure.
    And I think a hearing like this is so important to 
understand that we have to make a recommitment to that 
commitment we made generations ago. It is important to have 
rural infrastructure. The light--the Animas-La Plata Lite that 
you referred to, sir, that would have had the ability to expand 
many acres in Colorado, if the original vision had been 
completed.
    And I think we went through a period where we kidded 
ourselves that we could live without infrastructure. We can't. 
The Platte River Dams were built during the Roosevelt 
Administration, not Franklin. They are 100 years old.
    Mr. Tipton. OK----
    Mr. O'Toole. The infrastructure has to be dealt with, and 
we have to have new storage to be able to complete our vision.
    And the numbers in this think tank thing that I have been 
asked to participate in went from--in the year that I have been 
there--from 9.2 to 9.6 billion----
    Mr. McClintock. I am sorry, Mr. O'Toole, I am going to have 
to cut you off.
    Mr. O'Toole. Yes----
    Mr. McClintock. Time has expired, plus. Mr. Costa?
    Mr. Costa. Thank you very much, Mr. Chairman. Mr. O'Toole, 
your family has been farming for generations. My family has 
been farming for three generations. I farm today. We both 
obviously support additional surface storage supply.
    But let me ask you, as a farmer--I mean I--all my farmers 
look very closely at the bottom line, to stay in business. And 
per acre-foot on how much we pay for our water is part of the 
bottom line. There is an old proverb that says--goes something 
like this, that, you know, you don't care what color the cat 
is, as long as the cat catches mice. We know we need additional 
water. Do you care so much about this project versus that 
project, or do you care most about what the cost per acre-foot 
is to the farmer?
    Mr. O'Toole. Let me give you two answers. One is that 
Family Farm Alliance, from a perspective of our over 17-state 
look at the West, we think that storage that may not be for 
agriculture but keeps water from being transferred from 
agriculture is one critical part. But clearly, the cost of 
water is--the bottom line is if you are a farmer, the guy that 
rules your world is the bankers. And you have to make that 
payment----
    Mr. Costa. No, I know. But I mean getting back to the cost 
of water is what my farmers care the most about.
    Mr. O'Toole. Yes, sir.
    Mr. Costa. Mr. Bettner?
    Mr. Bettner. Yes?
    Mr. Costa. The cost per acre-foot, since this is what I am 
talking about right now, on Sites would be approximately how 
much on the current funding plan that you have?
    Mr. Bettner. Right now it is estimated--well, at least the 
Bureau has estimated--about $300 per acre-foot.
    Mr. Costa. $300 per acre-foot.
    Mr. Bettner. Right.
    Mr. Costa. And when you blend that with existing water 
supplies, it makes it more affordable when you look down the 
road, I guess.
    Mr. Bettner. That is true. But the other things we are also 
looking at is, is the project properly designed, are the most 
recent construction techniques And cost involved in that 
estimate, have you looked at the right financing mechanisms?
    Mr. Costa. Right.
    Mr. Bettner. And so, really, you know, what it costs, how 
you pay for it----
    Mr. Costa. And this innovative funding methodology you 
think would go a long ways toward getting you to a more cost-
feasible project?
    Mr. Bettner. Exactly. I mean you have to know how--what 
it--how much it costs, and who can afford to pay----
    Mr. Costa. Mr. Brown, for the expansion of Los Vaqueros, 
the additional from 100,000 acre-feet to 275,000 acre-feet, how 
much per acre-foot are you talking about?
    Mr. Brown. It is about $300 an acre-foot.
    Mr. Costa. About the same as Sites. Mr. Gabaldon, I want to 
ask you. You talked about the projects that we are looking at. 
But has there been an attempt to assess how many acre-feet of 
water we will need in California or in other parts of the West, 
in terms of just a total to sustain the population growth and 
to maintain an agriculture economy?
    Mr. Gabaldon. We haven't studied that aspect of it. But 
that is certainly information that is out there, widely 
available.
    Mr. Costa. Let me get a little more local. I will come back 
to that with a letter. But the Bay Delta Conservation Habitat 
Program that I am very hopeful will get to some decision points 
this summer, under the conveyance program assessment I am told 
that part of the hangup with your study of Shasta being raised, 
Sites, Los Vaqueros, And Temperance is talking about whether or 
not the conveyance program assessments have to be complete. 
What does that mean, in your view?
    Mr. Gabaldon. The conveyance assessments, we are studying 
the conveyance--the operational side of that conveyance 
process. We now have some experience under our belt on that. We 
have now been in operations for a few years with that 
conveyance. So with that information we are taking another look 
at it, reformulating----
    Mr. Costa. Well, I think you have to take another look. Why 
is it the Bureau can't determine the feasibility of Temperance 
Flat or Sites until there is certainty in the Delta? I mean I 
think both of those projects, frankly, stand alone but could 
enhance issues with regards to environmental restoration.
    Mr. Gabaldon. I agree with that, that there is a whole lot 
of components you need to look at there. And there are some 
situations where they stand alone. In this situation we are 
looking at all those together. And perhaps they could be 
separated and looked at separately, so----
    Mr. Costa. Much has been talked about in the studies, and I 
said in my opening statement these studies have gone through 
two and sometimes three Administrations. What is the shelf life 
of a study?
    Mr. Gabaldon. Something this complex, with relentless 
operational, environmental issues associated with them, they 
could go for 10 years, 20 years.
    Mr. Costa. So if you completed something--and I know my 
time has expired, Mr. Chairman, but just----
    Mr. McClintock. Yes, it has.
    Mr. Costa. If you completed something in 2005, how long is 
it good for, 10 years? Fifteen years?
    Mr. Gabaldon. That is probably a decent estimate.
    Mr. Costa. Great.
    Mr. McClintock. Thank you.
    Mr. Costa. Thank you.
    Mr. McClintock. Mr. Gosar?
    Mr. Gosar. Mr. Bettner, I am a dentist by trade, so I am a 
poor impersonation of a politician. But I understand business, 
and that is where I want to go with this one. The 
Administration has talked about most of their money has been 
allocated for upkeep and stuff like that. So I want to look at 
the private equity markets, and how we get them involved here.
    In the current environmental process, how do you see this 
working? You know, time to me is money. So give me an outline 
of how do you see us working this through.
    Mr. Bettner. Well, I think we work it through the same way 
we actually do our local projects. You know, a lot of it is 
trying to figure out what do we need, what can we afford, how 
are we going to pay for it, how does that affect our rate-
payers, in terms of recollecting those costs? And then, from 
there, we actually do the environmental documentation, based on 
that project, looking at alternatives. And then, if we need to, 
we may have to mitigate for those--that project.
    So, we set up--that way we actually address the financial 
side up front, versus right now the way it is set up is you 
have to do all the environmental work up front, and you never 
really get to how do you pay for it. And if you do, sometimes 
it becomes unaffordable. So you have lost all that time, you 
lost all that money.
    And then, when we have talked to the private markets about 
how to finance a project like Sites, they want to know, well, 
is this going to--can this project go or not? And if you can't 
give them, you know, the say of, yes, we can get this thing 
built, they are going to take their money and go somewhere 
else. And so, trying to keep them interested in a project is 
vitally important.
    Mr. Gosar. So it is a time variable, right? The longer the 
time variable, there is a cost. Right?
    Mr. Bettner. Exactly. I mean, yes, from not only just 
trying to get the investors to invest in the project, but they 
are also holding their money out while you are trying to get 
studies done, design, and construction. So the more you can 
shorten up that window, the more you can get more people 
willing to invest in the project.
    Mr. Gosar. So, you know, from the environmental aspects of 
these studies, I know what Mr. Gabaldon said, that these 
studies are good for 10, 20 years. But they are really not, are 
they?
    Mr. Bettner. No. I mean they are not. I mean the other big 
concern is not just the time, but the problem is if you go into 
the project from an environmental review standpoint saying, 
``This is a way you may operate and build it,'' but in the end, 
once you decide what your financing is, and what beneficiaries 
want the water--including the environment, if you have a 
different project that comes out of that financial look, you 
may have to redo all your environmental documentation because 
your project has changed.
    Mr. Gosar. So how much of your cost would be, you know, a 
typical project cost for mitigation for environmental 
permitting?
    Mr. Bettner. Well, I can go back to, for example, one of 
our recent projects. We put a flat-plate fish screen on our 
diversion structure about nine years ago. It was a $40 million 
project. We spent $15 million in all the environmental work, 
permitting, and mitigation. So almost a third of the project.
    Mr. Gosar. Mr. Semanko, could you give me an idea of what 
your cost would be, environmental aspects and permitting?
    Mr. Semanko. Yes, Mr. Gosar, I will have to get that to you 
for the record. It is substantial, though. It is almost a show-
stopper for our projects.
    Mr. Gosar. And it is an ever-evolving door, is it not?
    Mr. Semanko. Absolutely. The longer the permission process 
goes on, the permitting process, the higher the cost scope, 
particularly given the favorable costs we have right now.
    Mr. Gosar. So, going back to you, Mr. Bettner, in your 
opinion, what type of reforms to the existing law do we in 
Congress need to implement to streamline this? We need rules. 
Don't get me wrong. We need rules and regulations and hold them 
accountable. But what kind of streamlining do you see us 
needing?
    Mr. Bettner. I mean I think first, really--and, you know, I 
think Reclamation needs to define its role. I think you have a 
staff of employees at Reclamation we work with that do a good 
job, but they are also bound by existing law. And if they went 
into a project, for example, not as ``We are going to build 
this project,'' if they went in versus ``We are going to help 
support this project, we may help with permits, but we are not 
going to be the builder, financier, operator of the project,'' 
that changes their role dramatically. And from there you 
actually can get to construction feasibility, in my mind, a lot 
quicker.
    As far as permitting goes, the other thing we like to have 
is right now you almost have to go consult individually with 
each agency through your process. There is really no joint 
consultation set up, unless----
    Mr. Gosar. So you highlight for me--this process is linear. 
You got to do point one first, then the next one, then the next 
one. Why can't we have a project manager doing them all at the 
same time?
    Mr. Bettner. Yes, I mean, to--in my mind, that would be a 
great role for Reclamation, if they could be the one that 
actually went out and did a joint consultation on it. That is 
part of their role, but maybe that is the role that they should 
fulfill. Giving them congressional direction like that would be 
very helpful.
    If they are not in the business of wanting to build 
projects, finance them, let's construct the right role for 
them, and they have the staff to get it done.
    Mr. Gosar. Imagine that, multi-tasking. Last question. We 
really need to have litigation reform, do we not? Particularly 
in the----
    Mr. Bettner. You know what? I can't--I am an engineer. I 
try not to--if my attorneys--if I start talking, my attorney, 
he will get mad at me. So I am not going to--I can't answer 
that one.
    Mr. Gosar. Mr. Semanko?
    Mr. Semanko. Yes.
    Mr. Gosar. Thank you. My time is up.
    Mr. McClintock. Thank you. Mr. Garamendi?
    Mr. Garamendi. Mr. Chairman, thank you for the hearing. And 
for the witnesses, thank you for your presentations.
    Mr. O'Toole, in your written testimony you said there would 
be nothing done with water in the West without being winners 
and losers, and therein lies the problem. Most everything that 
occurs, there are winners and there are losers. And the task at 
hand is to find a way in which there are winners and winners. 
It becomes very, very complex. I would like to try to get to 
some solutions here.
    One of the issues, it seems to me, is funding at every 
level. At the Federal level, the Bureau of Reclamation has a 
very limited budget, and it stretches that budget out among 
projects across the entire West, the result of which is that 
they are unable--I should ask this as a question.
    Let me make the statement and then put a question mark at 
the end. It seems to me that they are unable to focus 
sufficient attention on individual projects so that things can 
move forward rapidly. Is that the question, Mr. Gabaldon?
    Mr. Gabaldon. That is correct. There is competing projects, 
competing issues that we have to deal with in our budget. We do 
get, as I mentioned earlier, about $1 billion average in the 
appropriations. And with that, within that, we have a lot of 
safety of dams issues, we have a lot of competing issues there.
    Mr. Garamendi. Now, one of the reasons you have so many 
issues to deal with is that we tell you to deal with so many 
issues.
    Mr. Gabaldon. That is right.
    Mr. Garamendi. I mean these are congressional directives. 
We say, ``Do this,'' ``Do that,'' and then we don't give you 
enough money to get it done rapidly. And so, this is something 
that we should be paying attention to, both in projects, as 
well as with the appropriations.
    And associated with that, the question has been 
appropriately raised here as to coordination. Now, this is 
something that we could do here, with regard to directive. We 
could set priorities. Instead of all of us having our own 
individual priorities and telling the Bureau of Reclamation, 
``Get them all done,'' we could set priorities and we could 
require coordination. We don't. And, therefore, don't be 
surprised that it doesn't exist. Insufficient money, 
insufficient direction, and too many things to do with too 
little money. That is our problem, and we create it, and we 
could change that.
    Second, Mr. Bettner, you raised, I think, a very 
interesting point about financing. For some 15 years there has 
been before the Congress an infrastructure bank which could 
finance cash flow projects such as Sites Reservoir. You did 
come up with a different proposal which you call a water 
infrastructure financing innovation act. I would like you to 
expand on that. You did it in about 15 seconds. Could you take 
a little longer? Because this too is a challenge that could be 
ours, if we chose to solve problems instead of just ruminating.
    Mr. Bettner. Sure. Thank you. Yes, and I apologize, I was 
running out of time there. But, you know, we have looked at 
what has been done under the Transportation Infrastructure and 
Finance Act, and that was really kind of what we looked at as 
really the outline, potentially, of how it could work for 
water.
    But under that system, you know, you have basically about 
$10 of credit assistance--for every $10 of credit assistance 
you get $30 of investment in infrastructure. And what we are 
saying is that we don't think it is likely that, you know, if 
we come to Congress with a $3 billion project in 7 years, that 
potentially you are going to say, ``We found money and we are 
going to fund it.''
    So, we have taken the approach of, you know, really it 
needs to be--we need to go to the private side, we need to look 
to them to help finance the project. But if there was some 
Federal mechanism to basically provide some backing to those 
long-term investments, that would allow them to come forward 
and be more willing to make investments to the project at a 
potentially lower interest rate, as well.
    Mr. Garamendi. Essentially a loan guarantee program?
    Mr. Bettner. Exactly, exactly.
    Mr. Garamendi. Now, you know, if we want to do something 
besides just yak back and forth across these various hearings 
we could focus on innovative solutions such as this one that 
you have just recommended.
    The other issue that I really would like to get to is how 
we are going to finance all of these projects. The loan 
guarantee program is a way, but it will not sufficiently 
address every project, because there are multiple uses of a 
project, and therefore, multiple payers. This is one of the 
problems that holds up most every project, is who is going to 
pay for it.
    Now, that gets to be a very complex situation. But at the 
outset, you don't know that until you know what the project is 
going to look like and where the beneficiaries might be. We 
need to turn our attention to that mechanism of how to 
determine who is going to pay for it early on in the project.
    I will let it go at that, as a challenge for us----
    Mr. McClintock. The gentleman's time has expired. He will 
have to let it go at that. But we will have another round.
    Mr. Labrador?
    Mr. Labrador. Thank you, Mr. Chairman. Mr. Semanko, Norm, 
you discussed the proposed Boise River Arrowrock, which would 
increase storage space, water supplies, and provide 
environmental enhancements. I understand that you are concerned 
that the U.S. Fish and Wildlife Services designation of the 
Boise River as a critical habitat for the bull trout may impede 
the project's progress. How serious of an impediment is the 
Fish and Wildlife Service's critical habitat designation for 
the project? And what steps can be taken to alleviate it?
    Mr. Semanko. Well, Congressman Labrador, it is a serious 
potential impediment. Arrowrock is an early generation 
Reclamation project. And interestingly, the Corps of Engineers 
is the one that has the feasibility study authority on the 
Boise River, and who the Idaho Water Resource Board has been 
working with.
    Under section 7 of the Endangered Species Act, any time 
there is a proposed Federal action there has to be 
consultation, both with regard to the impact on the fish that 
are listed themselves, and the critical habitat that has been 
designated. So the inquiry with the fishery service will be 
what kind of impact would inundation of an additional 3,000 
acre-feet have, another 5 or 6 miles of riverine habitat 
inundated have. And that is a serious consideration.
    As I mentioned briefly, Governor Otter is not impressed 
with the critical habitat designation. The water user community 
certainly is not. This has been an ongoing saga for 20-some 
years. The Boise River was not included in critical habitat a 
few years ago. And then there was a lawsuit that was 
conveniently settled, And the new critical habitat designation 
included this, notwithstanding the fact that there are 
significant economic impacts associated with the critical 
habitat designation that, under the Endangered Species Act--
that is one of the few places in the Act where economics come 
into consideration. The Service certainly could have found that 
the critical habitat designation was not necessary.
    So, we have reserved the opportunity to litigate that 
issue, frankly. But, more importantly, the Governor, working 
with the Fish And Wildlife Service hopefully, And certainly 
with our Idaho Department of Fish And Game, are beginning the 
assessment through the recovery planning process of whether 
these fish have, in fact, been recovered, whether they can be 
delisted. And if they are delisted, then there would be no more 
critical habitat designation.
    So, that would be a roundabout way of eliminating that 
consideration. But, absent that, we would have to work through 
the Idaho Water Resource Board and the Federal agencies would 
have to work through the consultation process under section 7, 
which is, of course, subject to potential citizen lawsuits, as 
well.
    Mr. Labrador. Considering that Idaho is one of the few 
states in which the state doesn't have the authority to issue 
permits, what avenues will users have to object or challenge a 
permit?
    Mr. Semanko. With regard to the Clean Water Act, that is 
certainly a concern. I know that the Legislature--I believe 
today at a hearing, which you are very familiar with that 
process, as a former legislator--is considering taking over the 
Clean Water Act permitting program, the MPDS program. Really, 
it is very difficult. We--you are basically--your resort is to 
challenging EPA in the Federal district court, and that is no 
cake walk. So it is a very difficult process. Even our DEQ in 
Idaho has very limited influence on the process.
    Mr. Labrador. How much do environmental permitting and 
mitigation add to project costs?
    Mr. Semanko. Congressman, as I mentioned to Mr. Gosar, I 
would have to get exact figures. But it can be a deal breaker. 
It depends on whether a categorical exclusion can be 
identified, whether EA is sufficient, or whether you have to go 
through the full-blown EIS process. If the section 7 
consultation is involved, all of those different variables add 
to the cost. So it can be astronomical. In all cases it is 
going to be significant enough to be a potential show-stopper.
    Mr. Labrador. I am going to ask you a question that may 
throw you off a little bit, and you may not have an answer for 
this.
    But I don't know if you have watched on MSNBC there has 
been a series of ads where some of the political talkers talk 
about projects like the Hoover Dam and, you know, you have one 
of the political talkers are talking about how America is so 
great because we could do projects like the Hoover Dam. And 
every time I see that ad I think of the hypocrisy of some 
people. And I think. Could we build the Hoover Dam today? And 
would there be any impediments to building the Hoover Dam if--
in today's environment? I don't know if you have an answer to 
that, but----
    Mr. Semanko. If you ask the gentleman to my left whether we 
could build Hoover Dam again today, I haven't seen one built 
lately.
    But I can tell you that one of my favorite sayings from 
former Commissioner John Keys is, ``We are building new dams 
all the time. We are replacing and existing dams.'' And that is 
the one thing that we have to make sure that we continue to do, 
in addition to looking at additional storage.
    Mr. Labrador. Thank you.
    Mr. McClintock. Thank you. Mr. Gardner?
    Mr. Gardner. Thank you, Mr. Chairman. And, Mr. Gabaldon, 
what is the number one priority of the Bureau of Reclamation?
    Mr. Gabaldon. Our--I go back to our mission. That is to 
deliver water and generate power. That is what we are about.
    Mr. Gardner. And what is the number one way that you are 
able to deliver water?
    Mr. Gabaldon. Through working with irrigation districts, 
working with our stakeholders, and conveying water from point A 
to point B, from where it is abundant to where it is needed, 
i.e., storage, i.e., Central Arizona project comes to mind. We 
are also doing new technology, we are also doing conservation, 
all of those, to get to what our main priority is, of 
delivering water.
    Mr. Gardner. In terms of delivering water and finding new 
water, what is the number one way in which you accomplish that? 
Is it--how would you rank, say, water storage as compared to 
conservation?
    Mr. Gabaldon. I would have to go back and look at the 
portfolio, as far as how much water we have, conservation-wise, 
how much water we are yielding from those projects. Right now I 
would rank storage pretty high up there, if not at the top. 
That is what we did----
    Mr. Gardner. As in----
    Mr. Gabaldon [continuing]. Dams in the western----
    Mr. Gardner. You believe the number one focus of Bureau of 
Reclamation to meet--what you said in the mission statement--is 
water storage?
    Mr. Gabaldon. I would hate to rank those, but I mean, if--
that is where we have a lot of our water right now.
    Mr. Gardner. If that is the case, then how can we help 
encourage the Bureau of Reclamation to push water storage even 
more?
    Mr. Gabaldon. I think----
    Mr. Gardner. In an expedited fashion?
    Mr. Gabaldon. Yes. The feasibility studies we are doing now 
in California, the projects we mentioned, we have several of 
those through every region, except Great Plains Region, we 
don't have any there.
    But in upper Colorado we are looking at El Vado Reservoir. 
In New Mexico we are looking at some projects in----
    Mr. Gardner. How do we get from looking at them to doing 
them?
    Mr. Gabaldon. We need a congressional authorization.
    Mr. Gardner. Congressional authorization? That is the only 
thing that is holding you back?
    Mr. Gabaldon. Not--I mean we have all the requirements that 
gets to that--i.e., feasibility studies, feasibility reviews, 
complying with the laws, NEPA, et cetera, that are part of the 
feasibility of the planning projects. So, yes, all those get to 
the process of getting a project authorized.
    Mr. Gardner. And the reason I ask that question, that 
series of questions, is in my conversations with Colorado water 
users, it seems that the one thing they come back to me and 
they say is it feels like the Administration is no longer 
following--the Bureau of Reclamation is no longer following the 
desires of local water users, the desire of local conservation 
district conservancy offices, but instead is pushing a 
mentality that is more toward conservation only, and away from 
water storage. And that is throughout all of the departments in 
government or agencies that are working with the western water 
agencies, whether that is the EPA or Bureau of Reclamation or 
the Corps of Engineers.
    Mr. O'Toole, in your experience, do you think the agencies 
that you work with, your members work with, see the focus on 
water storage that was mentioned by the Bureau of Reclamation?
    Mr. O'Toole. Actually, I think that it has been years since 
we have really had the debate that is beginning here. We 
indicated in our testimony that the Family Farm Alliance asked 
seven years ago for Bureau of Rec potential projects. We have 
that on a database.
    You know, I think we are reinvigorating because we 
understand the multiple needs for more storage. And so that 
debate has been reinvigorated. But I think over the last few 
years--the last few decades, really--we diminished our 
appetite, to our demise, to our--you know, really, not to the 
benefit of both farmers and growth in the West.
    Mr. Gardner. Mr. Gabaldon, I believe in Mr. O'Toole's 
opening statement, in his written statement, he mentions 
several different regulations or practices that are interfering 
with the ability to streamline permitting, or that are blocking 
new projects. I would really be interested in getting the 
Bureau of Reclamation's take on those.
    And I am sure you may not have had time to study it, but it 
is on page 10 of his written testimony under heading 2, where 
it talks about the 5 different points that they have identified 
that are impediments to new projects. And if you could get back 
to me, Bureau of Reclamation get back to me on your opinion of 
these five points that he raises, I would certainly appreciate 
it, and then perhaps share that with the other members of the 
Committee.
    And then, Mr. O'Toole, you mentioned that--in your opening 
statement, that the easiest way for municipal, industrial, and 
others to find the water that they will need is through the 
buy-up and dry-up of agricultural land.
    Do the others on the panel agree with that statement? Mr. 
Bettner?
    Mr. Bettner. Yes. I would say if things don't change, it 
looks like the problems are going to be solved on the back of 
agriculture. That seems the direction that it is going.
    Mr. Gardner. Mr. Brown?
    Mr. Brown. I think balance is the key.
    Mr. Gardner. But do you think--I agree with you, balance is 
the key. But I mean, do you think that the easiest way to 
achieve water now is the buy-up and dry-up of agricultural 
land?
    Mr. Brown. I think there is a market of willing sellers out 
there. And if they are willing to sell, then there are buyers 
that will buy the water.
    Mr. Gardner. I will take that as a yes. Mr. Semanko?
    Mr. Semanko. The willing sellers in Idaho are very limited, 
and that is why you are seeing a progression toward looking at 
building additional storage, not so much for agriculture, but 
for the municipal demands.
    Mr. McClintock. Great, thank you. I am going to have to cut 
you off there, but we are going to do another round, starting 
right now.
    Mr. Gabaldon, I want to get the record clear on this. The 
New Melones Dam was completed in 1979. It was 2.4 million acre-
feet of storage capacity. Animas-La Plata was 120,000 acre-
feet, about 5 percent of the capacity of the New Melones. Has 
the Bureau of Reclamation, since the New Melones, constructed 
any dam with a capacity of more than a million acre-feet?
    Mr. Gabaldon. No, Mr. Chairman.
    Mr. McClintock. Has it constructed any dam with capacity 
more than 500,000 acre-feet?
    Mr. Gabaldon. Not since then, Mr.----
    Mr. McClintock. Has it constructed a dam with a capacity 
above 250,000 acre-feet?
    Mr. Gabaldon. Animas-La Plata was the last one, and that 
was 120,000.
    Mr. McClintock. Five percent of the capacity of New 
Melones. So I will correct my statement of in this generation, 
from 1979, Reclamation has not completed a single major dam, if 
you define that as over 250,000 acre-feet of storage capacity, 
which would be about one-tenth the capacity of the New Melones.
    Mr. Gabaldon. I don't know if the numbers are accurate. I 
assume they are. I can say that, had we had the authorization 
to do those, we would certainly be building.
    Mr. McClintock. No, I think you would certainly be studying 
them, which is the problem, and I think that gets to the crux 
of this matter.
    The cost of Sites, Mr. Bettner, was estimated at 300 acre-
feet?
    Mr. Bettner. The cost or the yield? I am sorry, what----
    Mr. McClintock. No, for yield. The cost was 300----
    Mr. Bettner. Oh, yes, about $300 per acre-foot, correct.
    Mr. McClintock. OK. And your estimate was that, generally 
speaking, about a third of the project cost is regulatory in 
nature?
    Mr. Bettner. Well, I was talking about projects that we--
our fish screen project. I can't speak to right now what we 
think the regulatory cost----
    Mr. McClintock. Just the actual construction. What would 
the cost be of--just for the actual construction of that dam?
    Mr. Bettner. The dam itself is only about half-a-billion 
dollars--or about $500 million. But then you have other 
facilities that go along with it, a couple pipelines----
    Mr. McClintock. OK, that is exactly the question I was 
getting at. Half-a-million--or half-a-billion dollars, you 
said--actually to build the dam.
    Mr. Bettner. But there are other parts of the project, the 
pipeline----
    Mr. McClintock. Exactly--oh, no, no, I understand.
    Mr. Bettner. Parts of the infrastructure--right.
    Mr. McClintock. The conveyance and infrastructure is one 
thing.
    Mr. Bettner. Right, right.
    Mr. McClintock. But how much, in addition to that, to meet 
all of the regulatory requirements?
    Mr. Bettner. Well, we--one of the positives about the 
project is we haven't identified a lot of environmental issues 
with the site itself. So we are expecting, actually, the cost 
of mitigation to be fairly low. Where we see the permitting 
action is we have a project that is going to meet multiple 
benefits, including the ecosystem. And part of that is we have 
to get permits from the wildlife agency.
    So, if they see the project as a benefit, we hope that our 
permitting process goes fairly----
    Mr. McClintock. Would you consider a project that costs 
$1,600 per acre-foot to be economically attractive?
    Mr. Bettner. No.
    Mr. McClintock. Would it surprise you that this Congress, 
in the prior session, approved a bill that came in at exactly 
that cost, a Title XVI recycling bill?
    Mr. Bettner. I am not familiar with that, but--I can't 
speak to that.
    Mr. McClintock. Mr. Semanko And Mr. Bettner, with respect 
to the Endangered Species Act, both of you said that that is a 
major cost amplifier of these projects. Suppose we simply 
required that a hatchery fish be included in the ESA counts. 
How would that affect your projects?
    Mr. Bettner. For our project, we are actually trying to 
enhance existing wild runs of fish. So we have four different 
runs on the Sacramento River, and so we see this--our project 
is trying to enhance the existing runs. Some of those are 
hatchery fish. But we see the wild runs as being just as 
significant.
    Mr. McClintock. Mr. Semanko?
    Mr. Semanko. We would, Mr. Chairman, potentially see the 
fish that we are concerned about delisted, the salmonids, in 
particular.
    Mr. McClintock. Mr. Semanko, you mentioned the categorical 
exclusions being a cost saver of--it is my understanding the 
Administration, through the Council on Environmental Quality, 
is proposing new EPA guidelines for implementation of 
categorical exemptions. How would that affect your projects?
    Mr. Semanko. Mr. Chairman, we have not had a chance to look 
at that. I will tell you that categorical exclusions, in my 18 
years of practice, are more something that I read about during 
law school than I have seen practical application of on the 
ground. It is very difficult to find a categorical exclusion 
that works, from my experience. So I am hopeful this will 
improve that, but I have had not had a chance to look at that.
    Mr. McClintock. OK, thank you. I will yield back and 
recognize the Ranking Member.
    Mrs. Napolitano. Thank you, Mr. Chair. I really was looking 
at my Blackberry, because it was a mention of the use of water 
to develop oil shale. And----
    Mr. McClintock. Excuse me for interrupting. Will the Clerk 
please reset the clock? Sorry.
    Mrs. Napolitano. And the--I will mention the comment from 
the Director of Renewable Energy Development for the Rocky 
Mountain Farmers Union, who states, ``We are really concerned 
about the impacts on water. We cannot gamble away our water on 
oil shale speculation. We cannot risk our farm economy.'' That 
is another component to be able to take--to keep in mind as we 
are moving along and trying to, how would I say, remove a lot 
of the regulations by government on water. This is one other 
one that I am very concerned about.
    Mr. Semanko, on the Arrowhead Project in Idaho, you 
mentioned the critical habitat impact as an impediment. But 
isn't it true there is a state designation, the Boise River, 
that it is a natural river? So both Federal and state regs 
apply?
    Mr. Semanko. Madam Chair, that is correct. And the Idaho 
Water Resource Board is the one that made that designation. 
And, fortunately, it is not a Federal Wild Scenic designation, 
so the Idaho Water Resource Board can change that, and is 
looking at changing that.
    Mrs. Napolitano. OK. Then one of the other things that I 
would like to ask Mr. Gabaldon, the CALFED storage studies 
take--have taken a long time. Why?
    Mr. Gabaldon. There is a--I mentioned some of those 
earlier.
    Mrs. Napolitano. Quickly.
    Mr. Gabaldon. Relentless operational and environmental 
changes. We constantly are getting hit with litigation there. 
There is new biological opinions that go into litigation. So 
every time one of those happens, we need to take another look 
at those things.
    Mrs. Napolitano. Thank you. Mr.----
    Mr. Gabaldon. That is just one reason.
    Mrs. Napolitano. Mr. Brown, how important was the 
cooperation with other agencies--and I am talking about state, 
local, and Federal--to the success of the expansion? How did 
you attain that cooperation?
    Mr. Brown. It is very critical, particularly the Bureau 
provided significant support in getting permits and approvals 
from the various agencies, as well as state Department of Water 
Resources, the state Control Board.
    How did we achieve that cooperation? Largely through 
working to secure the funding that was needed to support the 
staff that would provide those resources.
    Mrs. Napolitano. Thank you. Mr. O'Toole, on page 11 you 
indicate that those who benefit from new water supply 
infrastructure should help pay. And you go on to state, ``In 
the country we are seeing a move in the opposite direction, 
where ag lands are going out of production, and being lost to 
expanding urban development.''
    Are you implying that we have to look at ag versus people? 
Because cities cannot control who moves into their city. And 
most of them do not set any parameters for builders to say, 
``OK, you can only build five units or five homes.''
    Mr. O'Toole. I really think that pitting each other against 
each other is not what is happening. The reality is there is a 
limited supply, and the money goes to the highest bidder in 
many cases.
    My thought process, Madam Chairman, is that the discussion 
about the need to produce food, and the importance of rural 
communities, has to be integrated into our long-term vision of 
what America we want. And we believe that storage can help 
ameliorate those pitting against each other.
    Mrs. Napolitano. Right. And I totally agree. But storage is 
only part of the portfolio that we need to look at, especially 
if it is above ground, where you have the evaporation rate only 
15 to 20 percent. And if we have more warm weather and drought 
conditions, that is going to be worse.
    Mr. O'Toole. Absolutely. And, Madam Chairman, I understand 
this Committee is the Natural Resources Committee. One of the 
other huge inputs is the energy development in the West. And I 
saw where the State of Utah just released 59,000 acre-feet for 
some--nuclear fracking has a water cost. Every part of the 
Western economy has a water cost. Our message is that it seems 
to be always agriculture who is giving up water for those other 
needs.
    Mrs. Napolitano. Thank you for that answer. And, Mr. 
Chairman, I take a little exception to your comment about 
comparing the fish, the wild fish versus hatchery fish, to 
children born at home versus the hospital. You are not a 
mother. I yield back.
    [Laughter.]
    Mr. McClintock. Whereas I am eternally grateful of that 
every day.
    Mr. Tipton?
    Mr. Tipton. Thank you, Mr. Chairman. And, Mr. Gabaldon, 
just from a Colorado perspective, could you maybe speak to the 
importance a little bit in terms of recreation and water 
storage?
    Mr. Gabaldon. Recreation? What--recreation?
    Mr. Tipton. Yes. How many people recreate from Reclamation 
facilities in Colorado each year? Do you have any----
    Mr. Gabaldon. I don't----
    Mr. Tipton [continuing]. Estimates on that?
    Mr. Gabaldon [continuing]. Know in Colorado. Certainly you 
build a reservoir--you build a dam, you have a reservoir, you 
are going to have ample opportunities for recreation, from 
boating to fishing to----
    Mr. Tipton. So it is positive.
    Mr. Gabaldon. Yes.
    Mr. Tipton. And that is part of Reclamation's core 
mission----
    Mr. Gabaldon. It is.
    Mr. Tipton [continuing]. As well?
    Mr. Gabaldon. Very positively.
    Mr. Tipton. And with--and I am going to go back to a 
question I had asked earlier, just as a point of clarification. 
Does the Bureau of Reclamation facilities, do those help 
stabilize water flows to be able to make rafting possible?
    Mr. Gabaldon. Yes. We are not in the business of releasing 
water for----
    Mr. Tipton. Specifically for that----
    Mr. Gabaldon. Right.
    Mr. Tipton [continuing]. But it does help stabilize it 
during a season, which----
    Mr. Gabaldon. It would.
    Mr. Tipton [continuing]. Probably also helps endangered 
species for instream flows and----
    Mr. Gabaldon. Absolutely, absolutely----
    Mr. Tipton [continuing]. Those sorts of things, as well.
    Mr. Gabaldon. Yes.
    Mr. Tipton. Great. You know, one thing I would like to be 
able to speak to--and Representative Napolitano And I visited 
on this a little bit--when it comes to some of the fracking 
issues, when you get into Colorado, at least, you have to be 
able to own your water. We have a priority-based system that is 
regulated by the State. It is not a freeflow free grant that 
actually exists in that. So that ought to give you a little bit 
of comfort, I think.
    And, Mr. O'Toole, I would like you to maybe address 
something that I think is critical. When we are talking about 
conservation for water, are you seeing it in the farm and ranch 
community, that they are making efforts to actually conserve 
and make highest and best use of the water that they have 
available?
    Mr. O'Toole. Well, when our community is--still looking at 
some other storage. And we integrate--as I said, we created 25-
mile fishery hatching for Upper Colorado endangered fish in the 
reservoir. We did build--those are integrated into our long 
term.
    I would tell you that I--in a relationship I have on 
migratory birds with a committee that works on those, it is 
interesting to know the highest bird count since 1955 is now. 
And when you dig down on why, it is because of irrigated 
agriculture. And whether it be the Central Valley or Klamath or 
the rice----
    Mr. Tipton. Right.
    Mr. O'Toole [continuing]. North of San Francisco, it is an 
integrated process. And our bountiful wildlife populations have 
an awful lot to do with agriculture.
    Mr. Tipton. You bet. Now, and is it your observation that 
our farmers and ranchers are trying to get the highest, best 
use out of their water as well, using some different practices 
in irrigation?
    Mr. O'Toole. Well, in our family's ranch, we integrated our 
irrigation and our fishery. We have a fishery that my daughter 
manages. It is another income source. We have created an 
important bird area in our White Heron area, which is--you 
know, I can tell you that with elder birder, don't get in front 
of them when they see a new bird.
    But there is all kinds of opportunities to integrate what 
we all know, and that is the most valuable resource is water. 
And if done right, it is a multiplicity of opportunities.
    Mr. Tipton. I don't want to put words in your mouth, but I 
would just like to hear your opinion. And Colorado and probably 
elsewhere, you know, there is an old saying that money doesn't 
follow water, water follows money. And that lends itself to 
your comment that we are seeing more water being directed into 
urban areas.
    When I look at my district right now, Las Animas County, 
Otero County, we have literally seen areas dried up, in terms 
of farms that are going to have to be able to produce the food 
to be able to feed the people that choose to live in those 
cities.
    Would it be a fair representation of your views that in 
order to be able to create a win-win, to be able to feed the 
people, to be able to grow the cities, that it is in our best 
interest to be able to store more water?
    Mr. O'Toole. The one example I would say quickly is South 
Park, that transferred its water to the urban areas and the 
Eastern Slope in 1998. Storage would have been much preferable 
to that just transfer.
    And I think we reduce our viability by not looking at the 
whole picture. And for a couple of decades we haven't looked at 
the whole picture. I think that is why this hearing, I think, 
is so important. We are going to expand our opportunities to 
look at a whole variety of ways to do all the things that we 
think are valuable.
    Mr. Tipton. Well, thank you. I appreciate your comments. 
And I noted you had said it has been years since we have had a 
debate, the debate that is beginning here today. And, Mr. 
Chairman, I again want to applaud you for holding this hearing. 
Thank you.
    Mr. McClintock. Well, I want to thank you for suggesting 
it. Mr. Costa.
    Mr. Costa. Thank you again, Mr. Chairman. Mr. O'Toole, I 
want to thank the Family Farm Alliance for the work you do on 
an ongoing basis as it relates to our water resources 
throughout the West. And you play an important role.
    Mr. Bettner, I want to go back to where my line of 
questioning was before. Do you think that we need to have all 
the answers with regards to the Bay Delta Conservation Plan 
before we can decide whether or not Sites or Temperance Flat 
are feasible?
    Mr. Bettner. Well, I mean we think, obviously, the Bay 
Delta Conservation Plan and some form of conveyance to the 
Delta is important for California.
    Mr. Costa. So do I.
    Mr. Bettner. And I think what we need to do is--and what we 
have done for Sites, and I am sure our friends are looking at 
Temperance Flat, as well--is you should be able to have a 
scenario where those projects can work with or without 
conveyance. And we have looked at Sites. We have 
configurations----
    Mr. Costa. OK.
    Mr. Bettner [continuing]. Of tradeoff for benefits that can 
work under----
    Mr. Costa. All right.
    Mr. Bettner [continuing]. Scenario.
    Mr. Costa. Yes, that is good. Mr. Brown or Mr. Bettner, is 
there anything you would recommend to the Committee in a short, 
concise statement, as to where we ought to focus our efforts on 
a bipartisan basis?
    Mr. Brown. I think one of the keys is just recognizing that 
the Bureau's role is changing in the development of surface 
storage, and they are going from an agency that builds dams to 
one that helps locals build dams. And that is the most critical 
focus, I think.
    Mr. Costa. And so we ought to try to facilitate that 
process and make it work better?
    Mr. Brown. Yes. And another point I want to make is that, 
you know, this ag versus urban issue, it is not really an ag 
versus urban issue in California. We are trying to capture 
surplus flows. It is the flows that the Chairman spoke about in 
his opening remarks that we are trying to catch before it goes 
out to the----
    Mr. Costa. Yes. Well, I think agriculture and the urban 
water users have worked closer in the last several years--and I 
have been working with them for 20-plus years--than they have 
in the past.
    Mr. Gabaldon?
    Mr. Gabaldon. Gabaldon.
    Mr. Costa. Yes. I want to go back to the studies. Your time 
lines for--and I want to commend the Bureau for--and Mr. 
Connor--for getting the report out this week on Shasta. When is 
the time line for the completion of the Shasta study? Because, 
as I look at this right now, between 2002 and 2008, you have 
spent--2001, excuse me--$130 million on your studies through 
those fiscal years. What is your time line for completion?
    Mr. Gabaldon. I don't have that date with me, that time 
line.
    Mr. Costa. Would you get that to the Subcommittee?
    Mr. Gabaldon. I will be glad to do that----
    Mr. Costa. I think we all want to know that. All of us from 
California sure want to know that.
    With the interim report out this week on Shasta, when do 
you look for the completion of the one on Shasta? Do you know 
the answer to that question?
    Mr. Gabaldon. I will provide that for the record.
    Mr. Costa. OK. And also then with Sites, as well as with 
Los Vaqueros And Temperance Flat.
    Mr. Gabaldon. We will be glad to provide the whole----
    Mr. Costa. All right. I am curious. You know, I mean we 
have a sort of a ongoing debate around here for 10 years or 
longer about what the causes of climate change are. I hope no 
one debates, though, that climate does change. It has 
historically changed for millions of years, going back to the 
Ice Ages.
    I am wondering with the transition, what seems to be a 
transition--last year 174 percent above average snowpack in the 
Sierra, and December of last year and one of the lowest 
recorded rainfalls in California in history since we have been 
keeping records, and January hasn't been much better--although 
we are getting some rain today--with these wide swings, does 
that change how we manage our reservoirs? And to ensure--
because most projects that are built out of either a 
combination of water supply, flood control, hydroelectric 
power, and with these wide variations, I am wondering. Can we 
realize a supply that historically these reservoirs have 
provided?
    Mr. Gabaldon. We definitely look at those from an 
operational standpoint. The climate change could be debated, 
yes, it has been debated.
    Mr. Costa. Yes, I don't want to go there.
    Mr. Gabaldon. From a water----
    Mr. Costa. But it is--it does change.
    Mr. Gabaldon. From a water manager and from an engineer's 
perspective, we know that the water is coming off earlier, off 
the mountains, off the snowpack. So we are adjusting our 
operations to meet that change, if you will.
    And also, there is more demand. On the demand side there is 
more--the agricultural season is a little bit longer. So we are 
making all those and--factoring all those into our day-to-day 
operations.
    Mr. Costa. And to be able to forecast. I mean, as Mr. 
O'Toole said, farmers go to their bank for their annual crop 
loans. Unless you can depend upon a water supply, the banker is 
not going to loan you money. It is that simple.
    Mr. Gabaldon. Yes, that is right. So we are looking at 
those operations.
    Mr. McClintock. Thank you. Mr. Gosar.
    Mrs. Napolitano. Mr. Chair?
    Mr. McClintock. If you--the Subcommittee is pleased to 
welcome Mr. Salazar back.
    Mrs. Napolitano. Secretary of Agriculture.
    Mr. Salazar. How are you, sir? Good to see you. I wanted to 
say hello to all my great colleagues. Keep up the good work.
    Mr. McClintock. And now, sorry, Mr. Gosar. Please restart 
the clock.
    Mr. Gosar. Well, I want to go back to my friend and 
colleague, Mr. Tipton. The real adage is, ``Whiskey is for 
drinking, and water is for fighting over.'' That is the real 
thing about the West, and that is how important it is.
    I also want to underscore about the conservation that 
ranchers and farmers do. I mean we have been proactive about 
that. You know, from the farmers that use low--infuse tape 
emitters, you know, in growing crops down in the South, in 
Arizona. It is absolutely incredible. To the innovations that 
Arizona has spearheaded, to even go further with storage, 
underground storage. We actually have water banking. We work 
with California and Nevada. It is very integrated, and it is 
very proactive.
    And that is where the other thing I want to go with, is 
that, you know, the needs for agriculture are very different in 
some cases than they are for drinking. You know, for our 
recycled gray water. You know, we need to put more influence on 
recapture and cleaning, to utilize that as a resource in 
reclamation. Plants need things like phosphates and calciums 
that we particularly don't want, but they help grow plants.
    You know, Mr. Gabaldon, can you tell me, as a percentage, 
what the cost of your studies is when you look at litigation?
    Mr. Gabaldon. You mean the impacts of litigation on----
    Mr. Gosar. On your studies.
    Mr. Gabaldon. Well, that is going to vary dramatically, 
depending on the nature of the litigation. And I can certainly 
get some information to you on what--maybe some technical 
projects and what the litigation costs were associated with 
that.
    I know I was area manager in Albuquerque, and I was 
actually named in a lawsuit, an endangered species, and the 
lawsuit cost not just to reclamation but to stakeholders like 
the Rio Grande Conservancy District, to the State of New 
Mexico, to the City of Albuquerque, to Santa Fe, et cetera, 
were significant. I don't know what exactly those numbers were, 
but it is going to vary from project to project.
    Mr. Gosar. And it is rising over time, the further we go 
down 2000 to 2010, the costs are increasing. Right?
    Mr. Gabaldon. I don't----
    Mr. Gosar. So, with your experience, could you tell Mr. 
Bettner that he is kind of dreaming, if he is going to expect 
the kind of streamlining process with the environmental aspects 
in his project?
    Mr. Gabaldon. I--from my experience in Albuquerque, front 
and center in the middle of that, all I can say is that there 
were some costs associated with that litigation.
    Mr. Gosar. So, if we--and Mr. Semanko, if we go to these 
categorical exclusions, you know, for the managers, do you see 
that opening up more opportunities for litigation, more 
opportunities for litigation to hit from that perspective?
    Mr. Semanko. You know, I am not sure, Mr. Gosar, if it 
would open up more opportunities for litigation. I think it 
would provide more certainty if you knew, up front, as a 
project manager, that something may fit into a categorical 
exclusion. I think it would be better for the agency folks if 
they knew that something could fit into a categorical 
exclusion.
    Unless you changed the underlying citizen sue provisions 
and the incentive for folks to bring lawsuits because they get 
awarded attorneys fees, et cetera--you know the story--you 
won't eliminate that dynamic. But categorical exclusions could 
provide an avenue, a safe harbor, if you will, more certainty 
for folks moving forward with projects if they knew that there 
would be a more streamlined NEPA process.
    Mr. Gosar. Mr. Bettner, what would you say?
    Mr. Bettner. Well, you know, in California we have 
categorical exemptions that we have that may be akin to what 
you may be talking about from a Federal level. And we call--
when you do that through a state process, you can do what they 
call a ``notice of exemption.'' But you still have to file 
that, you still have to put it out for public review. And 
somebody can still challenge you on the assumptions you made, 
as to whether that--you actually complied with the exact 
exemption or not.
    So, it could hold some hope, but I am not sure it 
necessarily shortens the potential for somebody, you know, 
filing a lawsuit that you didn't do it correctly.
    Mr. Gosar. How do you feel about that, Mr. O'Toole?
    Mr. O'Toole. Many of the farmers that were impacted by the 
Delta smelt decisions in the process on endangered species, 
that was a very troubling time for us. What is--our family has 
won awards on sage grouse management and other conservation 
issues. And I am proud of that.
    But I can tell you that looking down the road at the 
settlements that Interior has made with Center for Biological 
Diversity, for example, on expansion of more endangered 
species, I don't see how we move forward unless we have 
resolved that, philosophically. We--many projects aren't being 
done, not because they aren't the right ones, but governments 
are looking and saying, ``We just can't afford the time. We 
have to try to do things that aren't as efficient.'' That isn't 
the right way to run a business.
    Mr. Gosar. Yes. It is the same thing we find in our 
forests. Thank you.
    Mr. McClintock. All right, thank you. Mr. Garamendi?
    Mr. Garamendi. This hearing and the debate going on here 
is, I don't know, the 27th year, the 30th year of it. And it is 
not going to get resolved. But we do have an opportunity, it 
seems to me, to make some significant progress, at least in 
California. And my familiarity with some of these other 
projects, we could also.
    It is going to come down to, in my view, the Federal 
Government deciding how it wants to spend money. Many of these 
projects are simply held up for lack of Federal funding and, 
discussed earlier, the issue of the Bureau of Reclamation being 
stretched thinly across many, many projects, and stretching 
things out because of that. We ought to set some priorities.
    We do know that in California, with the recent completion 
of the initial investigation of the Shasta Dam, that it is a 
viable project, at least as we know it today. We also know that 
the Sites Reservoir is a viable project. What is going to hold 
us up a long, long time is figuring out who is going to pay for 
it. How much is environmental down the river? How much of the 
benefit goes to the exporters? That is the Delta exporters. How 
much goes to north of the Delta? And that is going to take a 
long time for both of these projects.
    Now, Mr. Chairman, if you really want to build dams, these 
are two viable dams that are ready to go. But we will be held 
up for lack of funding through process everything from the 
detailed engineering to ultimate financing of it. So if you 
have $4 billion sitting somewhere and you want to appropriate 
it and you want to build dams, you can build these dams 
probably very quickly, and you can get past the litigation and 
all of those issues. But if we are going to continue to cut 
Federal budgets on infrastructure projects, which is what we 
have been doing, then don't expect these projects to move 
swiftly forward.
    And, by the way, I believe the New Melones Dam was built by 
the Army Corps of Engineers. Is that correct, Mr. Gabaldon?
    Mr. Gabaldon. Yes.
    Mr. Garamendi. It was not a Bureau project. Maybe your 
point still remains. But for the record, let us get accurate.
    With regard to moving forward, it comes down to what we do 
here. We could set up a financing mechanism--actually, the 
infrastructure bank would probably be somewhat cheaper than the 
loan guarantee program that Mr. Bettner has proposed, but 
either one could move projects more quickly forward.
    Now, how do we score that here? We would probably score it 
at the potential total risk, total loss, not as to what the 
actuarial loss might be. So, we also have the potential for an 
infrastructure bank. These are ways we can fund projects. We 
can sit here in Committee and talk forever. But if we want to 
really do something, we need to find the money.
    Both of those are viable ways of dealing with it, a loan 
guarantee or an infrastructure bank. We ought to move forward 
with legislation on both of those if we want to build projects. 
If we want to build projects beyond that, then we are going to 
have to come up with Federal money. Or not. And we are out of 
that game. If the Federal Government wants to get out of the 
way, as happened in the Los Vaqueros Reservoir, OK. But let's 
not go around and around and around and leave the Bureau of 
Reclamation out there, not knowing whether it is going to go 
left or right or build or not build.
    So, Mr. Chairman, as you move this Committee forward, 
please try to get to the heart of the matter. Please try to get 
to the heart of the matter. Is the Majority in this House 
willing to put the money up to build the projects? Last year 
you cut the budgets. You cut the budgets. You can't expect 
these projects to go forward without the money to support the 
projects. If you want the Federal Government out of it, then 
state so and let the local governments, state And irrigators 
And so forth, move it forward. But you got everybody caught 
between Never Never Land.
    So, we are going to deal with the budget very shortly, $4 
billion and you will build some great dams in California. Do 
you have $4 billion lying around?
    [No response.]
    Mr. Garamendi. I guess I will just not ask questions of the 
gentleman down there, but rather to state the case as I see it 
from here. I yield back my time.
    Mr. McClintock. If the gentleman will yield before he 
yields back his time, I would answer by suggesting that he read 
the full written testimony, in which the witness has provided 
many cases where funding was available but the project was held 
up because of regulatory excesses.
    And I would also commend to the gentleman consideration of 
restoring the beneficiary pays principle to these projects, at 
which point we could free up enormous amounts of money. That is 
the way it ought to be done. Your constituents should not be 
paying for water projects in my district, nor vice versa. The 
projects should be paid for by the users of the water in 
proportion to their use. And I thank the gentleman for 
yielding----
    Mr. Garamendi. Mr. Chairman, that is a--exactly what we 
ought to be talking about. We ought to be talking about exactly 
that issue, of the beneficiary pay issue. And because we go 
around and around on that, and because we are unwilling to come 
to a definitive decision early in the process, projects go 
around and around. It happens every day. It is happening to the 
projects that are out there. I will guarantee it is going to 
happen with the Shasta.
    Mr. McClintock. The gentleman has correctly stated the 
history of the last 30 years, but I am afraid we are out of 
time.
    Mr. Garamendi. Well, it seems to me that the discussion you 
and I are having here is the central issue. And to spend time 
on that central issue is well worth----
    Mr. McClintock. Again, I would warn the gentleman that the 
testimony that we--the Subcommittee has received goes far 
beyond that, and points to the regulatory excesses that are 
actively blocking these projects, even when they are funded. 
That is also a central part of the issue.
    And with that, I am afraid we are going to have to 
conclude. I want to thank the Members for their time, I want to 
thank the witnesses for some extraordinarily helpful testimony 
to the Subcommittee's work. And if there is no further 
business, the Committee stands adjourned.
    [Whereupon, at 12:13 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

    [The prepared statement of Mr. Denham follows:]

   Statement submitted for the record by The Honorable Jeff Denham, 
       a Representative in Congress from the State of California

    My state of California is known around the world for having 
``good'' weather year round. That may be true for San Diego, but my 
district is in Northern California where seasons do exist in the 
weather patterns. There are times when California is in a drought and 
water resources are scarce. And, then there are times, like this past 
year, where sufficient water falls from the skies and down to the 
lakes, rivers, wells, and onto the farm land.
    It will prove evident this year, and especially next year in 
California that our need for increased water storage is long overdue. 
As my district annually endures hot summers, it is critical to have 
water resources available. The ability to store more water when it is 
plentiful in the winter is the only way to avoid severe drought 
conditions in the Central Valley when the temperatures rise through the 
summer.
    Over the years and partly due to the drought periods and the need 
to provide water to a rapidly growing population and farms led to an 
innovative and complex water storage and delivery system. As a result, 
the state of California and the federal government jointly operate two 
water projects to capture and convey water from where it falls to where 
it is in demand.
    My district depends on this water for farming and the 
sustainability of local communities. As water becomes scarcer in the 
Central Valley, the unemployment numbers rise to extreme levels.
    To begin to resolve some of the unacceptable unemployment issues in 
my district, I have introduced a bill, H.R. 1604, that can increase the 
reliability of water resources and renew an investment in water storage 
and conveyance infrastructure. H.R. 1604 would streamline redundant 
environmental review processes that waste time, money, and deters 
investment in water projects.
    When the cost of the environmental review alone makes a water 
storage project a bad investment for the welfare of human life, the 
regulations have reached an extreme point that stifles our ability to 
provide for future generations. We can begin to provide better security 
in water supply and electrical generation if we commit to these 
infrastructure projects.
    Lest we all forget, that a tangential benefit to developing more 
water storage is the ability to produce and generate more renewable 
electricity. So, in an effort to go ``green'' the pursuit of more 
storage, conveyance, and hydroelectric power is only prudent.
    Now there are uncompromising environmental regulations that do not 
recognize the renewable aspect of hydropower to its full potential in 
favor of other, more costly technologies. These costs are always borne 
by the consumer; further stretching already thin family budgets during 
this economic down turn.
    If we can start to streamline regulations and remove burdens on 
necessary water storage projects, we will not only create construction 
jobs but also farming, scientific, and engineering jobs.
    The creation of jobs today through these projects is very 
important, but I do not want to completely overshadow the benefits that 
come from pursuing and completing infrastructure projects that will 
benefit generations to come.
    Everyone likes to point out that Hoover Dam is a project that 
America once strived for, and I agree. However, I believe that we still 
strive to develop infrastructure for the future and the biggest hurdle 
that we have to overcome is our own regulatory overreaches.
                                 ______
                                 

                 Statement of David J. Guy, President, 
                 Northern California Water Association

    Mr. Chairman and Members of the Subcommittee. My name is David Guy. 
I am the President of the Northern California Water Association (NCWA), 
which represents water suppliers and local governments throughout the 
Sacramento Valley--the northern part of California's Great Central 
Valley.
    NCWA and water resources managers throughout the Sacramento Valley 
are committed to advance the economic, social, and environmental 
sustainability of the Sacramento Valley by enhancing and preserving its 
water rights, supplies, and water quality for the rich mosaic of 
farmlands, refuges and managed wetlands, meandering rivers that support 
fisheries and wildlife, and cities and rural communities in the region. 
These ongoing sustainability efforts advance the new California policy 
in Water Code Sec. 85021 ``to improve regional self-reliance for water 
through investment in water use efficiency, water recycling, advanced 
water technologies, local and regional water supply projects and 
improved regional coordination of local and regional water supply 
efforts.''
    We appreciate the Subcommittee convening a hearing on the important 
topic ``Water for our Future and Job Creation: Examining Regulatory and 
Bureaucratic Barriers to New Storage Projects.'' We associate with and 
fully support the testimony provided by the Glenn-Colusa Irrigation 
District at the hearing, and we offer the following testimony to 
highlight the Sacramento Valley and the related opportunities presented 
by the Sites Reservoir.
    The ability to view the Sites Reservoir in a manner different from 
traditional projects presents a unique opportunity for the State of 
California to meet important (albeit elusive) policy objectives around 
the Bay-Delta and the Central Valley and to accomplish these objectives 
in a way that will provide water supplies to enhance California's 
economy and the environment.

The Foundation for New Water Storage
    Water resources managers in the Sacramento Valley are undertaking 
aggressive efforts to foster regional sustainability in the Sacramento 
Valley with respect to water supplies; yet they are continually facing 
greater operational constraints in managing these supplies.
    To better understand these operational constraints in the 
Sacramento Valley, water resources managers in the region have joined 
together to commission various technical studies and reports focused on 
hydrology, salmon life-cycles, and models for water operations in the 
region. For purposes of today, we recommend Efficient Water Management 
for Regional Sustainability in the Sacramento Valley, which is 
available at www.norcalwater.org. The report builds upon decades of 
continually improving water use efficiency in the Sacramento Valley at 
the farm, refuge, district, and basin level. The technical report 
provides a foundation to further evaluate improved water management 
opportunities in the Sacramento Valley and the trade-offs that will 
need to be considered in making future management decisions. The report 
highlights many of the operational constraints that water resources 
managers face every day in making management decisions in the flow-
through system in the Sacramento Valley, as well as the challenges in 
serving water for all the various beneficial uses--farms, refuges, 
fisheries, recreation and cities and rural communities.
    In this light, what has become apparent over the years is that with 
each advance in water use efficiency technology and the implementation 
of a new water use activity or program, the marginal potential 
efficiency in the region diminishes and the likelihood for adverse 
consequences--primarily for environmental values--increases. While 
water use efficiency is an integral part of a water resources 
portfolio, responsible and sustainable water management increasingly 
requires more sophisticated consideration of the various trade-offs 
resulting from water use efficiency actions or programs and an 
acknowledgment that increased efficiency in certain situations may 
adversely affect water supplies for beneficial uses. As a result, water 
resources managers are dedicating tremendous resources to better 
understand and thus manage water resources in the Sacramento Valley to 
assure that the region remains in balance with respect to its water 
resources.
    At the same time, the two major projects in the region--the Central 
Valley Project and State Water Project--have both reduced their water 
supply yields and operational flexibility due to increased water 
demands and more regulatory constraints. This in turn has further 
constrained the ability to manage water within the Sacramento Valley 
for the various beneficial uses. It is these constraints and a better 
understanding of these constraints by water resources managers that 
provides the backdrop for the importance and need to further explore 
surface storage in the Sacramento Valley.

Integrating Sites Reservoir into the Central Valley
    The Sites Reservoir is a proposed off-stream storage project 
located approximately ten miles west of Maxwell in the Antelope Valley. 
The proposed reservoir would have a storage capacity of 1.8 million 
acre-feet. The ability to view Sites differently stems in part from its 
location within or adjacent to the Glenn-Colusa Irrigation District 
(GCID) and districts within the Tehama-Colusa Canal Authority. This 
allows the reservoir to be filled during peak flow periods by conveying 
water into the reservoir through wheeling arrangements involving 
existing facilities.
    As such, Sites Reservoir can be integrated with local interests 
within the Sacramento Valley so that it is operated and managed in 
conjunction with various direct diversion rights, other surface water 
resources (including Shasta Reservoir) and groundwater resources. 
Proceeding with integrated water management will provide direct and 
indirect benefits that include reliable and certain supplies of 
irrigation, municipal and industrial and environmental water of 
suitable quality for beneficial uses in the Sacramento Valley. This 
also includes flexible hydropower generation, recreation and flood 
damage reduction.
    This integrated management, in turn, will provide greater 
flexibility in managing the system for the benefit of the Bay-Delta and 
areas that rely upon water from the Delta. Sites Reservoir integrated 
into the Sacramento Valley thus provides the ability to operate the 
existing water system in the Central Valley in a more flexible manner 
to maximize system-wide benefits.
    Moreover, when looking at the Sites Reservoir in tandem with other 
facilities and groundwater management in the Sacramento Valley, the 
water supply benefits are compounded. For example, a 1.8 million acre-
foot capacity Sites Reservoir would generate an average annual yield of 
400,000 to 640,000 acre-feet, in dry and critical years, and in 
addition would provide nearly 900,000 acre-feet of additional storage 
in Lakes Shasta, Oroville, Folsom and Trinity during the important 
months of May through September through the system integration and 
operation.
    In sum, Sites Reservoir will generate water for the environment, 
while improving statewide water reliability and regional sustainability 
in Northern California. This additional water supply upstream of the 
Bay-Delta during these critical times will thus provide significant 
benefits to the State of California.

Achieve Co-Equal Goals
    The California Delta Reform Act in 2009 declared the over-arching 
policy to ``achieve the co-equal goals of providing a more reliable 
water supply for California and protecting, restoring, and enhancing 
the Delta ecosystem.'' Many of the agency proposals in California to 
solve the Bay-Delta favor one of the co-equal goals over the other or 
they create, either directly or indirectly, clear winners and losers 
with respect to the allocation of water supplies. By its location 
upstream of the Delta, Sites Reservoir, as part of the integrated 
management described above, can provide direct benefits to the Delta 
ecosystem by maximizing the amount and timing of water available for 
the Bay-Delta, including improvements in Delta water quality. With 
respect to the co-equal goal of a more reliable water supply, water 
will be available for the mosaic of water uses in the Sacramento 
Valley, and there will be a more reliable water supply for water users 
within the Delta, as well as water users south of the Delta. Sites 
Reservoir thus provides an opportunity to change the dynamic in the 
Bay-Delta debate and provide management flexibility in the system in 
such a way that can truly achieve the co-equal goals.
    Thank you Mr. Chairman and Members of the Subcommittee for 
convening this hearing and for the opportunity to provide this 
testimony. If you have any questions, please call me at 916-442-8333.

                                 
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