March 10, 2011

Permit Systems Entrench Large Water Users

Dan Tarlock's paper on Water Law’s Climate Disruption Adaptation Potential, prepared for the upcoming Research Roundtable on Climate Change, Adaptation, and Environmental Law, at Northwestern Law's Searle Center, April 7, 2011—April 18, 2011, has just been posted online. The paper raises pertinent issues for the discussion going on in New York now about the proposed legislation to issue water withdrawal permits to large private water users. This legislation would move New York from a riparian rights system to a regulated riparian system of water rights law.

The paper points out that while permits in regulated riparian systems are not perpetual as they are under prior appropriation systems in the Western United States, they are still "hard to dislodge . . . even though the law permits the reassignment of rights." The paper describes the role permits played in Georgia’s law making responses to a severe drought and notes that, "[t]he reality is that the permit system entrenches large withdrawals."

The paper begins with a discussion of how Global Climate Change (GCC) will alter many of the fundamental hydrologic assumptions upon which water allocation, water pollution control and aquatic ecosystem conservation are based, and says this will stress both the laws of prior appropriation and riparian rights. Prof. Tarlock notes that the assumption that regional water balances will remain relatively constant or stationary over time is no longer viable, and says this will create conflicts between present right holders and future claimants and between consumptive and non-consumptive, especially environmental, uses. "The hard question," he says, "is how the law and those charged with applying it and managing water within its framework should react to this new, even more, uncertain world."

The paper states that water law has always provided users clear notice of the risks of a reduction in the amount of water to which they will be entitled:

The risks include reduced quantities because of a drought, the wasteful or non-beneficial use of water and total or partial displacement by a “higher” or subsequent uses including public rights. Thus, GCC can be characterized as simply another drought risk to which all users have always been subject. Users can therefore be expected to adopt the most cost-effective adaptation strategy and will not be surprised if this requires making do with less water than was previously was available. The rub is that water law has not been widely used for this function. Until recently, nature and human intervention kept the risks of supply curtailment to a low and the expectation of full enjoyment of the right high. As a result, there are major psychological, political, institutional and legal barriers to using the law to distribute the extreme risks of global climate change among large classes of water users in the common law of riparian rights, prior appropriation and regulated riparianism.

After an excellent discussion of riparian rights, prior appropriation and regulated riparianism, the paper points out that there is a large disconnect between the theory and reality. First, Prof. Tarlock says, "water law, like all property, is designed to provide secure rights, but security creates the expectation of the perpetual maintenance of the status quo. Thus, there will always be resistence to forward adaptive planning. Change is not only surprising, but any change that reduces that amount of water previously available is potentially unconstitutional." Second, he says, the “illusion” of perpetual security has been nourished by the federal government and states such as California which have invested millions of dollars in tax revenues and bond sales to construct the necessary carry-over storage to avoid disruptive calls. Third, he says, "junior users often have put water to high valued uses compared to senior right holders. These junior users have every incentive to push back politically and legally when disruptive calls are threatened. In short, the continued protection of existing rights is potentially inconsistent with the proposed adaptation strategies which counsel increased flexibility in responding to change, the greater recognition of the risks of supply interruption, more cooperation among all users from small watersheds to large regions, and real time water use management."

The paper concludes with two examples showing that existing users will resist the consequences of any curtailment of withdrawals in both riparian and appropriative states. The first example is the one most relevant to the proposed move in New York from a riparian rights system to a regulated riparian system. The example comes from Georgia, a regulated riparian jurisdiction, and illustrates how the introduction of a permit system can promote adaptation but may also impede it.

The paper points out that while permits in regulated riparian systems are not perpetual as they are in the West, they are still "hard to dislodge . . . even though the law permits the reassignment of rights." The paper describes the role permits played in Georgia’s law making responses to a severe drought and notes that, "[t]he reality is that the permit system entrenches large withdrawals."

A severe, prolonged drought started in the Flint River Basin in 1998 and did not break until 2009. The river is at the center of an on-going interstate dispute among Alabama, Florida and Georgia in two river basins. The nub of the dispute is that the downstream states of Alabama and Florida challenge upstream Georgia’s claims to the amount of stored water in a Corps of Engineers’ reservoir necessary to keep Atlanta watered. While the states were trying to negotiate an interstate compact, Georgia took the proactive step of dealing with the risks of intrastate and interstate shortages in a major downstream agricultural basin. She passed the Flint River Drought Protection Act which requires permits for ground surface diversions over 100,000 gallons per day. In addition, when a drought is declared, the Director of the Environmental Protection Division of the Department of Natural Resources may set the number of acres that must be retired for the irrigation season. This allowed Georgia to meet the minimum Flint River flows informally promised to Florida. The costs of fallowing are borne by the public fisc. Farmers bid the price per acre that they will accept to participate in the program. However, if the auction does not produce the target reduction, the Director can begin to revoke the most recent permits and “work chronologically backward with
each order issued."

The state initially issued agricultural use permits for groundwater based on the amounts used prior to 1998, but it realized that it had to tighten the permits based on the 1998 data. Earlier data was not a reliable indicator to determine how much water was actually saved by the auctions because the state did not know the amount of actual–let alone beneficial–prior use. After 2003, new permits are limited to 25 year terms and existing permits may be renewed at a lower capacity if they “would have unreasonable adverse effects on other water users.”

The reality is that the permit system entrenches large withdrawals. The 2001 auction withdrew about 33,000 acres from production. The state calculated that the withdrawals increased the flow of the Flint by about 399 acre feet per day, but this figure has been question[ed]. GCC could be factored into the Georgia permit system because permits over 25 years require a supply adequacy determination which must be periodically reviewed. But, because the permits allow a user to withdraw as much water as they can use to grow any commodity, they will [be] hard to cancel and this impedes, if not frustrates, adaptation. Financial hardship or circumstances beyond the control of the user are cancellation defenses, and the Director of the Department of Natural Resources “shall give preference to an existing use over an initial application." [Footnotes omitted.]

Posted by Rachel Treichler at 03/10/11 11:00 AM

Copyright 2021, Rachel Treichler

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New York Water Law covers legal developments relating to water usage in New York and elsewhere. The author, Rachel Treichler, practices law in the Finger Lakes region. .

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