Hearings target cost of ecolaws, but not water subsidies

A subcommittee of the House Committee on Resources chaired by Rep. Richard Pombo, R-Tracy, is scheduled to hold hearings today on how environmental regulations effect water supplies.

Some environmentalists say the real story is the multibillion-dollar subsidy taxpayers give to farmers in the form of federal water projects.

The Subcommittee on Water and Power hearing, "Environmental Regulations and Water Supply Reliability," was called by committee chair George Radanovich, R-Fresno. There are seven scheduled witnesses, representing agribusiness, water experts and environmental groups.

"Everyone wants to protect endangered species, but we need to improve the way the Endangered Species Act is being carried out," Radanovich said in a press release. "Throughout the West, communities are threatened daily with severe water problems and it's our responsibility to help find solutions."

According to the press release, the federal Bureau of Reclamation spent nearly $84 million to comply with the Endangered Species Act in 2003. This represents nearly 10 percent of its annual budget.

Brian Kennedy, press secretary at the House Resources Committee, cited several examples of why many believe the cost of the Endangered Species Act enforcement has been extreme, such as lost access to water and power on the Colorado, Columbia, Klamath and Rio Grande rivers.

Kennedy said the Bonneville Power Administration, a federal energy agency based in Portland, lost $1.7 billion when it had to open spillways for fish during the 2001 West Coast power crisis.

When the administration couldn't run its dam turbines, it had to buy power at elevated prices from elsewhere in order to serve its customers.

"Water is very important out West, as is the Bureau of Reclamation getting abundant and reliable water to end users," Kennedy said.

However, according to Barry Nelson, senior policy analyst with the Natural Resources Defense Council, the numbers cited by the resources committee are dwarfed by the amount taxpayers have given away to farmers in the form of water projects.

One of the prime examples, he said, was California's own Central Valley Project.

This Sacramento River basin water project was established by the U.S. Bureau of Reclamation in 1935. Under the terms of the original deal, farmers had 50 years to pay off a $1 billion interest-free loan on the federal money used to build the project.

The interest alone amounts to a multibillion-dollar subsidy to farmers, Nelson said, some who are wealthy and receive other subsidies. After nearly 60 years, farmers have paid off only 10 percent of the loan, he added.

"We tell welfare recipients to get off welfare in a couple of years," Nelson said. "I think half a century is long enough for Central Valley farmers to get off welfare, too."

Furthermore, Nelson said, the Central Valley Project operates at a huge loss to taxpayers every year. Farmers use 80 percent of California's water, he said, but the Central Valley Project sells water for a fraction of the market rate.

Typically, these farmers pay $30 for each acre foot, the amount of water that would cover one acre one foot deep, and many pay nothing at all. By contrast, the market rate for an acre foot of agricultural water is $120 to $150.

Residential customers, Nelson said, pay about $1,000 per acre-foot. An acre-foot is 329,250 gallons, the amount of water need to cover an acre of land in a foot of water.

Much of this water is used to support California's major crops of cotton, rice, and the beef and dairy industries. While Nelson said that he agrees that some water subsidies are reasonable, the market is currently glutted with many of these goods.

Meanwhile, he said, decades of dam building have decimated another important industry, California's salmon fisheries, putting thousands out of work.

Nelson said that the annual salmon run in the San Joaquin River has gone from hundreds of thousands of fish each year to zero because of dams.

"Think about the transportation problems California would have if 80 percent of our population paid a nickel a gallon for gas," Nelson said. "That's the situation we have with water."