U.S. Renews 40-Year Calif. Water Pact

In a major blow to environmentalists, Interior Secretary Manuel Lujan Jr. signed a precedent-setting contract Tuesday to renew federal water subsidies to growers in California’s San Joaquin Valley for the next 40 years.

Lujan’s abrupt action rejected concerns raised by the Environmental Protection Agency, which had urged the Interior Department to study the environmental impact of the subsidies before signing the Orange Cove Irrigation District contract.

A White House advisory panel, the Council on Environmental Quality, had agreed to arbitrate the dispute and had scheduled public hearings to begin this week. But Lujan called reporters to his office Tuesday to announce that he had signed a contract requiring only an after-the-fact environmental assessment.

The decision is a victory for Central Valley farmers, guaranteeing them a continuing source of water, despite objections from environmental groups. Environmentalists regard the subsidies as a setback to water conservation efforts and fear that continued diversion of San Joaquin River water under the contract could endanger valuable fisheries and wildlife habitats.

The action still could be overturned by a federal court in California, which is considering a lawsuit filed by the Natural Resource Defense Council. The suit argues that the Interior Department is obligated by law to conduct an environmental study before signing a contract.

The sudden decision by Lujan, who had expressed willingness to compromise on the issue less than a month ago, represents a significant hardening of the Bush Administration’s position.

Lujan acknowledged that he intended the decision to be a precedent to be followed in coming years as dozens of other long-term water contracts come up for renewal in actions that would lock up federal water rights for decades to come.

The newly signed contract calls for water users to pay the federal government $14.84 per acre foot of water--a more than fourfold increase over the $3.50 price that has been in effect for the last 40 years.

Lujan described the price increase as an attempt by the federal government to encourage water conservation. A senior project attorney for the Natural Resources Defense Council, however, noted that the price was “the lowest possible he could have set under federal law.”

The attorney, Hal Candee, said that the true value of the water was nearly $50 per acre foot. “The new prices still represent a huge taxpayer subsidy,” he said.

The secretary argued that the federal government has a “legal and moral obligation” to renew the contracts to the area’s water users, who first obtained the rights in a 40-year contract signed in 1949.

“Failure to meet that obligation,” Lujan said, “would be devastating to the economy of the entire area and would represent a severe breach of faith.”

Lujan earlier had told a Senate panel that he would accept a proposal calling for the contract to be renewed for just 10 years. But he said Tuesday that such a plan would make it impossible for farmers to make long-term plans and that they would “raise economic chaos in that whole area.”

The turnabout came after heavy lobbying by Gov. George Deukmejian, Sen. Pete Wilson and some other California political figures who urged Lujan to approve the 40-year renewal.

Lujan said that he was sensitive to environmental concerns in making the decision, noting that the contract now requires an assessment of its environmental effects.

But critics noted that the contract obliges the federal government to defend the interests of growers if the State of California seeks to reduce the supply of water to them.

A number of politicians and environmentalists denounced the Lujan action, charging that his preemption of the review by the White House advisory panel demonstrates a lack of sympathy for environmental concerns.

“Time after time, political pressure from the White House and the big farmers’ lobbyists has overridden sound environmental judgment,” said California Rep. George Miller (D-Martinez). “And sadly, this case doesn’t seem to be any different.”

“If this is to be the new federal role in environmental matters,” said Sen. Bill Bradley (D-N.J.), “it’s almost enough to make you long for the (Ronald) Reagan years.”

Gary Sawyers, an attorney for the Friant Water Users Authority, said that his client is “obviously pleased” by the 40-year renewal and welcomed indications that the plan would be used as a model for other agricultural water contracts.

“Contractors have long believed this kind of contract appropriate throughout the San Joaquin Valley,” Sawyers said.

The Friant authority represents the Orange Cove district. Both are part of the Central Valley Water Project.

Dispute Not Resolved

The Orange Cove contract was referred to the White House panel after negotiators for the EPA and Interior were unable to resolve a dispute over the conditions under which the contract should be renewed.

EPA had urged that a broad environmental impact study be completed before a long-term contract was signed, while Interior said that it did not believe such a study was required by law.

While the matter was under review early this month, the judge in the California case issued a ruling permitting the Administration to sign the contract pending his final decision. Interior Department officials said they regarded that decision as a go-ahead for Tuesday’s action, but critics said that they were shocked by the Lujan “power play” that preempted the recommendation Council on Environmental Quality.

In the wake of action, CEQ officials indicated that they planned to proceed with their study, which is to include hearings in Washington on Thursday and in Sacramento next week. CEQ counsel Dina Bear acknowledged, however, that the panel could not overrule the Interior decision.

EPA officials expressed anger at the Interior decision to preempt the arbitration procedure and voiced strong hopes that the federal court would overrule the department’s action. “This action,” one official said, “was less than collegial.”