Water Reform That Is Anything But a Watershed in Fairness, Efficiency : Legislation: The Omnibus Water Bill, if signed, would be a step forward, but at the cost of hurting the environment and keeping the feds in control.

Long overdue reforms in Western water may soon lurch one step forward, but only at the cost of slouching two steps backward. The Omni bus Water Bill is on President George Bush’s desk. Proponents of the bill in and out of Congress claim it would transform the way the West uses water. That is only half true.

The bill would certainly make it easier to shift taxpayer-subsidized water from agricultural to urban, industrial, recreational and environmental uses. That’s one step forward. But it is not true that it provides a far-reaching solution to the West’s water problems.

For most of this century, taxpayers have paid for federal dam building in a gigantic--and destructive--effort to make the desert bloom for the benefit of the few. Such thirsty crops as rice, cotton, corn and alfalfa suck up ridiculously cheap federal water, while wealthy farmers and ranchers laugh all the way to the bank, where they double-dip on crops whose prices are federally supported. These are the main constituents urging Bush to veto the water bill.

But heavy bipartisan support for the legislation seems to skewer Bush on the horns of a dilemma. His signature would make him seem more like “the environmental President.” It would also possibly gain him some votes in the rapidly urbanizing Rocky Mountain West, where most politicians want federal taxpayers to support regional uses for water other than the traditional agricultural ones. If Bush vetoes the bill, he leaves in place a system that combines the worst of capitalism and socialism, since it uses federal power to enrich the few, while impoverishing the cities and the environment.

Politics aside, the legislation would still take us two steps back for every step forward. National environmental groups like the bill, thinking it brings them to the table where major players divide up scarce water. But environmentalists west of Washington should be wary before declaring victory, for the bill begs the main question: Should the federal government be in the water business?

What the bill really does is: In shifting water from agricultural to municipal and industrial uses, federal command and control simply accelerates the urbanization and industrialization of the West, especially in California. If you think an even greater a Greater Los Angeles is a good idea, this legislation is for you.

But if you think there must be a better way to achieve goals that include fairness, economic efficiency and environmental quality, you ought to be suspicious of the bill’s last-second appearance in the confusion of the political season. The second step backward is that the Omnibus Water Bill fails to allow for a free market in Western water. It simply shifts federal taxpayer-financed largess from one group of special interests to another.

There is a piece of the water action for Salt Lake City, for Phoenix and for Denver. That’s where the voters are. And, of course, there is a huge source of new water, by reconfiguring the Central Valley Water Project, for California cities. What’s missing? A fair and efficient way of distributing the water. The feds retain command and control.

This bill represents “reform” in the politics of Western water, but it is not the revolution we need. That revolution would boot the federal government out of the water business altogether. That revolution would foster a free market for water that would allow everyone, including environmentalists, to bid for secure rights to use water as they see fit, either permanently or temporarily. That revolution would also produce the money we need to defend and nurture strong local economies. A little-noticed provision of the bill helps to show why we still should not trust thje feds. The San Luis Valley, on the Colorado-New Mexico border, is at the headwaters of the Rio Grande. Surrounded by storm-catching mountains, it serves as a huge catchment basin or reservoir, which slowly seeps into the Rio Grande. From certain vantage points, vast stretches of standing water, evaporating into the dry desert air, can be seen. “Use it or lose it!” runs the Water Law of the West. And “using” it in this case amounts to simply diverting and “storing” it where the sun and the wind can do their work before the remainder is dumped onto alfalfa fields. As much standing water as there is on the surface, much more lies underground, where enormous aquifers remain untapped.

A few years ago, the federal government locked this wasteful system into place, centering efforts on San Luis Lake. The Bureau of Reclamation plumbed the San Luis Valley to be sure that the Rio Grande could provide cheap, ample water to “lucky” agricultural beneficiaries downstream in New Mexico, Texas and Mexico. Before the advent of the Europeans, the Pueblo Indians of the Rio Grande considered San Luis Lake a sacred part of their origin story. Now it is the center of a system of reservoirs and canals designed to keep the world safe for alfalfa.

Most people accepted this state of affairs until the advent, in the 1980s, of American Water Development Inc. The new kids on the block had a great idea. Since they owned a huge ranch, they claimed much of the ground water that currently goes to waste through evaporation, low-value crops or inefficient irrigation. Then they announced they would sell “their” water to the highest bidder.

That’s when all hell broke loose. That’s why the Omnibus Water Bill contains specific provisions that would kill the project. Put another way: The bill kills a free-market approach to water utilization. The horrifying thought of a free market threatens a status quo in which federal power poses as the only prize worth fighting for, and where our political system, with all its corruptions, is the only arena where the fight can take place.

Admittedly, AWDI’s project might threaten the wildlife refuges and the great sand dunes of the San Luis Valley. If it does, it should cease. But those threats apparently do not apply when the federal government does exactly what the project would do. Nor do they apply to local ranchers and farmers, who formed a rare alliance with environmentalists to fight AWDI. Having temporarily stopped it in the courts and in Congress, these same agricultural interests have suddenly decided that they will get in the water-marketing business.

Left holding the bag, as usual, are the environmentalists, who never play the political game well. That is because the environment always loses in the political game, no matter how well environmental bureaucracies might prosper.

Free-market solutions are not cure-alls. But they do simultaneously address more of the messes associated with Western water quantity and quality than the Omnibus Water Bill.