I. Introduction

Under the doctrine of prior appropriation, the acquisition of water rights is based on the principle: first in time, first in right. As a result, this system has the capacity to create winners (the senior water rights holders) and losers (the junior or no water rights holders). In times of drought, this problem is exacerbated.

In Estate of Steed v. New Escalante Irrigation Co., the Supreme Court of Utah rejected a proposal for balancing the interests of senior and junior water rights owners. Instead, the court concluded that “both parties cannot ‘win’ [because] the law simply favors the first user.” The court stated that “when there is not enough water to satisfy the needs of all users, the user who depends upon another’s seepage and runoff will suffer.”

Citing a strong policy of conservation underlying its water law as the reason for its decision, the court refused to recognize that return flows—resulting from the inefficient irrigation practice existing at the time—were legitimate means of supplying water rights to others. Although acknowledging that water users may appropriate wastewater and obtain protection against junior appropriators, the court stated that Utah water law encourages improvements in irrigation efficiency and the junior water appropriator of wastewater cannot compel the continued wasteful use of water. The adoption of improved and more efficient conservation technologies thereby brought benefits to the irrigator, including increased crop production and lower irrigation costs, but unfortunately, this development occurred at the expense of junior water-right holders. The result is increased pressure on an already over-appropriated Western water system and a greater divide between the “winners” and “losers.” While the court encouraged farmers to conserve and efficiently use water to ensure they retain all of their allocated water rights, this ruling discouraged the spread of water rights to different uses.

In the face of a changing climate and increasing urbanization in the West, water transfers could help arid regions meet growing demands for water through implementation of voluntary market-based sales and leases of water rights. Water rights may be transferred by sale, lease, or exchange. A water transfer is a voluntary agreement that results in a change in the type, time or place of use of a water right. A transfer may not exceed the quantity of rights held by the transferor, but may change the use of the water, the location, the time it is released, and the point of diversion. Water transfers are a means of making water available to those who don’t hold senior water rights. Water transfers can facilitate and enable the use of water, as necessary, for agricultural, municipal, industrial energy and environmental uses. Such transfers afford the opportunity to maximize the use of the available water supplies and promote the most efficient use of water.

Transfers of water could also be used to mitigate the impact of the holding in Estate of Steed, which ultimately promoted the inefficient use of water. Water transfers could potentially help balance the interests of senior and junior water rights owners by encouraging the water rights holder to better conserve his or her water and lease the remaining water rights for a limited time. As a result, this water will become available for junior water rights holders for the market price.

While voluntary water transfers have occurred for years, there are many barriers that water appropriators face when attempting to transfer water, including the lack of accurate and reliable information. Currently there is a high demand for water to be transferred from agriculture to uses that return higher economic benefits. This is most clearly evidenced by the circumstances of farmers in Northern California who hold senior water rights. With droughts plaguing arid climates, farmers are finding that their most valuable asset is no longer their crops, but rather their water rights. Therefore, farmers often face a choice between fallowing a field to lease out that water or continuing to farm the land without leasing any of the water rights.

This economic dilemma—which results in either an inefficient use of water resources or a loss in profits for a farmer—may soon disappear with changes in technology. Recently, farmers have found a third option that allows them to continue farming the land while implementing efficiency measures to significantly reduce water use for the same crop yield and then leasing that saved water to others in a high-demand market. A new technology, Sustainable Water and Innovative Irrigation Management (SWIIM), could provide the information necessary to help facilitate water transfers, and, thus, maximize the utility of this precious and dwindling resource. SWIIM helps farmers (1) conserve water; (2) more easily prove conservation efforts and successes to regulators more easily; and, (3) lease their excess water to municipalities, industrial users, or other farmers and individuals seeking additional water resources.

II. Non-Use, Forfeiture, and the Difficulty of Proving Conservation Encourage Waste—the Law Behind Estate of Steed

Water rights acquired by prior appropriation may be lost if the allocated water is not fully consumed each year. The general rule is that as soon as the water leaves an appropriator’s land and enters, or is destined for, a natural stream, it becomes subject to appropriation by other users. Typically, in farming only a portion of the allocated water is actually consumed for irrigation. The amount that does return to the stream—return flow—thereafter becomes available for others to divert.

Appropriators may also lose their water rights if they do not use their water for a significant period of time. Non-use for a significant period of time, coupled with intent to relinquish water rights, is sufficient to constitute abandonment of a water right. However, because water is such a scarce commodity, it is rare that a right holder will have the requisite intent to abandon a right. More likely, the water right holder may lose its water right despite the absence of any intent to do so under a forfeiture statute for non-use. Under the forfeiture statute for non-use, those appropriators who fail to beneficially use all of their allotted water, risk losing the rights to this water.

Although conserving water is a beneficial use and therefore will not result in a reduction of water rights, the burden is on the appropriator to prove such conservation to the authorities. Unfortunately, calculating the amount of water conserved is very complicated and an imprecise. Accordingly, rather than risk losing valuable water rights, appropriators, like the farmers in the Estate of Steed, are thereby discouraged from adopting more efficient methods of operation and conserving water to lease. Instead, water appropriators have a financial incentive to use all of their water rights, however inefficient such use may be, to avoid the risk of forfeiture. This logical consequence of our current system promotes the inefficient and illogical incentive to flood lands and reuse instead of applying that extra water to a more productive use that will return higher environmental, economic, and social benefits.

The transfer of water is further complicated when the water rights are conveyed separately or there is a different use contemplated. The laws of water take extra precaution by ensuring that the rights of other stream appropriators are not negatively impaired. This special protection comes in the form of the no-harm rule.

In sum, farmers who reduce water use do not necessarily see their “savings” translate into that same amount of conserved water being available to lease to someone else for a different—and possibly more important—use. Rather many farmers conclude that the lack of information available to senior appropriators makes it extraordinarily difficult to transfer water, and the possibility of losing their unused water rights is too great to risk implementing more efficient conservation technologies. As a result, these right holders have been notoriously resistant to water conservation because the legal system has created a financial disincentive that actually promotes inefficient use. In effect, the overly complicated process of transferring water actually discourages water conservation and creates a perverse motivation for farmers to overwater their crops merely to avoid losing water rights.

III. The Short-Term Solution: Transfer of Water

Water transfers could be one method of allowing water managers to combat drought-riddled areas and repurpose existing water resources for new and more beneficial uses. Transfers of water could help improve farming practices, further energy development, and meet the demands of increasing urbanization. States can also develop new infrastructure and storage capabilities, implement conservation and efficiency initiatives, and promote water reuse projects.

In general, water transfers are done on an ad-hoc basis and there are barriers to overcome. In particular, measurement poses a difficult problem for authorities attempting to regulate use. This problem is exacerbated by the limited data available on the amount of water used. However, SWIIM can help facilitate the transfer of water; and thereby help farmers sell their extra water so it could be utilized for other uses. SWIIM has the capacity to accomplish these tasks by allowing farmers to assess all of their economic options. The program instructs the farmer on what crops can be grown, the expected yields that can be anticipated from each of these various crop options, and the amount of water required to achieve the various crop yields. SWIIM is also a tool that provides a guide to the farming interest in how to sell or lease water rights, thereby enabling the farm to retain a sufficient amount of their water rights to continue productive farming. Most importantly, this new system can work in a manner that is consistent with the western doctrine of prior appropriation and still help expedite water transfers. As a result, the prior appropriation doctrine may continue serving as the legal framework to guide the allocation of water resources, while incorporating the flexibility to meet evolving needs through the promotion of more efficient utilization of water rights in a rapidly changing environment.

SWIIM’s software enables farmers to lease their extra water to others. This program allows farmers to quote the availability of water and provide it to other users who need this resource—sharing the water for the best and most efficient use. Farmers who hold the most senior water rights in a region will no longer have the economic incentive to flood their fields with little regard for efficiency. Instead, this program creates a new opportunity for both the farmer in particular and society in general, whereby the farmer maximizes the economic return on the use of water and others can receive the benefit of a limited resource that would otherwise be unavailable.

To utilize the program, the farmers must enter detailed information about past use of their land and water rights and then identify measures that they are willing to adopt to reduce water use. Using data from irrigation districts, field instruments, weather reports, satellites, and low-altitude flights, the SWIIM software calculates in real time how much of a farm’s water is consumed and how much returns to underground flows—thereby ensuring that farmers do not jeopardize their rights if they choose to sell or lease their conserved water. Using the information provided, an algorithm developed jointly with the U.S. Department of Agriculture informs farmers how to conserve water, by adopting efficient measures such as a targeted drip-irrigation system that will not result in reduced productivity.

IV. Conclusion

With an influx of population and industries settling in the water-scarce West, combined with an increasingly arid climate, SWIIM could help evaluate and facilitate how society utilizes water transfers as a means of allocating a vital resource. This technology will enable stakeholders to learn from other’s experiences with water transfers, thereby facilitating more informed and efficient decisions with respect to the use of their water rights. SWIIM facilitates water transfers to other uses while avoiding inflicting harm to agricultural economies and surrounding communities.

The law encourages implementation of improvements in water systems to promote the conservation of water. However, to effectively implement such improvements, water rights owners should not be penalized for conserving water. Instead, there should be an incentive system to economically reward implementing water conservation practices. SWIIM offers a market-based solution that could be regulated to ensure there is equal water distribution to municipalities and individuals in need of this vital resource. The purpose of water transfers and the utilization of the SWIIM system, is not to “dry” up the farm. Rather, it is to move the water efficiently where needed, without adverse economic consequences to the senior right holder. When we “free-up” the water, we can grow as a society, conserve water and utilize the flexibility that the prior appropriation doctrine is intended to allow.

Managing California’s complex water storage and delivery system is a never-ending balancing act between supply, demand and environmental considerations, particularly during a severe drought. As water scarcity reaches unprecedented extremes in the West, SWIIM technology could help mitigate the impact in the region. It provides one method of managing drought and is a welcome new addition to the state’s water market.


See generally Gunnison Irrigation Co. v. Gunnison Highland Canal Co., P. 852 (1918).

See generally Estate of Steed v. New Escalante Irr. Co., 846 P.2d 1223, 1228 (Utah 1992).

SWIIM home, http://www.swiimsystem.com/home.aspx, (last accessed September 23, 2015).


Hallie Jackson and Elizabeth Chuck, Farmers Faced With Whether to Grow Crops or Sell Water, April 4, 2015, http://www.nbcnews.com/storyline/california-drought/grow-crops-or-sell-water-california-farmers-face-dilemma-n335696.

Greta Kraul, Airbnb for water seeks to help farmers transfer surplus, S.F. GATE (April 21, 2015) http://www.sfgate.com/business/article/Airbnb-for-water-seeks-to-help-farmers-transfer-6215032.php.


“The Story of Regenesis Management Group: Balancing Water Use for Profit and Conservation” (PDF). COLORADO WATER, NEWSLETTER OF THE WATER CENTER OF COLORADO STATE UNIVERSITY 28 (1): 19.

Lorraine Chow, Can This ‘Airbnb for Water’ Help Drought-Stricken Farmers?, ECO WATCH, (April 27, 2015) http://ecowatch.com/2015/04/27/swiim-app-drought-farmers/.

Greta Kraul, Airbnb for water seeks to help farmers transfer surplus, S.F. GATE (April 21, 2015) http://www.sfgate.com/business/article/Airbnb-for-water-seeks-to-help-farmers-transfer-6215032.php.

Larua Bliss, It’s About to Get Easier For California Farmers to Conserve Water—And Sell It, CITY LAP (July 10, 2015) http://www.citylab.com/weather/2015/07/its-about-to-get-easier-for-california-farmers-to-conserve-waterand-sell-it/398144/.

Jennifer Najjar

Image: An aerial shot of Ririe Dam in Bonneeville, Idaho.  Flickr user Sam Beebe, Creative Commons.


If passed, the proposed California drought legislation, entitled the Sacramento-San Joaquin Valley Emergency Water Delivery Act (“Bill”), will purportedly help Californians cope with the hardships of California’s severe recent drought. However, this Republican-sponsored bill could have dangerous impacts on endangered species. At the expense of certain protections offered endangered species under the Endangered Species Act, this bill proposes aid to California farmers and the agricultural industry. While the drought has caused human hardship and Californians need a solution, reducing protections for endangered species’ habitat is not the best option.

A Clean Water Crisis in California

Severe drought has gripped the western United States. California, particularly, is experiencing all time lows in precipitation, reducing some major reservoirs by 30 percent. Agriculture uses approximately 70 percent of the world’s accessible freshwater. According to the Public Policy Institute of California (“PPIC”), California’s “Big Ag” industry is a major water consumer, consuming roughly 80 percent of statewide water use for approximately nine million acres of irrigated farmland. California’s Central Valley is home to most of its agriculture and the increase in perennial crops has made the region even more vulnerable to drought. According to PPIC, “Big Ag” industry’s failure to manage groundwater sustainably limits groundwater availability as a drought reserve. Due in part to global warming and shifts in weather patterns, droughts will only become more frequent and last longer in some places, like the western United States.

Freshwater Scarcity Impacts Endangered Species

The current freshwater crisis is a burden to species as well. While many animals are facing this water shortage, to species that are already endangered, the additional problem of freshwater scarcity only exacerbates their threat level. Already strained ecosystems are becoming more damaged, resulting in the destruction of habitat for many endangered species, including mammals, birds, reptiles, and fishes.

California provides a prime example of how freshwater scarcity is negatively impacting species. Because of the severity of California’s recent droughts, fisheries have dried up and many animals have had to migrate to find freshwater. California currently lists 37 species of fish on its endangered species list and, experts believe “there is every sign that that number will increase.” If the current drought continues at the present rate, it is likely that 80 percent of listed fish species will face extinction within the next few decades.

If passed, the Sacramento-San Joaquin Valley Emergency Water Delivery Act (“Bill”) would further exacerbate threats to California’s endangered species, override protections under the Endangered Species Act (“ESA” or “Act”), and negate a 2009 settlement agreement that served to protect species and freshwater resources in the San Joaquin Valley.

The Endangered Species Act

The ESA, 16 U.S.C. §§ 1531-1544 (2012), is a reactive regime that protects one species at a time from extinction. It was designed to be broad and far-reaching, including the prohibition of “taking” an endangered species under section 1538. The term “take,” as defined under the Act, means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. To ensure no governmental action results in a “taking” of a listed species or its critical habitat, section 1536 mandates interagency cooperation and consultations. This section directs federal agencies to work with the Secretary of Interior to make sure “any action authorized, funded, or carried out by such agency is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species.” To further ensure that agency actions will not jeopardize listed species, the ESA also directs agencies to conduct biological assessments to identify any endangered or threatened species, which would likely be affected by such federal action. This assessment must be completed before any contract for construction is entered into and before construction can begin.

California’s Endangered Species

Overall, California’s Department of Fish and Wildlife lists 149 species as endangered and threatened; 31 listed by California only, 68 listed federally only, and 50 listed under both California’s program and the federal program.

The giant kangaroo rat is listed as endangered on both the California state list and the federal list. The giant kangaroo rat can only be found in California’s Western San Joaquin Valley. Development and agriculture have dramatically decreased the giant kangaroo rat’s original habitat by about 98 percent. While kangaroo rats can survive without water very few females will mate after prolonged drought. Therefore, during severe droughts, the already endangered giant kangaroo rat will reproduce at significantly lower rates. This, in turn, impacts the San Joaquin kit fox, which preys on the giant kangaroo rat. The ripple effect creates a cycle and further endangers species along the food chain.

Another species affected by drought is the tiger salamander, which is already in serious danger as it faces drying wetland habitats. All four species of tiger salamander are listed as threatened on California’s list. Two of the four species are federally listed as threatened and the other two are listed as endangered. The tiger salamander relies on freshwater wetlands for a majority of its lifecycle: for mating, breeding, and for food sources. Tiger salamanders live on land in underground burrows, but journey to ponds and wetlands to mate and breed. As California’s freshwater ponds and wetlands are drying up, or being destroyed by human development, some adult tiger salamanders may not make it to a freshwater pond to mate. The salamander’s natural breeding grounds are becoming fewer meaning the species rate of reproduction is also decreasing. Additionally, the tiger salamander relies on the freshwater pond ecosystem to feeds on algae, mosquito larvae, tadpoles, and insects as it matures.

These are just a few of California’s species that are severely impacted by the drought. However, if the Bill succeeds, it will remove crucial protections and could further harm these species.

The Sacramento-San Joaquin Valley Emergency Water Delivery Act

Touted as “emergency drought legislation,” this Bill was introduced as a means to solve some of the problems and hardships caused by the California drought. The Bill passed the House last year and is pending before the Senate. However, this Bill, H.R. 3964, 113th Congress, 2013-2014, could override protections granted endangered species under the ESA and further defined by the decision in NRDC v. Rodger, all in favor of promoting the agriculture industry.

The Bill proposes to amend the Central Valley Project Improvement Act (“CVPIA”) (Pub.L.No. 102-575, 106 Stat. 4600, 4706-31 (1992)), which seeks to achieve “a reasonable balance among competing demands for use of Central Valley Project water, including the requirements of fish and wildlife, agricultural, municipal and industrial and power contractors.” The CVPIA also directs the Secretary of the Interior to implement fish and wildlife habitat restoration projects, as well as to meet obligations imposed by the ESA. The Bill would redefine the CVPIA’s purpose to ensure that water dedicated to fish and wildlife purposes is replaced and expediently provided to water contractors at the lowest cost reasonably achievable, meaning ESA protections granted to fish and wildlife under the CVPIA could be overridden.

The Bill also directs the Secretary of the Interior to stop all implementation of the San Joaquin River Restoration Settlement Act, which would effectively override the ESA protections granted to fish and wildlife in the Valley as the result of Natural Resources Defense Council, et al. v. Rodgers, et al. (381 F. Supp. 2d 1212 (E.D. Cal. 2005)). In NRDC v. Rodgers, plaintiffs relied on the ESA to support their assertion that agencies, including the U.S. Bureau of Reclamation (“BOR”), the U.S. Fish and Wildlife Service (“FWS”), and the U.S. National Marine Fisheries Service (:NMFS”), failed to examine critical issues in biological opinions before executing water contracts for the delivery of California Water Project water, which was to be used partly for irrigation in agriculture. The District Court for the Eastern District of California ruled in favor of plaintiffs and a settlement was reached.

This case began because of big agriculture. The Friant Dam was built on the San Joaquin River to irrigate agriculture throughout the San Joaquin Valley, but as a result, the River dried-up in many places, causing many fish species to extirpate, including endangered species like the Chinook Salmon. The water diverted from the Dam is contracted under long-term water contracts and were up for renewal in 2000. Pursuant to the protections offered species under the ESA, before these contracts could be renewed, biological opinions should have been conducted to determine if such renewals would have any negative impact on listed species. The agencies determined that the contract renewals would not likely jeopardize endangered species and would have little adverse impact, even though seven critical habitats had been designated for species in the Valley, including the California condor, the Delta smelt, and the kangaroo rat. Based on the biological opinions from NMFS and FWS, BOR issued the water delivery contracts. The case was brought by plaintiff’s alleging the biological opinions did not meet the standards set forth under the ESA and, because of that, several threatened and endangered species were adversely impacted.

The Court held that the agencies actions violated the ESA. The result was implementation of the San Joaquin River Restoration Settlement Act in 2009. The Settlement Act created the San Joaquin River Restoration Program, which is a long-term effort to restore flows to the San Joaquin River from the Friant Dam, as well as an effort to restore a self-sustaining Chinook salmon population in the River. The Settlement was based on the two goals of restoration and water management; restoring and maintaining the River and its population of threatened and endangered species, as well as continued efforts to make sure there are no future adverse impacts from Friant Dam contracts.

This Bill could undo all that has been achieved since NRDC v. Rodgers to tae the River back to where it was before NRDC v. Rodger. This Bill, which would halt all action on the Settlement Act and Restoration Project, ignores the Court’s findings in NRDC v. Rodgers, like the fact that endangered species could be adversely impacted by water delivery contracts. The Bill would eliminate references to the Settlement Act and Restoration Plan, directing the Secretary of the Interior to modify Friant Dam operations to release restoration flows. The Bill directs the Secretary to identify impacts and implement mitigation measures, but such impacts and mitigation measures only refer to adjacent and downstream water users, landowners, and agencies, not to impacted species. Additionally, the Bill preempts and supersedes any state law, regulation, or requirement that imposes more restrictive requirements, meaning that California’s state Endangered Species Act would be overridden. The Bill also repeals provisions requiring the reintroduction of California Central Valley Spring Run Chinook salmon, a listed species, into the San Joaquin River. The Bill essentially authorizes a “take” of threatened and endangered species and their critical habitat without conducting a proper biological assessment and a finding of no jeopardy.

The Damaging Dam

It was determined years ago that contracting to deliver water from the Friant Dam adversely impacted species, especially threatened and endangered fishes. But the drought in California, and the negative impact it has had on California crops, seems to have taken precedence over such species. The proposed Bill would take the San Joaquin River and Valley back to the issues it faced before NRDC v. Rodgers and would not resolve any long-term issues the drought poses. Decreasing environmental protections of any kind will not cause the drought to lessen; rather, California should focus on water conservation, consumption, increased efficiency and combating climate change, the real causes of the drought. It is important to focus on the bigger picture here. Every living thing needs water and endangered species should not pay the price of supporting “Big Ag.”

*L.L.M. Environmental Law, Vermont Law School;
 J.D. Penn State Dickinson School of Law

The title image features the Friant Dam in California and is licensed under the Creative Commons Attribution 2.0 Generic license. The owner of this image does not endorse this blog.