Demand Cap Analysis

7/28/2019 Demand Cap Analysis

1/15

1

THEUPPERBASINVOLUNTARYDEMANDCAPASAMEANSOFMITIGATINGLEGALUNCERTAINTYINTHECOLORADORIVERBASIN:MODELINGRESULTS

AReportoftheColoradoRiverGovernanceInitiative1

April,2013

Introduction

InpreviouspublicationsoftheColoradoRiverGovernanceInitiative(CRGI),weconcludedone

ofthemostimportantsourcesofuncertaintyinthebasinarethelegaluncertaintiesregarding

theobligationsoftheUpperBasintoreleasewatertotheLowerBasin.Specifically,wehave

highlightedthreerelatedandhighlysalientquestions:(1)doestheUpperBasinhavean

obligationtodeliver7.5MAF/yeardownstream(onaverage)forLowerBasinconsumption;(2)

doestheUpperBasinhaveanobligationtodeliverhalftheMexicanTreatyobligation(0.75

MAF/year)downstream;and(3)canthefailuretoachieveoneorbothoftheseobjectives

triggeracompactcall?2Thesearefundamentalquestions,astheylargelydeterminelongterm

wateravailabilityinthebasin.Buttheyarealsolargelyignoredquestions,asuptothispoint,

norulingonthesequestionshasbeenrequiredtooperatethesystemafortunatebyproduct

ofUpperBasindemandsstillbeinglowenoughtoallowbothofthepresumeddelivery

obligationstobefulfilled.Wherethesequestionscurrentlyariseareinlongtermsystem

modeling,thelatestexamplebeingworkconductedfortheColoradoRiverBasinWaterSupply

andDemandStudy(theBasinStudy).3

Unfortunately,duetopoliticalsensitivities,theBasinStudydidnotprovide,orattemptto

provide,adirectanalysisofthesequestions,asthemodelingassumptionswereconstructedin

awaytominimizetheneedforcontroversiallegalassumptions.Thisisbestillustratedbythe

conceptofmiraclewater.InmodelingscenariosinwhichtheUpperBasincouldphysically

notdeliver7.5MAFdownstreamwithoutcurtailingUpperBasindepletions,theapproachwas

toallowUpperBasinusestoproceedwithoutcurtailmentwhilemagicallyconjuringupthe7.5

MAFdesiredbytheLowerBasinandinjectingitintothesystemdownstreamofLeesFerry

evenifitwouldnotphysicallyexistinreality.Thissatisfiesthelegalinterpretationsand

politicalobjectives

of

both

basins:

the

Lower

Basin

receives

the

7.5

MAF

which

they

believe

is

1Formoreinformation,[email protected] orCRGIDirectorDougKenney([email protected]).2Themostcompletesummaryoftheseargumentshavebeenpublishedas:Robison,Jason,andDouglasS.

Kenney.2013.EquityandtheColoradoRiver.EnvironmentalLaw,42(4):11571209[availableat:http://law.lclark.edu/live/files/13155robisonkenneyfinalforwebsitepdf].Avarietyofsupportingdocuments

canbefoundattheColoradoRiverInformationPortalathttp://waterpolicy.info/projects/CRIP/index.html.3http://www.usbr.gov/lc/region/programs/crbstudy/finalreport/index.html


2/15

owedto

orclarifi

curtailm

magnitu

subtract

doneto

interpre

interpre

Iftheco

downstr

UpperB

climate

byCRGIi

Fig

4Thisgrap

theColora

themunde

ationsrega

ntsand/or

eofmiracl

this

from

Ullowmodel

ations,itca

ationsand

monassu

amis,infa

sinuse,th

hangescen

nthefollo

re1.Wate

hicwasfirstp

doRiverGove

theCompa

rdingwhich

theimpositi

wateracc

per

Basin

uingtoproc

nhideshor

hedistribut

ptionisuti

ct,afirmob

nasqueez

ariosthatfe

ingfigure:

rAvailabilit

blishedasFig

rnanceInitiati

ct,andthe

manageme

onofaCo

mulations,

ses

or

elseedforward

agesand,

ionofshort

lizedthatth

ligationtha

eonUppe

aturedecre

(bysubba

ure8inReth

e(December,

2

pperBasin

ntscenario

pactcall.

butthereis

here

(such

withoutbei

orefunda

ages.

e7.5MAF/

couldbee

Basindepl

asedlongt

sin)asaFu

inkingtheFut

2010),availa

doesnoth

,ifany,wo

hemodels

nonecessit

as

from

resngblocked

entally,the

ear(avera

forcedby

tionscano

rmflows.

ctionofLo

reoftheCol

leattheColo

vetomake

ldrequire

ankeeptra

yinthemo

rvoir

storabydisputes

relationshi

e)delivery

ompactcal

ccur,especi

hiswasgra

gTermAve

radoRiver,t

radoRiverInf

anyconces

pperBasin

ckofthe

elingto

e).

While

toverlegal

betweenl

fwater

lcurtailmen

allyunder

hicallysho

rageFlows4

eInterimRe

rmationPort

ions

is

is

gal

tson

n

ortof

l:


3/15

3

ThesharpdeclineinUpperBasinwateravailability5istheunavoidableconsequenceofhaving

toreleasewaterdownstreambeforesatisfyingUpperBasindemandswhich,again,isapointof

legaldispute,inpartbasedontheCompactwordinginSectionIII(d)thatdoesnotdescribe

thesereleasesasandeliveryobligation,andinpartonthepremiseofequitythatruns

through

the

Compact.

As

shown

in

the

Figure

1,

a

decline

in

average

streamflows

of

20%well

withinthescopeofmanyclimatechangestudiescouldresultinasituationinwhichLower

BasinwateravailabilityfromthemainstemisroughlytwicethatoftheUpperBasin,despitethe

intentoftheCompact(asshowninArticleIII(a))toallocateequalsharesamongbasins.

ImposingafirmobligationupontheUpperBasintodeliverpartoftheMexicanobligationonly

intensifiestheeffect.Obviously,thissqueezecouldhavecatastrophicconsequencesforUpper

Basinusers,leadingustospeculatethatthesituationwouldeitherneveroccuri.e.,a

negotiatedsolutionorsuccessfulUpperBasinlitigationwouldstopthecurtailmentsorwould

occuronlyaftersuccessfulLowerBasinlitigation.Anyofthesesolutions,however,couldtake

avarietyofformsandanumberofyearsperhapsdecadestocomplete,andtheoutcome

wouldhavesignificantandimmediateimpactsonwateravailabilityinbothbasins.Thislegal

uncertaintyhangsoverthebasinandhasforatleast65years6.Arguably,thissourceof

uncertaintyoutweighstheclimateanddemanduncertaintiesexposedandfeaturedintheBasin

Studyanalysis.

Thereisnowaytoallocatewaterdifferentlybetweenthetwobasinsthatresultsinanet

basinwidegaininwateravailability;itisazerosumeffort.Buttherearewaystoallocatewater

thatbalancestheriskofclimaterelatedshortagesmoreequitablybetweenbasins,andwhich

hasthebenefitofreplacinguncertaintywithcertainty.Inwatermanagement,thevalueof

certaintycannot

be

underestimated,

and

as

argued

above,

the

greatest

threat

to

certainty

is

themannerinwhichthelegalambiguitiesandomissionswillultimatelybeaddressed.Remove

http://waterpolicy.info/projects/CRIP/index.html.Thefigureisbasedonahostofhighly(andintentionally)

debatableassumptionsandsimplifications;thus,itshouldbeviewedasastartingpointfordiscussion,ratherthan

aformalprojectionorlegalinterpretation.Specifically,inscenarioswherethelongtermaverageLeeFerryflowis

14.5MAF/yearorhigher,itassumesthattheUpperBasinwillberequiredtomaintainaminimumdelivery

scheduleof8.23MAF/yearinordertosatisfytheCompactandTreaty,andthattheLowerBasinwillberequiredto

pass1.5MAF/yearofthiswatertoMexico,withtheremainderavailableforusebytheLowerBasin.Inscenarios

wherethelongtermaverageLeeFerryflowis14.0MAF/yearorless,itassumestheUpperBasinwillberequired

tomaintainaminimumdeliveryscheduleof8.18MAF/yearinordertosatisfytheCompactandTreaty,andthat

theLowerBasinwillberequiredtopass1.4MAF/yearofthiswatertoMexico.(Notethatthisfigurewas

developedprior

to

Minute

319;

those

rules,

if

modeled

here,

would

have

anegligible

impact

on

the

trend

lines

shownhere.)Allvaluesaremaximumwateravailableforusebeforesubtractingevaporationorotherlosses.5Notethattheavailabilityofwaterandtheentitlementorallocationofwaterareseparate(butobviously

related)issues.TheCompactisclearthattheUpperBasinisallocated7.5MAF/yearofconsumptiveuses(Article

III(a)),butvirtuallynoclimatescenario(paleo,historic,orfutureprojections)suggeststhisisarealisticpossibilityif

anobligationtopasswaterdownstreamexists.6ThisconcernispartofthesubtextoftheUpperBasinCompactnegotiations(circa1948)[transcriptsavailableat

http://lawpac.colorado.edu/record=b119651],andisreflectedinthedecisiontoallocateUpperBasinsharesin

percentagesratherthanfixedvalues.


4/15

4

theselegaluncertaintiesandthedoorisopentoavarietyofdealsandcopingmechanisms,and

theneedtoprepareforlegalshockstothesystemareavoided.This,inanutshell,wasthe

motivationfortheUpperBasinVoluntaryDemandCapoptionsubmittedbytheCRGItothe

BasinStudyforanalysis.Thefactthatthisoptionandtheothersocalledgovernance

options

7

were

not

analyzed

is

the

motivation

for

this

memo.

TheDemandCapConcept

ThecentralideaoftheUpperBasinVoluntaryDemandCap(hereaftertheDemandCap)is

thattheUpperBasinagreestolimittotalUpperBasindepletionsatanegotiatedlevel(well

belowthetheoretical7.5MAF/year)and,inreturn,isassuredthatneitherthefederal

governmentnorthestatesoftheLowerBasinwillrequestorsupportadministrationofan

interbasincompactcallinanyperiodwhenstorageinLakePowellisinsufficienttomaintain

thepredetermined

downstream

release

objective.8

Establishing

the

value

of

the

cap

and

the

releaseobjectivearepointstobenegotiated;buttheprincipleistoestablishthesenumbersin

advanceofacrisisandwithoutaneedtolitigatetheomissionsandambiguitiesthatexistinthe

CompactandrelatedelementsoftheLawoftheRiver.Inthatregard,theDemandCapisnot

intendedtoreplaceoramendtheCompact9,butrather,isanoperationalregimeplacedontop

ofthisfoundationfollowingtheprecedentofthe2007InterimGuidelinesforLowerBasin

ShortagesandCoordinatedOperationsforLakePowellandLakeMead(InterimGuidelines).

AlsoanalogoustotheInterimGuidelines,enactmentofthevoluntaryagreementwouldrequire

theunanimousagreementofthesevenbasinstates,andindoingso,wouldestablisha

temporaryarrangement.

In

this

case,

the

proposed

operating

regime

would

remain

in

effect

foratermof40years,subjecttorenewal(nolaterthan10yearspriortoexpiration)by

affirmativeactionbyaminimumof5of7states.Theagreementcouldbemodifiedor

741of160submittedoptionswerecharacterizedasinvolvinggovernance;see

http://www.usbr.gov/lc/region/programs/crbstudy/finalreport/techrptF.html.8TheDemandCapproposalcanbefoundintwoslightlymodifiedforms:theoriginalversionintheBasinStudy

materials(option117at

http://www.usbr.gov/lc/region/programs/crbstudy/finalreport/Technical%20Report%20F%20

%20Development%20of%20Options%20and%20Stategies/Appendix%202%20

%20Options%20Submitted%20to%20the%20Study/Appendix%20F2%20

%20Options%20Submitted%20to%20the%20Study.pdf),andaslightlyupdatedversionontheColoradoRiver

InformationPortal

(http://waterpolicy.info/archives/docs/Upper%20Basin%20Voluntary%20Demand%20Cap,%20amended%20Feb%

202012.pdf?p=1683).Neitherversionisreprintedhereinitsentirelyasthefollowingsectionprovidesthemost

comprehensivearticulationandanalysistodate.9Infact,theDemandCapproposalisseenasawaytohonorandreinforcetheheartoftheCompact,whichisthe

commitmenttoanequalsharingofwateramongthetwobasins.


5/15

5

terminatedatanytimebyunanimousagreementofthestates.Onceterminated,theLawof

theRiver,asitcurrentlyexists,providesthedefaultlegalandoperationalregime.

TheDemandCapisnotacompletelynewidea,asasimilarideawasoncefloatedataBasin

StudymeetinginAlbuquerque.10

Then,asnow,theidearaisesseveralconcerns.Firstand

foremost,while

the

value

of

eliminating

legal

uncertainty

is

undeniably

attractive

and

valuable,

thereisabenefitassociatedwithuncertaintyinthatitallowsallpartiestoretainhopeforthe

legalinterpretationthatbestsuitstheirinterests.ToagreetoacapforcestheUpperBasinto

concedeapracticalapportionmentsignificantlylessthan7.5MAF11;similarly,agreeingtothe

proposalforcestheLowerBasintoconcedethattheirapportionmentisnotseniortoallUpper

Basinuses(exceptUpperBasinPresentPerfectedRights).Forbothparties,theideamakes

senseonlytotheextentthattheconcessionsinvolvedaremorethanoffsetbythevalueof

thereducedlegaluncertaintyandtheotherancillarybenefitsoftheproposal.Insummary,

potentialbenefitsoftheDemandCap(ascomparedtothestatusquo)include:x ThethreatofaninterbasinCompactcalliscompletelyeliminatedtherebyprotecting

existingUpperBasinwaterusersfromacall,andeliminatingtherelianceofLowerBasin

usersonsuccessfullylitigatingacallasistheneedforanyinterim

litigation/negotiationconcerningtheexistenceofanUpperBasindeliveryobligation

andseveralrelatedlegalissues(includingtheUpperBasinsshareoftheMexican

deliveryobligationandtheuseofLowerBasintributaries);

x TheDemandCaparrangementprovidesmechanisms(namely,theUpperBasincaponconsumption)thatencouragethemaintenanceofstorageinLakePowell(andallthe

associatedbenefits

thereof,

including

drought

protection,

and

protection

of

recreation

andhydropowerindustries);

x Withtheexceptionofsomenewadministrativeexpenses(associatedprimarilywithtrackingUpperBasinconsumption),theDemandCapoptionrequiresnonew

expenditures,andinfactislikelytosavesignificantpublicfundsbyeliminatingor

reducingtheneedformanyexpensiveriskcopingstrategies,andbyreducingthe

financialcosts(andpotentialimpacts)oflitigation;and,

x Thearrangementprovidesafoundationuponwhichmanyemergingandnewreformscouldbeestablished,whilemaintainingtheexistingLawoftheRiverasthedefault

10See:Kuhn,Eric.2011.RiskManagementStrategiesfortheUpperColoradoRiverBasin.DraftofJune7.

11Arguably,thishasalreadyoccurredinUpperBasinreports,includingtheseminalstudybyTiptonandKalbach

(1965)estimatinglongtermUpperBasinwateravailabilityasrangingfrom4.7to6.3MAF/year.(Tiptonand

Kalbach,Inc.1965.WaterSuppliesoftheColoradoRiver.ReportpreparedfortheUpperColoradoRiverCommission.Denver,July.)ThisisalsodoneintheHydrologicDeterminations.


6/15

6

condition.Bylargelyremovingortemperingthegamechanginguncertainties

(associatedwiththeeffectofclimatechangeonaverageandextremeflows,andthe

interpretationofkeyLawoftheRiverissues),theDemandCapestablishesan

environmentencouragingfurtherinnovations(includingriveraugmentation).

TheModelingEffort

Thefollowingmodelingwasconductedinsummerandfall2012usingCRSS12

byKevinWheeler,

ownerofWaterBalanceConsulting(andaproductoftheUniversityofColoradoCenterfor

AdvancedDecisionSupportforWaterandEnvironmentalSystems(CADSWES)).Thisworkwas

donecommensuratewiththeBasinStudyand,assuch,utilizedassumptionsfromthat

investigationwhereverpossiblewithafewnotableexceptions.Modelingresultsareshown

below,precededbyadiscussionofsomeprominentmodelingassumptionsandadjustments

thatshaped

the

study

design.

MethodologyandAssumptions

Themodelingapproachwastocomparetheperformanceofthedemandcapscenarioagainsta

statusquo(hereaftertheBaseline)scenario,primarilyfromthestandpointofconsumptionlevelsinbothbasinsandreservoirstorage.Thesearethemacrolevelvariablesofinterestin

anyoperationalregimethatmodifiestherelationshipbetweentheUpperandLowerBasin.For

bothscenarios,

inputs

(supplies)

derive

from

use

of

the

downscaled

GCM

projected

hydrology.

Thatclimaticscenario,whichassumeswarming,hasthefurtherinfluenceofaugmenting

demandsspecifiedintheBasinStudysScenarioAdemandschedule.13

Thesesupplyand

demandelementshaveavarietyofembeddedassumptionsandshortcomings,notdetailed

here,butwereselectedtodovetailtheanalysiswiththeBasinStudytotheextentpossible.

Similarly,weutilizedtheBasinStudytimehorizon,whichextendsto2060.Someofthe

benefitsoftheDemandCapproposalareprobablymoreevidentatlaterdates,butwecould

notexplorethispointwithoutaccesstosupplyanddemandscenariosextendingpast2060.

Toperformthiscomparison,afewelementsofCRSShadtobemodified.Asforeshadowed

earlier,themiraclewateralgorithmhadtobemodifiedintwoways.First,inthoseinstancesin

whichmiraclewaterwasutilizedintheBaselinescenarios,thosequantitiesweresubtracted

fromUpperBasinusetogetanaccuratevalueofhowmuchwatertheUpperBasinactually

12CRSSistheColoradoRiverSimulationSystem,aRiverWarebasedmodelthatistheofficialmodelusedbythe

BureauofReclamationforsystemoperationsandscenarioplanning.13

Theimpactofassumedwarmingondemandsissignificant,averageroughly0.5MAF/yearby2060.


7/15

7

consumed.FailuretodosowouldmakecomparisonsoftheBaselinetotheDemandCap

scenariomeaningless.Second,themiraclewateralgorithmisunlimitedi.e.,theprogramcan

addinmorewaterthanwouldphysicallybemadeavailablefromUpperBasincurtailments.As

amatterofphysicsandpolicy,welimitedmiraclewatertotheamountthatcouldactuallybe

achieved

through

Upper

Basin

curtailments,

subject

to

the

protection

of

Upper

Basin

Present

PerfectedRights(whichweassumetobe2.2MAF).

AlsoproblematicwasthefactthatCRSSoperatesbasedondemands,notdepletions.Despite

thenameDemandCap,ourproposalis,inreality,adepletioncap.Additionally,insatisfying

demands,CRSStracksofwateravailabilityanddemandsinvariousreaches/tributaries,and

doesnotsatisfydemandsinagivenriversegmentwherewaterisphysicallyunavailable.For

thepurposesofouranalysis,thislevelofdetailissomewhatcounterproductive,asweassume

thatonceafirmcapisinplace,physicalandinstitutionaladjustmentswouldbemadetoensure

fulluseofthecap.AdjustmentsweremadetohittheUpperBasindepletionmaximums

describedin

the

Demand

Cap

scenarios.

BoththeBaselineandDemandCapscenariosrequiredrefinements.Ofthetwo,specifyingthe

Baselinescenariowasthelargerchallenge,asitrequiressomeassumptionsabouthowthe

currentrulesmightactuallybeinterpretedinpractice.Twoissuesareparticularlysalient.First,

themagnitudeoftheUpperBasindeliveryobligationhadtobespecifiedatsomelevel,with7.5

MAF/yearand8.25MAF/yearbeingobviouscandidates.Ratherthanchooseoneoftheother,

weutilizedbothvalues(thuscreatingtwoBaselinescenarios).Second,theInterimGuidelines

arescheduledtoexpirein2026ifnotrenewedormodified.Wechoosetokeepthese

guidelines

throughout

the

full

scenario.

To

the

extent

that

other

legal

assumptions

were

required,unlessotherwisenoted,weretainedtherulesalreadycodifiedinCRSS.

ThreeadjustmentstotheoriginalDemandCapscenarioarenotable.First,weoriginally

proposedusingacapvaluethatincludedUpperBasinevaporationlosses.Ultimately,we

decidedtospecifyanUpperBasincapnumberbeforeevaporation,whichimmunizedtheUpper

Basinfromthepracticalchallengeoftryingtopredictevaporationpreciselyinanygivenyear.

(Weassumethoselossestobeintheneighborhoodof0.5MAF/year.)Second,inorderto

investigatethepotentialbenefitsoftheDemandCapproposalinprotectingreservoirstorage,

wequicklyrealizedthatitmightbeadvisabletopreventtheLowerBasinfromusingsurpluses

attributableto

enforcement

of

the

Upper

Basin

cap.

To

do

this,

aLower

Basin

cap

of

7.5

MAF/yearwasimposedthroughoutmostoftheDemandCapscenarios.Andthird,through

initialmodelingrunswedeterminedthatanUpperBasincapof4.5MAF/year(notcounting

evaporation)wasthebestvalueforillustratingthetradeoffsinherenttotheDemandCap.

(Theoriginalproposalsuggested5.5MAFroughly5MAFindepletionsand0.5MAFin


8/15

8

evaporationasastartingpointofanalysis.)Ofcourse,weencouragesubsequentanalyses

thatfeatureabroaderrangeofvalues.

Results

Theresultspresentedbelowarefromthesixth(andfinal)iteration,bywhichtimethekey

modelingissuesdescribedabovehadbeenidentifiedandresolved.Eachfigureprovidesresults

forthreescenarios:

75Prot22 Thisbaselinescenarioassumesadeliveryobligationaveraging7.5MAF/year.

FailuretodeliverthisvolumeresultsinUpperBasincurtailmentsasnecessary

tomeetthisdelivery,withthecaveatthat2.2MAFofUpperBasinPresent

PerfectedRightsarealwaysprotectedfromcurtailment(hencetheProt22

nomenclature).

82.5Prot22 Thisbaselinescenarioassumesadeliveryobligationaveraging8.25MAF/year.

Aswith75Prot22,failuretodeliverthisvolumeresultsinUpperBasin

curtailmentsasnecessarytomeetthisdelivery,withthecaveatthat2.2MAF

ofUpperBasinPresentPerfectedRightsarealwaysprotectedfrom

curtailment.

4.5DoubleCap ThisDemandCapscenarioallowstheUpperBasintodeplete4.5MAF/year

beforeevaporativelosses(roughly0.5MAF/year),andadditionallycaps

LowerBasin

consumption

at

7.5

MAF/year.

No

Upper

Basin

delivery

obligationisenforced(i.e.,noCompactcalls).

Afewfiguresplottwoadditionalvariables:

ASchedule(withClimateChange) ThesearetheprojectedUpperBasindemandsfromthe

BasinStudyScheduleAdemandscheduleasadjusted(increased)toreflect

theaddeddemandsassociatedwiththedownscaledGCMprojected

hydrology.

4.5SingleCap ThisDemandCapscenarioallowstheUpperBasintodeplete4.5MAF/year

beforeevaporativelosses(roughly0.5MAF/year).NocaponLowerBasin

consumptionisenforced.NoUpperBasindeliveryobligationisenforced(i.e.,

noCompactcalls).


9/15

9

Collectively,thesevariablesallowustotrackdifferencesinhowtheDemandCapaffectswater

availability(measuredintermsoftheamountofconsumptionallowed)andchangesin

reservoirstorage.Asapracticalmatter,watermanagersarelikelytowanthighlevelsofboth

variables,althoughinrealitythereisafixedquantityofwater,andmaximizingboth

consumption

and

storage

at

all

times

is

an

impossibility.

Similarly,

it

is

an

impossibility

to

simultaneouslyincreasewaterconsumptionandstorageforallusers;inputstothesystemare

notmodifiedacrossallthescenariosi.e.,theyallusethesamedownscaledGCMprojected

hydrologysothisisazerosumexercise.Thus,thewaytoevaluatetheresultsistocompare

thequantitativetradeoffsintermsofsupplies(asmeasuredbyconsumption),storage(as

measuredbyreservoirvolume/elevation),andreliability,andtodothiswithrespecttothe

nonquantitativetradeoffsassociatedwiththeeaseofmaintainingthestatusquo(offeredbytheBaselinescenarios)versusthebenefitsofeliminatinglegaluncertainties(offeredbythe

DemandCapscenarios).

Giventhe

importance

of

these

non

quantitative

variables,

it

is

impossible

for

us

to

impartially

establishanyscenarioasthewinnerorbest,andthus,toarguefororagainstenactmentof

theDemandCappolicy.Butthatisnotthepointofthisexercise.Thepointistoillustrate

tradeoffsandopportunitiesassociatedwiththepursuitofagovernancebasedsolution,inthis

case,aDemandCapscenario.WhetherornottheDemandCapisagoodapproachiscertainly

debatable;whetherornotgovernancebasedreformsshouldbepartofthesearchforsolutions

isnot.Basinleaderswillsoonbeforcedtomakedecisionsregardingseveralgovernanceand

LawoftheRiveritems,includingextensionoftheInterimGuidelines;thedefinitionofUpper

Basindeliveryobligations,ifany,totheLowerBasinand/ortoMexico;thedesignand

implementation,ifany,

of

an

interbasin

Compact

call;

the

quantification

of

Upper

Basin

Present

PerfectedRights;andsoon.Again,muchoftheappealoftheDemandCapisthatitcan

subordinateorcompletelyeliminatemanyofthemostdivisiveissues,anddosoinawaythat

leavestheCompactunalteredandasthedefaultinstitutionalframework.


10/15

Depletions:Upper asin

10


11/15

Depletions:Lower asin

11


12/15

ReservoirStorage

12


13/15

13

FindingsandConclusions

Theprecedingfiguresillustratesomeofthemostimportanttradeoffsassociatedwithadopting

theDemandCapproposal.Asnotedearlier,thedatadoesnotallowustomakeadefinitive

rulingaboutwhichapproachisbest,butitdoesallowustospeculateonthetradeoffs

(assuminga4.5

MAF

cap)

that

would

be

central

to

any

decision

making.

What

we

believe

to

be

thesalientlessonsofFigures2through7aresummarizedbelow.

Depletions:UpperBasin

Theplotofaveragedepletions(Figure2)isperhapsmostnotableforshowinghowboththe

BaselineandDemandCapscenariosfallwellbelowthedemandsassociatedwithScheduleA

anddownscaledGCMprojectedhydrology.TheDemandCapdoesnotsolvethisproblemof

unmetdemands,

but

neither

does

either

Baseline.

14

Thus,

this

plot

is

abetter

illustration

of

the

UpperBasinsupply/demandmismatchthanitisinstructiveinilluminatingasolution.

ThePDF(probabilitydistributionfunction)showninFigure3illustratesakeyfeatureofthe

DemandCap,asUpperBasindepletionsarerelativelyflatandstablewhencomparedtothe

Baselinescenarios.Overall,theBaselinescenariosofferslightlymorewaterabout60%ofthe

timeandslightlylessabout40%ofthetime,withbigdifferencesseenonlyattheextremes.Of

course,muchofwatermanagementisfocusedonmanagementattheextremes.

Overall,theUpperBasindepletionfiguresillustratethat,whiletheDemandCapconceptmight

firstseem

like

aradical

and

significant

concession

for

the

Upper

Basin,

the

effect

during

the

studyperiodisrelativelymodestatleastatthe4.5caplevel.Extendingthetimehorizonpast

2060wouldlikelyyieldmoredramaticresults,aswouldchangingtheclimatehydrology

assumptions.Ultimately,fortheUpperBasin,thekeydecisionsarewhetherornotlosingthe

extremehighsisworthbeinginsulatedagainsttheextremelows,andwhetherornottabling

thelegalissues(forthetermoftheagreement)ispreferabletoleavingthoseopen.

Depletions:LowerBasin

Notsurprisingly,theplotofaverageLowerBasindepletions(Figure4)showstheneteffectof

theDemandCapistolimitLowerBasindepletionsbelowwhatwouldbepossiblegiventhe

Baselinescenariosassumingenforcementofeithera7.5MAF/yearor8.25MAF/yearUpper

14ItisquitepossiblethatCRSSoverestimatestheUBshortagesforeachofthesescenarios,inthattheresolutionof

themodeldoesnotincludesomeexistingstoragereservoirsand,thus,mayunderestimatetheabilityofthe

systemtomeetsomedemands.


14/15

14

Basindeliveryobligationalthoughthedifferencesarenotextreme(notetheyaxisdivisions

areonly200KAF).Again,whetherornottheLowerBasincanrealisticallyexpecttosurmount

thelegalandpoliticalhurdlesassociatedwithenforcingeitherdeliveryobligationisastrategic

considerationthatcannotbeshownquantitatively.IntheDemandCapscenario,theLower

Basin

is

not

required

to

pursue

(or

prevail

in)

such

litigation.

TheotherkeystrategicconsiderationfortheLowerBasinistheeffectoftheDemandCapon

watersupplyreliability.ThePDF(Figure5)showsvirtuallynosignificantdifferencesin

reliabilityovermostoftheruns,withthenotableexceptionofthelowesttailwhichshowshow

theDemandCapshiftssomeoftheclimaterisktotheLowerBasin.Thisisaninherentand

predictableconsequenceofeasingsomeoftheclimateriskontheUpperBasin(explained

earlierandshowninFigure1).TheDemandCapisassumedtoamelioratethisconcernby

betterprotectingreservoirstorage,thesubjectofthefollowingsetoffigures.

ReservoirStorage

TheimpactoftheDemandCaponreservoirstorageisconsistentlypositivei.e.,betterthan

eitherBaselinescenario,andespeciallynotableinthelateryearsoftheruns.AverageLake

Meadelevation,forexample,isroughly20feethigherintheDemandCapscenariothanthe7.5

MAF/year(75Prot22)scenarioby2060(Figure6).ThestoryforLakePowellisalso

consistentlypositive,inthattheDemandCapresultsingreaterstoragethaneitherBaseline

(Figure7).

NotethatFigure7alsoshowstheimpactofasinglecapi.e.,justanUpperBasincapas

originallyproposedonreservoirstorage.Thedoublecapwasutilizedinthismodelingfor

fearthat,withouttheLowerBasincap,anygainsinLakePowellreservoirstoragemightbelost

tosurplususesdownstream.Figure8showsthesefearswereprobablyoverblown,asno

discernibleimpactisseenforLakePowell.

Conclusions

Overall,the

modeling

of

the

Demand

Cap

shows

that,

compared

to

the

statusquo,this

institutionalreformcan(a)betterbalancetheriskofwatersupplyperturbationsassociated

withclimatechangebetweentheUpperandLowerBasins,(b)eliminatemanysignificantlegal

uncertainties,and(c)protectandenhancereservoirstorage,allwhilehavingmodestimpacts

onwateravailableforconsumptiveuseinbothbasins.Whetherornotthisisviewedasan

improvementoverthestatusquoisamatterofpersonaljudgment,andrestsonassumptions


15/15

15

aboutwhatthestatusquomightactuallyentail.Itisworthnotingthat,formodelingpurposes,specifyingtheBaseline(statusquo)scenariosprovedmuchmoredifficultthantheDemandCap,whichisapowerfulreminderthatsignificantlegalomissionsandambiguitiesexistinthe

LawoftheRiverduringperiodsofwaterscarcity.

Thatagovernance

reform

can

mitigate

against

both

hydrologic

(climate

change)

and

legal

uncertaintiesisevidencethatthisclassofreformsneedtobeconsideredprominentlyinthe

searchforsolutions,despitetheiromissionintheBasinStudyanalysisandthehesitancyof

manypartiestodiscussmattersoflawandpolitics.Thefactis,thethornylegalandpolicy

issuesthatexistwillatsomepointdemandresolution,andthetimetodothatisbeforethe

reservoirsareemptyandthespecterofaCompactcallhastakencenterstage.Conceptually,

solutionsthatprotecttheCompactfromlegalchallengesshouldhavebroadappeal;the

DemandCapisonepathwaytothatfuture.

Demand Cap Analysis

Documents

Transcript of Demand Cap Analysis