The Flow of Change: State Boundaries and Water Management in Las Vegas

via Didier Camus on Flickr

October 2011
Jenny Farman
Ben Lerman
Will Toaspern
Michelle Valentine

For nearly a century after the signing of the Colorado River Compact, Nevada’s water allotment of 300,000 acre-feet per year adequately served the population of Las Vegas. However, since the 1980s the city has experienced explosive population growth, forcing Las Vegas water officials to discuss new sources of water for the city. Our report explores historical, political, legal, and economic dimensions of Las Vegas' water use and the Southern Nevada Water Authority's role in the Colorado River Basin.

By Jenny Farman, Ben Lerman, Will Toaspern, Michelle Valentine

A Brief History of the Colorado River Compact

In the twilight of his career John Wesley Powell, who gained infamy exploring the Colorado River and developing Government Science, was asked to speak at the International Irrigation Congress. He listened as the men before him exclaimed about the unbelievable potential of the American West that irrigated agriculture would bring.  When it was his turn he stood up and said, “Gentlemen you are piling up a heritage of conflict and litigation over water rights for there is not sufficient water to supply the land.” He was promptly booed out of the room. Powell put forth many such prophetic analyses of the arid west throughout his career. The Colorado River is the most highly litigated and controlled river in the world. The Colorado River Compact, signed in 1922, was the first major agreement in establishing what is now referred to as “The Law of the River”.

As Pat Mulroy, head of the Southern Nevada Water Authority said at a conference marking the 75th anniversary of the Compact, "Things have changed, but what remains the same is that California was the problem back then, and California is the problem today." The Supreme Court’s ruling in Wyoming v. Colorado showed that the doctrine of prior appropriation could be applied across state lines. The states in the Colorado River Watershed worried that California, the wealthiest, most powerful and fastest-growing state, would be able to make huge claims on the Colorado River. These fears were increased by report on a potential dam site at or near Boulder Canyon. The delegates intended to apportion water in accordance to the Potentially Irrigable Acres but there was too much contention in determining those numbers. Instead, under the guidance of then Secretary of Commerce Herbert Hoover, the water was split between the Upper Basin consisting of New Mexico, Colorado, Utah, Wyoming and the Lower basin including, California, Nevada and Arizona. Unlike the upper basin, the Lower Basin was unable to apportion the water amongst themselves smoothly. Arizona eventually asked the Supreme Court for a judicial apportionment which led to the gargantuan Arizona v. California case. Although the impacts of the case were immense, the most important number for Las Vegas and our research was 300,000, the number of Acre Feet guaranteed to the state of Nevada.

A History of Las Vegas and Its Water: From Powell to the Robert B. Griffith Water Project

One John Wesley Powell’s proposed solutions to the hard truth of insufficient water supply in the American West was a division of the territories based on watershed, shown in the map below. That is, however, not what happened. Instead boundaries were formed along other lines for various reasons. Nevada’s northern boundary, for instance, runs along the 42d parallel which was established at the Nootka convention as the boundary between Spain and England’s new world territories. The southeastern portion of the border is now determined by the Colorado River but wasn’t given to Nevada until after it gained statehood. The ramifications of these divisions are immense and wide-ranging. Concerning water in the west, Powell biographer Donald Worster has said that, “We would not have, if Powell's ideas had carried through, any of our huge federal water projects. And we certainly would not have had anything like the massive urban growth that's taken place in the West."

The boundaries that were created contained people and natural resources as well as outlining the territory that state government’s can legislate. State governments have the political autonomy to create laws influencing the way each state’s resources are developed. They also had a mandate from their citizens to protect their resources (i.e.-water) from outside forces. Geopolitical boundaries also affect identity. The men who met in 1922 at Bishop’s Lodge to form the Colorado River Compact were not just westerners or Americans but also Nevadans. They were there to represent their states and figure out how to allocate Colorado River Water amongst the states in the Basin.

Nevada didn’t bring much in the way of wealth, people or irrigable acreage to the table. In the southern tip of the state, however, there were three springs that created a patch of vegetation and hospitable land in the middle of the desert.  In a narrative common to the American West, this small region was named Las Vegas by the Spanish and then cultivated by the Mormons. Although they were driven out by the alkaline nature of the soil the Mormons left a fort that became part of the first permanent ranching operation. From there the city grew. 

The railroads selected Las Vegas as one of many stops between the Brigham Yong’s communities in Utah and the growing region of Southern California because it had a relative abundance of water. The town remained relatively small until the construction of Hoover Dam. In addition to Lake Mead’s importance in future water strategies, the construction of the dam kept Las Vegas afloat through the Great Depression and created a tourist attraction that would shape the town’s identity. The Nevada Legislature offered another way to improve the state’s economy during the depression by legalizing gambling in 1931. Vegas was also gaining reputation as a “marriage mecca” because couples from California came to Vegas for a more expedient marriage process than California offered. In 1941, Thomas Hull built the first resort hotel and the city began to develop the identity we know today. Between 1940 and 1945 the population of Las Vegas doubled. 

The railroads formed the Las Vegas Land and Water Company to regulate Las Vegas’ water on May 2nd, 1905. By 1907, Las Vegans were already looking for other sources of water beyond the springs. The discovery of an aquifer under the city led to an ultimately unsuccessful attempt at farming the land more intensely. It also led to a commonly accepted idea that the springs would continue to flow no matter what. Water quality and pressure had plagued the city but any attempts for a municipal takeover of the city’s utilities had ultimately failed. In 1944, a conference was held in Las Vegas to discuss, “The Fundamental Problem Confronting Las Vegas---the Water Supply”. Although Colorado River was suggested as an alternative, Las Vegans were unwilling to pay the price or drink the highly mineralized water. Instead, another, bigger pump was built and a reservoir constructed. By 1949, the Las Vegas Land and Water Company was not willing to build the pipeline to Lake Mead that the city needed and was looking to sell. They eventually found a buyer in the Las Vegas Valley Water District, a not-for-profit government agency. The first bond issue voters passed was 8.7 million dollars to purchase the LVL&WC and to bring Lake Mead Water into the valley. In September 22, 1955 the District ordered half of its new reservoir filled with Lake Mead Water and Las Vegas started using about 15,000 acre feet of its allotment. The Court affirmed Nevada’s allotment of 300,000 feet in Arizona v. California and another 50,000 acre feet to come from the Virgin River. The District immediately started developing a plan to use more Lake Mead water as the city continued its astonishing growth. They continued to try and enhance and protect their groundwater sources but they needed a better option. After years of debate and politics the Southern Nevada Water Project, now known as the Robert B. Griffith Water Project was implemented in 1971. It provided 299,000 acre-feet of Lake Water (basically the entire allotment) to Las Vegas, North Las Vegas, Henderson, Boulder City, and Nellis Air Force Base in southern Nevada. From this point on, Las Vegas was forced to get even more aggressive in order to satisfy their amazing growth.

Flow of Change: State Boundaries and Water Management in Las Vegas

Each year, hundreds of thousands of tourists take in the magnificent water shows at the Bellagio Fountains in Las Vegas. The shooting towers of water belie the fact that the city lies within the harsh desert lands of the arid west, and anyone watching the Bellagio fountains would find it hard to think of water scarcity. Despite the glamour of Las Vegas’ tourist attractions, the desert metropolis faces a looming water crisis. The future of the city’s water resources is dependent in large part on the complex network of the Colorado River Basin. The river and the seven states receiving its water under the Colorado River Compact are connected by a host of complex legal and political ties. The state borders of this region run brashly across the complicated ecological and hydrological systems of the most managed river on earth. In this context, Las Vegas provides a fascinating case study in how such geopolitical factors  affect water management in a city facing its limits.

The Hoover Dam today. Image credit: Kate Headley via Flickr

Although Las Vegas grew and developed under the influence of the Spanish, Mormons and railroads companies, the city was a small desert town until the 20th century. The construction of the Hoover Dam in 1936 nearby provided a tourist attraction and economic growth that quickly expanded the city’s population. As the population of Las Vegas continued to expand at the end of the 20th century, the city was forced to aggressively pursue new water options. Its current and future plans for water resource development are shaped largely by the geopolitical boundaries of the southwest. In response to a need for new water options, Las Vegas has responded with various approaches to the state borders that define the region’s division of water. . Their reaction has been threefold - developing resources within the state, pushing to the forefront of water conservation efforts, and looking to neighboring states for water transfers.

When Southern Nevada realized in the late 1980s that its water resources would last just until the next millennium, manager Pat Mulroy of the Las Vegas Valley Water District (soon to become the larger, more powerful Southern Nevada Water District) looked first to in-state resources to augment Southern Nevada's supply. She launched a campaign to claim nearly all the unused groundwater in the southern half of Nevada. When she met serious backlash from the agricultural community, she made a deal with the farmers to back down from her groundwater claims in exchange for their support on a new project to tap water from the Virgin River, which flows from Utah into Lake Mead. Mulroy was able to unite both farmers and environmentalists from her state in support of this project, and in 2007 with the implementation of the new Interim guidelines for river management, succeeded in bringing Southern Nevada its first new water in over fifty years.

Despite new water from the Virgin River, Las Vegas recognized the need for a variety of solutions to its water scarcity. In the past decade, Las Vegas has launched several creative in-state conservation initiatives ranging from changing cultural assumptions to wastewater recycling programs. For example, the Southern Nevada Water Authority has provided monetary incentives for citizens to remove lawns in favor of water-smart landscaping options. Under the program, homeowners receive two dollars for every square foot of grass removed. So far, over 80 million square feet of water-thirsty grass has been replaced. In addition, most casinos now have their own wastewater treatment systems beneath their hotel, which allows for one hundred percent of the water used on the Strip to be recycled. Through clever in-state conservation methods, Las Vegas has been able to continue to provide decadent extravagance to the 39 million tourists that visit the city each year.

Although Las Vegas has developed new in-state water resource options, the city’s future water demands will require supplemental water from beyond Nevada’s borders. Las Vegas has already benefitted from a groundwater storage deal with Arizona (see sidebar), but this type of water banking is only the first step towards an established system of water transfers between states. One potentially significant option in Las Vegas’ hunt for out of state water is water markets, which allow water users to buy and sell water rights on an open market. These water markets would allow Las Vegas to buy Colorado River water rights from a variety of sources, most notably agricultural users in the Basin states. However, state lines are a significant obstacle in the flow of water between users. When water allocations are divided between states or groups of states, it becomes difficult to transfer the water rights that affect these allotments.

Despite the legal and political complexities involved with water marketing, it still remains an important option for Las Vegas. The desert city continues to face a looming water crisis, and its future is inextricably linked to the Colorado River Basin as a whole. The complexity of Las Vegas’ future in this context is confounded by the state lines that divide the basin into geometric units of power and autonomy. As Mulroy has noted, “for nearly a century, the basin states have focused primarily on protecting their share of the river” - highlighting this unavoidable consequence of state lines. Interstate water transfers and basin-wide marketing could potentially encourage new forms of cooperation between the states whose arbitrary borders encompass the most complex river management system in the world. The water gushing out of the Bellagio Fountains may one day come from as far away as Utah, with the tourists crowded around it still blissfully unaware of the complicated geopolitical forces hidden beneath the water’s surface.

Banking, Transferring, and Marketing Water in the Colorado River Basin

For nearly a century after the signing of the Colorado River Compact in 1922, Nevada’s water allotment adequately served the growing population of Las Vegas. The ‘80s and ‘90s, however, put Las Vegas on a path of explosive population growth that demanded a re-evaluation of the city’s water sources. From 1990 to 2000, Las Vegas emerged as the fastest growing metropolis in the U.S., with a growth rate of 83% over the ten year period. During this decade Las Vegas water officials began to discuss new sources of water for the city, knowing that Nevada’s allotment of 300,000 acre-feet per year alone could not sustain such rapid expansion. Despite the new groundwater and Virgin River resources , the city recognized a need to pursue new water options out of the state.

The Bureau of Reclamation’s 1994 draft regulations ushered in Las Vegas’ new era of water management. The regulations, which included a provision allowing for interstate leasing of Colorado River rights, gave the city an unprecedented opportunity to seek water sources outside of Nevada’s borders. The key player in Las Vegas’ new water hunt was Arizona, who was eager to sell its unused entitlements of Colorado River water. At that point, all the state’s unused river water flowed to California and became a free surplus. In 1996 Arizona created a Water Banking Authority, through which the state purchased some of its unused water allotments. The AWBA began storing the Colorado River water in underground aquifers, with idea that they could then sell this water to thirsty states like California and Nevada.

Arizona’s water bank successfully enticed Las Vegas, and by 2001 California, Arizona, and Nevada had negotiated a three-part water storage deal. This agreement allowed Las Vegas, represented by the Southern Nevada Water Authority, to withdraw some of Arizona’s Lake Mead water in times of shortage. Arizona in turn would withdraw the same amount of stored water from its aquifers. According to Pat Mulroy, general manager of the SNWA, the deal represented a “landmark in cooperation between the states that rely upon the Colorado River.” Although the deal was historic, interstate water banking was only the first step towards a new system of water transfers between states.

The real revolution in interstate water transfers would come from the development of water markets in the Colorado River Basin. Water markets would have great potential benefit to a city like Las Vegas. If water rights could be traded more freely, water would naturally move from lower to higher-value uses. These types of markets would in many cases transfer water from agricultural users to urban users, which would clearly benefit the sprawling Las Vegas Metropolis. However, the obstacles standing in the way of efficient water transfers are numerous. Water is regulated and controlled unlike most other markets goods, and the political forces tied up in Colorado Basin River rights present a challenge to many types of transfers.

If the development of water markets can overcome these obstacles, Las Vegas could find itself benefitting from a more efficient network of water users. Economic research has shown that both intrastate and interstate transfers would provide significant efficiency gains in the consumptive uses of water. When non-consumptive uses are taken into account, such as hydropower and pollution control, the potential gains are even higher. Although both types of water markets could lead to a more efficient allocation of water, water transfers within the state will not suffice for the future demands of Las Vegas. Thus interstate water transfers, arranged through open market water purchases, appear to be integral to the future of Las Vegas’ water resources.

There is some potential for successful interstate water transfers, as the groundwater agreements between Arizona, Nevada, and California indicate. However the geopolitical boundary between the Upper and Lower Basins provides another obstacle in Las Vegas’ continued hunt for out-of-state water options. The city’s banking deals have all stayed within the boundary of the Lower Basin, where the states have no official compact dividing up their allocation. Water transfers between basins, on the other hand, would need to work around the Basin allocations described in the Colorado compact. Las’ Vegas 1995 attempt to buy water from Utah was met with strong objections and legal threats from the Upper Basin, hinting at the difficulties that inter-basin transfers might face in the future.

The issue of water markets is clearly complex in view of all the forces at play in the Colorado River basin. Considering the complexity of inter-basin water transfers as well as the significant water demands predicted for Las Vegas’ future, the city may find itself a leader in the development of a completely new approach to water rights. Water expert Kenneth D. Frederick believes that an inter-basin transfer would require a “renegotiation of the 1922 Colorado River Compact,” and in all likelihood Las Vegas would be at the forefront of such a revolutionary transformation of water in the Southwest.

A Revolution in Water Management: The Virgin River Story

They call her the Water Witch of the West. She has the ears of Senators, Governors, Cabinet Members, and at times even the President of the United States. Pat Mulroy, manager of the Southern Nevada Water authority, controls one of the most powerful water districts in the Colorado River Basin, and has used that power to revolutionize the way we manage water in the west.

In 1989, around the time Southern Nevada realized that by the turn of the century it would be out of water, Mulroy launched a claim on nearly all the unused groundwater in the southern half of Nevada. She reasoned that given the rural land’s low value and development, the water would be much better allocated in the booming Las Vegas area. Predictably, Mulroy received a tremendous amount of resistance from the Nevada agricultural community. Chants of “Remember the Owens Valley,” the community that was largely destroyed to make way for the water needs of the then booming Los Angeles metropolitan area, rang throughout town hall meetings around the State. Eventually Mulroy backed off, but not before proving the political brilliance of her seemingly doomed-to-failure groundwater plan.

Mulroy agreed to release her claim on the rural groundwater—but only under one condition. She wanted to be able to increase Nevada’s Colorado River allotment to serve Las Vegas’ needs. Under the 1922 Colorado River Compact, Nevada receives 300,000 acre feet from the river each year, and up until this point in history there was no legal framework by which any State could increase its piece of the pie. Because of arbitrary State borders, Nevada was constrained by purely in-State projects to get its water. Pat Mulroy aimed to change that.

While backing off her ground water claim, Pat Mulroy simultaneously proposed a project to augment Nevada’s water supply through the Virgin River. The Virgin River, unlike most waterways in the West, was not fully allocated, and flowed into Lake Mead at the base of the Grand Canyon. Rather than build an expensive dam and pipeline that would harm the environment, Pat Mulroy proposed that the SNWA simply let the river run into Lake Mead, and take its water in addition to the 300,000 acre feet of Colorado River Water through existing infrastructure (with a few performance improving tweaks). By trading groundwater for the Virgin River, Mulroy got farmers on her side. By proposing a project that lacked any new construction projects and left the Virgin River completely untouched until Lake Mead, she got the environmentalists on her side as well. Now Mulroy just needed the law on her side.

Because of the 1922 Compact, the “Law of the River,” deals like this just weren’t possible at the turn of the 21st century. The in-State isolation system of water management did not allow for running tributaries through Lake Mead to increase Colorado River allocations. However, in 2007, the Interim Guidelines for River management allowed for Intentionally Created Surpluses, which allowed the SNWA to let the Virgin River run into Lake Mead, and then receive use credits. Through this revolutionary change in River management, Southern Nevada received Virgin River water in 2008—the first new source of water to the region in over 50 years.

From Sophomore College 2011