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Columbia River Initiative Water Withdrawal Impact Analyzed by Barry Espenson Columbia Basin Bulletin - January 16, 2004

An independent economic report prepared as a part of Washington's Columbia River Initiative process says that scenarios in which as much as one million acre feet of additional water would be diverted from the river would have "moderately large negative impacts on hydropower production" but "very large positive impacts on the agricultural economy."

The report released this week says that some of the management scenarios analyzed also had the potential to "have some negative effects on fisheries and passive use values tied to salmon and steelhead runs." Flood control and navigation would be little affected, according to the group of University of Washington scientists that prepared the report.

According to the study, effects on the agricultural sector of the state's economy range from small to large.

The study estimated that the full allocation of 1 million acre feet would result in the creation of nearly 45,000 jobs and an annual economic impact of $2 billion.

Changes from a draft report released in November to the final version resulted largely to adjustments to assumptions regarding crop prices and the efficiency of irrigation systems.

"The Economics of Columbia River Initiative: Final report to the Washington Department of Ecology and CRI Economics Advisory Committee" was posted this week on the state agency's web site

The report was prepared by a study team from the University of Washington schools of Marine Affairs (Daniel Huppert), Geography (Andrew Wenzel and William Beyers) and Economics (Andrew Subkoviak). Also on the team was Gareth Green of Seattle University's Albers School of Business.

Ecology contracted with the University of Washington to conduct an economic review of the value of water for various Columbia River mainstem uses. The data collected for this analysis will assist the department in meeting statutory requirements necessary for rule adoption.

Ecology will use the information generated by the economic study, along with other information developed by the CRI, to prepare a draft management program in the form of a rule for public review. That rulemaking process is intended to allow access to new water withdrawals while providing support for salmon recovery.

The report is one of several kinds of information that will be used to inform the Department of Ecology's rule-making. In addition, the state has contracted with the National Academy of Sciences to consider the relationship between water use and the health of salmon populations. That report is due at the end of March.

Of the five management scenarios studied, the three that would draw off an additional one million acre feet of water would almost certainly provide an economic boon to agriculture. The annual gain in net agricultural revenues would be as much as $43.7 million for an option in which 1 MAF in additional diversions were allowed and no fee would be charged.

Three other of the options impose fees of $10, $20 and $30 per acre foot respectively for new and converted (from interruptible to non-interruptible) water rights. Those proceeds would be used to mitigate for negative effects of the additional diversions on habitat and flow conditions.

The scientists, in the report's executive summary, assume that "commercial and recreational fishing may be harmed by the increased diversions if the salmon and steelhead runs in the Columbia and Snake rivers are negatively affected. This would occur if mortality during downstream migration of juvenile fish, or upstream migration of adult fish, increases as flows decline." They declined, however, to put a dollar value on those losses.

"Lacking a scientific consensus on flow-mortality relationships, and considering that the National Research Council committee is evaluating the risks of salmon and steelhead, we did not attempt to quantify the possible economic loss," according to the final economics report. "Instead, the report summarized existing information about the economic values of fish caught in the commercial and recreational fisheries for Columbia River fish."

The scientists, after reviewing other economic studies, concluded that the loss of an individual salmon or steelhead may register higher when judged by "passive" or "existence" values rather than just the worth to commercial or sport fishers.

Existence values represent the amount people would be willing to pay for something even if they don't plan to consume or use it.

"Passive use values are thought to be particularly significant for public goods that are unique and scarce. Salmon and steelhead populations in the Columbia River qualify as objects having passive use values," the scientists wrote. They cited studies that put those values at from $66.28 to $268.08 per fish.

The report notes that each new diversion will decrease the flow downstream, meaning less water will pass the six federal and five public utility district dams on the mainstem of the Columbia River.

"Using a simple monthly model of irrigation and M&I water withdrawal and return flow, and assuming hydropower production rates (megawatt-hours per unit of flow) remain as in the past, we estimate that the loss of hydropower associated with an increased water withdrawal of 1 MAF will amount to $18.4 million for typical waters years," according to the report.

The report's conclusion acknowledged that it did not "consider wider regional repercussions of increased water diversions in Washington State. For example, reactions by the States of Idaho and Oregon, or by Treaty Tribes and Federal courts concerning water and fish allocations, have not been incorporated."

The report focuses solely on the five management scenarios developed by the state Department of Ecology in consultation with water users. Each scenario "incorporates a policy for issuing new water rights, and each is conditional upon an assessment of risks to anadromous fish," the report says.

It notes that there are now water rights for about 4.7 million acre-feet of Columbia River water rights held within the state, including groundwater rights within one mile of the river. About 91 percent of those rights are held by irrigated agriculture with 9 percent held by municipal, industrial, domestic and other users.

The first four scenarios require that new rights holders meet water efficiency standards and begin metering their withdrawals. The fifth scenario is the status quo.