Gene>>: A DIRE SITUATION DEVELOPING ON THE COLORADO  RIVER.

SEVEN WESTERN STATES, THE  FEDERAL GOVERNMENT AND MEXICO ARE ALL GRAPPLING WITH  CONTINUED LOWER FLOWS AND VERY LOW RESERVOIRS, AS YOU KNOW.

ON THE COLORADO RIVER LOWER BASIN STATES LIKE CALIFORNIA  AND ARIZONA, THEY ARE PARTICULARLY LOOKING AT HAVING  TO MAKE CUTS, BUT WHAT ABOUT NEW MEXICO?

AS AN UPPER BASIN STATE OUR SITUATION IS VERY DIFFERENT.

OUR LAND SENIOR PRODUCER LAURA PASKUS CHECKED IN WITH THE  STATE'S UPPER COLORADO RIVER COMPACT COMMISSIONER, ESTEVAN  LOPEZ, ABOUT NEW MEXICO'S SHARE OF COLORADO RIVER WATER  IN A WARMING WORLD.

>> Laura: COMMISSIONER   LOPEZ, THANK YOU SO MUCH FOR JOINING  ME TO TALK ABOUT THE COLORADO RIVER TODAY.

>> Lopez: THANK YOU.

IT IS MY PLEASURE TO BE HERE.

THANK YOU FOR HAVING ME.

SO I WANT TO START JUST WITH  THE BASICS.

PEOPLE HEAR ABOUT THE COLORADO  RIVER AND MAYBE DON'T THINK ABOUT NEW MEXICO NECESSARILY.

WHERE DOES NEW MEXICO FIT INTO THE LARGER RIVER BASIN AND  ALLOCATIONS?

>> Lopez: WELL, THE COLORADO  RIVER SPANS PROBABLY SEVEN STATES IN THE U.S. AND THEN  GOES INTO MEXICO AND IN NEW MEXICO THE SAN JUAN RIVER IS  THE RIVER THAT MOST PEOPLE ARE FAMILIAR WITH, THAT IS A MAJOR  TRIBUTARY OF THE COLORADO RIVER.

AND THAT IS WHERE WE GET SOME OF THE COLORADO RIVER WATER  APPORTIONED TO US AS A RESULT.

WE ALSO HAVE SMALLER, MUCH  SMALLER AMOUNTS FURTHER SOUTH IN THE SILVER CITY AREA, WITH  THE GILA RIVER AND THE SAN FRANCISCO RIVER, BUT THOSE ARE  MUCH SMALLER BY COMPARISON.

IN TERMS OF HOW MUCH WE GET,  FIRST, THE COLORADO RIVER WAS SPLIT BETWEEN THE UPPER BASIN  AND THE LOWER BASIN.

THE UPPER BASIN BEING  COMPRISED OF ALL OF THE AREA THAT FLOWS INTO THAT WATERSHED  ABOVE LEES FERRY, ARIZONA WHICH IS RIGHT BELOW GLENN  CANYON DAM NEAR PAGE, ARIZONA.

AND THAT IS THE UPPER BASIN.

FOR OUR PURPOSES, WE GENERALLY THINK OF THAT AS THE STATES OF  NEW MEXICO, COLORADO, WYOMING AND UTAH.

THE LOWER BASIN IS THE PORTION THAT FLOWS IN BELOW THAT AND  THAT IS COMPRISED PRIMARILY OF FLOWS IN ARIZONA, CALIFORNIA  AND NEVADA.

AND THEN, AS I MENTIONED  BEFORE, MEXICO HAS SOME RIGHTS TO IT AS WELL.

>> Laura: I THINK IT IS ACCURATE TO SAY   THAT THERE IS A CRISIS ON THE COLORADO,  PARTICULARLY ON THE LOWER COLORADO.

HOW WOULD YOU CHARACTERIZE THE UPPER BASIN'S SITUATION RIGHT  NOW?

>> Lopez: THE UPPER BASIN  SITUATION IS, YOU KNOW, WE, FOR REALLY DECADES, WE HAVE  BEEN NATURALLY SHORTED BY HYDROLOGY.

IN OTHER WORDS, WE DON'T HAVE A LOT OF BIG STORAGE  RESERVOIRS ABOVE US THAT WE CAN RELY ON LIKE THE LOWER  BASIN DOES.

SO, IF THERE IS A -- IF YOU  HAPPEN TO LIVE WITHIN A TRIBUTARY THAT GETS A LOT OF  SNOW YOU MIGHT GET A FULL SUPPLY THAT YEAR.

IF THAT TRIBUTARY OR THAT BASIN DOESN'T GENERATE A LOT  OF SNOW THAT YEAR, OFTENTIMES WE ARE SHORT.

SO, WHILE THE UPPER BASIN WAS APPORTIONED, THAT AREA ABOVE  LEES FERRY, WAS APPORTIONED SEVEN-AND-A-HALF MILLION ACRE  FEET UNDER THE 1922 COLORADO RIVER COMPACT, WE HAVE NEVER  USED THAT MUCH.

IN PART BECAUSE WE HAVEN'T  FULLY DEVELOPED BUT OFTENTIMES BECAUSE WE ARE JUST SHORTED BY  WHAT MOTHER NATURE GIVES US.

RECENTLY, WE HAVE BEEN USING  SOMETHING LIKE FOUR TO FOUR-AND-A-HALF MILLION ACRE  FEET RATHER THAN THAT SEVEN-AND-A-HALF MILLION  APPORTIONED TO US, COLLECTIVELY ON THE UPPER  BASIN.

>> Laura: THE CITIES LIKE  ALBUQUERQUE AND SANTA FE DIVERSIFIED AWAY FROM SORT OF  SOUL RELIANCE ON THE RIO GRANDE AND GROUNDWATER AND  HAVE BUILT UP A LOT OF INFRASTRUCTURE TO TAKE  ADVANTAGE OF SORT OF COLORADO RIVER BASIN ALLOCATIONS.

AND PROBABLY BUILT OUT ON THE PROMISE OF THAT WATER.

WHAT RISKS DOES THAT PUT THESE CITIES AT AS THE COLORADO  RIVER AND THE RIO GRANDE ARE REALLY FACING THE SAME  CHALLENGES?

>> Lopez: YOU POINT OUT A  REALLY IMPORTANT POINT.

ALBUQUERQUE AND SANTA FE  CURRENTLY RELY ON SIGNIFICANTLY   FOR THE WATER PORTFOLIO ON SAN JUAN CHAMA  WATER.

THAT IS WATER COMING FROM THE  SAN JUAN RIVER, GOES THROUGH TUNNELS UNDER THE CONTINENTAL  DIVIDE AND DELIVERED INTO THE CHAMA RIVER AND FLOWS  DOWNSTREAM TO THE RIO GRANDE AND THEY ARE ABLE TO USE IT.

AS YOU POINTED OUT, WITH RECENT HYDROLOGY ALREADY IN  THE LAST FEW YEARS, THEY HAVE BEEN SHORTED IN THE LAST  COUPLE, PROBABLY, BY 40% IN TERMS OF WHAT THEIR CONTRACT  AMOUNT WAS OR IS.

BUT THAT -- IF CLIMATE  CONTINUES IN THE TRAJECTORY, IT IS LIKELY TO CONTINUE,  WE'LL PROBABLY BE SHORTED YEAR TO YEAR.

SOME YEARS, IN GOOD YEARS, THEY WILL GET A FULL SUPPLY.

THIS MIGHT BE ONE OF THOSE YEARS HOPEFULLY.

BUT, YOU KNOW, THE GREATER RISK IS IF THE UPPER BASIN AS  A WHOLE, WE ARE UNDER THE 1922 COMPACT.

WE HAVE TO MAKE SURE THAT THERE IS AT LEAST  75 MILLION-ACRE FEET THAT FLOW TO THE LOWER BASIN.

WE CAN'T USE WATER SUCH THAT THEY DON'T GET THAT AMOUNT.

WELL, THE HYDROLOGY IS MAKING THAT A REAL CHALLENGE AND  WITHIN -- TO DATE WE HAVE NEVER HIT THAT THRESHOLD AND  WE ARE STILL PROBABLY A FEW YEARS AWAY FROM HITTING THAT  THRESHOLD BUT WE DO HAVE TO THINK ABOUT HOW WE MANAGE OUR  WATER SUCH THAT IF WE HIT THAT THRESHOLD, WE CAN STILL MEET  PRIORITY NEEDS INCLUDING THINGS LIKE SAN JUAN CHAMA  CONTRACTORS NEEDS IN ALBUQUERQUE AND SANTA FE AND  ELSEWHERE.

>> Laura: LOOKING AHEAD TO  THIS YEAR AND MAYBE THE NEXT FIVE OR 10, WHAT ARE YOU  HOPEFUL FOR ON THE COLORADO RIVER?

>> Lopez: I AM OPTIMISTIC FROM ONE REGARD.

IT IS KIND OF A DAUNTING CHALLENGE, WHAT WE HAVE GOT TO  DO.

ON THE OTHER HAND, FOR PERHAPS  THE FIRST TIME THAT I AM AWARE OF, THE NATURE OF THE PROBLEM  IS ACKNOWLEDGED ACROSS THE BOARD.

ALL SEVEN STATES NOW ACKNOWLEDGE IT.

WHEREAS, YOU KNOW, ABOUT 10 YEARS AGO, THERE WAS NOT AN  AGREEMENT THAT WE ACTUALLY HAD A PROBLEM THAT WE HAD TO WORK  OUT.

RIGHT NOW EVERYBODY  UNDERSTANDS THE NATURE OF THE PROBLEM AND EVERYBODY HAS A  COMMON OBJECTIVE IN TERMS OF HOW MUCH WE THINK WE HAVE TO  REDUCE USES AND SO FORTH.

HOW WE DO IT, WE STILL HAVEN'T  FIGURED OUT.

BUT FOR THAT REASON, THAT  MAKES ME OPTIMISTIC IN THAT WE HAVE KIND OF FINALLY DEFINED  THE PROBLEM.

NOW WE HAVE TO WORK THROUGH  IT.

MEXICO, THEY RECOGNIZE JUST  HOW TENUOUS THE SITUATION IS AND THEY ARE COMMITTED TO  WORKING THROUGH THESE PROBLEMS WITH US.

SO, I THINK THOSE ARE THE THINGS THAT I THINK MAKE ME  OPTIMISTIC ABOUT THIS.

IT IS A CHALLENGE.

EVERYBODY HAS THEIR OWN INTERESTS THEY ARE TRYING TO  PROTECT, BUT IN THE END I THINK WE ALL RECOGNIZE ALSO  THAT IF WE DON'T DO WHAT WE HAVE TO DO, EITHER THE  SECRETARY OF THE INTERIOR WILL IMPOSE THOSE SHORTAGES  UNILATERALLY.

OR IF HE DOESN'T, NATURE WILL,  IF WE CONTINUE ON THIS PATH.

WE HAVE GOT TO FIGURE OUT A  WAY OF MANAGING THE RIVER AT THIS VERY, VERY LOW END.

ALL OUR OPERATING GUIDELINES FOR THE RIVER ASSUMED  RESERVOIRS THAT WERE GOING TO BE FULL OR CLOSE TO FULL  FOR -- AND THAT IS THE WAY WE HAVE ALWAYS OPERATED.

OPERATING AT THE LOWER END OF THE RESERVOIRS, WE NEED TO  HAVE NEW MANAGEMENT CRITERIA AND THAT IS OUR CHALLENGE  RIGHT NOW.

WE NEED TO FIGURE THAT OUT BY  PROBABLY AUGUST OF THIS YEAR AND THEN IMMEDIATELY AFTER  THAT, WE HAVE GOT TO START RENEGOTIATING THE 2007  GUIDELINES, INTERIM GUIDELINES, WHICH EXPIRE IN  2026.

SO WE HAVE TO NEGOTIATE A NEW  SET OF GUIDELINES GOING FORWARD, COMPLETELY NEW SET OF  GUIDELINES, BUT ONES THAT HOPEFULLY WILL BE INFORMED BY  THIS NEW CLIMATE THAT WE ARE SEEING AND THIS REALITY THAT  WE ARE LIKELY TO BE OPERATING WITH A LOT LESS WATER THAN WE  EVER THOUGHT WE HAD BEFORE.

>> Laura: COMMISSIONER LOPEZ,  I APPRECIATE YOU TALKING WITH ME TODAY.

IT HAS BEEN REALLY HELPFUL.

>> Lopez:   APPRECIATE THIS OPPORTUNITY.