Oregon's Water Future: The Hot Topics for 2022

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As drought conditions intensify throughout the western United States, water allocation and procurement continue to be contentious issues. While the problem is easily identified—demand keeps increasing, but supply is diminishing—its solutions are complex.

Oregon is unique for the multitude of interests served by the state's water resources: fish and wildlife, Tribal, municipal and industrial, agricultural, recreational, flood control, and hydropower are among the uses that rely on water. All of these create real challenges for water allocation and use but also some opportunities for innovation. Below we take a look at some of the hot topics we will be tracking for Oregon in 2022.

Willamette Basin Litigation…

Efforts to investigate future Willamette River Basin water demand began in 1996 but were put on hold following the listing of three fish species under the Endangered Species Act (ESA). Action agencies developed a Biological Assessment and subsequent Biological Opinion (BiOp), which concluded that continued operation of the Willamette Valley Project, a 13-dam water resource management system, would cause jeopardy to listed fish. The BiOp further provided reasonable and prudent alternatives (RPAs) to mitigate these risks.

The U.S. Army Corps of Engineers then developed a flow management strategy to meet flow objectives and operate the project for more than 15 years. The Northwest Environmental Defense Center (NEDC) sued the Corps over its operation of certain dams, arguing that the Corps had failed to meet certain deadlines under the 2008 BiOp.

On September 1, 2021, Judge Marco A. Hernández issued his final opinion and order, directing the Corps to immediately implement new measures at certain dams to benefit listed fish. The court assembled an expert panel to draft implementation details for each of the required actions, which will continue to be a hot topic to follow in the coming months.

… and Willamette Basin Reallocation

Meanwhile, we also expect to see more action on the implementation of the Willamette Basin Reallocation. A reallocation feasibility study was initiated in 2013 with the goal of reallocating the Willamette Valley Project's conservation storage capacity—totaling approximately 1,590,000 acre-feet—for the benefit of fish and wildlife, agricultural irrigation, and municipal and industrial water supply.

What became known as the Willamette Basin Review Feasibility Study analyzed current water uses in the basin for each of those uses and provided projected water demand for each for the foreseeable future. The study recommended a reallocation of the stored water as follows: 1,102,600 acre-feet (69 percent) to fish and wildlife protection; 327,650 acre-feet (21 percent) to agriculture and irrigation uses; and 159,750 acre-feet (10 percent) to municipal and industrial uses.

This recommendation was eventually adopted by Congress as part of the Water Resources Development Ac of 2020, but not without opposition. Still, some questions remain as to implementation.

In particular, there must be a legal mechanism to transfer storage water rights to other uses like fish and wildlife, and municipal and industrial, in addition to the other existing uses of the project, i.e., irrigation, flood control, recreation, or power generation. In 2021, Oregon passed HB 3103, clarifying that the Oregon Water Resources Department does in fact have the authority to "transfer," i.e., change the use of approved storage water rights.

HB 3103 was the first step implementing the reallocation, and the process for affecting the transfer of storage rights to instream water rights will require further discussion and rulemaking (potentially in 2022).

Infrastructure Funding

It would be hard to have missed the drama and back-and-forth surrounding the Infrastructure Investment and Jobs Act (Infrastructure Act) and the yet-to-pass Build Back Better bill. A lot has been said about transportation infrastructure and climate, but the Infrastructure Act also provides a great deal of funding opportunities for water infrastructure: $48.4 billion over five years for drinking water and wastewater spending.

A big chunk of the funding will be spent on lead service line replacement projects ($15 billion); addressing emerging contaminants in drinking water with a focus on PFAS, but could also include harmful algae blooms that are common in Oregon, as well as projects focused on providing service to small and disadvantaged communities. Cities and counties across Oregon may be able to access that funding for water infrastructure projects.

Also relevant to Oregon waters, the Infrastructure Act adopted various incentives (over $900 million) for new and existing hydropower, pumped storage, and marine energy, and specifically to modernize hydropower by enhancing the safety, grid resilience benefits, and power generation capacity of existing dams.

Climate and Drought Resiliency

At the risk of sounding like a broken record, drought conditions are worsening in Oregon and throughout the western United States. Aside from the obvious direct impact on water supplies, these conditions also increase the risk of wildfires, which in turn can damage water infrastructure.

In 2021, the Oregon legislature allocated $110 million to water and sewer infrastructure projects in wildfire-impacted communities as part of a wildfire recovery package. The legislature also adopted a robust funding package for drinking water and water quality projects around the state.

While it is encouraging to see that water infrastructure projects are receiving greater attention and funding, more will need to be done to increase resiliency in the face of climate change. In particular, it may be time to rethink our outdated water law framework in the Pacific Northwest in order to promote more efficient use of water and create additional opportunities for reuse and recycling of water resources, since the impacts of climate change are not going away anytime soon.

Klamath Basin, Wild Scenic Rivers Act, and More…

Extreme drought conditions continue to affect water allocation in the Klamath Basin. Upper Klamath Lake drained below crucial thresholds for managing fish survival, resulting in shutting the gates that feed the Klamath Project's irrigation system and depriving farmers of water that has flowed every year since 1907.

Those extreme conditions exacerbated existing tensions on the ground between Tribes and farmers. In the background, the Klamath River Basin Adjudication, a decades-long process to quantify and qualify the rights of water users in the region, will continue to unfold. Judge Cameron F. Wogan, who had presided over the state court phase of the adjudication since 2013, stepped down in 2021, pausing the process for a few months, but the adjudication is expected to pick back up with a new judge in 2022.

Throughout the state, water users are also gearing up to see which version of the River Democracy Act will pass in Congress, which could result in the additional protection of 4,700 miles of river in Oregon, permanently prohibiting future mining, development (with some exceptions), and dams.

With so many high-profile issues, 2022 will certainly be a busy year for water policy in Oregon, and no doubt other developments will arise, making it a fascinating, yet challenging area to practice in.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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