Our common future is shaped by record drought and population growth within the Colorado River Basin. These factors herald a new era of limits on Colorado River water use. These limits are shaping the decisions that will guide the future course of river management.

While increasing water demand is causing change, what must not change is our commitment to honor compacts, decrees and agreements. Otherwise, the legal foundation upon which this river is administered will be at risk.

We are at a turning point in the history of the Colorado River. For the first time, a Secretary of the Interior faces the need to enforce the limits confirmed by the U.S. Supreme Court in the historic Arizona v. California litigation. The issue is not whether, but when, California will live within its apportionment of 4.4 million acre-feet of water.

It is important to understand how we arrived at this critical point in shaping the future of Colorado River policy. In 1929, California agreed to limit its annual use of water from the Colorado River to 4.4 million acre-feet. Yet over the years, California has grown accustomed to using more than 5 million acre-feet of water per year. Two factors made this additional water available ? other states were not using their full apportionments, and reservoirs were generally full, making surplus water available.

That has changed. The basin is experiencing one of the most significant drought cycles in modern history. This year produced the lowest Colorado River flow on record, at just 25 percent of the 30-year-average flow.

Total natural runoff in the Colorado River Basin during 2002 water year is estimated at 7 million acre-feet. To put this in context, total demands for Colorado River water, including losses, over this same period was approximately 152 million acre-feet. These demands were met by reducing storage in the basin by more than 82 million acre-feet in this period. In 2002, California used approximately 5.2 million acre-feet - which means that California could be seen as using 75 percent of the water that the basin produced.

At the same time, the basin states also are experiencing population growth. As a result, states like Arizona and Nevada, that once did not use their full Colorado River apportionments, now do.

Over the last decade, the Interior Department and the seven basin states painstakingly negotiated an historic agreement on Colorado River water use. The principal issue of the negotiations was how to achieve certainty that California would actually reduce its overuse of the Colorado River. The agreement that emerged is embodied in what is known as the "Interim Surplus Guidelines." This agreement is non-partisan, as demonstrated by the fact that my predecessor, former Interior Secretary Bruce Babbitt, negotiated and approved the Guidelines. After careful review when I took office, I endorsed the agreement and decided to stay the course.

Choices to be Made

California could take specific actions to reduce its Colorado River water use to 4.4 million acre-feet by the year 2015. In return, California would receive enhanced access to surplus water during a 15-year interim period. This is known as the "soft landing" for California. Alternatively, if California didn't take required actions, it would lose enhanced access to surplus water. This is known as the "hard landing" approach.

California's choice will be determined by whether California water entities sign the Quantification Settlement Agreement (QSA). At this time, it appears that California's Imperial Irrigation District has decided not to execute the QSA. This QSA is extremely important to the basin states and to the Department. The QSA quantifies California agricultural water entitlements - a matter that has been unresolved since 1931.

Without a clear understanding of each entities' portion of California's agricultural entitlement, it will be very difficult to transfer water from agricultural users to its urban users. These transfers may be the only solution for California to live within its 4.4 million acre-foot limit. California's agricultural users have a priority right to 3.85 million acre-feet of this apportionment, and the small remainder is all that is left for Southern California cities serving more than 17 million people.

Because the Metropolitan Water District in Southern California had the leadership and foresight to develop alternative water supplies, people there will continue to see water flow from their taps. But over time, the reduction in Colorado River water could have very real impacts to all water users in Southern California.

I signed the 2003 Colorado River Annual Operating Plan that implements the surplus guidelines. It provides that if the California entities do not sign the QSA, surplus deliveries of water to Southern California cities will be suspended. As Secretary and River Master, I must enforce the Law of the River. This means I will hold California to the express covenant it made in 1929 to limit its use of the Colorado River to 4.4 million acre-feet. No alternative is permitted under the Decree of the United States Supreme Court in Arizona v. California. Absent enforcement of the limits established in the Law of the River, the allocation of the right to consume water among the states would be meaningless.

Enforcing the seven-state agreement preserves the important principle that agreements will be honored. These commitments were carefully negotiated by all seven basin states with the Interior Department. California helped craft the agreement. If this agreement is not enforced, other water negotiations and agreements will be at risk. If the California entities choose not to take the steps necessary for the gradual, voluntary reductions contemplated under the seven-state agreement, California will be forced to live within its 4.4 million acre-feet apportionment from the Colorado River in 2003.

While we have not yet finalized the details, it is fair to say that there will be an actual reduction in diversions through the Colorado River Aqueduct. In the event that the QSA is not signed by the deadline, it is possible for California to have the Guidelines reinstated. Reinstatement can occur if the QSA is signed, or if California takes such actions as are required by the Department. For those who rest hope on the "all required actions" option in the Guidelines, be aware that the actions that will be required must be real and permanent.

It makes no sense to respond to a failure to meet the first deadline in the Seven States agreement by lessening the requirements for enhanced access to surplus water. To the contrary, the bar will be raised.

Neighbors to the South

We share the Colorado River with the Republic of Mexico. We also share the Rio Grande with Mexico, and the 1944 Treaty defines each nation?s rights to water from these rivers. As you know, Mexico wants more water from the Colorado River. But the demands on the River for uses in the United States are increasing. We do not have extra water to send across the border. As Secretary Powell explained, "We are committed to upholding our water treaty obligations." We will continue to do so. We expect the Republic of Mexico to do the same.

We are working with the International Boundary and Water Commission on efforts to support the recently adopted Minute 306 to the 1944 Treaty. Three of our Interior agencies - the U.S. Geological Survey, the Fish and Wildlife Service, and the Bureau of Reclamation - are engaged with Mexico on a variety of tasks. We will continue to work in a cooperative fashion with the Republic of Mexico on Colorado and Rio Grande River issues.

Look to the Future

Other factors counsel the importance of taking careful account of reliable scientific data, and projections about water supply. While the amount of water available is relatively fixed, demand in the urban and industrial sectors will continue to grow. Western states generally are growing at nearly double the national average. California expects a population growth of 15 million people in the next 20 years. To accommodate these new arrivals, we need to make the smartest and most efficient use of the limited supplies of the river. Innovative arrangements will need to be developed.

The Metropolitan Water District's negotiations with the Palo Verde Irrigation District are an example of innovative thinking. They are using conservation contracts and dry-year options to accommodate temporary needs. There undoubtedly will be new possibilities for conjunctive use of surface and ground water supplies where surplus water can be stored underground for future use.

We still have significant opportunities to use water more efficiently - both in the cities and in agriculture. There are methods that can benefit urban residents, agricultural irrigators and the environment. It also is important to recognize that economic incentives have an important role to play. Urban water users can often afford to help finance efficiency improvements that agriculture could not afford on its own. We need to encourage these efforts while protecting the viability of agricultural communities and maintaining in-stream values such as recreation, fisheries and wildlife habitat.

We have entered an era of constraint on the Colorado River - not only in water supply - but also in the fiscal resources available to us. Efficient use of limited resources will have to be the watchword. Because of the sluggish economy and the need to provide for our homeland security, tighter budgets are going to be a fact of life for some time to come. Partnerships can help us stretch our resources, and we welcome them.