Testimony of Dan Keppen on behalf of Klamath Water Users Association
for Field Hearing July 17, 2004
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Chairman Pombo, Chairman Calvert and Members of the Committee:

Thank you for this opportunity to submit testimony on behalf of the Klamath Water Users Association (KWUA). I am Dan Keppen, and I serve as the executive director for KWUA, a non-profit corporation that has represented Klamath Irrigation Project farmers and ranchers since 1953. KWUA members include rural and suburban irrigation districts and other public agencies, as well as private concerns who operate on both sides of the California-Oregon border. We represent 5,000 water users, including 1,400 family farms that encompass over 200,000 acres of irrigated farmland.

Three years after Klamath Irrigation Project (Project) water deliveries were terminated by the federal government, local water users are attempting to proactively address water supply challenges while at the same time trying to stave off a furious round of attacks launched by environmental activists. Project irrigators – who farm on lands straddling the California-Oregon state line - remain apprehensive about the future certainty of water supplies.

In the last 13 years in the Klamath River watershed, two sucker species were listed (1988) as endangered and coho salmon were listed (1997) as threatened under the Endangered Species Act (ESA). Since then, biological opinions rendered by the U.S. Fish and Wildlife Service (for the suckers) and NOAA Fisheries (for the coho), have increasingly emphasized the reallocation of Project water as the sole means of avoiding jeopardizing these fish. The net result of these restrictions on local water users was fully realized on April 6, 2001, when the U.S. Bureau of Reclamation (Reclamation) announced its water allocation for the Project after USFWS and NOAA Fisheries officials finalized the biological opinions (BOs) for project operations in a critically dry year. Based on those regulatory actions, Reclamation announced that – for the first time in Project’s 95-year history - no water would be available from Upper Klamath Lake to supply Project irrigators.

The resulting impacts to the local community were immediate and far-reaching. Thousands of acres of valuable farmland were left without water, which, in addition to harming those property owners, managers, and workers, also imparted an economic "ripple" effect through the broader community. The wildlife benefits provided by those farms – particularly the food provided for area waterfowl – were also lost with the water. The local farming community is still reeling from the April 6, 2001 decision, and severe business losses echoed the hardship endured by farmers and farm employees.

In 2001, congressional representatives serving the Upper Klamath Basin requested that an independent, unbiased peer review be conducted of the science and decision-making that led to the 2001 curtailment. The decision to reallocate stored water originally intended for irrigation purposes to the alleged needs of three fish species protected under the ESA was questioned by many in the Upper Basin, who felt that their input was ignored, and that relevant observed empirical information was discarded by agency biologists. The National Research Council (NRC) convened a multidisciplinary panel of experts to review the 2001 decision, and to develop long-term recommendations to address the fishery challenges of the Klamath River watershed.

After a yearlong barrage of criticism and blame stemming from advocates for higher Klamath River flows, Klamath Project irrigators in October 2003 were vindicated by long-awaited findings from the NRC. The final NRC report is important to local farmers and ranchers for several key reasons:

1. The report clearly indicates that recovery of endangered suckers and threatened coho salmon in the Klamath Basin cannot be achieved by actions that are exclusively or primarily focused on operation of the Klamath Project.
2. The committee also reconfirmed its findings from an earlier report that found no evidence of a causal connection between Upper Klamath Lake water levels and sucker health, or that higher flows on the Klamath River mainstem help coho salmon.
3. The NRC committee did not accept arguments that the operation of the Klamath Project caused the 2002 fish die-off or that changes in the operation of the Project at the time would not have prevented it.

Despite the final conclusions, some environmentalists and many in the media continue to maintain the sensational but unsupported position that the Klamath Project was responsible for the 2002 fish mortality that occurred over 200 miles from the Klamath Project.

The NRC report is consistent with what Upper Basin interests have been saying for years: the Klamath Project cannot solely bear the burden for species recovery in this basin. A watershed-wide approach to species recovery – one that addresses all the stressors to fish – is essential to improving our environment and saving our local economy. We share the NRC report’s vision that increased knowledge, improved management, and cohesive community action will promote recovery of the fishes. At the same time, as discussed below, we remain extremely concerned that the "business as usual" approach - regulation of the Klamath Project – remains the dominant aspect of ESA biological opinions and advocacy of Project opponents.

The NRC report clearly shows that the Klamath Project alone cannot solve the problems of the entire watershed. With that said, water users want to avoid pointing the finger at other parts of the watershed in an attempt to shift blame. Rather, we encourage other areas to take action towards solving the problem, and we believe that farmers and ranchers throughout the watershed have already clearly demonstrated that actions speak louder than words.

Since the early 1990s, local water users – both within the Klamath Project and those who farm in upstream areas north of Upper Klamath Lake – have taken proactive steps to protect and enhance water supplies, enhance the environment, and stabilize the agricultural economy. Farmers and ranchers in the Klamath Project have consistently supported restoration actions to improve habitat for the basin’s fish and wildlife species. Local agricultural and business leaders have dedicated thousands of volunteer hours and have spent millions of dollars in the past ten years to participate in processes associated with environmental restoration, Klamath Basin water rights adjudication, dispute resolution, drought-proofing, and water supply enhancement. Most impressive, however, is the multitude of actions undertaken on-the-ground

• Local efforts to assist National Wildlife Refuges
• Ecosystem Enhancement and Sucker Recovery Efforts in the Upper Basin
• Fish Passage Improvement Projects
• Wildlife Enhancement and Wetland Restoration Efforts
• Local Efforts to Improve Water Quality
• Power Resource Development
• Efforts to Improve Klamath Project Water Supply Reliability and Water Use Efficiency

Many of these efforts were driven by an initial desire to implement meaningful restoration actions intended to provide some sort of mitigation "credit" that could be applied towards reducing the burden carried by Klamath Project irrigators to "protect" threatened and endangered fish species. For many years, that credit was not recognized. For example, Federal agencies or non-profit conservation groups have acquired over 25,000 acres of farmland in the Upper Klamath Basin for habitat purposes. Each time the agencies sought additional land, they promised that each acquisition would provide environmental benefits, reducing pressure on the Klamath Project’s family farmers and ranchers. Those promises have not materialized, and Project irrigation water still remains the sole regulatory tool used to address federal ESA objectives for endangered suckers and threatened coho salmon in the Klamath River watershed.

In the past year, our irrigators have finally begun to get the recognition –if not the actual regulatory relief - they deserve for their proactive efforts. To wit:

• KWUA was awarded the 2003 "Leadership in Conservation" award by the Oregon Department of Agriculture;
• KWUA, last month, was honored on the steps of the Oregon state capitol for "exemplifying the spirit" of the Oregon Plan for Salmon and Watersheds;
• Tulelake Irrigation District in January received the F. Gordon Johnston award for its innovative canal lining project completed near Newell; and
• U.S. Secretary of Agriculture Ann Veneman and NRCS chief Bruce Knight last month recognized local rancher Mike Byrne for his leadership in conservation.

It is clear that our irrigators have not been idle in the past ten years. Their efforts to improve their environment are all the more impressive when you consider that, all the while, the uncertainty and difficulty associated with keeping their farming operations profitable have not diminished.

Reclamation’s final 10-year Biological Assessment for Klamath Project 2002-2012 operations properly incorporates the findings of the interim NRC report, and generally captures the essence of the "watershed-wide" philosophy endorsed in the final NRC report. Unfortunately, the fishery agency BOs do not. The USFWS opinion continues to perpetuate the questionable assumption that lake level management is the principle mechanism affecting sucker survival in Upper Klamath Lake (UKL). The NOAA Fisheries jeopardy decision similarly continues to place high emphasis on downstream flows. The stored water developed for Klamath Project farmers continues to be reallocated to meet the artificial demands set by agency biologists.

The combined – and apparently, unanticipated – impacts placed on our community from the application of the two opinions are unacceptable. On June 25th, 2003, local irrigators were told by Reclamation officials that UKL diversions to the Project would be shut down for a minimum of 5 days – in the middle of the growing season. By day’s end, reason prevailed: the agencies backed off their initial request and instead, Reclamation notified farmers to continue their efforts to reduce diversions from the lake. This was driven by one apparent agency mission: to avoid dropping UKL one inch below a lake level requirement established by the USFWS.

In addition to the continued uncertainty irrigators face, the opinions are generating new, unanticipated impacts to the community. In the past 40 to 50 years, while the cropping pattern in the Klamath Project has varied from year to year, the overall planted acreage has remained consistent. On the other hand, the 2002-2012 biological opinion created by NOAA Fisheries for coho salmon established the river flow schedule and an "environmental water bank" – which ratchets up to 100,000 acre-feet in 2005, regardless of actual hydrologic conditions – that is the primary source of new demand for water in the Klamath River watershed. The result: stored water that has flowed to farms, ranches and the refuges for nearly 100 years is now sent downstream at such high levels, that groundwater pumped from the Lost River basin is being used to supplement the resulting "coho salmon demand" in the Klamath River.

It is not the farmers who have imposed new water demands that, in essence, have made groundwater the default supplemental supply to the Klamath Project. It is the opinions of agency fishery biologists who have fundamentally altered how our century-old water project operates, and who have apparently failed to anticipate the resulting impacts to our community. While Reclamation in 2002 sharply disagreed with the findings of both fishery agency biological opinions, it is not yet clear how consultation will be reinitiated to create a new operations plan.

The NRC report questions the current regulatory structure that governs Klamath basin fisheries management. In addition to calling for oversight of current federal agency management, the NRC report recommends that the management structure for ecosystem restoration needs to involve local groups and private landowners in the design of restoration activities and investments. The report urges federal management agencies to recognize the nature of incentives in the ESA for private landowners to participate in ecosystem recovery. The report confirms observations of many landowners in the Upper Klamath Basin: the regulatory approach of implementing the ESA, as opposed to the use of incentives that would encourage landowners to promote the welfare of species, is viewed by landowners as more stick than carrot. It concludes:

"This perception could be changed by cooperative arrangements that promote the welfare of the listed species without threatening landowners." (emphasis added).

To solve the problems of the Klamath River watershed, we need a coordinated management program that spans two states in a watershed that is characterized by a strong federal presence. Competition among stakeholder groups – including four tribes, agricultural water users, and countless environmental groups – is fierce. In order to be successful, we need to better understand the real state of the watershed by developing the facts and best possible information to make the best possible decisions. Environmental sensationalism – like that promoted in the wake of the 2002 fish die-off - scare the public and make us more likely to spend our resources and attention solving phantom problems while ignoring real and pressing issues.

We can all thank the Bush Administration for having the courage and commitment to tackle this very contentious issue. I am puzzled by critics who claim that this administration discards sound science for politics. What we’ve seen here in the past three years tells a different story. The Bush Administration in 2001 was literally handed opinions that shut down our family farms, and in fact, implemented those opinions. The Secretary of Interior later in the year asked the premier independent science body in the land to assess what happened and to provide long-term recommendations. With a final report in hand, the Administration stepped up, and, in the FY 2005 budget request, asked for $105 million to tackle programs throughout the watershed, consistent with the NRC Committee findings. So – tell me again - what’s wrong with this approach? The answer is – nothing. It’s how you manage business using a watershed-wide approach.

We hope the NRC report can be used as a catalyst to improve the collaboration required to address the basin-wide problems we face. We know we can develop locally derived solutions to address most of the NRC report recommendations. We should do this together, and not wait for the government or outside interests to do it for us. It's the only way we can protect the economic livelihood of our communities.