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• 691. [Image] Geology and ground-water resources of the Swan Lake-Yonna Valleys area, Klamath County, Oregon

  	Abstract The Swan Lake-Yonna Valleys area consists of two intermountain valleys with their subordinate side valleys adjoining slopes, and mountainous boundary ridges, In all the area covered is about 256 ...
  	Citation × Citation Citation Abstract Copy Title: Geology and ground-water resources of the Swan Lake-Yonna Valleys area, Klamath County, Oregon Author: Meyers, Joseph D. Year: 1952, 2007, 2005 Abstract The Swan Lake-Yonna Valleys area consists of two intermountain valleys with their subordinate side valleys adjoining slopes, and mountainous boundary ridges, In all the area covered is about 256 square miles but the essential agricultural sections are restricted to the floors of Swan Lake and Yonna valleys with their respective subsidiary extensions of Pine Flats and Alkali Lake flats, a valley-floor area totaling about 90 square miles The floors of Swan Lake Valley and Yonna Valley lie at an altitude of about U52OO feet but the mountainous boundary ridges rise generally to 6000 feeto Yonna Valley is largely drained to Lost River by Buck Creek but also in part to Alkali Lakeo Swan Lake Valley and Pine Flats have only internal drainage. The Swan Lake Valley floor is the top of a deep alluvial fill, while Yonna Valley floor is mainly an erosional surface sloping to lines of through drainage Precipitation is about lit inches annually on the valley floors 9 but must be much more, possibly 18 to 24 inches, on the higher parts of the drainage basins. The growing season is short and killing frosts do occur in late spring and early fall. The rock units forming the bedrock structure of the area are consolidated or semiconsolidated rocks of Tertiary age and are largely of volcanic-flow and volcanic-sedimentary originc They consist of three main elements, a lower lava-rock unit, a sedimentary and volcanic-sedimentary unit, and an upper lava-rock unito The unconsolidated deposits are the older alluvium of Quaternary (and in part of late-Tertiary) age and the younger alluvium of Quaternary age0 The bedrock is faulted and deformed particularly so along a northwest-southeast set of fault lines that have given a remarkable linearity to the topography. Unpublished records subject to revision Ground water occurs below a regional water table that slopes south-ward to the level of the Lost Rivero The upper lava rocks and the lower lava rocks contain the principal permeable zones that occur beneath the areao Breccia and other porous zones in those rocks in places yield water to wells at a rate as large as 35OOO gallons per minute with but 1 or 2 feet of drawdowno The economical construction of irrigation wells requires the determination of the best possible location at which those rocks may be tapped at shallow depth below the level of the water tableo The ground water in general relatively low in dissolved mineral matter and is but slightly to moderately hard and would be considered chemically satisfactory for most uaeso Irrigation is the principal use of the ground water in the area north of the Horsefly Irrigation Districto There 3? wells supplied about 6,000 acre-feet of water to about 3800 acres of land in 1950. Water-level records obtained since 19U8 and approximations of the probable annual recharge from precipitation indicate that the present withdrawals are considerably less than the annual increment of the ground-water recharge, Rough estimates indicate that an increase in withdrawals of as much as 100 percent or more can take place before ground-water levels, by a persistent lowering, will begin to indicate that the annual replenishment is being exceeded. Title: Geology and ground-water resources of the Swan Lake-Yonna Valleys area, Klamath County, Oregon Author: Meyers, Joseph D. Year: 1952, 2007, 2005 Abstract The Swan Lake-Yonna Valleys area consists of two intermountain valleys with their subordinate side valleys adjoining slopes, and mountainous boundary ridges, In all the area covered is about 256 square miles but the essential agricultural sections are restricted to the floors of Swan Lake and Yonna valleys with their respective subsidiary extensions of Pine Flats and Alkali Lake flats, a valley-floor area totaling about 90 square miles The floors of Swan Lake Valley and Yonna Valley lie at an altitude of about U52OO feet but the mountainous boundary ridges rise generally to 6000 feeto Yonna Valley is largely drained to Lost River by Buck Creek but also in part to Alkali Lakeo Swan Lake Valley and Pine Flats have only internal drainage. The Swan Lake Valley floor is the top of a deep alluvial fill, while Yonna Valley floor is mainly an erosional surface sloping to lines of through drainage Precipitation is about lit inches annually on the valley floors 9 but must be much more, possibly 18 to 24 inches, on the higher parts of the drainage basins. The growing season is short and killing frosts do occur in late spring and early fall. The rock units forming the bedrock structure of the area are consolidated or semiconsolidated rocks of Tertiary age and are largely of volcanic-flow and volcanic-sedimentary originc They consist of three main elements, a lower lava-rock unit, a sedimentary and volcanic-sedimentary unit, and an upper lava-rock unito The unconsolidated deposits are the older alluvium of Quaternary (and in part of late-Tertiary) age and the younger alluvium of Quaternary age0 The bedrock is faulted and deformed particularly so along a northwest-southeast set of fault lines that have given a remarkable linearity to the topography. Unpublished records subject to revision Ground water occurs below a regional water table that slopes south-ward to the level of the Lost Rivero The upper lava rocks and the lower lava rocks contain the principal permeable zones that occur beneath the areao Breccia and other porous zones in those rocks in places yield water to wells at a rate as large as 35OOO gallons per minute with but 1 or 2 feet of drawdowno The economical construction of irrigation wells requires the determination of the best possible location at which those rocks may be tapped at shallow depth below the level of the water tableo The ground water in general relatively low in dissolved mineral matter and is but slightly to moderately hard and would be considered chemically satisfactory for most uaeso Irrigation is the principal use of the ground water in the area north of the Horsefly Irrigation Districto There 3? wells supplied about 6,000 acre-feet of water to about 3800 acres of land in 1950. Water-level records obtained since 19U8 and approximations of the probable annual recharge from precipitation indicate that the present withdrawals are considerably less than the annual increment of the ground-water recharge, Rough estimates indicate that an increase in withdrawals of as much as 100 percent or more can take place before ground-water levels, by a persistent lowering, will begin to indicate that the annual replenishment is being exceeded. Close

• 692. [Image] EPA 314 clean lakes program: phase I diagnostic/feasibility project: Upper Klamath Lake, Oregon

  	SUMMARY PROBLEM DEFINITION Upper Klamath Lake, a 90,000 acre body of water located in south-central Oregon, is eutrophic and has reached a stage where summer algal and macrophyte productivity causes ...
  	Citation × Citation Citation Abstract Copy Title: EPA 314 clean lakes program: phase I diagnostic/feasibility project: Upper Klamath Lake, Oregon Author: Klamath Consulting Service, Inc Year: 1983, 2006, 2005 SUMMARY PROBLEM DEFINITION Upper Klamath Lake, a 90,000 acre body of water located in south-central Oregon, is eutrophic and has reached a stage where summer algal and macrophyte productivity causes severe aesthetic problems and often renders the lake unusable as a recreational site. The problem is a natural one; it has not been caused by man's carelessness and cannot be turned around by regulation. Upper Klamath Lake is quite shallow, warming rapidly in the summer, and the waters carry a naturally occurring high nutrient load. Algal growth is extensive, predominently APHANEZOMENON FLOS-AQUAE, a blue-green algae prevalent in eutrophic waters. These organisms form dense mats that become very odorous as they decay. Numerous macrophytes (aquatic weeds) are indigenous to the lake, but the major problem is with P0TAM06ET0N CRISPUS, which forms long floating fonds that tangle boat motors and prevent passage. The Pelican Bay channel has an extensive growth of this weed. Title: EPA 314 clean lakes program: phase I diagnostic/feasibility project: Upper Klamath Lake, Oregon Author: Klamath Consulting Service, Inc Year: 1983, 2006, 2005 SUMMARY PROBLEM DEFINITION Upper Klamath Lake, a 90,000 acre body of water located in south-central Oregon, is eutrophic and has reached a stage where summer algal and macrophyte productivity causes severe aesthetic problems and often renders the lake unusable as a recreational site. The problem is a natural one; it has not been caused by man's carelessness and cannot be turned around by regulation. Upper Klamath Lake is quite shallow, warming rapidly in the summer, and the waters carry a naturally occurring high nutrient load. Algal growth is extensive, predominently APHANEZOMENON FLOS-AQUAE, a blue-green algae prevalent in eutrophic waters. These organisms form dense mats that become very odorous as they decay. Numerous macrophytes (aquatic weeds) are indigenous to the lake, but the major problem is with P0TAM06ET0N CRISPUS, which forms long floating fonds that tangle boat motors and prevent passage. The Pelican Bay channel has an extensive growth of this weed. Close

• 693. [Image] Draft resource management plan/environmental impact statement for the Upper Klamath Basin

  	"March 1994."
  	Citation × Citation Citation Abstract Copy Title: Draft resource management plan/environmental impact statement for the Upper Klamath Basin Author: United States. Bureau of Land Management. Klamath Falls Resource Area Office Year: 1994, 2005 "March 1994." Title: Draft resource management plan/environmental impact statement for the Upper Klamath Basin Author: United States. Bureau of Land Management. Klamath Falls Resource Area Office Year: 1994, 2005 "March 1994." Close

• 694. [Image] The Klamath Project at 100 : conserving our resources, preserving our heritage

  	The Klamath Project at 100: Conserving our Resources, Preserving our Heritage 1905- 2005: The First Century of Water for the Klamath Project Grain Truck, Lower Klamath Lake, 2004 Prepared by Dan Keppen, ...
  	Citation × Citation Citation Abstract Copy Title: The Klamath Project at 100 : conserving our resources, preserving our heritage Author: Keppen, Dan Year: 2004, 2005 The Klamath Project at 100: Conserving our Resources, Preserving our Heritage 1905- 2005: The First Century of Water for the Klamath Project Grain Truck, Lower Klamath Lake, 2004 Prepared by Dan Keppen, Executive Director Klamath Water Users Association December 2004 1 1 1 1 1 ) 1 1 ) 1 1 1 I 1 I I I 003E00042195 .... rrj R13E ^ ^ T ^ I l* IILLER DIVERSION DAM MILLER CREEK AND LOST RIVER CHANNEL L. ^ ^ IMPROVEMENTS — FEATURES: Hydrography Canal Drain Dike ) ( Tunnel )—( Flume ) - - ( Siphon Pipeline Drop 9 Pumping Plant Q Irrigation District Pumping Plant H Private Utility Powerplant ik Project Headquarters Project Land Lea3 « Area MAJOR WATER DISTRICTS: Ady Dist. Improv. Co. Enterprise I. D. Horsefly I. D. Klamath Drain. Dist. Klamath I. D. Langell Valley I. D. Malin ID. Midland Dist. Improv. Co. P Canal Mutual Water Co. Pine Grove I. D. Pioneer Dist. Improv. Co. Plevna Dist. Improv. Co. Poe Valley Improv. Dist. Shasta View I. D. Sunnyside I. D. Tulelake I. D. Van Brimmer Ditch Co. Westside Improv. Dist. KLAMATH PROJECT Oregon - California N 0 12 3 4 5 Miles Background of Klamath Water Users Association The original Klamath Water Users Association was organized on March 4, 1905 under Oregon statute and capitalized in the amount of $ 2,000,000. That Association was created by local farmers, livestock producers, businessmen, bankers, attorneys, and community leaders interested in seeing the Klamath Reclamation Project constructed with the least amount of cost and for the lasting benefit of the entire Klamath community. Working in cooperation with Reclamation the stockholders of the Association contracted with the U. S. Secretary of the Interior to assume the responsibility of payment to the United States the cost of the Klamath Project irrigation works on November 3, 1905. The Association was active in bringing in lands to be served by the Project and addressing water right matters of those lands. By the 1950' s much of the construction costs of the project had been reimbursed to the United States, and irrigation districts assumed the contractual obligations for maintaining and operating the Project. The current Klamath Water Users Association ( KWUA) has its origins in the Klamath Water Users Protective Association, bylaws adopted June 22, 1953, organized to address water right and electrical power issues for Klamath Basin irrigators. The Protective Association reformed itself March 16,1993 with amended bylaws, and incorporated in 1994 as the modern Klamath Water Users Association. The KWUA represents private rural and suburban irrigation districts and ditch companies within the Klamath Project, along with private irrigation interests outside the Project in both Oregon and California in the Upper Klamath Basin. The KWUA is governed by an eleven-person board of directors elected from supporting irrigation districts, private irrigation interests, and the business community. The KWUA now represents over 5,000 water users on 1,400 family farms. Klamath Association KWUA's mission statement: To preserve, protect and defend the water and power rights of the landowners of the Klamath Basin while promoting wise management of ecosystem resources. r Table of Contents Page Executive Summary 4 Introduction 5 Overview 7 Pioneers 9 The Reclamation Act 10 The Klamath Basin Calls in the United States Government 10 Construction Begins 11 Homesteaders 13 The Klamath River Compact 15 The Klamath Project's Finishing Touches 18 New Demands 19 r Sucker Listings 20 Coho Salmon Listing 21 Problems on the East Side 22 2001 Curtailment 24 The Farmers Fight Back 26 Enter President Bush 27 Vindication: The National Research Council Steps In 28 The Assault on the Klamath Project Intensifies 29 Vindication, Part II 32 " We hate to say we told you so, but...." 33 The Klamath Project Regulatory Regime: 3 Years After the Curtailment. 34 Proactive Efforts of Upper Basin Landowners 36 Sucker Recovery Planning 36 On- the- Ground Actions 36 Environmental Water Bank 38 EQIP Funding in Klamath Basin 39 Recognition at Last 39 50 Years After the Compact - Back to the Watershed- Wide Approach 40 BOR Study on Pre- Project Flow Conditions on Upper Klamath River 40 Conclusion - The Future 41 Notes 44 Photo Credits 47 " " Executive Summary r The Klamath Project in 2005 marks its 100- year anniversary. This report summarizes the original formation of the Project, describes the enthusiastic response of the local community to the federal water project, and steps through the development of the Project in ensuing decades. The story of the pioneers, early settlers, and homesteaders who helped settle the area - veterans of both world wars - provides a sense of the character possessed by local farmers and ranchers, who had to rely on similar traits to keep their community alive when irrigation supplies were curtailed in 2001. And it explains a very important dynamic of the region, especially in recent years, where 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. The immediate future remains uncertain for Klamath Project irrigators, but their marked propensity for adapting to change will keep local farmers and ranchers in business for another 100 years. In order to deal with the uncertain water situation, and facing higher power costs in 2006, the 21st century Klamath Project irrigator is adapting, by developing new market niches for products, creating innovative approaches to energy use, conserving and marketing water, and developing habitat for fish and wildlife. The same abilities shown by pioneers and veteran homesteaders beginning over a century ago to carve out new communities from the wilderness will now be employed to conserve resources and preserve their remarkable and uniquely American heritage. r A load of produce from the Klamath Fair, October 1907. • - r r The Klamath Project at 100: Conserving our Resources, Preserving our Heritage " We desire to impress upon your mind the fact that 99% of the people in the Klamath Basin are a unit, and are clamoring for the assistance which might be rendered by the Government under the Reclamation Act. " 1905 Petition from Basin residents to the Secretary of the Interior " The vision of the Klamath Basin as a place for human habitation must include agriculture, and an agricultural sector of sufficient size to be economically viable. This place ought to have an urban center and a scattering of pleasant small towns - and in between green fields with dancing water from irrigation works." Klamath Falls Herald & News Editorial June 20, 2004 " Agriculture plays a vital role in this state } s economy. An economic issue is one thing, for the farmers who need the resource, need the water, to be able to make a living. There fs another piece to this that ys much larger for all Oregon, and that is a cultural issue. The people here are very, very important to the future of this state. " Oregon Governor Ted Kulongoski, At the A Canal Fish Screen, Klamath Falls, Oregon. April 17, 2003 Introduction The year 2005 marks the one hundred- year birthday of one of the oldest federal water projects in the western United States - the Klamath Irrigation Project. As was painfully made evident in 2001, when Klamath Project supplies were curtailed for the first time in 95 years, the local community and its economy are interwoven with the health of this irrigation project. One hundred years after overwhelming national policy supported its construction, the Klamath Project continues to play a critical role in the local community. " The Klamath Project started out as a good thing, and it remains a good thing", said Tulelake farmer Rob Crawford. " When the Project was created, Klamath Basin people were meeting a national call by doing what they were supposed to do - settle the West. Today, our efforts focus on preserving our heritage, while conserving our resources." r r - r r rr At the beginning of the last century, when the local community learned that the Klamath Project would be developed, an " incredible celebration" ensued, said Paul Simmons, an attorney for the Klamath Water Users Association. " The people of the Klamath Basin basically posed a proposal to the federal government," said Simmons. " They told the government,' if you will be the plumber and the banker, we can do something good for the country.'" The federal government did just that by constructing the irrigation project. Local growers repaid the construction costs in the ensuing decades. Today, thousands of people - family farmers and ranchers, their employees, and agriculture- related businesses - make their living directly from farming and ranching in the Klamath Project. In turn, their activities support the communities of Malin, Merrill, Midland, Bonanza, Tulelake, Newell, and Klamath Falls. And, equally important, their efforts yield high- quality safe food for the country and the world. The last century has been one of massive transformation, vitality, shining hope, and deep despair for the farmers and ranchers served by the Klamath Project. The core reason for the creation of the Klamath Project - to develop water supplies and storage for irrigation uses - has been diminished as new competing demands, intended to satisfy Endangered Species Act ( ESA) and tribal trust conditions, have come on line. As a result, after perceived ESA and tribal trust obligations are met, Klamath Project irrigators and national wildlife refuges essentially get the remaining water. Because very little carryover storage is provided by Klamath Project reservoirs, the farmers now find themselves becoming increasingly reliant on incoming flows to the reservoirs, rather than the stored water that was originally developed to provide them with a reliable summertime irrigation supply. In essence, because of new laws and policies developed in the recent past, the original purpose of the Klamath Project has been somewhat lost in the shuffle. This became glaringly obvious in 2001, when for the first time in 95 years, water supplies to the Klamath Project from Upper Klamath Lake were curtailed before the irrigation season had even begun, to meet conditions set by federal fishery agencies to purportedly prevent harm to three fish species. Three and one- half 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 n supplies. However, the strong traits shown by the original Klamath Project settlers - self-independence, creativity, a sense of community - are still apparent, one hundred years later. Without these characteristics, the tragic events of 2001 might have become nothing more than n passing headlines in the local newspaper. Instead, a galvanized community grabbed national media and political attention by forcing the rest of the country to see that things had gone too far. r r Now, Klamath Project irrigators are preparing for the next 100 years. In order to deal with the uncertain water situation, and facing higher power costs in 2006, the 21st century Klamath Project irrigator is adapting, by developing new market niches for his products, creating innovative approaches to energy use, conserving and marketing water, developing habitat for fish and wildlife, and improving the symbiotic relationship he has with neighboring national wildlife refuges. The same abilities shown by pioneers and veteran homesteaders to carve out new communities from the wilderness will now be employed to conserve resources and preserve their remarkable and uniquely American heritage. Overview The irrigable lands of the Klamath Project ( Project) are in south- central Oregon ( 62 percent) and north- central California ( 38 percent). Two main sources supply water for the Project: Upper Klamath Lake and the Klamath River on the Klamath system; and Clear Lake Reservoir, Gerber Reservoir, and Lost River on the Lost River system, are in a closed basin. The total drainage area for the Klamath Project, including the Lost River and the Klamath River watershed above Keno, Oregon is approximately 5,700 square miles. Currently, approximately 225,000 acres, many previously submerged, have been transformed into productive farmland. The crops grown within the Klamath Project area consist of grain, hay, pasture, silage, mint, potatoes, onions, other vegetables, alfalfa, strawberry rootstock, and horseradish. This list of crops represents the majority of planted acreage within the Klamath Project over the last 40 to 50 years. The cropping pattern has varied from year to year, but the overall planted acreage has remained consistent. The Bureau of Reclamation operates Clear Lake Dam, Gerber Dam, and the Lost River Diversion Dam. The Link River Dam is operated by the Pacific Power and Light Company in accordance with Project needs, or more recently also as directed by federal agencies. The Tulelake Irrigation District operates the Anderson- Rose Dam, and the Langell Valley Irrigation District operates the Malone and Miller Diversion Dams. The various irrigation districts operate the canals and pumping plants. The original Klamath Project plan included construction of facilities to divert and distribute water for irrigation of basin lands, including reclamation of Tule and Lower Klamath Lakes, and control of floods in the area. The development of the stored water provided by the Klamath Project allowed for the controlled, beneficial use of water in the Upper Basin. Currently, late summer and fall flows in the Lower Klamath River are augmented with stored water that would not be there, but for the Project. Under pre- Project conditions, natural controls existed below both Upper Klamath Lake and Lake Ewauna which stabilized lake levels except during critical droughts. Those controls were natural reefs of hard earth material in the channel and other channel constrictions. Under these pre- Project conditions, the Klamath River flowed into the Lower Klamath Lake area. A 1906 map titled " Topographic and Drainage Map, Upper and Lower Klamath Project" shows the invert of the Klamath Strait approximately the same level as the Klamath River channel bottom near Keno. In addition, the Lost River terminated at Tule Lake. These flows flooded approximately 183,000 acres within Lower Klamath and Tule Lake. In general, under pre- Project conditions, Klamath River flows downstream of Keno likely occurred after a certain water level was reached in the Klamath River and Lower Klamath Lake. An engineer speaking in the early days of the Project observed that adequate Klamath Project water supplies were not a worry. Rather - something that would be inconceivable today - dealing with too much water was more of a concern at the time: " It contains an irrigation problem, an evaporation problem, a run- off problem, any one of which is difficult in itself but all of which together form a most perplexing whole," said the engineer. " In nearly all reclamation projects water has to be conserved. In this project there is more than enough and the question of disposing of it becomes an important part." 1906 Map of Pre- Project Area r • r r r Pioneers Irrigation development began in areas now served by the Klamath Project in the latter half of the nineteenth century. Various landowners and entrepreneurs utilized water of the Klamath River and its tributaries, and undertook a wide range of visionary activities. Prime farmland, exposed around the edges of old historic Tule Lake as early as 1846 stimulated early settlers' interest in irrigation. Similarly, early settlers beginning in the early 1860s relied on " naturally irrigated" greases and forage in the Lower Klamath area for pasture and hay. The first irrigation ditch was dug by George Nurse and Joseph Conger in the bottom of Linkville Canyon in 1868. In 1878, this ditch was expanded and incorporated into the Linkville Water Ditch Company. Early pioneers Steele and Ankeny pursued a canal to deliver water to land between Klamath Falls and Merrill. Ultimately, the canal system was replaced by the A Canal and its distribution system which, operated by Klamath Irrigation District, continues to serve Project land to this day. t Adams Cut, July 18,1906. Diversion for irrigation of additional agricultural lands in the area now comprising the Klamath Project was initiated in 1882 with construction of an irrigation ditch by the Van Brimmer brothers to the land from White Lake, which was fed by the Klamath River. Private interests further developed this project by constructing the Adams Canal in 1886, which was supplied also from White Lake. Frank Adams, with assistance from the Van Brimmer r rr rr r Brothers, cut a canal through tule roots using hay- knives and a derrick, in order to improve diversion from White Lake. This canal ultimately extended to a length of 22 miles. By 1903, approximately 13,000 acres were irrigated by private interests, with the canal system in progress to deliver much more. After the 1905 authorization of the Klamath Project ( see below), many water rights were acquired to facilitate, and for the benefit of, the Klamath Project enterprise, and other agreements were made with other water right- holders. The Project utilized, extended, expanded and/ or improved previously existing systems, and included construction of other facilities. The Reclamation Act In 1902 Congress enacted the Reclamation Act, which encouraged the settlement of lands in the western states and the development of agricultural economies to feed the nation. The 1902 Act provided for federal financing of irrigation works, with the construction costs to be repaid over time by project water users. In addition, public lands were made available for homesteaders who accepted the responsibility to undertake improvements and pay the water charges. Both the Oregon and California legislatures also enacted laws making state- owned land available for use in the Klamath Project. The Klamath Basin Calls in the United States Government In 1903, the Reclamation Service conducted investigations that led in 1904 to the first withdrawal of land by the Secretary of the Interior for developing a federal irrigation project. J. B. Lippincott, a supervising engineer from Los Angeles - who also played a key role in the City of Los Angeles' securement of Owens Valley water supplies - personally toured the Klamath Basin in June of 1904. l Although private irrigation projects were moving forward by the turn of the century, and some large- scale projects were being planned, most local citizens saw great value in a federally authorized and supported project. In 1905, local residents sent numerous petitions to Washington, D. C. requesting government irrigation assistance. By this time, a private corporation had given notion of its plans to develop water for what would ultimately become virtually the entire Klamath Project. Ironically, after Owens Valley agricultural water rights were secured by the City of Los Angeles, many of the displaced farmers moved to the Klamath Basin for the " reliable" water supplies of the Klamath Project. On their way north, they passed the first Reclamation Project in the West - the Newlands Project, near Reno, Nevada. 10 r r r r r r r " We desire to impress upon your mind the fact that 99% of the people in the Klamath Basin are a unit, and are clamoring for the assistance which might be rendered by the Government under the Reclamation Act," stated one petitioner. In November 1904, F. H. Newell, Chief Engineer of the federal Reclamation Service, told a large audience of enthusiastic farmers in Klamath Falls that, in his judgment, they had " a great irrigation project". Early in 1905, California and Oregon had ceded certain rights in the Upper and Lower Klamath Lakes and Tule Lake to the United States. On May 1, 1904, a board of engineers made a report that served as the basis for authorization of the Project. Congress authorized the use of lands and water in accordance with the State Acts of February 1905. The Secretary of the Interior authorized development of the Project on May 15, 1905, under provisions of the Reclamation Act of 1902. Construction Begins The Interior Secretary's 1905 authorization provided for project works to drain and reclaim lake bed lands of the Lower Klamath and Tule Lakes, to store waters of the Klamath and Lost Rivers, to divert irrigation supplies, and to control flooding of the reclaimed lands. The states of Oregon and California ceded then- submerged land to the federal government for the specific purpose of having the land drained and reclaimed for irrigation use by homesteaders. The Oregon Legislature also authorized the raising and lowering of Upper Klamath Lake in connection with the Project, and allowed the use of the bed of Upper Klamath Lake for storage of water for irrigation. Construction began on the Project in 1906 with the building of the main " A" Canal. Water was first made available May 22, 1907, to the lands now known as the Main Division. 1907 Completion of the A Canal Headgates 11 r r r r r This initial construction was followed by the completion of Clear Lake Dam in 1910, the Lost River Diversion Dam and many of the distribution structures in 1912, and the Lower Lost River Diversion Dam in 1921. ( In 1970, a public dedication at the Lower Lost River Diversion Dam officially changed the name of the structure to Anderson- Rose Dam.) Constructing Clear Lake Dam, September 1909. Large stone in self- dumping car. A contract executed February 24, 1917, between the California- Oregon Power Company ( now the Pacific Power and Light Company) and the United States authorized the company to construct Link River Dam for the benefit of the Project and for the company's use, and also extended to the water users of the Klamath Project certain preferential power rates. The dam was completed in 1921. The contract was amended and further extended for a 50- year period on April 16, 1956. The Malone Diversion Dam on the Lost River was built in 1923 to divert water to Langell Valley. The Gerber Dam on Miller Creek was completed in 1925, and the Miller Diversion Dam was built in 1924 to divert water released from Gerber Dam. In the Great Depression, continued settlement and leasing and distribution construction resulted in a significant increase, between 1930 and 1939 of the acres receiving water directly from Project facilities. The project work undertaken during this period included the enlargement of the Lost River Diversion Channel. In 1940, construction was begun on Pumping Plant D and the Tule Lake Tunnel. By 1942, these facilities, as well as the P- Canal were completed. In 1943, the Ady pumping plant was placed in operation, and in the next two years, the Straits Drain and pumps were constructed and installed and began operation. 12 r r Homesteaders The story of the homesteaders is a source of great pride in the Klamath Project. As Tule Lake receded according to plan, the lake bottom became suitable for cultivation. The land that ultimately became homesteads was under jurisdiction of the U. S. Bureau of Reclamation ( Reclamation). Homesteading and developing more productive agricultural land was the goal of the reclamation project that " reclaimed" the beds of Tule Lake and Lower Klamath Lake to expose more arable land. After Tule Lake was dewatered, a large area of public land became available for agriculture. The government would lease this land to settlers, and in fact leased as much as 50,000 acres in Tule Lake in the 1920s. Over time, most of this land was homesteaded. In 1917,180 people applied for the 37 homestead parcels the Reclamation made available on the drained wetlands and lake beds. Between 1922 and 1937 there were five more homestead offerings and hundreds of homesteaders settled in on the fertile soil of the drained lake bed. Then, World War II curtailed the homesteading process. » rri.. . r i* Ul. r- Xio. 1 wi sat Mi M MM ttw DCCA rru. ilon _ ji « _ jra .... r. r tk. M r « i t » a-. . « *^ J •* 4. MM r* T RTMtNT Or THE X ,. . tie*. . ..< L. » ii tatwJ l u i » T « 11 r ( » T « rnr » ) xfc. ir « « . •" « » ^> « • inS| « Ut !•• « . • TTDHOII. ,.> , ^% laMitk r » u. « . orumtm. _ JBKS!*! « r._: iit_ » « « » i.. bwrlac n i M la t&. MttaJOMI ( 1* nat.. J « a>. aa4 tk* a. t* JKLaUMftULJatiLJlJrt.. . . . . W l t a . is a- S.- ..- M « ri « ia*. t u . ar tka ar. ra* al « » ot af i t kav* a » « . > n » M < aatrr. • M M MMtMl. MMM t . aa n » tn4 » r ua « « . o. rol - • M it. » • « i WMM .. 1927 Homesteader Affidavit In three drawings held in 1946, 1948 and 1949, a total of 216 World War II veterans were awarded homesteads on farmland in the Tule Lake Basin, as a thank you from a grateful nation. The number of applicants was far greater than the number of available homesteads. Veterans and the community gathered to watch the names drawn from a pickle jar. Farm homesteads and crop- producing land were the goals of reclamation, and the Tule Lake Basin became a showcase for reclamation work. 13 " When I arrived to see my homestead there was nothing there, just an expanse of opportunity," recalls Carman. " No roads, no houses, no trees, just bare ground. I then pitched my tent in the corner of my homestead." My wife Eleanor was expecting our second child, but could not join me until later. A tent was not acceptable living quarters for a young woman, a small child and another baby on the way." The settlers formed organizations, elected a school board, and went about creating a society. " When I began my new life as a Tulelake homesteader there were approximately 300 homesteaders, most of them with families," said Carman. " We united and began to build schools, churches and a hospital in Klamath Falls. We started a community. We were living the American dream and our dream was achieved by hard work and dedication, and I must say we could never have done this without our wives." Homesteaders: Robinsons in 2001 Remember Days Gone By r - The Klamath River Compact The Klamath River Compact ( Compact) is a law of both Oregon and California, consented to by and Act of Congress. In the following decade, a variety of concerns and issues led to the passage of the Compact in 1957. These included: • Differing positions regarding the extent of development that could occur under Klamath Project water rights; 15 • • The related issue of priority of Klamath Project and overall Upper Klamath Basin irrigation development as against other uses, especially generation of hydro- electric power on the mainstem Klamath River; and • Concerns over potential future out- of- basin water exports. The development of the Compact was closely tied to an application for a water right filed by the California Oregon Power Company ( Copco) in 1951. This application anticipated using water at a proposed hydroelectric project on the Klamath River known as " Big Bend No. 2." In turn, this dispute folded in past dealings, agreements and opinions related to the operation of Link River Dam on Upper Klamath Lake. The agreements made between Copco and the Bureau of Reclamation at the time of construction of Link River Dam around 1920 had been controversial. Upper Klamath Basin irrigation interests had three primary concerns: 1. Power development, as an incident of the Project's reclamation purpose, should be undertaken only by the United States; 2. That the agreements threatened Klamath Project water supplies; and 3. The agreements were inconsistent with state legislation authorizing use of Upper Klamath Lake by the United States for storage or reclamation purposes. In 1951, Copco filed an application with the Oregon Hydroelectric Commission ( OHC) for a water right for the proposed Big Bend No. 2 hydroelectric facility. The OHC at that time had authority and jurisdiction over issuance of water rights for hydropower facilities. Copco at the time of filing took the position that water was available for appropriation and Copco was entitled to a right, senior in priority, to any future Upper Klamath Basin irrigation that was not then actually developed. J. C. Boyle Dam on the Klamath River. — 16 r r • A. To facilitate and promote the orderly, integrated and comprehensive development, use, conservation and control thereof for various purposes, including, among others: the use of water for domestic purposes; the development of lands by irrigation and other means; the protection and enhancement offish, wildlife, and recreational resources; the use of water for industrial purposes and hydroelectric power production; and the use and control of water for navigation and flood prevention. B. To further intergovernmental cooperation and comity with respect to these resources and programs for their use and development and to remove causes of present and future controversies by providing ( l) for equitable distribution and use of water among the two states and the Federal Government, ( 2) for preferential rights to the use of water after the effective date of this compact for the anticipated ultimate requirements for domestic and irrigation purposes in the Upper Klamath River Basin in Oregon and California, and ( 3) for prescribed relationships between beneficial uses of water as a practicable means of accomplishing such distribution and Copco's application to the OHC, and its parallel application to the Federal Power Commission ( FPC) for a license under the Federal Power Act, were contested and opposed by the Department of the Interior and various agricultural and irrigation interests. The OHC did not act on Copco's application until 1956. The States of California and Oregon appointed commissioners to negotiate an interstate Compact. At the same time, Reclamation and local water users were negotiating a new agreement with Copco for operation of Link River Dam. It appeared that such an agreement might be concluded prior to enactment by the States of a Compact. The draft Copco contract was brought before the Compact negotiating commissioners, who sought to ensure consistency with the Compact being developed. During the course of several meetings of the Compact commissioners, terms were developed which resulted in conditions in the FPC license, the water right certificate, and a new contract for Copco's operating of Link River Dam. After preparation of various drafts, negotiation of the Compact was concluded and the legislatures of Oregon, California, as well as the United States Congress, acted in 1957. The major purposes of this compact are, with respect to the water resources of the Klamath River Basin: The Compact recognized water rights for then- existing and future needs in the Klamath Project service area. It also established a system of priority for new water rights under which Upper Basin irrigation ( up to a specified number of acres) had superior rights over water for power generation, fish or wildlife, or recreation. 17 r r r r r In short, the Klamath Compact provided guidelines to lead the competing interests of the Klamath River watershed towards a more harmonious future. For the next 40 years, the intent of the Compact was essentially fulfilled, until the early 1990s, when new pressures to address endangered fish and tribal trust demands resulted in the reemergence of fractionalized conflict into the Upper Basin. Although it had been seen as a resolution for future disputes, the Compact has been interpreted not to override the Endangered Species Act or tribal trust water rights. The Klamath Project's Finishing Touches r Through the 1950s, Reclamation envisioned continued development of the Project that would have doubled its current size by including Butte Valley, California and other areas. The plans were not implemented and the Project acreage has not significantly increased since the end of the 1940s. In the following decades, the delivery system has been improved, bottlenecks eliminated, and relatively small areas have both been brought under irrigation and converted to commercial or residential development. By 1960, due in part to improvements made on Tule Lake dikes, the M Canal, the Lost River Diversion Channel, and installation of new canals in the southern portion of the Tulelake Irrigation District ( TID) service area and the Miller Hill Pumping Plant, the Project provided irrigation service to nearly 216,000 acres. Tulelake, California In the 1960' s, improvements and expansion of certain facilities led to the formation of Klamath Basin Improvement District. The Stukel and Poe Valley Pumping Plants were constructed and the Miller Hill Pumping Plant enlarged. The D, F and G- Canals were also 18 r enlarged. These facilities provided more reliable service to certain lands and also added land to the area that could receive water from Project works. In the 1970' s, Shasta View Irrigation District and Reclamation entered a $ 3.2 million contract for installation of a pressure irrigation system to replace the previous gravity- fed system. The 1972 Project history reported, ".. . the Project provided irrigation and drainage service to 223,661 acres," while the total harvested acreage "... was 193,160, down 2,329 acres from 1971." Also in the 1970' s, the Straits Drain was enlarged. Because of the Klamath Project's design and the interrelated nature of water use within it, including the use of return flows by farmers and the refuge, Project efficiency is very high. A recent assessment of Klamath Project water use efficiency2 implies that a sophisticated seasonal pattern of water use has evolved in the Klamath Project. One must understand that the Klamath Project has developed into a highly effective, highly interconnected form of water management. According to the 1998 Davids study ( see footnote), effective efficiency for the overall Project is 93 percent, making the Klamath Project one of the most efficient in the country3. New Demands For eighty years, Klamath Project irrigation supplies proved sufficient to meet the needs of the area's burgeoning farming and ranching communities. Although there were years where Mother Nature and Klamath Project storage capacity proved insufficient to meet full irrigation demands, the local community managed to stretch thin supplies and make things work. That all changed in the early 1990s, when steadily more restrictive government agency decisions made to meet Endangered Species Act ( ESA) goals began to steadily chip away at the stored water supply originally developed for irrigation. Two sucker species were listed ( 1988) as endangered and coho salmon were listed ( 1997) as threatened under the 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. Klamath Project " operations plans" based on these biological opinions also factor in tribal trust obligations, although the nature and extent of such obligations is undefined. 2 " Klamath Project Historical Water Use Analysis", Davids Engineering for U. S. Bureau of Reclamation, October 1998. 3 For example, Tulelake Irrigation District irrigates 62,000 acres of farmland. In the 1990s, the district diverted an average of 131,000 acre- feet of water. Each year, an average of 80,000 acre- feet was pumped out of the district. Consumptive use within the district is considerably less than the amount of water diverted. The reason is the difference from the return flow from other districts and the reuse of water within the Project. 19 r Sucker Listings In the past twelve years, political and regulatory demands have affected activities at the Klamath Project. In 1988, the short nose sucker and the Lost River sucker, two species that live in Upper Klamath Lake, were designated as endangered under the ESA. Biological opinions issued by the U. S. Fish and Wildlife Service ( USFWS) in 1992 and 1994 concerning operation of the Klamath Project identified actions to avoid jeopardy to suckers. When the suckers were listed, there had been no mention whatsoever of reservoir elevations as a factor affecting sucker populations. These operation elevations were adopted by Reclamation. The reservoir elevations pertaining to Upper Klamath Lake generally allowed the Project to operate for its intended purposes. However, the United States District Court of Oregon found that the reservoir elevations pertaining to Clear Lake and Gerber Reservoirs to be arbitrary and capricious, and they were invalidated in a succession of decisions4. The most compelling and prominent reason why the federal government justified listing the two sucker species as " endangered" in 1988 was an apparent abrupt downturn in both populations during the mid- 1980s. To support the decision to list the suckers, the USFWS believed the only significant remaining populations were in Upper Klamath Lake. We now know that the assumptions by the USFWS were in error and the assumed sucker population crisis never materialized. In fact, shortly after listing of the species, the populations demonstrated dramatic increases5. r Just prior to the listing of the suckers in 1988, a sport snag fishery was allowed. Before 1969, the fishery was largely unregulated with no harvest limit; in 1969 a generous bag limit of 10 fish per angler was imposed. During the early to mid- 1980s, despite the belief that the numbers offish were in a state of rapid decline, the State of Oregon still allowed the sport snag fishery. Ultimately, because of increased focus on the status of the sucker populations, Oregon eliminated the fishery in 1987. Some fisheries experts believe that if the USFWS would have properly assessed the known impacts on the suckers caused by the snag fishery and the benefits from ceasing the fishery, it very likely could have affected the ultimate listing decision. " Simply stated, the largely unregulated snag fishery slaughtered the sucker populations," said Dave Vogel, with Natural Resource Scientists, Inc. " Since the fishery was eliminated in 1987, the two sucker populations dramatically rebounded. The threat was removed and the populations increased ten- fold." 4 Bennett v Spear, 520 U. S. 154 ( 1997); 5 F. Jupp. 2d 887 ( D. Or. 1998); Bennett v. Badgely, No. 93- 6075- HO ( April 13, 1999, June 11, 1999). 5 Vogel, David, 2004. Testimony Before the Committee on Resources ( Subcommittee on Water and Power), United States House of Representatives. Oversight Field Hearing on The Endangered Species Act 30 Years Later: The Klamath Project. 20 At the time of the listings in 1988, the Klamath Project was not identified as having known adverse affects on the sucker populations, yet four years after the listing, using limited or no empirical data, the USFWS turned to the Klamath Project as their singular focus. Paradoxically, since the early 1990s, despite new beneficial empirical evidence on the improving status of the species and lack of relationship with Klamath Project operations, the USFWS became ever more centered on Project operations and increased restrictions on irrigators instead of paying attention to more obvious, fundamental problems for the species. This circumstance caused tremendous expense in dollars and time by diverting resources away from other known factors affecting the species. Coho Salmon Listing r A similar circumstance occurred with NOAA Fisheries during and after the coho salmon listing in the lower basin in the late 1990s. It cited the reasons to list coho salmon, excluding Klamath Project operations as a significant factor affecting the species. There are many other documented factors that have affected salmon runs in the Klamath River6. The USFWS in the 1980s described the most important eight factors as " most frequently referred to with regard to recent population declines" of anadromous fish in the Klamath River. Those factors are: " • Over fishing • Logging • Trinity River transbasin diversion Irrigation diversions in lower Klamath tributaries • 1964 flood • 1976- 1977 drought • Sea lion predation • Brown trout predation. However, shortly following the listing, and with no supporting data, NOAA Fisheries chose to center its attention on the Klamath Project as the principal factor affecting coho salmon. In its biological opinions, NOAA Fisheries opined that much higher than historic flow levels, released from the stored water of the Klamath Project, would be needed to protect coho salmon downstream of Iron Gate Dam. Iron Gate Dam is located forty miles away and coho are generally found further downstream and in tributaries. 7 In essence, both agencies adopted a single- minded approach of focusing on Klamath Project operations to artificially create high reservoir levels and high reservoir releases. This puzzling, similar sequence of events has yet to be explained by agency officials. 6 KWUA biologists compiled a comprehensive listing of those factors in March 1997. 7 Vogel, David, 2004. Testimony Before the Committee on Resources ( Subcommittee on Water and Power), United States House of Representatives. Oversight Field Hearing on The Endangered Species Act 30 Years Later: The Klamath Project. 21 r " ~ Commercial harvests of salmon intensified with the development of canning technology. By the early 20th century, habitat destruction combined with commercial harvests had resulted in serious salmon depletion on the Klamath River. Cobb ( 1930) estimated that the peak of the Klamath River salmon runs occurred in 1912, Snyder ( 1931) observed " in 1912 three [ canneries] operated on or near the estuary and the river was heavily fished, no limit being placed on the activities of anyone". Problems on the East Side Irrigation districts on the east side of the Klamath Project felt the first impacts from increased regulatory focus on lake levels in the early 1990s. Langell Valley Irrigation District ( LVID) and Horsefly Irrigation District ( HID) receive water from Clear Lake and Gerber reservoirs. Historically, stored water was released from these two reservoirs beginning about April 15 and ending about October 15 each year. These reservoirs are not large, but they provide the essential water supply to an otherwise arid area. In an average year, Clear Lake releases about 36,000 acre- feet of irrigation water, and Gerber releases about 40,000 acre- feet. Clear Lake Reservoir contains populations of both endangered sucker species, and Gerber reservoir hosts one of the species. ESA-" threatened" bald eagles are also known to inhabit the Klamath Project area. In 1991, at the request of the USFWS, Reclamation initiated ESA consultation to assess the impact of the long- term operation of the Klamath Project on the suckers and the bald eagle. In the next year, three biological opinions were rendered by USFWS that imposed minimum levels in Clear Lake to purportedly protect the sucker populations. As a result of the minimum lake levels imposed by the draft biological opinions, and the water lost to evaporation before the USFWS allowed any water releases, the Districts were not able to make their normal irrigation releases during the 1992 water year. Neither district received its first seasonal water delivery until May 15, 1992, a full four weeks later than normal. By 22 r " that date, 12,000 acre- feet of the water that had been stored in Clear Lake in March 1992 had evaporated, an amount that represents about 60% of LVID's total yearly withdrawal from Clear Lake Reservoir. As a result of the minimum lake levels and the evaporation losses, only 2,148 acres of the 16,800 irrigable acres within the LVID received any Klamath Project water at all. The lack of water reduced both acreage farmed and per- acre yields that year. As a result of reduced yields, farm properties lost up to 70% of their assessed values in 1992. The lack of water also hurt the region's cattle ranching operations, because some ranchers could not produce pasture for their cattle. Water users who could afford the extra expense purchased feed to sustain their herds. Others had to cut back substantially on their herds or sell their cattle. Wildlife also suffered as a result of the decision to impose minimum surface levels in the reservoirs. Because the Lost River obtains most of its water from releases from Clear Lake Dam and return flows from agricultural operations, the water levels in the Lost River and its tributaries were exceedingly low in 1992. As a direct result, wildlife relying on Lost River water, including deer, sandhill cranes, hawks, turtles, frogs, ducks, and more, were all noticeably scarce that year. On July 22, 1992, USFWS finally issued its final biological opinion on the long- term operations of the Klamath Project. While the 1992 opinion conceded that " little" was known about Gerber Reservoir's shortnose sucker population, the opinion reported " good numbers" of these fish and noted that the Gerber sucker population appeared to be successfully reproducing, despite the lowered lake levels of the early 1990s. Despite this undisputed evidence, the 1992 biological opinion concluded that continuing to operate the Project, including Clear Lake and Gerber reservoirs, in its historic manner was likely to jeopardize the continued existence of both sucker fish species. Reclamation accepted the USFWS recommendations for continued adherence to minimum lake levels, prompting the Districts and two of the individual farmers to sue the federal agencies. Even after the federal district court entered judgment invalidating the jeopardy conclusions, USFWS defied this judgment, and the districts were forced to bring several additional motions to enforce the Court's rulings. At each stage of the legal proceedings, the districts prevailed, based largely on the fact that USFWS had no scientific evidence to justify its actions. When the United States Supreme Court considered the Districts' case against the USFWS, the Court described the purpose of the ESA's science requirement as follows: The obvious purpose of the requirement that each agency " use the best available scientific and commercial data available" is to ensure that the ESA not be implemented haphazardly, on the basis of speculation or surmise. While this no doubt serves to advance the ESA's overall goal -., of species preservation, we think it readily apparent that another objective ( if not indeed the 23 primary one) is to avoid needless economic dislocation produced by agency officials zealously but unintelligently pursuing their environmental objectives. Now, ten years later, HID and LVID enjoy positive relationships with USFWS and Reclamation. However, the problems they suffered in the early 1990s were a harbinger of things to come for other Klamath Project irrigators shortly after the turn of the new century. 2001 Curtailment The net result of increasing restrictions on other Klamath Project water users was fully realized on April 6, 2001, when Reclamation announced its water allocation for the Project after U. S. Fish and Wildlife Service 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. No water for most farmers April 6, 2001 Local Headlines The resulting impacts to the local community were immediate and far- reaching. Even with a later release of a small percentage of needed water over a 30- day period in July and August, thousands of acres of valuable farmland were left without water. 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. 24 Kliewer Family in Dry Fields South of Klamath Falls - 2001 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. As farmers and laborers attempted to deal with the loss of jobs, a year's income, and in some cases the land itself, referrals for mental health counseling increased dramatically. The Tulelake school district lost around 50 students after farm families sold their land and moved on. Students were under stress, understandably confused as to why three species of fish were more important than their lifelong homes. Tragically, one Hispanic family had started out as field workers, and after a lifetime of piecework under the sun had saved enough to buy their own farm. They lost everything as a direct result of the irrigation cutofi . Veteran homesteaders, who fifty years ago were promised reliable water, felt betrayed by the same government, who chose to provide water to fish instead of farmers in 2001. " I want the government to honor the contract that promised me and my heirs water rights forever," said Jess Prosser, a World War II veteran and Tulelake homesteader, in 2001, after water supplies were cut. " This land is our life. Farmers and fish have survived previous drought years when the farmers voluntarily cut back on water consumption. The Klamath Project was designed to withstand drought conditions, and right now there is more than ample water for agriculture and fish. The government took 100% of the water for fish, disregarding farmers, ranchers, families and numerous other species of wildlife in the Klamath Basin. This is a man- made disaster. This will be the end of a way of life and an entire community." 1 " Calamity in Klamath", Blake Hurst. The American Enterprise magazine. October / November 2002, pp 28- 29. 25 Cemeteries Went Dry in 2001 The Farmers Fight Back The local community did not take the decision lying down. Employing the ingenuity and perseverance that allowed them to successfully create brand new communities over the past century, local farmers, ranchers, elected officials and business leaders organized a " bucket brigade" to dramatize their plight, drawing nearly 20,000 sympathizers to the streets of Klamath Falls. A web site and cell phone calling tree were set up, and farmers, who only a year before were working their fields, suddenly became knowledgeable about the media. Civil disobedience, in the form of peaceful protests at the A Canal headgates, drew television crews from throughout the Pacific Northwest. The 2001 Klamath Basin crisis became the topic of front- page coverage and sympathetic editorials in publications like Time magazine, the Los Angeles Times, the Wall Street Journal, and the New York Times. Time Magazine Captures Rob Crawford & Family, Summer 2001. In part because of the tremendous media and political attention generated by the local community, a congressional field hearing was held in the summer of 2001 at the Klamath County fairgrounds, which drew the largest audience to ever attend such a hearing in the nation's history. Much of the focus was on the decision- making and processes that led to the fishery agencies' recommendation to curtail irrigation supplies. 26 In 2001, a desperate community essentially was looked in the eye and told, " sorry, we know it may hurt, but ' the science' is compelling and requires you to go without water." This was wrong, literally, and as a matter of policy. For whatever reason, the agencies had become too close to, and too much a part of, the side- taking that had come to dominate issues surrounding the Klamath Project. For this reason alone, outside review was needed. Nearly 20,000 marchers support the Klamath Bucket Brigade, May 2001. Prayer / protest at the A Canal headgates, 2001. Elected officials - from county commissioners and supervisors, to state representatives and senators, to U. S. Senators and Representatives, continued the fight, and ultimately, later in 2001, the U. S. Secretary of the Interior, Gale Norton, directed the National Academy of Sciences to conduct an independent peer- review of the agency decision to curtail irrigation supplies. Also, in early 2002, President Bush himself took a personal interest in the plight of the Klamath Project irrigator. Enter President Bush In January 2002, just months after the federal government curtailed Klamath Project irrigation deliveries for the first time in 97 years, Sen. Gordon Smith and Rep. Greg Walden met the president in southern California, boarded Air Force One, and took a slight detour over the Basin on their way to a Portland high school where the Mr. Bush was to deliver a speech. On the flight north, the president was briefed on the 2001 Klamath water crisis. When he entered the gymnasium at Park Rose High School, he opened his speech up with a pledge to help both the farmers and the fish of the Klamath Basin. 27 Compassion: George W. Bush Meets and Greets Klamath Basin Residents in Redmond, Oregon, 2003. In the ensuing two years, President Bush has followed through with his pledge by establishing a Klamath Basin cabinet- level working group, promoting sound and independent peer-reviewed science, and making funding of Klamath River water and environmental projects a priority. Enacted and requested Bush Administration funding in the Klamath River watershed for fiscal years 2003- 2005 exceeds $ 260 million dollars, according to a federal government summary. This includes $ 105 million proposed by the administration for Klamath Basin federal funding in the Fiscal Year 2005 budget. Vindication: The National Research Council Steps In The Klamath Water Users Association and others in the community in 2001 strongly advocated for an independent peer review of the 2001 fishery agency biological opinions, the underlying science, and the related overall scientific process. In early 2002, an interim report from the National Research Council ( NRC) Committee on Endangered and Threatened Fishes in the Klamath Basin was released. This represented a critical step towards ensuring proper assessment and maintenance of healthy fish populations. The panel successfully completed an objective, unbiased initial review of the information used by the U. S. Fish and Wildlife Service ( USFWS) and NOAA Fisheries to formulate the agencies' two 2001 Biological Opinions ( BOs). The interim NRC report concluded that there was insufficient scientific evidence used by USFWS and NOAA Fisheries in 2001 to support changing the recent historical water operations of the Klamath Project. Specifically, the NRC interim report concluded that higher or lower than recent historical lake levels or Klamath 28 rr r rrr r r r River flows were not scientifically justified based on the available information used by the USFWS and NOAA Fisheries. Despite varying interpretations of the data used by the USFWS and NOAA Fisheries in the BOs, it is especially noteworthy that the NRC panel achieved consensus on the Interim Report's conclusions for not just one, but both BOs. The report's conclusions were adequately supported by the available evidence and analyses used by USFWS and NOAA Fisheries. It was particularly evident that the NRC Committee report was fair and impartial, essential attributes that were sorely lacking in Klamath basin issues to date. The Assault on the Klamath Project Intensifies The release of the NRC Committee's interim report in early 2002 unleashed a barrage of criticism from environmental activists and their allies in academia and government agencies. Two Oregon State University professors, supporters of the high lake level requirements that contributed to the 2001 water curtailment, submitted a formal " rebuttal" of the interim report to a fisheries journal. The " rebuttal" ( so labeled when transmitted by its authors) and other media developments caused the Klamath Project community to fear that the NRC work would be diluted. The local community simply did not have the resources or the networks of contacts to continually counter the anti- Klamath Project messages that were being sent to the public and policymakers, primarily by outside environmental activist organizations. The NRC Committee's interim report triggered what grew to be an extraordinary, and obviously coordinated, attack on the Klamath Project by these interests. Media outlets seemingly relish a good western fight, and many uncritically reprinted a good deal of information that was not fair to Klamath Basin irrigators. The scrutiny on the Klamath Project and the Bush Administration's reliance on the NRC interim report intensified further that fall, when 33,000 salmon died on the lower Klamath River. Immediately after the unfortunate die- off, vocal critics of Project operations and Bush Administration environmental policy used the event to renew attacks on irrigated agriculture in the Klamath Basin. Even though the fish die- off occurred 200 miles downstream from the Project, at a location below the confluence of the main stem Klamath River and the Trinity River, traditional advocates for higher river flows quickly assigned blame to Klamath Project farmers and ranchers. Some of these same interests and others in the environmental community even attempted to directly link the fish die- off to alleged political maneuvering orchestrated by senior policy officials in the Bush Administration. As a result, presidential hopeful Senator John Kerry called on the U. S. Interior Department's Inspector General to look into whether " political pressure from the White House is intimidating staff and influencing policy" in Klamath River management decisions. Interior Department Inspector General Earl Devaney's report - released in March 2004- found " no evidence of political influence affecting the decisions pertaining to the water in the Klamath Project." 29 r r r r r r Eugene Register- Guard Why the salmon died: Pattern points to Bush administration policies A Register- Guard Editorial A 2002 Editorial Headline Between 2002- 2004, the fish die- off was effectively spun by Klamath Project critics to drive a dizzying array of attacks aimed at the Bush Administration and federal agencies responsible for Klamath Project management. Well- coordinated media coverage surrounding several acts of litigation and proposed federal legislation in the two years since the fish die- off have effectively imprinted the environmentalists' message in the minds of many: • " Fish need water"; • " Klamath Project farmers were denied water in 2001 and no fish died in the Klamath River"; • " Klamath Project farmers received full supplies in 2002, and 33,000 salmon died in the river"; • " The Bush Administration sacrificed fish for the benefit of farmers." The claims discussed above are just a few of the more prominent arguments that Klamath Project critics have employed to justify a series of actions undertaken in the wake of the public release of the interim NRC Committee report, including the following: • Federal legislation that would finalize a controversial and flawed draft Klamath River flow report. • Unsuccessful federal legislation that would restrict the ability of local lease land farmers to grow row crops. • Litigation ( PCFFA v. USBR) that, if successful, would have likely shut down Klamath Project operations in 2003. • Public protests staged by tribal members and environmentalists in Klamath Falls in 2002 and in Sacramento in 2003. 30 Listing of the Klamath River as the third most endangered waterway in the country by American Rivers, a Washington, D. C. - based activist group. An unsuccessful lawsuit filed by environmental groups against NOAA Fisheries to hasten the potential ESA listing of the green sturgeon. The release of an Oregon Natural Resources Council ( ONRC) report, which contends that voluntary buyouts of willing sellers within the Project " remain the most politically responsible, socially just, and economically viable method" to address power and ecological challenges. A subsequent letter sent by ONRC to Project landowners, tempting them with the promise of a buyout that would provide them with 2 '/ z times the fair market value of their land. Numerous editorials, journal articles and magazine stories that clearly accept the arguments made by Project critics. However, others did not jump so quickly on to the " blame game bandwagon." During late summer and early fall of 2002, Dave Vogel, a fisheries biologist with 28 years of experience, conducted a field investigation to assess water temperatures in the main stem Klamath River. - Vogel noted that main stem water temperatures in the Klamath River were measured hourly just prior to and during the fall- run Chinook salmon migration season. He found that water temperatures in the upper Klarnath River downstream of Iron Gate Dam during September 2002 were unsuitable for adult salmon, a finding that was similar to that of previous studies. As expected, a normal seasonal cooling trend at the end of September and early October provided the moderating influence lowering Klamath River temperatures to tolerable levels for salmon. Vogel also found that large numbers of salmon entered the lower Klamath River earlier than usual and were exposed to two dramatic and uncharacteristic cooling and warming conditions causing disease outbreak from warm water and crowded conditions. The combination of these factors was chronically and cumulatively stressful to fish and is probably the most plausible reason for the fish die- off. " In my opinion, the best available scientific data and information indicate that the continued operation and maintenance of historical flows at Iron Gate Dam will not jeopardize coho salmon," said Vogel in March 2003. " Furthermore, in my opinion the operations of Iron Gate Dam during the summer and fall of 2002 did not cause and could not have prevented the fish die- off in the lower Klarnath River." Unfortunately, scant media coverage was afforded to Vogel's findings. Outside of the Upper Basin, the press made no mention of the fact that, despite the die- off, the numbers of fish returning to Iron Gate hatchery on the Klamath River were the third highest in 40 years. The media also largely ignored a similar finding made in October 2003 by the National Research Council Committee on Endangered and Threatened Fish in the Klamath Basin. In its final report, the Committee failed to find a linkage between the operation of the Klamath Project and the fish die- off, and questioned whether changes federal project operations at the time would have prevented it. Clearly, the hard working landowners of the Upper Klamath Basin have been on the receiving end of a cruel and long- distance war being waged by environmental activists who assert that the federal water project - representing only 2 percent of the total land base of the Klamath River watershed, and consuming only 3- 4 percent of the average annual flows to the Pacific Ocean - is somehow responsible for all of the environmental woes of the river system. These advocates are intent on portraying the Klamath Basin as a poster child to help fuel outside efforts that are focused on litigating, legislating and publicly condemning the local community for doing what it has done for 98 of the last 99 years - irrigating farm and ranch land. r r r r These interests know that federal water projects are an easy target of litigation, since federal environmental and clean water laws govern project operations. The lawsuits are often aimed at federal entities - such as the U. S. Bureau of Reclamation and fishery agencies - which, on the surface, give the appearance that the environmental plaintiffs are simply interested in correcting errors made by some non- descript governmental agency. The true intended target of these actions, however, ultimately becomes the landowners and water users who fall under the management jurisdiction of the federal agencies. It is the farmers and ranchers that pay the price of litigation through altered management practices, increased uncertainty, and escalating legal expenses to defend their interests. For the most part, the potentially damaging effects these actions could cause family farmers and ranchers have been deflected. However, local water users are concerned that permanent Klamath River policy will be influenced by misinformation in the future. Vindication, Part II After an 18- month barrage of anti- Klamath Project attacks in the media and courtrooms, the long- awaited final report from the National Research Council ( NRC) Committee on Endangered and Threatened Fishes in the Klamath Basin was released in October 2003. The final NRC report is important to local farmers and ranchers for several key reasons: 1. The report clearly indicated 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 the earlier interim 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 p the time would have prevented it. 32 r ~ r r 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 final NRC report was 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 the environment and saving the local economy. Local water users shared the NRC report's vision that increased knowledge, improved management, and cohesive community action would promote recovery of the fishes. At the same time, they remained extremely concerned that the " business as usual" approach - regulation of the Klamath Project - would remain the dominant aspect of ESA biological opinions and advocacy of Project opponents. For reasons now clearly evident, the irrigators' original recommendation for an outside technical review of the ESA activities in the Klamath basin by an objective group such as the r National Academy of Sciences back in 1993 ( KWUA 1993) was an important first step. The benefits of an ESA peer review are obvious after reading the NRC's final report. " We are beginning to see signs of progress with ESA activities in the basin," said Dave Vogel, nearly one year after the release of the final NRC Committee report. " However, alarmingly, there are some individuals within the agencies that are in a state of denial over the findings and conclusions of the NRC's report. Despite the NRC's final report, the USFWS and NOAA Fisheries still have too much focus on the Klamath Project and not enough emphasis on a watershed- wide approach." Other experts agree. " We found that the prevailing scientific sentiment in the basin-' More water is better for fish'- was the wrong approach," NRC Committee member Jeffrey Mount told California Farmer magazine in December 2003, two months after the final NRC report was released. " We hate to say we told you so, but...." It is very important to note that many of the most pertinent findings, conclusions, and r recommendations of the NRC Klamath Committee were not new to the USFWS or NOAA Fisheries. Dave Vogel elaborated on this in testimony he provided to the House Resources Committee at a field hearing held in Klamath Falls in June 2004. " The NRC final report advocates a watershed approach, peer review, greater stakeholder involvement, oversight of agency actions, focus on factors other than the Klamath Project 33 r operations, reduction of resource conflicts, and incorporation of the principles of adaptive management toward species recovery," said Vogel. " Over the past decade, local water users and their allies forwarded much of the same and similar technical findings and recommendations to those two agencies, but were mainly ignored. Additionally, the NRC's major conclusion that there is insufficient scientific justification for high reservoir levels and high instream flows was always prominent in water users' technical comments on the agencies' biological opinions during the past decade." r " The NRC Klamath Committee's final report was an outstanding effort and the product must serve as a catalyst to advance balanced natural resource management in the basin," Vogel said. " If federal agencies meaningfully incorporate many of the NRC's principal findings, conclusions, and recommendations, we fully expect positive results to the species recovery and reduced resource conflicts. We should use the momentum of the NRC's final report to guide recovery efforts and watershed improvements. However, if the agencies do not take this pro- active approach, we could again return to the disaster that transpired in 2001." • Dr. Mount agrees. r " For too long, Klamath managers have relied on fixing their problems by turning only one knob- the knob of raising and lowering water levels in Upper Klamath Lake and the river," said Mount, a University of California professor. " They need to take new approaches that support multiple populations offish and healthy ecosystems throughout the watershed," he said. The Klamath Project Regulatory Regime: 3 Years After the Curtailment The U. S. Bureau of Reclamation's final 10- year Biological Assessment for Klamath Project 2002- 2012 operations properly incorporated the findings of the 2002 interim National Research Council's ( NRC) interim report, and generally captured the essence of the " watershed- wide" philosophy endorsed in the final 2003 NRC report. Unfortunately, the fishery agency biological opinions ( BOs) do not. Despite the so- called ecosystem approach to species recovery advocated by the USFWS and NMFS, their actions in the Klamath basin over the past decade amply demonstrates that the exact opposite took place. They focused on: 1) a single- species approach; and 2) Klamath Project operations. 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. 34 r The combined - and apparently, unanticipated - impacts placed on the Upper Basin 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 request9 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. Rancher Gary Wright learns that the Klamath Project would be shut down in the middle of the irrigation season, June 25, 2003. Common sense prevailed, and later in the day, Reclamation rescinded its earlier decision. 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. 9 Improved coordination between USFWS managers and their Reclamation counterparts in Klamath Falls and Sacramento was one important reason for the positive corrective action that was taken. 35 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 this century- old water project operates, and who have apparently failed to anticipate the resulting impacts to the 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. Proactive Efforts of Upper Basin Landowners Since the early 1990s, and particularly in the new millennium, 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, r 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. Sucker Recovery Planning KWUA in 1993 published the Initial Ecosystem Restoration Plan - the first ecosystem- based, scientifically valid planning document on Klamath Basin restoration. The plan placed particular emphasis on real, on- the- ground projects to recover endangered species. It was widely recognized as a meaningful assessment of necessary restoration activities. KWUA in 2001 reiterated its previous call with the release of a report entitled Protecting the Beneficial Uses of Upper Klamath Lake: A Plan to Accelerate Recovery of the Lost River and Shortnose Suckers. The 2001 report provided timelines and budgets for dozens of projects that could provide real benefits. Regrettably, until the past three years, there has been failure to effectively implement most of the on- the- ground activities proposed by KWUA. On- the- Ground Actions 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 ( e. g. " Walking Wetlands") • 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 36 • 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. • TEAMWORK A broad range of partners include U. S. Fish and Wildlife, Bureau of Reclamation. CalOre Wetlands. Tulelake Growers Association, Audubon Society. Tulelake Irrigation District, California Waterfowl Association. University of California. Ducks Unlimited. Klamath Water Users Association. USDA NRCS. Leaseland Advisory Council, and numerous volunteer organizations. A page from the " Refuge" section of the tule- Iake. com website. Environmental Water Bank KWUA in early March 2003 announced it would support, and assist the Department of Interior in the implementation of, a Klamath Project Pilot Environmental Water Bank in 2003 to provide over 50,000 acre- feet of additional water for environmental purposes. Reclamation's 10- year Biological Assessment ( BA) developed in February 2002 proposed an environmental water bank through which willing buyers and sellers will provide additional water supplies for fish and wildlife purposes and to enhance tribal trust resources. The 2002- 2012 biological opinion created by NOAA Fisheries for coho salmon firmly established the river flow schedule and the 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. 37 The coho biological opinion's rigid water bank schedule, which steps up the magnitude of the bank for the first four years, regardless of actual hydrology, is difficult to justify. This type of water bank does not reflect the intent of either the proposal put forth by KWUA in 2002 ( see below), or the original USBR biological assessment, which proposed implementation of a water bank in drier years, not every year. Water users committed to pursue developing a water bank with Reclamation in January 2002. At that time, KWUA was asked by Reclamation to develop a Project- wide water bank to assist with meeting environmental water demands in drier years. KWUA's Water Bank and Supply Enhancement Committee held over 30 meetings in 2002- 03 to develop the 65- page report/ proposal for a long- term water bank, which differs substantially from the pilot water bank proposed by Reclamation this past year. Certainty of water supplies is a key principle imbedded in KWUA's long- term water bank proposal. Local water users insist that, in exchange for voluntary participation in a Project water bank - which would be used to " fund" environmental water needs - 100% of the irrigation demand for remaining Project acreage will be satisfied, season- long. Water users further believe that the water bank cannot be viewed as a stand- alone element. While Reclamation's 2003 and 2004 pilot programs did not closely resemble KWUA's vision for a long- term bank, water users are hopeful that Reclamation and Interior will look to the irrigators' document to complete its 10- year water bank proposal. EQIP Funding in Klamath Basin The federal government in 2003 released $ 7 million in conservation funding to the Klamath Basin. This sum represents a portion of the $ 50 million in funding earmarked for the Basin in the 2002 Farm Bill under the Environmental Quality Incentives Program ( EQIP). KWUA was instrumental in securing these provisions during Farm Bill negotiations. In 2004, Interior Secretary Norton included another $ 12 million for this program in the president's 2005 budget request. The funds provided cost- share payments to farmers and ranchers to employ water conservation measures. Over 800 Klamath Basin landowners have applied to participate in this program, despite the requirement that they pay 25% of the costs. This shows remarkable commitment by local irrigators to do the right thing, despite the fact that many of these landowners are still recovering from the financial impacts of the 2001 water curtailment. Recognition at Last In the past year, local 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 in 2004 was honored on the steps of the Oregon state capitol for " exemplifying the spirit" of the Oregon Plan for Salmon and Watersheds; 38 Tulelake Irrigation District in January 2004 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 in 2004 recognized local rancher Mike Byrne for his leadership in conservation. NRCS Chief Bruce Knight ( left) with 2004 Excellence in Conservation Award winner Mike Byrne. It is clear that local irrigators have not been idle in the past ten years. Their efforts to improve their environment are all the more impressive when one considers that the uncertainty and difficulty associated with keeping their farming operations profitable have not diminished. Oregon Governor Ted Kulongoski, Congressman Greg Walden and KWUA Executive Director Dan Keppen at the new A Canal Headgates, April 2003. 39 50 Years After the Compact - Back to the Watershed- Wide Approach Klamath Project water users in October 2004 enthusiastically greeted the announcement that the states of California and Oregon and the Bush Administration had signed the historic " Klamath River Watershed Coordination Agreement". The agreement - signed by California Governor Arnold Schwarzenegger, Oregon Governor Ted Kulongoski, and four of President Bush's cabinet level secretaries - underscored the commitment of these parties to solve the fisheries challenges of the Klamath River on a watershed - wide basis. The state- federal Klamath agreement reflects the philosophy embedded in both the Klamath River Basin Compact and the 2003 NRC Klamath report, which confirmed that Klamath Basin issues must be dealt with in an integrated and comprehensive way for a lasting solution of the challenges facing the basin. The NRC committee report makes clear that merely closing the spigot on the Klamath Project will not solve the problems facing Klamath Basin fisheries, and that strategy obviously was disastrous for farming and ranching communities. The coordination agreement recognizes that message and promotes a unified effort that many water users believe is much needed. An important part of this agreement is that it supports the Conservation Implementation Program ( CIP), a work in progress proposed by federal agencies to coordinate management actions in the Klamath River watershed. The CIP would meld a scientific advisory body, local communities, and resource agencies to identify, coordinate and resolve the Basin's critical water quality, water quantity and fish and wildlife restoration challenges. KWUA is working with other producer groups and local government to develop guidelines that make the CIP workable and acceptable to Klamath Basin communities. USBR Study on Pre- Project Flow Conditions on Upper Klamath River Reclamation in late 2004 finalized a draft study intended to provide a glimpse at how the Klamath River might have looked before the Klamath Project was built. The report shows that- especially in drier years - historic flows in the Klamath River near Keno, Oregon dwindled to a mere trickle. The report provides compelling evidence that supports claims made by local residents for decades - the stored water provided by the Klamath Project may actually provide more flows downriver than what would have flowed before the Project was built. This is primarily due to the developed storage and the fact that farmlands that were once under water now use less water than what was historically lost to consumptive and evaporative use of the former marshes. 40 Ufric; lfftid Kur , Jhm% tr Excerpt from Draft BOR Flow Study 41 Conclusion - The Future 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. Collaborations need to replace ideological advocacies; watershed wide approaches need to replace regionalism; and honest exchanges of information need to displace environmental sensationalism. A June 20, 2004 editorial published by the Klamath Falls Herald & News provides an apt glimpse of what the future might bring to the Klamath irrigation community and how the Klamath Water Users Association will address that future: Recently, the Klamath Water Users Association got an award for not using water, which is not a contradiction in terms at all. It's a matter of doing what has to be done to keep farming and ranching alive in the Klamath Basin. The award was from the state of Oregon and recognized the water users' efforts in behalf of the Oregon Plan for Salmon and Watersheds. It was presented to the group in a ceremony on the steps of the Capitol with leaders such as Gov. Ted Kulongoski and the Democratic and Republican leaders of the Legislature participating. The award recognizes a welter of actions in the Basin, some using federal and state dollars and some not, many aimed at making agricultural operations more efficient water users. Some have given agriculture interests heartache, such as the conversion of farmlands to wetlands - the water users cite 24,000 acres in the past decade, equal to more than a tenth of the Klamath Reclamation Project. Nevertheless, it's clear that farmers and ranchers have recognized their predicament given the pressure of the Endangered Species Act and competition for water from Indian tribes upstream and down. Agriculture is in the midst of a struggle that could take decades yet to play out, and its defenders are determined that they will survive. This is a longer- term version of the creativity they showed in 2001, when, faced with imminent ruin, they responded with skill and imagination in a political protest that brought national attention and saved Basin agriculture to fight another day. The vision of the Klamath Basin as a place for human habitation must include agriculture, and an agricultural sector of sufficient size to be economically viable. This place ought to have an urban center and a scattering of pleasant small towns - and in between green fields with dancing water from irrigation works. ~ 42 Whatever alternate vision exists involves blowing away towns such as Merrill Malin and Tulelake and shriveling the city ofKlamath Falls. It involves throwing lots of people off the land, and itfs not acceptable. This is not the first such award, and won't be the last. It is a signal of a widening recognition in Oregon and the nation that farmers and ranchers will do good things here to make sure that they can continue in their necessary and honorable work. The Klamath Water Users Association, with the talents and support of the community, will continue to address the resource needs of its constituency in a proactive and creative manner. The KWUA has shown itself to be steadfast and able in protecting water users while being receptive to innovative and reasonable solutions. Our irrigating communities, through the continued efforts of the KWUA, will always be persistent and adaptable representatives of our American heritage. The " future".. . bring it on, we can handle it. r Father and daughter ride to the headgates, summer 2001. 43 Notes Information sources used in the preceding report sections are further described below. Overview The source for much of this information comes from the Klamath Water Users Association 2003 Water Bank report. Pioneers The Department of the Interior, United States Reclamation Service 1913 report entitled " History of the Klamath Project. Oregon- California. From May 1, 1903 to December 13, 1912", written by I. S. Voorhees, contains detailed accounting of early irrigation works in the Upper Klamath Basin. Paul Simmons of Somach Simmons and Dunn also made significant contributions based on research he and his staff conducted on behalf of Klamath Project water users in the State of Oregon Klamath River adjudication process. The Klamath Basin Calls in the United States Government *— The Voorhees document, noted above, details this issue. Construction Begins The source for much of this information comes from the Klamath Water Users Association 2003 Water Bank report, the Voorhees report, and the affidavit and testimony of Rebecca Meta Bunse, who in 2004 prepared a detailed historic summary of Klamath Project development on behalf of Klamath Project irrigators for the Klamath River adjudication process. ( Reference No. 003E00040050, before the Office of Administrative Hearings, State of Oregon, for the Water Resources Department). Paul Simmons of Somach Simmons and Dunn also made significant contributions based on research he and his staff conducted on behalf of Klamath Project water users in the State of Oregon Klamath River adjudication process. The Bureau of Reclamation Klamath Basin Area Office also provided factual data on the Klamath Project. Homesteaders The Journal of the Modoc County Historical Society, No. 18- 1996, focuses exclusively on twentieth century development of the Tule Lake area. Betty Lou Byrne- Shirely's " The Reclamation of Tule Lake" and the February 1947 Reclamation Era article " Gold Mine in the Sky", both included in the Modoc County historical journal, served as sources for the homesteader information. Quotes made by Dave Carman, a World War II veteran Tule Lake homesteader, were pulled from his testimony submitted at a House Resources Committee field hearing in Klamath Falls in June 2004. The Klamath River Compact The source for much of this information regarding development of the Compact comes from the affidavit and testimony of Stephen R. Wee, who in 2004 prepared a detailed historic summary of Klamath Project water rights and related issues on behalf of Klamath Project irrigators for the Klamath River adjudication process. ( Reference No. 003E00040049, before the Office of Administrative 44 - r Hearings, State of Oregon, for the Water Resources Department). The conclusion of this section contains the actual purposes of the Compact, as identified in Article I of that document. The Klamath Project's Finishing Touches The source for much of this information comes from the Klamath Water Users Association 2003 Water Bank report, the Voorhees report, and the affidavit and testimony of Rebecca Meta Bunse, who in 2004 prepared a detailed historic summary of Klamath Project development on behalf of Klamath Project irrigators for the Klamath River adjudication process. ( Reference No. 003E00040050, before the Office of Administrative Hearings, State of Oregon, for the Water Resources Department). Paul Simmons of Somach Simmons and Dunn also made significant contributions based on research he and his staff conducted on behalf of Klamath Project water users in the State of Oregon Klamath River adjudication process. New Demands Legal documents prepared by the Klamath Water Users Association attorney - Paul Simmons, of Somach, Simmons & Dunn - provide much of the background information regarding the steadily increasing regulations faced by Project irrigators, starting in the 1990s. Specifically, the plaintiffs' memorandum of points and authorities in support of motion for preliminary injunction ( Kandra et al v. United States of America) was relied upon. Also, David Vogel's testimony before the U. S. House of Representatives Committee on Resources oversight field hearing in June 2004 provides an excellent treatise on the real reasons for the decline of suckers in the Upper Klamath Basin. The Klamath Water Users Association previously developed the section that assesses stressors to coho salmon during the 1990s. Problems on the East Side This section derives from an excellent letter ( dated July 28, 2004) prepared by Best Best & Krieger on behalf of Horsefly Irrigation District and Langell Valley Irrigation District. The letter was submitted to the U. S. House of Representatives Resources Committee in connection with a congressional field hearing held in Klamath Falls in July 2004. 2001 Curtailment Of the numerous media accounts of the 2001 water cutoff, I believe Blake Hurst's piece " Calamity in Klamath", which originally was published in The American Enterprise magazine in late 2002, is the best. I have borrowed liberally from Mr. Hurst, particularly his assessment of the impacts to the community of Tulelake, California. Jess Prosser's comments were originally printed in Range Magazine in 2001. The Farmers Fight Back The comments regarding the " desperate community" were pulled from an outstanding paper presented by Paul Simmons at the American Bar Association Environmental Section Fall 2004 Meeting. 45 Enter President Bush I was in the audience when President Bush made his speech in Portland. After the president's speech, I met Congressman Greg Walden for the first time; he conveyed to me some of the details of the president's flight over the Klamath Basin earlier in the day. Vindication: The National Research Council Steps In This section was derived from press statements developed by KWUA in early 2002. The Assault on the Klamath Project Intensifies Most of this section derives from personal experience, and the latter part was pulled directly from an opinion piece I was asked to write for a Boise, Idaho newspaper at the request of Idaho water users who were also being attacked by some of the same activists engaged in Klamath issues. Vindication, Part II / " We hate to say we told you so, but...." Much of this information originates in Dave Vogel's written testimony that he submitted to the House Resources Committee in June 2004. After more than a decade of professional and sometimes, personal criticism by agency and tribal biologists, the final NRC Report perhaps vindicated Dave Vogel more than anyone else. The Klamath Project Regulatory Regime: 3 Years After the Curtailment This section was written based on personal experience of the author. Proactive Efforts of Upper Basin Landowners We refer you to www. kwua. org and a 45- page document entitled Summary of Recent and Proposed Environmental Restoration and Water Conservation Efforts Undertaken by Klamath Water Users and Basin Landowners for further information on this topic. 50 Years After the Compact - Back to the Watershed- Wide Approach This perspective comes from KWUA assessments and press releases. USBR Study on Pre- Project Flow Conditions on Upper Klamath River The USBR study is incredibly important, because, for the first time, it provides a numerical modeling assessment of the conditions that likely existed on the Upper Klamath River before Europeans settled the area. Prior to this effort, assertions that flow conditions in the river were likely lower than the present could only be backed up by anecdotal ( albeit accurate) reports and incomplete flow studies. Conclusion - The Future The June 20, 2004 Herald & News editorial on recent water user efforts provided a fitting ending to this report, which is further enhanced by language developed by Steve Kandra, 2004- 05 KWUA President. 46 Lower Klamath Lake National Wildlife Refuge, California Photo Credits 1. Cover photo - courtesy of Jacqui Krizo. 2. Map of Klamath Project - courtesy of Bureau of Reclamation. 3. " A load of produce from the Klamath Fair, October 1907" - courtesy of Tulelake- Butte Valley _ Fair, Museum of Local History ( TBVF Museum). 4. " 1906 Map of Pre- Project Area" - courtesy of Oregon Water Resources Department. 5. " Adams Cut, July 18, 1906" - courtesy of Tulelake - Butte Valley Fair, Museum of Local History. 6. " 1907 Completion of the A Canal Headgates" - courtesy of U. S. Bureau of Reclamation. 7. " Constructing Clear Lake Dam, September, 1909" - courtesy of TBVF Museum. 8. " 1927 Homesteader Affidavit" - courtesy of Somach, Simmons and Dunn 9. " Farm Lottery Article, Life Magazine" - courtesy of Bureau of Reclamation. 10. " The Sign Says it AH" - courtesy of U. S. Bureau of Reclamation. 11. " Homesteaders: Robinsons in 2001 Remember Days Gone By" - courtesy of Anders Tomlinson 12. J. C. Boyle Dam on the Klamath River - courtesy of PacifiCorp. 13. " Tulelake, California" - courtesy of Rob Crawford r l4. " Del Norte Salmon Cannery" - courtesy of Anders Tomlinson 15. " April 6, 2004 Headlines" - courtesy of Anders Tomlinson 16. " Kliewer Family in Dry Fields South of Klamath Falls" - courtesy of Anders Tomlinson 17. " Cemeteries went Dry in 2001" - courtesy of Rob Crawford 18. " Time Magazine Captures Rob Crawford & Family" - courtesy of Rob Crawford 19. Klamath Bucket Brigade - courtesy of Klamath Relief Fund. 20. Prayer / Protest at Headgates - courtesy of Klamath Relief Fund. 21. President Bush Photo courtesy of Rob Crawford _ 22. Tulelake Rancher Gary Wright, June 2003 - courtesy of Pat Ratliff 23. Walking Wetlands photo - courtesy of Anders Tomlinson. 24. Bruce Knight and Mike Byrne - courtesy of U. S. Department of Agriculture 25. Gov. Kulongoski, Rep. Walden, and Dan Keppen at the A Canal, 2003 - Courtesy of Pat Ratliff 26. Undepleted Natural Flow of the Upper Klamath River - U. S. Bureau of Reclamation. 27. " Father and Daughter Ride to the Headgates" - courtesy of Rob Crawford 28. " Lower Klamath Lake National Wildlife Refuge, California" - courtesy of Scott Harding Photography r — 47 Title: The Klamath Project at 100 : conserving our resources, preserving our heritage Author: Keppen, Dan Year: 2004, 2005 The Klamath Project at 100: Conserving our Resources, Preserving our Heritage 1905- 2005: The First Century of Water for the Klamath Project Grain Truck, Lower Klamath Lake, 2004 Prepared by Dan Keppen, Executive Director Klamath Water Users Association December 2004 1 1 1 1 1 ) 1 1 ) 1 1 1 I 1 I I I 003E00042195 .... rrj R13E ^ ^ T ^ I l* IILLER DIVERSION DAM MILLER CREEK AND LOST RIVER CHANNEL L. ^ ^ IMPROVEMENTS — FEATURES: Hydrography Canal Drain Dike ) ( Tunnel )—( Flume ) - - ( Siphon Pipeline Drop 9 Pumping Plant Q Irrigation District Pumping Plant H Private Utility Powerplant ik Project Headquarters Project Land Lea3 « Area MAJOR WATER DISTRICTS: Ady Dist. Improv. Co. Enterprise I. D. Horsefly I. D. Klamath Drain. Dist. Klamath I. D. Langell Valley I. D. Malin ID. Midland Dist. Improv. Co. P Canal Mutual Water Co. Pine Grove I. D. Pioneer Dist. Improv. Co. Plevna Dist. Improv. Co. Poe Valley Improv. Dist. Shasta View I. D. Sunnyside I. D. Tulelake I. D. Van Brimmer Ditch Co. Westside Improv. Dist. KLAMATH PROJECT Oregon - California N 0 12 3 4 5 Miles Background of Klamath Water Users Association The original Klamath Water Users Association was organized on March 4, 1905 under Oregon statute and capitalized in the amount of $ 2,000,000. That Association was created by local farmers, livestock producers, businessmen, bankers, attorneys, and community leaders interested in seeing the Klamath Reclamation Project constructed with the least amount of cost and for the lasting benefit of the entire Klamath community. Working in cooperation with Reclamation the stockholders of the Association contracted with the U. S. Secretary of the Interior to assume the responsibility of payment to the United States the cost of the Klamath Project irrigation works on November 3, 1905. The Association was active in bringing in lands to be served by the Project and addressing water right matters of those lands. By the 1950' s much of the construction costs of the project had been reimbursed to the United States, and irrigation districts assumed the contractual obligations for maintaining and operating the Project. The current Klamath Water Users Association ( KWUA) has its origins in the Klamath Water Users Protective Association, bylaws adopted June 22, 1953, organized to address water right and electrical power issues for Klamath Basin irrigators. The Protective Association reformed itself March 16,1993 with amended bylaws, and incorporated in 1994 as the modern Klamath Water Users Association. The KWUA represents private rural and suburban irrigation districts and ditch companies within the Klamath Project, along with private irrigation interests outside the Project in both Oregon and California in the Upper Klamath Basin. The KWUA is governed by an eleven-person board of directors elected from supporting irrigation districts, private irrigation interests, and the business community. The KWUA now represents over 5,000 water users on 1,400 family farms. Klamath Association KWUA's mission statement: To preserve, protect and defend the water and power rights of the landowners of the Klamath Basin while promoting wise management of ecosystem resources. r Table of Contents Page Executive Summary 4 Introduction 5 Overview 7 Pioneers 9 The Reclamation Act 10 The Klamath Basin Calls in the United States Government 10 Construction Begins 11 Homesteaders 13 The Klamath River Compact 15 The Klamath Project's Finishing Touches 18 New Demands 19 r Sucker Listings 20 Coho Salmon Listing 21 Problems on the East Side 22 2001 Curtailment 24 The Farmers Fight Back 26 Enter President Bush 27 Vindication: The National Research Council Steps In 28 The Assault on the Klamath Project Intensifies 29 Vindication, Part II 32 " We hate to say we told you so, but...." 33 The Klamath Project Regulatory Regime: 3 Years After the Curtailment. 34 Proactive Efforts of Upper Basin Landowners 36 Sucker Recovery Planning 36 On- the- Ground Actions 36 Environmental Water Bank 38 EQIP Funding in Klamath Basin 39 Recognition at Last 39 50 Years After the Compact - Back to the Watershed- Wide Approach 40 BOR Study on Pre- Project Flow Conditions on Upper Klamath River 40 Conclusion - The Future 41 Notes 44 Photo Credits 47 " " Executive Summary r The Klamath Project in 2005 marks its 100- year anniversary. This report summarizes the original formation of the Project, describes the enthusiastic response of the local community to the federal water project, and steps through the development of the Project in ensuing decades. The story of the pioneers, early settlers, and homesteaders who helped settle the area - veterans of both world wars - provides a sense of the character possessed by local farmers and ranchers, who had to rely on similar traits to keep their community alive when irrigation supplies were curtailed in 2001. And it explains a very important dynamic of the region, especially in recent years, where 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. The immediate future remains uncertain for Klamath Project irrigators, but their marked propensity for adapting to change will keep local farmers and ranchers in business for another 100 years. In order to deal with the uncertain water situation, and facing higher power costs in 2006, the 21st century Klamath Project irrigator is adapting, by developing new market niches for products, creating innovative approaches to energy use, conserving and marketing water, and developing habitat for fish and wildlife. The same abilities shown by pioneers and veteran homesteaders beginning over a century ago to carve out new communities from the wilderness will now be employed to conserve resources and preserve their remarkable and uniquely American heritage. r A load of produce from the Klamath Fair, October 1907. • - r r The Klamath Project at 100: Conserving our Resources, Preserving our Heritage " We desire to impress upon your mind the fact that 99% of the people in the Klamath Basin are a unit, and are clamoring for the assistance which might be rendered by the Government under the Reclamation Act. " 1905 Petition from Basin residents to the Secretary of the Interior " The vision of the Klamath Basin as a place for human habitation must include agriculture, and an agricultural sector of sufficient size to be economically viable. This place ought to have an urban center and a scattering of pleasant small towns - and in between green fields with dancing water from irrigation works." Klamath Falls Herald & News Editorial June 20, 2004 " Agriculture plays a vital role in this state } s economy. An economic issue is one thing, for the farmers who need the resource, need the water, to be able to make a living. There fs another piece to this that ys much larger for all Oregon, and that is a cultural issue. The people here are very, very important to the future of this state. " Oregon Governor Ted Kulongoski, At the A Canal Fish Screen, Klamath Falls, Oregon. April 17, 2003 Introduction The year 2005 marks the one hundred- year birthday of one of the oldest federal water projects in the western United States - the Klamath Irrigation Project. As was painfully made evident in 2001, when Klamath Project supplies were curtailed for the first time in 95 years, the local community and its economy are interwoven with the health of this irrigation project. One hundred years after overwhelming national policy supported its construction, the Klamath Project continues to play a critical role in the local community. " The Klamath Project started out as a good thing, and it remains a good thing", said Tulelake farmer Rob Crawford. " When the Project was created, Klamath Basin people were meeting a national call by doing what they were supposed to do - settle the West. Today, our efforts focus on preserving our heritage, while conserving our resources." r r - r r rr At the beginning of the last century, when the local community learned that the Klamath Project would be developed, an " incredible celebration" ensued, said Paul Simmons, an attorney for the Klamath Water Users Association. " The people of the Klamath Basin basically posed a proposal to the federal government," said Simmons. " They told the government,' if you will be the plumber and the banker, we can do something good for the country.'" The federal government did just that by constructing the irrigation project. Local growers repaid the construction costs in the ensuing decades. Today, thousands of people - family farmers and ranchers, their employees, and agriculture- related businesses - make their living directly from farming and ranching in the Klamath Project. In turn, their activities support the communities of Malin, Merrill, Midland, Bonanza, Tulelake, Newell, and Klamath Falls. And, equally important, their efforts yield high- quality safe food for the country and the world. The last century has been one of massive transformation, vitality, shining hope, and deep despair for the farmers and ranchers served by the Klamath Project. The core reason for the creation of the Klamath Project - to develop water supplies and storage for irrigation uses - has been diminished as new competing demands, intended to satisfy Endangered Species Act ( ESA) and tribal trust conditions, have come on line. As a result, after perceived ESA and tribal trust obligations are met, Klamath Project irrigators and national wildlife refuges essentially get the remaining water. Because very little carryover storage is provided by Klamath Project reservoirs, the farmers now find themselves becoming increasingly reliant on incoming flows to the reservoirs, rather than the stored water that was originally developed to provide them with a reliable summertime irrigation supply. In essence, because of new laws and policies developed in the recent past, the original purpose of the Klamath Project has been somewhat lost in the shuffle. This became glaringly obvious in 2001, when for the first time in 95 years, water supplies to the Klamath Project from Upper Klamath Lake were curtailed before the irrigation season had even begun, to meet conditions set by federal fishery agencies to purportedly prevent harm to three fish species. Three and one- half 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 n supplies. However, the strong traits shown by the original Klamath Project settlers - self-independence, creativity, a sense of community - are still apparent, one hundred years later. Without these characteristics, the tragic events of 2001 might have become nothing more than n passing headlines in the local newspaper. Instead, a galvanized community grabbed national media and political attention by forcing the rest of the country to see that things had gone too far. r r Now, Klamath Project irrigators are preparing for the next 100 years. In order to deal with the uncertain water situation, and facing higher power costs in 2006, the 21st century Klamath Project irrigator is adapting, by developing new market niches for his products, creating innovative approaches to energy use, conserving and marketing water, developing habitat for fish and wildlife, and improving the symbiotic relationship he has with neighboring national wildlife refuges. The same abilities shown by pioneers and veteran homesteaders to carve out new communities from the wilderness will now be employed to conserve resources and preserve their remarkable and uniquely American heritage. Overview The irrigable lands of the Klamath Project ( Project) are in south- central Oregon ( 62 percent) and north- central California ( 38 percent). Two main sources supply water for the Project: Upper Klamath Lake and the Klamath River on the Klamath system; and Clear Lake Reservoir, Gerber Reservoir, and Lost River on the Lost River system, are in a closed basin. The total drainage area for the Klamath Project, including the Lost River and the Klamath River watershed above Keno, Oregon is approximately 5,700 square miles. Currently, approximately 225,000 acres, many previously submerged, have been transformed into productive farmland. The crops grown within the Klamath Project area consist of grain, hay, pasture, silage, mint, potatoes, onions, other vegetables, alfalfa, strawberry rootstock, and horseradish. This list of crops represents the majority of planted acreage within the Klamath Project over the last 40 to 50 years. The cropping pattern has varied from year to year, but the overall planted acreage has remained consistent. The Bureau of Reclamation operates Clear Lake Dam, Gerber Dam, and the Lost River Diversion Dam. The Link River Dam is operated by the Pacific Power and Light Company in accordance with Project needs, or more recently also as directed by federal agencies. The Tulelake Irrigation District operates the Anderson- Rose Dam, and the Langell Valley Irrigation District operates the Malone and Miller Diversion Dams. The various irrigation districts operate the canals and pumping plants. The original Klamath Project plan included construction of facilities to divert and distribute water for irrigation of basin lands, including reclamation of Tule and Lower Klamath Lakes, and control of floods in the area. The development of the stored water provided by the Klamath Project allowed for the controlled, beneficial use of water in the Upper Basin. Currently, late summer and fall flows in the Lower Klamath River are augmented with stored water that would not be there, but for the Project. Under pre- Project conditions, natural controls existed below both Upper Klamath Lake and Lake Ewauna which stabilized lake levels except during critical droughts. Those controls were natural reefs of hard earth material in the channel and other channel constrictions. Under these pre- Project conditions, the Klamath River flowed into the Lower Klamath Lake area. A 1906 map titled " Topographic and Drainage Map, Upper and Lower Klamath Project" shows the invert of the Klamath Strait approximately the same level as the Klamath River channel bottom near Keno. In addition, the Lost River terminated at Tule Lake. These flows flooded approximately 183,000 acres within Lower Klamath and Tule Lake. In general, under pre- Project conditions, Klamath River flows downstream of Keno likely occurred after a certain water level was reached in the Klamath River and Lower Klamath Lake. An engineer speaking in the early days of the Project observed that adequate Klamath Project water supplies were not a worry. Rather - something that would be inconceivable today - dealing with too much water was more of a concern at the time: " It contains an irrigation problem, an evaporation problem, a run- off problem, any one of which is difficult in itself but all of which together form a most perplexing whole," said the engineer. " In nearly all reclamation projects water has to be conserved. In this project there is more than enough and the question of disposing of it becomes an important part." 1906 Map of Pre- Project Area r • r r r Pioneers Irrigation development began in areas now served by the Klamath Project in the latter half of the nineteenth century. Various landowners and entrepreneurs utilized water of the Klamath River and its tributaries, and undertook a wide range of visionary activities. Prime farmland, exposed around the edges of old historic Tule Lake as early as 1846 stimulated early settlers' interest in irrigation. Similarly, early settlers beginning in the early 1860s relied on " naturally irrigated" greases and forage in the Lower Klamath area for pasture and hay. The first irrigation ditch was dug by George Nurse and Joseph Conger in the bottom of Linkville Canyon in 1868. In 1878, this ditch was expanded and incorporated into the Linkville Water Ditch Company. Early pioneers Steele and Ankeny pursued a canal to deliver water to land between Klamath Falls and Merrill. Ultimately, the canal system was replaced by the A Canal and its distribution system which, operated by Klamath Irrigation District, continues to serve Project land to this day. t Adams Cut, July 18,1906. Diversion for irrigation of additional agricultural lands in the area now comprising the Klamath Project was initiated in 1882 with construction of an irrigation ditch by the Van Brimmer brothers to the land from White Lake, which was fed by the Klamath River. Private interests further developed this project by constructing the Adams Canal in 1886, which was supplied also from White Lake. Frank Adams, with assistance from the Van Brimmer r rr rr r Brothers, cut a canal through tule roots using hay- knives and a derrick, in order to improve diversion from White Lake. This canal ultimately extended to a length of 22 miles. By 1903, approximately 13,000 acres were irrigated by private interests, with the canal system in progress to deliver much more. After the 1905 authorization of the Klamath Project ( see below), many water rights were acquired to facilitate, and for the benefit of, the Klamath Project enterprise, and other agreements were made with other water right- holders. The Project utilized, extended, expanded and/ or improved previously existing systems, and included construction of other facilities. The Reclamation Act In 1902 Congress enacted the Reclamation Act, which encouraged the settlement of lands in the western states and the development of agricultural economies to feed the nation. The 1902 Act provided for federal financing of irrigation works, with the construction costs to be repaid over time by project water users. In addition, public lands were made available for homesteaders who accepted the responsibility to undertake improvements and pay the water charges. Both the Oregon and California legislatures also enacted laws making state- owned land available for use in the Klamath Project. The Klamath Basin Calls in the United States Government In 1903, the Reclamation Service conducted investigations that led in 1904 to the first withdrawal of land by the Secretary of the Interior for developing a federal irrigation project. J. B. Lippincott, a supervising engineer from Los Angeles - who also played a key role in the City of Los Angeles' securement of Owens Valley water supplies - personally toured the Klamath Basin in June of 1904. l Although private irrigation projects were moving forward by the turn of the century, and some large- scale projects were being planned, most local citizens saw great value in a federally authorized and supported project. In 1905, local residents sent numerous petitions to Washington, D. C. requesting government irrigation assistance. By this time, a private corporation had given notion of its plans to develop water for what would ultimately become virtually the entire Klamath Project. Ironically, after Owens Valley agricultural water rights were secured by the City of Los Angeles, many of the displaced farmers moved to the Klamath Basin for the " reliable" water supplies of the Klamath Project. On their way north, they passed the first Reclamation Project in the West - the Newlands Project, near Reno, Nevada. 10 r r r r r r r " We desire to impress upon your mind the fact that 99% of the people in the Klamath Basin are a unit, and are clamoring for the assistance which might be rendered by the Government under the Reclamation Act," stated one petitioner. In November 1904, F. H. Newell, Chief Engineer of the federal Reclamation Service, told a large audience of enthusiastic farmers in Klamath Falls that, in his judgment, they had " a great irrigation project". Early in 1905, California and Oregon had ceded certain rights in the Upper and Lower Klamath Lakes and Tule Lake to the United States. On May 1, 1904, a board of engineers made a report that served as the basis for authorization of the Project. Congress authorized the use of lands and water in accordance with the State Acts of February 1905. The Secretary of the Interior authorized development of the Project on May 15, 1905, under provisions of the Reclamation Act of 1902. Construction Begins The Interior Secretary's 1905 authorization provided for project works to drain and reclaim lake bed lands of the Lower Klamath and Tule Lakes, to store waters of the Klamath and Lost Rivers, to divert irrigation supplies, and to control flooding of the reclaimed lands. The states of Oregon and California ceded then- submerged land to the federal government for the specific purpose of having the land drained and reclaimed for irrigation use by homesteaders. The Oregon Legislature also authorized the raising and lowering of Upper Klamath Lake in connection with the Project, and allowed the use of the bed of Upper Klamath Lake for storage of water for irrigation. Construction began on the Project in 1906 with the building of the main " A" Canal. Water was first made available May 22, 1907, to the lands now known as the Main Division. 1907 Completion of the A Canal Headgates 11 r r r r r This initial construction was followed by the completion of Clear Lake Dam in 1910, the Lost River Diversion Dam and many of the distribution structures in 1912, and the Lower Lost River Diversion Dam in 1921. ( In 1970, a public dedication at the Lower Lost River Diversion Dam officially changed the name of the structure to Anderson- Rose Dam.) Constructing Clear Lake Dam, September 1909. Large stone in self- dumping car. A contract executed February 24, 1917, between the California- Oregon Power Company ( now the Pacific Power and Light Company) and the United States authorized the company to construct Link River Dam for the benefit of the Project and for the company's use, and also extended to the water users of the Klamath Project certain preferential power rates. The dam was completed in 1921. The contract was amended and further extended for a 50- year period on April 16, 1956. The Malone Diversion Dam on the Lost River was built in 1923 to divert water to Langell Valley. The Gerber Dam on Miller Creek was completed in 1925, and the Miller Diversion Dam was built in 1924 to divert water released from Gerber Dam. In the Great Depression, continued settlement and leasing and distribution construction resulted in a significant increase, between 1930 and 1939 of the acres receiving water directly from Project facilities. The project work undertaken during this period included the enlargement of the Lost River Diversion Channel. In 1940, construction was begun on Pumping Plant D and the Tule Lake Tunnel. By 1942, these facilities, as well as the P- Canal were completed. In 1943, the Ady pumping plant was placed in operation, and in the next two years, the Straits Drain and pumps were constructed and installed and began operation. 12 r r Homesteaders The story of the homesteaders is a source of great pride in the Klamath Project. As Tule Lake receded according to plan, the lake bottom became suitable for cultivation. The land that ultimately became homesteads was under jurisdiction of the U. S. Bureau of Reclamation ( Reclamation). Homesteading and developing more productive agricultural land was the goal of the reclamation project that " reclaimed" the beds of Tule Lake and Lower Klamath Lake to expose more arable land. After Tule Lake was dewatered, a large area of public land became available for agriculture. The government would lease this land to settlers, and in fact leased as much as 50,000 acres in Tule Lake in the 1920s. Over time, most of this land was homesteaded. In 1917,180 people applied for the 37 homestead parcels the Reclamation made available on the drained wetlands and lake beds. Between 1922 and 1937 there were five more homestead offerings and hundreds of homesteaders settled in on the fertile soil of the drained lake bed. Then, World War II curtailed the homesteading process. » rri.. . r i* Ul. r- Xio. 1 wi sat Mi M MM ttw DCCA rru. ilon _ ji « _ jra .... r. r tk. M r « i t » a-. . « *^ J •* 4. MM r* T RTMtNT Or THE X ,. . tie*. . ..< L. » ii tatwJ l u i » T « 11 r ( » T « rnr » ) xfc. ir « « . •" « » ^> « • inS| « Ut !•• « . • TTDHOII. ,.> , ^% laMitk r » u. « . orumtm. _ JBKS!*! « r._: iit_ » « « » i.. bwrlac n i M la t&. MttaJOMI ( 1* nat.. J « a>. aa4 tk* a. t* JKLaUMftULJatiLJlJrt.. . . . . W l t a . is a- S.- ..- M « ri « ia*. t u . ar tka ar. ra* al « » ot af i t kav* a » « . > n » M < aatrr. • M M MMtMl. MMM t . aa n » tn4 » r ua « « . o. rol - • M it. » • « i WMM .. 1927 Homesteader Affidavit In three drawings held in 1946, 1948 and 1949, a total of 216 World War II veterans were awarded homesteads on farmland in the Tule Lake Basin, as a thank you from a grateful nation. The number of applicants was far greater than the number of available homesteads. Veterans and the community gathered to watch the names drawn from a pickle jar. Farm homesteads and crop- producing land were the goals of reclamation, and the Tule Lake Basin became a showcase for reclamation work. 13 " When I arrived to see my homestead there was nothing there, just an expanse of opportunity," recalls Carman. " No roads, no houses, no trees, just bare ground. I then pitched my tent in the corner of my homestead." My wife Eleanor was expecting our second child, but could not join me until later. A tent was not acceptable living quarters for a young woman, a small child and another baby on the way." The settlers formed organizations, elected a school board, and went about creating a society. " When I began my new life as a Tulelake homesteader there were approximately 300 homesteaders, most of them with families," said Carman. " We united and began to build schools, churches and a hospital in Klamath Falls. We started a community. We were living the American dream and our dream was achieved by hard work and dedication, and I must say we could never have done this without our wives." Homesteaders: Robinsons in 2001 Remember Days Gone By r - The Klamath River Compact The Klamath River Compact ( Compact) is a law of both Oregon and California, consented to by and Act of Congress. In the following decade, a variety of concerns and issues led to the passage of the Compact in 1957. These included: • Differing positions regarding the extent of development that could occur under Klamath Project water rights; 15 • • The related issue of priority of Klamath Project and overall Upper Klamath Basin irrigation development as against other uses, especially generation of hydro- electric power on the mainstem Klamath River; and • Concerns over potential future out- of- basin water exports. The development of the Compact was closely tied to an application for a water right filed by the California Oregon Power Company ( Copco) in 1951. This application anticipated using water at a proposed hydroelectric project on the Klamath River known as " Big Bend No. 2." In turn, this dispute folded in past dealings, agreements and opinions related to the operation of Link River Dam on Upper Klamath Lake. The agreements made between Copco and the Bureau of Reclamation at the time of construction of Link River Dam around 1920 had been controversial. Upper Klamath Basin irrigation interests had three primary concerns: 1. Power development, as an incident of the Project's reclamation purpose, should be undertaken only by the United States; 2. That the agreements threatened Klamath Project water supplies; and 3. The agreements were inconsistent with state legislation authorizing use of Upper Klamath Lake by the United States for storage or reclamation purposes. In 1951, Copco filed an application with the Oregon Hydroelectric Commission ( OHC) for a water right for the proposed Big Bend No. 2 hydroelectric facility. The OHC at that time had authority and jurisdiction over issuance of water rights for hydropower facilities. Copco at the time of filing took the position that water was available for appropriation and Copco was entitled to a right, senior in priority, to any future Upper Klamath Basin irrigation that was not then actually developed. J. C. Boyle Dam on the Klamath River. — 16 r r • A. To facilitate and promote the orderly, integrated and comprehensive development, use, conservation and control thereof for various purposes, including, among others: the use of water for domestic purposes; the development of lands by irrigation and other means; the protection and enhancement offish, wildlife, and recreational resources; the use of water for industrial purposes and hydroelectric power production; and the use and control of water for navigation and flood prevention. B. To further intergovernmental cooperation and comity with respect to these resources and programs for their use and development and to remove causes of present and future controversies by providing ( l) for equitable distribution and use of water among the two states and the Federal Government, ( 2) for preferential rights to the use of water after the effective date of this compact for the anticipated ultimate requirements for domestic and irrigation purposes in the Upper Klamath River Basin in Oregon and California, and ( 3) for prescribed relationships between beneficial uses of water as a practicable means of accomplishing such distribution and Copco's application to the OHC, and its parallel application to the Federal Power Commission ( FPC) for a license under the Federal Power Act, were contested and opposed by the Department of the Interior and various agricultural and irrigation interests. The OHC did not act on Copco's application until 1956. The States of California and Oregon appointed commissioners to negotiate an interstate Compact. At the same time, Reclamation and local water users were negotiating a new agreement with Copco for operation of Link River Dam. It appeared that such an agreement might be concluded prior to enactment by the States of a Compact. The draft Copco contract was brought before the Compact negotiating commissioners, who sought to ensure consistency with the Compact being developed. During the course of several meetings of the Compact commissioners, terms were developed which resulted in conditions in the FPC license, the water right certificate, and a new contract for Copco's operating of Link River Dam. After preparation of various drafts, negotiation of the Compact was concluded and the legislatures of Oregon, California, as well as the United States Congress, acted in 1957. The major purposes of this compact are, with respect to the water resources of the Klamath River Basin: The Compact recognized water rights for then- existing and future needs in the Klamath Project service area. It also established a system of priority for new water rights under which Upper Basin irrigation ( up to a specified number of acres) had superior rights over water for power generation, fish or wildlife, or recreation. 17 r r r r r In short, the Klamath Compact provided guidelines to lead the competing interests of the Klamath River watershed towards a more harmonious future. For the next 40 years, the intent of the Compact was essentially fulfilled, until the early 1990s, when new pressures to address endangered fish and tribal trust demands resulted in the reemergence of fractionalized conflict into the Upper Basin. Although it had been seen as a resolution for future disputes, the Compact has been interpreted not to override the Endangered Species Act or tribal trust water rights. The Klamath Project's Finishing Touches r Through the 1950s, Reclamation envisioned continued development of the Project that would have doubled its current size by including Butte Valley, California and other areas. The plans were not implemented and the Project acreage has not significantly increased since the end of the 1940s. In the following decades, the delivery system has been improved, bottlenecks eliminated, and relatively small areas have both been brought under irrigation and converted to commercial or residential development. By 1960, due in part to improvements made on Tule Lake dikes, the M Canal, the Lost River Diversion Channel, and installation of new canals in the southern portion of the Tulelake Irrigation District ( TID) service area and the Miller Hill Pumping Plant, the Project provided irrigation service to nearly 216,000 acres. Tulelake, California In the 1960' s, improvements and expansion of certain facilities led to the formation of Klamath Basin Improvement District. The Stukel and Poe Valley Pumping Plants were constructed and the Miller Hill Pumping Plant enlarged. The D, F and G- Canals were also 18 r enlarged. These facilities provided more reliable service to certain lands and also added land to the area that could receive water from Project works. In the 1970' s, Shasta View Irrigation District and Reclamation entered a $ 3.2 million contract for installation of a pressure irrigation system to replace the previous gravity- fed system. The 1972 Project history reported, ".. . the Project provided irrigation and drainage service to 223,661 acres," while the total harvested acreage "... was 193,160, down 2,329 acres from 1971." Also in the 1970' s, the Straits Drain was enlarged. Because of the Klamath Project's design and the interrelated nature of water use within it, including the use of return flows by farmers and the refuge, Project efficiency is very high. A recent assessment of Klamath Project water use efficiency2 implies that a sophisticated seasonal pattern of water use has evolved in the Klamath Project. One must understand that the Klamath Project has developed into a highly effective, highly interconnected form of water management. According to the 1998 Davids study ( see footnote), effective efficiency for the overall Project is 93 percent, making the Klamath Project one of the most efficient in the country3. New Demands For eighty years, Klamath Project irrigation supplies proved sufficient to meet the needs of the area's burgeoning farming and ranching communities. Although there were years where Mother Nature and Klamath Project storage capacity proved insufficient to meet full irrigation demands, the local community managed to stretch thin supplies and make things work. That all changed in the early 1990s, when steadily more restrictive government agency decisions made to meet Endangered Species Act ( ESA) goals began to steadily chip away at the stored water supply originally developed for irrigation. Two sucker species were listed ( 1988) as endangered and coho salmon were listed ( 1997) as threatened under the 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. Klamath Project " operations plans" based on these biological opinions also factor in tribal trust obligations, although the nature and extent of such obligations is undefined. 2 " Klamath Project Historical Water Use Analysis", Davids Engineering for U. S. Bureau of Reclamation, October 1998. 3 For example, Tulelake Irrigation District irrigates 62,000 acres of farmland. In the 1990s, the district diverted an average of 131,000 acre- feet of water. Each year, an average of 80,000 acre- feet was pumped out of the district. Consumptive use within the district is considerably less than the amount of water diverted. The reason is the difference from the return flow from other districts and the reuse of water within the Project. 19 r Sucker Listings In the past twelve years, political and regulatory demands have affected activities at the Klamath Project. In 1988, the short nose sucker and the Lost River sucker, two species that live in Upper Klamath Lake, were designated as endangered under the ESA. Biological opinions issued by the U. S. Fish and Wildlife Service ( USFWS) in 1992 and 1994 concerning operation of the Klamath Project identified actions to avoid jeopardy to suckers. When the suckers were listed, there had been no mention whatsoever of reservoir elevations as a factor affecting sucker populations. These operation elevations were adopted by Reclamation. The reservoir elevations pertaining to Upper Klamath Lake generally allowed the Project to operate for its intended purposes. However, the United States District Court of Oregon found that the reservoir elevations pertaining to Clear Lake and Gerber Reservoirs to be arbitrary and capricious, and they were invalidated in a succession of decisions4. The most compelling and prominent reason why the federal government justified listing the two sucker species as " endangered" in 1988 was an apparent abrupt downturn in both populations during the mid- 1980s. To support the decision to list the suckers, the USFWS believed the only significant remaining populations were in Upper Klamath Lake. We now know that the assumptions by the USFWS were in error and the assumed sucker population crisis never materialized. In fact, shortly after listing of the species, the populations demonstrated dramatic increases5. r Just prior to the listing of the suckers in 1988, a sport snag fishery was allowed. Before 1969, the fishery was largely unregulated with no harvest limit; in 1969 a generous bag limit of 10 fish per angler was imposed. During the early to mid- 1980s, despite the belief that the numbers offish were in a state of rapid decline, the State of Oregon still allowed the sport snag fishery. Ultimately, because of increased focus on the status of the sucker populations, Oregon eliminated the fishery in 1987. Some fisheries experts believe that if the USFWS would have properly assessed the known impacts on the suckers caused by the snag fishery and the benefits from ceasing the fishery, it very likely could have affected the ultimate listing decision. " Simply stated, the largely unregulated snag fishery slaughtered the sucker populations," said Dave Vogel, with Natural Resource Scientists, Inc. " Since the fishery was eliminated in 1987, the two sucker populations dramatically rebounded. The threat was removed and the populations increased ten- fold." 4 Bennett v Spear, 520 U. S. 154 ( 1997); 5 F. Jupp. 2d 887 ( D. Or. 1998); Bennett v. Badgely, No. 93- 6075- HO ( April 13, 1999, June 11, 1999). 5 Vogel, David, 2004. Testimony Before the Committee on Resources ( Subcommittee on Water and Power), United States House of Representatives. Oversight Field Hearing on The Endangered Species Act 30 Years Later: The Klamath Project. 20 At the time of the listings in 1988, the Klamath Project was not identified as having known adverse affects on the sucker populations, yet four years after the listing, using limited or no empirical data, the USFWS turned to the Klamath Project as their singular focus. Paradoxically, since the early 1990s, despite new beneficial empirical evidence on the improving status of the species and lack of relationship with Klamath Project operations, the USFWS became ever more centered on Project operations and increased restrictions on irrigators instead of paying attention to more obvious, fundamental problems for the species. This circumstance caused tremendous expense in dollars and time by diverting resources away from other known factors affecting the species. Coho Salmon Listing r A similar circumstance occurred with NOAA Fisheries during and after the coho salmon listing in the lower basin in the late 1990s. It cited the reasons to list coho salmon, excluding Klamath Project operations as a significant factor affecting the species. There are many other documented factors that have affected salmon runs in the Klamath River6. The USFWS in the 1980s described the most important eight factors as " most frequently referred to with regard to recent population declines" of anadromous fish in the Klamath River. Those factors are: " • Over fishing • Logging • Trinity River transbasin diversion Irrigation diversions in lower Klamath tributaries • 1964 flood • 1976- 1977 drought • Sea lion predation • Brown trout predation. However, shortly following the listing, and with no supporting data, NOAA Fisheries chose to center its attention on the Klamath Project as the principal factor affecting coho salmon. In its biological opinions, NOAA Fisheries opined that much higher than historic flow levels, released from the stored water of the Klamath Project, would be needed to protect coho salmon downstream of Iron Gate Dam. Iron Gate Dam is located forty miles away and coho are generally found further downstream and in tributaries. 7 In essence, both agencies adopted a single- minded approach of focusing on Klamath Project operations to artificially create high reservoir levels and high reservoir releases. This puzzling, similar sequence of events has yet to be explained by agency officials. 6 KWUA biologists compiled a comprehensive listing of those factors in March 1997. 7 Vogel, David, 2004. Testimony Before the Committee on Resources ( Subcommittee on Water and Power), United States House of Representatives. Oversight Field Hearing on The Endangered Species Act 30 Years Later: The Klamath Project. 21 r " ~ Commercial harvests of salmon intensified with the development of canning technology. By the early 20th century, habitat destruction combined with commercial harvests had resulted in serious salmon depletion on the Klamath River. Cobb ( 1930) estimated that the peak of the Klamath River salmon runs occurred in 1912, Snyder ( 1931) observed " in 1912 three [ canneries] operated on or near the estuary and the river was heavily fished, no limit being placed on the activities of anyone". Problems on the East Side Irrigation districts on the east side of the Klamath Project felt the first impacts from increased regulatory focus on lake levels in the early 1990s. Langell Valley Irrigation District ( LVID) and Horsefly Irrigation District ( HID) receive water from Clear Lake and Gerber reservoirs. Historically, stored water was released from these two reservoirs beginning about April 15 and ending about October 15 each year. These reservoirs are not large, but they provide the essential water supply to an otherwise arid area. In an average year, Clear Lake releases about 36,000 acre- feet of irrigation water, and Gerber releases about 40,000 acre- feet. Clear Lake Reservoir contains populations of both endangered sucker species, and Gerber reservoir hosts one of the species. ESA-" threatened" bald eagles are also known to inhabit the Klamath Project area. In 1991, at the request of the USFWS, Reclamation initiated ESA consultation to assess the impact of the long- term operation of the Klamath Project on the suckers and the bald eagle. In the next year, three biological opinions were rendered by USFWS that imposed minimum levels in Clear Lake to purportedly protect the sucker populations. As a result of the minimum lake levels imposed by the draft biological opinions, and the water lost to evaporation before the USFWS allowed any water releases, the Districts were not able to make their normal irrigation releases during the 1992 water year. Neither district received its first seasonal water delivery until May 15, 1992, a full four weeks later than normal. By 22 r " that date, 12,000 acre- feet of the water that had been stored in Clear Lake in March 1992 had evaporated, an amount that represents about 60% of LVID's total yearly withdrawal from Clear Lake Reservoir. As a result of the minimum lake levels and the evaporation losses, only 2,148 acres of the 16,800 irrigable acres within the LVID received any Klamath Project water at all. The lack of water reduced both acreage farmed and per- acre yields that year. As a result of reduced yields, farm properties lost up to 70% of their assessed values in 1992. The lack of water also hurt the region's cattle ranching operations, because some ranchers could not produce pasture for their cattle. Water users who could afford the extra expense purchased feed to sustain their herds. Others had to cut back substantially on their herds or sell their cattle. Wildlife also suffered as a result of the decision to impose minimum surface levels in the reservoirs. Because the Lost River obtains most of its water from releases from Clear Lake Dam and return flows from agricultural operations, the water levels in the Lost River and its tributaries were exceedingly low in 1992. As a direct result, wildlife relying on Lost River water, including deer, sandhill cranes, hawks, turtles, frogs, ducks, and more, were all noticeably scarce that year. On July 22, 1992, USFWS finally issued its final biological opinion on the long- term operations of the Klamath Project. While the 1992 opinion conceded that " little" was known about Gerber Reservoir's shortnose sucker population, the opinion reported " good numbers" of these fish and noted that the Gerber sucker population appeared to be successfully reproducing, despite the lowered lake levels of the early 1990s. Despite this undisputed evidence, the 1992 biological opinion concluded that continuing to operate the Project, including Clear Lake and Gerber reservoirs, in its historic manner was likely to jeopardize the continued existence of both sucker fish species. Reclamation accepted the USFWS recommendations for continued adherence to minimum lake levels, prompting the Districts and two of the individual farmers to sue the federal agencies. Even after the federal district court entered judgment invalidating the jeopardy conclusions, USFWS defied this judgment, and the districts were forced to bring several additional motions to enforce the Court's rulings. At each stage of the legal proceedings, the districts prevailed, based largely on the fact that USFWS had no scientific evidence to justify its actions. When the United States Supreme Court considered the Districts' case against the USFWS, the Court described the purpose of the ESA's science requirement as follows: The obvious purpose of the requirement that each agency " use the best available scientific and commercial data available" is to ensure that the ESA not be implemented haphazardly, on the basis of speculation or surmise. While this no doubt serves to advance the ESA's overall goal -., of species preservation, we think it readily apparent that another objective ( if not indeed the 23 primary one) is to avoid needless economic dislocation produced by agency officials zealously but unintelligently pursuing their environmental objectives. Now, ten years later, HID and LVID enjoy positive relationships with USFWS and Reclamation. However, the problems they suffered in the early 1990s were a harbinger of things to come for other Klamath Project irrigators shortly after the turn of the new century. 2001 Curtailment The net result of increasing restrictions on other Klamath Project water users was fully realized on April 6, 2001, when Reclamation announced its water allocation for the Project after U. S. Fish and Wildlife Service 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. No water for most farmers April 6, 2001 Local Headlines The resulting impacts to the local community were immediate and far- reaching. Even with a later release of a small percentage of needed water over a 30- day period in July and August, thousands of acres of valuable farmland were left without water. 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. 24 Kliewer Family in Dry Fields South of Klamath Falls - 2001 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. As farmers and laborers attempted to deal with the loss of jobs, a year's income, and in some cases the land itself, referrals for mental health counseling increased dramatically. The Tulelake school district lost around 50 students after farm families sold their land and moved on. Students were under stress, understandably confused as to why three species of fish were more important than their lifelong homes. Tragically, one Hispanic family had started out as field workers, and after a lifetime of piecework under the sun had saved enough to buy their own farm. They lost everything as a direct result of the irrigation cutofi . Veteran homesteaders, who fifty years ago were promised reliable water, felt betrayed by the same government, who chose to provide water to fish instead of farmers in 2001. " I want the government to honor the contract that promised me and my heirs water rights forever," said Jess Prosser, a World War II veteran and Tulelake homesteader, in 2001, after water supplies were cut. " This land is our life. Farmers and fish have survived previous drought years when the farmers voluntarily cut back on water consumption. The Klamath Project was designed to withstand drought conditions, and right now there is more than ample water for agriculture and fish. The government took 100% of the water for fish, disregarding farmers, ranchers, families and numerous other species of wildlife in the Klamath Basin. This is a man- made disaster. This will be the end of a way of life and an entire community." 1 " Calamity in Klamath", Blake Hurst. The American Enterprise magazine. October / November 2002, pp 28- 29. 25 Cemeteries Went Dry in 2001 The Farmers Fight Back The local community did not take the decision lying down. Employing the ingenuity and perseverance that allowed them to successfully create brand new communities over the past century, local farmers, ranchers, elected officials and business leaders organized a " bucket brigade" to dramatize their plight, drawing nearly 20,000 sympathizers to the streets of Klamath Falls. A web site and cell phone calling tree were set up, and farmers, who only a year before were working their fields, suddenly became knowledgeable about the media. Civil disobedience, in the form of peaceful protests at the A Canal headgates, drew television crews from throughout the Pacific Northwest. The 2001 Klamath Basin crisis became the topic of front- page coverage and sympathetic editorials in publications like Time magazine, the Los Angeles Times, the Wall Street Journal, and the New York Times. Time Magazine Captures Rob Crawford & Family, Summer 2001. In part because of the tremendous media and political attention generated by the local community, a congressional field hearing was held in the summer of 2001 at the Klamath County fairgrounds, which drew the largest audience to ever attend such a hearing in the nation's history. Much of the focus was on the decision- making and processes that led to the fishery agencies' recommendation to curtail irrigation supplies. 26 In 2001, a desperate community essentially was looked in the eye and told, " sorry, we know it may hurt, but ' the science' is compelling and requires you to go without water." This was wrong, literally, and as a matter of policy. For whatever reason, the agencies had become too close to, and too much a part of, the side- taking that had come to dominate issues surrounding the Klamath Project. For this reason alone, outside review was needed. Nearly 20,000 marchers support the Klamath Bucket Brigade, May 2001. Prayer / protest at the A Canal headgates, 2001. Elected officials - from county commissioners and supervisors, to state representatives and senators, to U. S. Senators and Representatives, continued the fight, and ultimately, later in 2001, the U. S. Secretary of the Interior, Gale Norton, directed the National Academy of Sciences to conduct an independent peer- review of the agency decision to curtail irrigation supplies. Also, in early 2002, President Bush himself took a personal interest in the plight of the Klamath Project irrigator. Enter President Bush In January 2002, just months after the federal government curtailed Klamath Project irrigation deliveries for the first time in 97 years, Sen. Gordon Smith and Rep. Greg Walden met the president in southern California, boarded Air Force One, and took a slight detour over the Basin on their way to a Portland high school where the Mr. Bush was to deliver a speech. On the flight north, the president was briefed on the 2001 Klamath water crisis. When he entered the gymnasium at Park Rose High School, he opened his speech up with a pledge to help both the farmers and the fish of the Klamath Basin. 27 Compassion: George W. Bush Meets and Greets Klamath Basin Residents in Redmond, Oregon, 2003. In the ensuing two years, President Bush has followed through with his pledge by establishing a Klamath Basin cabinet- level working group, promoting sound and independent peer-reviewed science, and making funding of Klamath River water and environmental projects a priority. Enacted and requested Bush Administration funding in the Klamath River watershed for fiscal years 2003- 2005 exceeds $ 260 million dollars, according to a federal government summary. This includes $ 105 million proposed by the administration for Klamath Basin federal funding in the Fiscal Year 2005 budget. Vindication: The National Research Council Steps In The Klamath Water Users Association and others in the community in 2001 strongly advocated for an independent peer review of the 2001 fishery agency biological opinions, the underlying science, and the related overall scientific process. In early 2002, an interim report from the National Research Council ( NRC) Committee on Endangered and Threatened Fishes in the Klamath Basin was released. This represented a critical step towards ensuring proper assessment and maintenance of healthy fish populations. The panel successfully completed an objective, unbiased initial review of the information used by the U. S. Fish and Wildlife Service ( USFWS) and NOAA Fisheries to formulate the agencies' two 2001 Biological Opinions ( BOs). The interim NRC report concluded that there was insufficient scientific evidence used by USFWS and NOAA Fisheries in 2001 to support changing the recent historical water operations of the Klamath Project. Specifically, the NRC interim report concluded that higher or lower than recent historical lake levels or Klamath 28 rr r rrr r r r River flows were not scientifically justified based on the available information used by the USFWS and NOAA Fisheries. Despite varying interpretations of the data used by the USFWS and NOAA Fisheries in the BOs, it is especially noteworthy that the NRC panel achieved consensus on the Interim Report's conclusions for not just one, but both BOs. The report's conclusions were adequately supported by the available evidence and analyses used by USFWS and NOAA Fisheries. It was particularly evident that the NRC Committee report was fair and impartial, essential attributes that were sorely lacking in Klamath basin issues to date. The Assault on the Klamath Project Intensifies The release of the NRC Committee's interim report in early 2002 unleashed a barrage of criticism from environmental activists and their allies in academia and government agencies. Two Oregon State University professors, supporters of the high lake level requirements that contributed to the 2001 water curtailment, submitted a formal " rebuttal" of the interim report to a fisheries journal. The " rebuttal" ( so labeled when transmitted by its authors) and other media developments caused the Klamath Project community to fear that the NRC work would be diluted. The local community simply did not have the resources or the networks of contacts to continually counter the anti- Klamath Project messages that were being sent to the public and policymakers, primarily by outside environmental activist organizations. The NRC Committee's interim report triggered what grew to be an extraordinary, and obviously coordinated, attack on the Klamath Project by these interests. Media outlets seemingly relish a good western fight, and many uncritically reprinted a good deal of information that was not fair to Klamath Basin irrigators. The scrutiny on the Klamath Project and the Bush Administration's reliance on the NRC interim report intensified further that fall, when 33,000 salmon died on the lower Klamath River. Immediately after the unfortunate die- off, vocal critics of Project operations and Bush Administration environmental policy used the event to renew attacks on irrigated agriculture in the Klamath Basin. Even though the fish die- off occurred 200 miles downstream from the Project, at a location below the confluence of the main stem Klamath River and the Trinity River, traditional advocates for higher river flows quickly assigned blame to Klamath Project farmers and ranchers. Some of these same interests and others in the environmental community even attempted to directly link the fish die- off to alleged political maneuvering orchestrated by senior policy officials in the Bush Administration. As a result, presidential hopeful Senator John Kerry called on the U. S. Interior Department's Inspector General to look into whether " political pressure from the White House is intimidating staff and influencing policy" in Klamath River management decisions. Interior Department Inspector General Earl Devaney's report - released in March 2004- found " no evidence of political influence affecting the decisions pertaining to the water in the Klamath Project." 29 r r r r r r Eugene Register- Guard Why the salmon died: Pattern points to Bush administration policies A Register- Guard Editorial A 2002 Editorial Headline Between 2002- 2004, the fish die- off was effectively spun by Klamath Project critics to drive a dizzying array of attacks aimed at the Bush Administration and federal agencies responsible for Klamath Project management. Well- coordinated media coverage surrounding several acts of litigation and proposed federal legislation in the two years since the fish die- off have effectively imprinted the environmentalists' message in the minds of many: • " Fish need water"; • " Klamath Project farmers were denied water in 2001 and no fish died in the Klamath River"; • " Klamath Project farmers received full supplies in 2002, and 33,000 salmon died in the river"; • " The Bush Administration sacrificed fish for the benefit of farmers." The claims discussed above are just a few of the more prominent arguments that Klamath Project critics have employed to justify a series of actions undertaken in the wake of the public release of the interim NRC Committee report, including the following: • Federal legislation that would finalize a controversial and flawed draft Klamath River flow report. • Unsuccessful federal legislation that would restrict the ability of local lease land farmers to grow row crops. • Litigation ( PCFFA v. USBR) that, if successful, would have likely shut down Klamath Project operations in 2003. • Public protests staged by tribal members and environmentalists in Klamath Falls in 2002 and in Sacramento in 2003. 30 Listing of the Klamath River as the third most endangered waterway in the country by American Rivers, a Washington, D. C. - based activist group. An unsuccessful lawsuit filed by environmental groups against NOAA Fisheries to hasten the potential ESA listing of the green sturgeon. The release of an Oregon Natural Resources Council ( ONRC) report, which contends that voluntary buyouts of willing sellers within the Project " remain the most politically responsible, socially just, and economically viable method" to address power and ecological challenges. A subsequent letter sent by ONRC to Project landowners, tempting them with the promise of a buyout that would provide them with 2 '/ z times the fair market value of their land. Numerous editorials, journal articles and magazine stories that clearly accept the arguments made by Project critics. However, others did not jump so quickly on to the " blame game bandwagon." During late summer and early fall of 2002, Dave Vogel, a fisheries biologist with 28 years of experience, conducted a field investigation to assess water temperatures in the main stem Klamath River. - Vogel noted that main stem water temperatures in the Klamath River were measured hourly just prior to and during the fall- run Chinook salmon migration season. He found that water temperatures in the upper Klarnath River downstream of Iron Gate Dam during September 2002 were unsuitable for adult salmon, a finding that was similar to that of previous studies. As expected, a normal seasonal cooling trend at the end of September and early October provided the moderating influence lowering Klamath River temperatures to tolerable levels for salmon. Vogel also found that large numbers of salmon entered the lower Klamath River earlier than usual and were exposed to two dramatic and uncharacteristic cooling and warming conditions causing disease outbreak from warm water and crowded conditions. The combination of these factors was chronically and cumulatively stressful to fish and is probably the most plausible reason for the fish die- off. " In my opinion, the best available scientific data and information indicate that the continued operation and maintenance of historical flows at Iron Gate Dam will not jeopardize coho salmon," said Vogel in March 2003. " Furthermore, in my opinion the operations of Iron Gate Dam during the summer and fall of 2002 did not cause and could not have prevented the fish die- off in the lower Klarnath River." Unfortunately, scant media coverage was afforded to Vogel's findings. Outside of the Upper Basin, the press made no mention of the fact that, despite the die- off, the numbers of fish returning to Iron Gate hatchery on the Klamath River were the third highest in 40 years. The media also largely ignored a similar finding made in October 2003 by the National Research Council Committee on Endangered and Threatened Fish in the Klamath Basin. In its final report, the Committee failed to find a linkage between the operation of the Klamath Project and the fish die- off, and questioned whether changes federal project operations at the time would have prevented it. Clearly, the hard working landowners of the Upper Klamath Basin have been on the receiving end of a cruel and long- distance war being waged by environmental activists who assert that the federal water project - representing only 2 percent of the total land base of the Klamath River watershed, and consuming only 3- 4 percent of the average annual flows to the Pacific Ocean - is somehow responsible for all of the environmental woes of the river system. These advocates are intent on portraying the Klamath Basin as a poster child to help fuel outside efforts that are focused on litigating, legislating and publicly condemning the local community for doing what it has done for 98 of the last 99 years - irrigating farm and ranch land. r r r r These interests know that federal water projects are an easy target of litigation, since federal environmental and clean water laws govern project operations. The lawsuits are often aimed at federal entities - such as the U. S. Bureau of Reclamation and fishery agencies - which, on the surface, give the appearance that the environmental plaintiffs are simply interested in correcting errors made by some non- descript governmental agency. The true intended target of these actions, however, ultimately becomes the landowners and water users who fall under the management jurisdiction of the federal agencies. It is the farmers and ranchers that pay the price of litigation through altered management practices, increased uncertainty, and escalating legal expenses to defend their interests. For the most part, the potentially damaging effects these actions could cause family farmers and ranchers have been deflected. However, local water users are concerned that permanent Klamath River policy will be influenced by misinformation in the future. Vindication, Part II After an 18- month barrage of anti- Klamath Project attacks in the media and courtrooms, the long- awaited final report from the National Research Council ( NRC) Committee on Endangered and Threatened Fishes in the Klamath Basin was released in October 2003. The final NRC report is important to local farmers and ranchers for several key reasons: 1. The report clearly indicated 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 the earlier interim 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 p the time would have prevented it. 32 r ~ r r 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 final NRC report was 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 the environment and saving the local economy. Local water users shared the NRC report's vision that increased knowledge, improved management, and cohesive community action would promote recovery of the fishes. At the same time, they remained extremely concerned that the " business as usual" approach - regulation of the Klamath Project - would remain the dominant aspect of ESA biological opinions and advocacy of Project opponents. For reasons now clearly evident, the irrigators' original recommendation for an outside technical review of the ESA activities in the Klamath basin by an objective group such as the r National Academy of Sciences back in 1993 ( KWUA 1993) was an important first step. The benefits of an ESA peer review are obvious after reading the NRC's final report. " We are beginning to see signs of progress with ESA activities in the basin," said Dave Vogel, nearly one year after the release of the final NRC Committee report. " However, alarmingly, there are some individuals within the agencies that are in a state of denial over the findings and conclusions of the NRC's report. Despite the NRC's final report, the USFWS and NOAA Fisheries still have too much focus on the Klamath Project and not enough emphasis on a watershed- wide approach." Other experts agree. " We found that the prevailing scientific sentiment in the basin-' More water is better for fish'- was the wrong approach," NRC Committee member Jeffrey Mount told California Farmer magazine in December 2003, two months after the final NRC report was released. " We hate to say we told you so, but...." It is very important to note that many of the most pertinent findings, conclusions, and r recommendations of the NRC Klamath Committee were not new to the USFWS or NOAA Fisheries. Dave Vogel elaborated on this in testimony he provided to the House Resources Committee at a field hearing held in Klamath Falls in June 2004. " The NRC final report advocates a watershed approach, peer review, greater stakeholder involvement, oversight of agency actions, focus on factors other than the Klamath Project 33 r operations, reduction of resource conflicts, and incorporation of the principles of adaptive management toward species recovery," said Vogel. " Over the past decade, local water users and their allies forwarded much of the same and similar technical findings and recommendations to those two agencies, but were mainly ignored. Additionally, the NRC's major conclusion that there is insufficient scientific justification for high reservoir levels and high instream flows was always prominent in water users' technical comments on the agencies' biological opinions during the past decade." r " The NRC Klamath Committee's final report was an outstanding effort and the product must serve as a catalyst to advance balanced natural resource management in the basin," Vogel said. " If federal agencies meaningfully incorporate many of the NRC's principal findings, conclusions, and recommendations, we fully expect positive results to the species recovery and reduced resource conflicts. We should use the momentum of the NRC's final report to guide recovery efforts and watershed improvements. However, if the agencies do not take this pro- active approach, we could again return to the disaster that transpired in 2001." • Dr. Mount agrees. r " For too long, Klamath managers have relied on fixing their problems by turning only one knob- the knob of raising and lowering water levels in Upper Klamath Lake and the river," said Mount, a University of California professor. " They need to take new approaches that support multiple populations offish and healthy ecosystems throughout the watershed," he said. The Klamath Project Regulatory Regime: 3 Years After the Curtailment The U. S. Bureau of Reclamation's final 10- year Biological Assessment for Klamath Project 2002- 2012 operations properly incorporated the findings of the 2002 interim National Research Council's ( NRC) interim report, and generally captured the essence of the " watershed- wide" philosophy endorsed in the final 2003 NRC report. Unfortunately, the fishery agency biological opinions ( BOs) do not. Despite the so- called ecosystem approach to species recovery advocated by the USFWS and NMFS, their actions in the Klamath basin over the past decade amply demonstrates that the exact opposite took place. They focused on: 1) a single- species approach; and 2) Klamath Project operations. 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. 34 r The combined - and apparently, unanticipated - impacts placed on the Upper Basin 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 request9 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. Rancher Gary Wright learns that the Klamath Project would be shut down in the middle of the irrigation season, June 25, 2003. Common sense prevailed, and later in the day, Reclamation rescinded its earlier decision. 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. 9 Improved coordination between USFWS managers and their Reclamation counterparts in Klamath Falls and Sacramento was one important reason for the positive corrective action that was taken. 35 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 this century- old water project operates, and who have apparently failed to anticipate the resulting impacts to the 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. Proactive Efforts of Upper Basin Landowners Since the early 1990s, and particularly in the new millennium, 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, r 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. Sucker Recovery Planning KWUA in 1993 published the Initial Ecosystem Restoration Plan - the first ecosystem- based, scientifically valid planning document on Klamath Basin restoration. The plan placed particular emphasis on real, on- the- ground projects to recover endangered species. It was widely recognized as a meaningful assessment of necessary restoration activities. KWUA in 2001 reiterated its previous call with the release of a report entitled Protecting the Beneficial Uses of Upper Klamath Lake: A Plan to Accelerate Recovery of the Lost River and Shortnose Suckers. The 2001 report provided timelines and budgets for dozens of projects that could provide real benefits. Regrettably, until the past three years, there has been failure to effectively implement most of the on- the- ground activities proposed by KWUA. On- the- Ground Actions 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 ( e. g. " Walking Wetlands") • 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 36 • 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. • TEAMWORK A broad range of partners include U. S. Fish and Wildlife, Bureau of Reclamation. CalOre Wetlands. Tulelake Growers Association, Audubon Society. Tulelake Irrigation District, California Waterfowl Association. University of California. Ducks Unlimited. Klamath Water Users Association. USDA NRCS. Leaseland Advisory Council, and numerous volunteer organizations. A page from the " Refuge" section of the tule- Iake. com website. Environmental Water Bank KWUA in early March 2003 announced it would support, and assist the Department of Interior in the implementation of, a Klamath Project Pilot Environmental Water Bank in 2003 to provide over 50,000 acre- feet of additional water for environmental purposes. Reclamation's 10- year Biological Assessment ( BA) developed in February 2002 proposed an environmental water bank through which willing buyers and sellers will provide additional water supplies for fish and wildlife purposes and to enhance tribal trust resources. The 2002- 2012 biological opinion created by NOAA Fisheries for coho salmon firmly established the river flow schedule and the 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. 37 The coho biological opinion's rigid water bank schedule, which steps up the magnitude of the bank for the first four years, regardless of actual hydrology, is difficult to justify. This type of water bank does not reflect the intent of either the proposal put forth by KWUA in 2002 ( see below), or the original USBR biological assessment, which proposed implementation of a water bank in drier years, not every year. Water users committed to pursue developing a water bank with Reclamation in January 2002. At that time, KWUA was asked by Reclamation to develop a Project- wide water bank to assist with meeting environmental water demands in drier years. KWUA's Water Bank and Supply Enhancement Committee held over 30 meetings in 2002- 03 to develop the 65- page report/ proposal for a long- term water bank, which differs substantially from the pilot water bank proposed by Reclamation this past year. Certainty of water supplies is a key principle imbedded in KWUA's long- term water bank proposal. Local water users insist that, in exchange for voluntary participation in a Project water bank - which would be used to " fund" environmental water needs - 100% of the irrigation demand for remaining Project acreage will be satisfied, season- long. Water users further believe that the water bank cannot be viewed as a stand- alone element. While Reclamation's 2003 and 2004 pilot programs did not closely resemble KWUA's vision for a long- term bank, water users are hopeful that Reclamation and Interior will look to the irrigators' document to complete its 10- year water bank proposal. EQIP Funding in Klamath Basin The federal government in 2003 released $ 7 million in conservation funding to the Klamath Basin. This sum represents a portion of the $ 50 million in funding earmarked for the Basin in the 2002 Farm Bill under the Environmental Quality Incentives Program ( EQIP). KWUA was instrumental in securing these provisions during Farm Bill negotiations. In 2004, Interior Secretary Norton included another $ 12 million for this program in the president's 2005 budget request. The funds provided cost- share payments to farmers and ranchers to employ water conservation measures. Over 800 Klamath Basin landowners have applied to participate in this program, despite the requirement that they pay 25% of the costs. This shows remarkable commitment by local irrigators to do the right thing, despite the fact that many of these landowners are still recovering from the financial impacts of the 2001 water curtailment. Recognition at Last In the past year, local 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 in 2004 was honored on the steps of the Oregon state capitol for " exemplifying the spirit" of the Oregon Plan for Salmon and Watersheds; 38 Tulelake Irrigation District in January 2004 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 in 2004 recognized local rancher Mike Byrne for his leadership in conservation. NRCS Chief Bruce Knight ( left) with 2004 Excellence in Conservation Award winner Mike Byrne. It is clear that local irrigators have not been idle in the past ten years. Their efforts to improve their environment are all the more impressive when one considers that the uncertainty and difficulty associated with keeping their farming operations profitable have not diminished. Oregon Governor Ted Kulongoski, Congressman Greg Walden and KWUA Executive Director Dan Keppen at the new A Canal Headgates, April 2003. 39 50 Years After the Compact - Back to the Watershed- Wide Approach Klamath Project water users in October 2004 enthusiastically greeted the announcement that the states of California and Oregon and the Bush Administration had signed the historic " Klamath River Watershed Coordination Agreement". The agreement - signed by California Governor Arnold Schwarzenegger, Oregon Governor Ted Kulongoski, and four of President Bush's cabinet level secretaries - underscored the commitment of these parties to solve the fisheries challenges of the Klamath River on a watershed - wide basis. The state- federal Klamath agreement reflects the philosophy embedded in both the Klamath River Basin Compact and the 2003 NRC Klamath report, which confirmed that Klamath Basin issues must be dealt with in an integrated and comprehensive way for a lasting solution of the challenges facing the basin. The NRC committee report makes clear that merely closing the spigot on the Klamath Project will not solve the problems facing Klamath Basin fisheries, and that strategy obviously was disastrous for farming and ranching communities. The coordination agreement recognizes that message and promotes a unified effort that many water users believe is much needed. An important part of this agreement is that it supports the Conservation Implementation Program ( CIP), a work in progress proposed by federal agencies to coordinate management actions in the Klamath River watershed. The CIP would meld a scientific advisory body, local communities, and resource agencies to identify, coordinate and resolve the Basin's critical water quality, water quantity and fish and wildlife restoration challenges. KWUA is working with other producer groups and local government to develop guidelines that make the CIP workable and acceptable to Klamath Basin communities. USBR Study on Pre- Project Flow Conditions on Upper Klamath River Reclamation in late 2004 finalized a draft study intended to provide a glimpse at how the Klamath River might have looked before the Klamath Project was built. The report shows that- especially in drier years - historic flows in the Klamath River near Keno, Oregon dwindled to a mere trickle. The report provides compelling evidence that supports claims made by local residents for decades - the stored water provided by the Klamath Project may actually provide more flows downriver than what would have flowed before the Project was built. This is primarily due to the developed storage and the fact that farmlands that were once under water now use less water than what was historically lost to consumptive and evaporative use of the former marshes. 40 Ufric; lfftid Kur , Jhm% tr Excerpt from Draft BOR Flow Study 41 Conclusion - The Future 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. Collaborations need to replace ideological advocacies; watershed wide approaches need to replace regionalism; and honest exchanges of information need to displace environmental sensationalism. A June 20, 2004 editorial published by the Klamath Falls Herald & News provides an apt glimpse of what the future might bring to the Klamath irrigation community and how the Klamath Water Users Association will address that future: Recently, the Klamath Water Users Association got an award for not using water, which is not a contradiction in terms at all. It's a matter of doing what has to be done to keep farming and ranching alive in the Klamath Basin. The award was from the state of Oregon and recognized the water users' efforts in behalf of the Oregon Plan for Salmon and Watersheds. It was presented to the group in a ceremony on the steps of the Capitol with leaders such as Gov. Ted Kulongoski and the Democratic and Republican leaders of the Legislature participating. The award recognizes a welter of actions in the Basin, some using federal and state dollars and some not, many aimed at making agricultural operations more efficient water users. Some have given agriculture interests heartache, such as the conversion of farmlands to wetlands - the water users cite 24,000 acres in the past decade, equal to more than a tenth of the Klamath Reclamation Project. Nevertheless, it's clear that farmers and ranchers have recognized their predicament given the pressure of the Endangered Species Act and competition for water from Indian tribes upstream and down. Agriculture is in the midst of a struggle that could take decades yet to play out, and its defenders are determined that they will survive. This is a longer- term version of the creativity they showed in 2001, when, faced with imminent ruin, they responded with skill and imagination in a political protest that brought national attention and saved Basin agriculture to fight another day. The vision of the Klamath Basin as a place for human habitation must include agriculture, and an agricultural sector of sufficient size to be economically viable. This place ought to have an urban center and a scattering of pleasant small towns - and in between green fields with dancing water from irrigation works. ~ 42 Whatever alternate vision exists involves blowing away towns such as Merrill Malin and Tulelake and shriveling the city ofKlamath Falls. It involves throwing lots of people off the land, and itfs not acceptable. This is not the first such award, and won't be the last. It is a signal of a widening recognition in Oregon and the nation that farmers and ranchers will do good things here to make sure that they can continue in their necessary and honorable work. The Klamath Water Users Association, with the talents and support of the community, will continue to address the resource needs of its constituency in a proactive and creative manner. The KWUA has shown itself to be steadfast and able in protecting water users while being receptive to innovative and reasonable solutions. Our irrigating communities, through the continued efforts of the KWUA, will always be persistent and adaptable representatives of our American heritage. The " future".. . bring it on, we can handle it. r Father and daughter ride to the headgates, summer 2001. 43 Notes Information sources used in the preceding report sections are further described below. Overview The source for much of this information comes from the Klamath Water Users Association 2003 Water Bank report. Pioneers The Department of the Interior, United States Reclamation Service 1913 report entitled " History of the Klamath Project. Oregon- California. From May 1, 1903 to December 13, 1912", written by I. S. Voorhees, contains detailed accounting of early irrigation works in the Upper Klamath Basin. Paul Simmons of Somach Simmons and Dunn also made significant contributions based on research he and his staff conducted on behalf of Klamath Project water users in the State of Oregon Klamath River adjudication process. The Klamath Basin Calls in the United States Government *— The Voorhees document, noted above, details this issue. Construction Begins The source for much of this information comes from the Klamath Water Users Association 2003 Water Bank report, the Voorhees report, and the affidavit and testimony of Rebecca Meta Bunse, who in 2004 prepared a detailed historic summary of Klamath Project development on behalf of Klamath Project irrigators for the Klamath River adjudication process. ( Reference No. 003E00040050, before the Office of Administrative Hearings, State of Oregon, for the Water Resources Department). Paul Simmons of Somach Simmons and Dunn also made significant contributions based on research he and his staff conducted on behalf of Klamath Project water users in the State of Oregon Klamath River adjudication process. The Bureau of Reclamation Klamath Basin Area Office also provided factual data on the Klamath Project. Homesteaders The Journal of the Modoc County Historical Society, No. 18- 1996, focuses exclusively on twentieth century development of the Tule Lake area. Betty Lou Byrne- Shirely's " The Reclamation of Tule Lake" and the February 1947 Reclamation Era article " Gold Mine in the Sky", both included in the Modoc County historical journal, served as sources for the homesteader information. Quotes made by Dave Carman, a World War II veteran Tule Lake homesteader, were pulled from his testimony submitted at a House Resources Committee field hearing in Klamath Falls in June 2004. The Klamath River Compact The source for much of this information regarding development of the Compact comes from the affidavit and testimony of Stephen R. Wee, who in 2004 prepared a detailed historic summary of Klamath Project water rights and related issues on behalf of Klamath Project irrigators for the Klamath River adjudication process. ( Reference No. 003E00040049, before the Office of Administrative 44 - r Hearings, State of Oregon, for the Water Resources Department). The conclusion of this section contains the actual purposes of the Compact, as identified in Article I of that document. The Klamath Project's Finishing Touches The source for much of this information comes from the Klamath Water Users Association 2003 Water Bank report, the Voorhees report, and the affidavit and testimony of Rebecca Meta Bunse, who in 2004 prepared a detailed historic summary of Klamath Project development on behalf of Klamath Project irrigators for the Klamath River adjudication process. ( Reference No. 003E00040050, before the Office of Administrative Hearings, State of Oregon, for the Water Resources Department). Paul Simmons of Somach Simmons and Dunn also made significant contributions based on research he and his staff conducted on behalf of Klamath Project water users in the State of Oregon Klamath River adjudication process. New Demands Legal documents prepared by the Klamath Water Users Association attorney - Paul Simmons, of Somach, Simmons & Dunn - provide much of the background information regarding the steadily increasing regulations faced by Project irrigators, starting in the 1990s. Specifically, the plaintiffs' memorandum of points and authorities in support of motion for preliminary injunction ( Kandra et al v. United States of America) was relied upon. Also, David Vogel's testimony before the U. S. House of Representatives Committee on Resources oversight field hearing in June 2004 provides an excellent treatise on the real reasons for the decline of suckers in the Upper Klamath Basin. The Klamath Water Users Association previously developed the section that assesses stressors to coho salmon during the 1990s. Problems on the East Side This section derives from an excellent letter ( dated July 28, 2004) prepared by Best Best & Krieger on behalf of Horsefly Irrigation District and Langell Valley Irrigation District. The letter was submitted to the U. S. House of Representatives Resources Committee in connection with a congressional field hearing held in Klamath Falls in July 2004. 2001 Curtailment Of the numerous media accounts of the 2001 water cutoff, I believe Blake Hurst's piece " Calamity in Klamath", which originally was published in The American Enterprise magazine in late 2002, is the best. I have borrowed liberally from Mr. Hurst, particularly his assessment of the impacts to the community of Tulelake, California. Jess Prosser's comments were originally printed in Range Magazine in 2001. The Farmers Fight Back The comments regarding the " desperate community" were pulled from an outstanding paper presented by Paul Simmons at the American Bar Association Environmental Section Fall 2004 Meeting. 45 Enter President Bush I was in the audience when President Bush made his speech in Portland. After the president's speech, I met Congressman Greg Walden for the first time; he conveyed to me some of the details of the president's flight over the Klamath Basin earlier in the day. Vindication: The National Research Council Steps In This section was derived from press statements developed by KWUA in early 2002. The Assault on the Klamath Project Intensifies Most of this section derives from personal experience, and the latter part was pulled directly from an opinion piece I was asked to write for a Boise, Idaho newspaper at the request of Idaho water users who were also being attacked by some of the same activists engaged in Klamath issues. Vindication, Part II / " We hate to say we told you so, but...." Much of this information originates in Dave Vogel's written testimony that he submitted to the House Resources Committee in June 2004. After more than a decade of professional and sometimes, personal criticism by agency and tribal biologists, the final NRC Report perhaps vindicated Dave Vogel more than anyone else. The Klamath Project Regulatory Regime: 3 Years After the Curtailment This section was written based on personal experience of the author. Proactive Efforts of Upper Basin Landowners We refer you to www. kwua. org and a 45- page document entitled Summary of Recent and Proposed Environmental Restoration and Water Conservation Efforts Undertaken by Klamath Water Users and Basin Landowners for further information on this topic. 50 Years After the Compact - Back to the Watershed- Wide Approach This perspective comes from KWUA assessments and press releases. USBR Study on Pre- Project Flow Conditions on Upper Klamath River The USBR study is incredibly important, because, for the first time, it provides a numerical modeling assessment of the conditions that likely existed on the Upper Klamath River before Europeans settled the area. Prior to this effort, assertions that flow conditions in the river were likely lower than the present could only be backed up by anecdotal ( albeit accurate) reports and incomplete flow studies. Conclusion - The Future The June 20, 2004 Herald & News editorial on recent water user efforts provided a fitting ending to this report, which is further enhanced by language developed by Steve Kandra, 2004- 05 KWUA President. 46 Lower Klamath Lake National Wildlife Refuge, California Photo Credits 1. Cover photo - courtesy of Jacqui Krizo. 2. Map of Klamath Project - courtesy of Bureau of Reclamation. 3. " A load of produce from the Klamath Fair, October 1907" - courtesy of Tulelake- Butte Valley _ Fair, Museum of Local History ( TBVF Museum). 4. " 1906 Map of Pre- Project Area" - courtesy of Oregon Water Resources Department. 5. " Adams Cut, July 18, 1906" - courtesy of Tulelake - Butte Valley Fair, Museum of Local History. 6. " 1907 Completion of the A Canal Headgates" - courtesy of U. S. Bureau of Reclamation. 7. " Constructing Clear Lake Dam, September, 1909" - courtesy of TBVF Museum. 8. " 1927 Homesteader Affidavit" - courtesy of Somach, Simmons and Dunn 9. " Farm Lottery Article, Life Magazine" - courtesy of Bureau of Reclamation. 10. " The Sign Says it AH" - courtesy of U. S. Bureau of Reclamation. 11. " Homesteaders: Robinsons in 2001 Remember Days Gone By" - courtesy of Anders Tomlinson 12. J. C. Boyle Dam on the Klamath River - courtesy of PacifiCorp. 13. " Tulelake, California" - courtesy of Rob Crawford r l4. " Del Norte Salmon Cannery" - courtesy of Anders Tomlinson 15. " April 6, 2004 Headlines" - courtesy of Anders Tomlinson 16. " Kliewer Family in Dry Fields South of Klamath Falls" - courtesy of Anders Tomlinson 17. " Cemeteries went Dry in 2001" - courtesy of Rob Crawford 18. " Time Magazine Captures Rob Crawford & Family" - courtesy of Rob Crawford 19. Klamath Bucket Brigade - courtesy of Klamath Relief Fund. 20. Prayer / Protest at Headgates - courtesy of Klamath Relief Fund. 21. President Bush Photo courtesy of Rob Crawford _ 22. Tulelake Rancher Gary Wright, June 2003 - courtesy of Pat Ratliff 23. Walking Wetlands photo - courtesy of Anders Tomlinson. 24. Bruce Knight and Mike Byrne - courtesy of U. S. Department of Agriculture 25. Gov. Kulongoski, Rep. Walden, and Dan Keppen at the A Canal, 2003 - Courtesy of Pat Ratliff 26. Undepleted Natural Flow of the Upper Klamath River - U. S. Bureau of Reclamation. 27. " Father and Daughter Ride to the Headgates" - courtesy of Rob Crawford 28. " Lower Klamath Lake National Wildlife Refuge, California" - courtesy of Scott Harding Photography r — 47 Close

• 695. [Image] The Klamath Project

  	"Seventh draft"; Includes bibliographical references and index
  	Citation × Citation Citation Abstract Copy Title: The Klamath Project Author: Stene, Eric A. Year: 1994, 2004 "Seventh draft"; Includes bibliographical references and index Title: The Klamath Project Author: Stene, Eric A. Year: 1994, 2004 "Seventh draft"; Includes bibliographical references and index Close

• 696. [Image] Klamath River fish die-off, September 2002 : causative factors of mortality

  	Executive Summary This report provides information describing the biological, hydrological, meteorological, and water quality conditions associated with the die-off of an estimated 34,056 fish in the Klamath ...
  	Citation × Citation Citation Abstract Copy Title: Klamath River fish die-off, September 2002 : causative factors of mortality Author: Guillen, George Year: 2003, 2005, 2004 Executive Summary This report provides information describing the biological, hydrological, meteorological, and water quality conditions associated with the die-off of an estimated 34,056 fish in the Klamath River, California in September 2002. The proximate cause of death was heavy infections of two fish pathogens, Ich and columnaris. However, given that these ubiquitous pathogens are normally found in the Klamath River, additional factors must have played a role for them to have become lethal. It is our conclusion based on multiple lines of evidence that the fish die-off in the lower Klamath River in 2002 was a result of a combination of factors that began with an early peak in the return of a large run of fall Chinook salmon. Low river discharges apparently did not provide suitable attraction flows for migrating adult salmon, resulting in large numbers of fish congregating in the warm waters of the lower River. The high density offish, low discharges, warm water temperatures, and possible extended residence time of salmon created optimal conditions for parasite proliferation and precipitated an epizootic of Ich and columnaris. Based on a review of available literature and historical records, this was the largest known pre-spawning adult salmonid die-off recorded for the Klamath River and possibly the Pacific coast. Title: Klamath River fish die-off, September 2002 : causative factors of mortality Author: Guillen, George Year: 2003, 2005, 2004 Executive Summary This report provides information describing the biological, hydrological, meteorological, and water quality conditions associated with the die-off of an estimated 34,056 fish in the Klamath River, California in September 2002. The proximate cause of death was heavy infections of two fish pathogens, Ich and columnaris. However, given that these ubiquitous pathogens are normally found in the Klamath River, additional factors must have played a role for them to have become lethal. It is our conclusion based on multiple lines of evidence that the fish die-off in the lower Klamath River in 2002 was a result of a combination of factors that began with an early peak in the return of a large run of fall Chinook salmon. Low river discharges apparently did not provide suitable attraction flows for migrating adult salmon, resulting in large numbers of fish congregating in the warm waters of the lower River. The high density offish, low discharges, warm water temperatures, and possible extended residence time of salmon created optimal conditions for parasite proliferation and precipitated an epizootic of Ich and columnaris. Based on a review of available literature and historical records, this was the largest known pre-spawning adult salmonid die-off recorded for the Klamath River and possibly the Pacific coast. Close

• 697. [Image] Nutrients in the nation's waters : too much of a good thing?

  	Includes bibliographical references (p. 22)
  	Citation × Citation Citation Abstract Copy Title: Nutrients in the nation's waters : too much of a good thing? Author: Mueller, David K. Year: 1996, 2004 Includes bibliographical references (p. 22) Title: Nutrients in the nation's waters : too much of a good thing? Author: Mueller, David K. Year: 1996, 2004 Includes bibliographical references (p. 22) Close

• 698. [Image] Defining and evaluating recovery of OCN coho salmon stocks : implications for rebuilding stocks under the Oregon Plan : summary of a workshop organized by the Independent Multidisciplinary Science Team, August 4-5, 1999

  	"December 10, 1999."
  	Citation × Citation Citation Abstract Copy Title: Defining and evaluating recovery of OCN coho salmon stocks : implications for rebuilding stocks under the Oregon Plan : summary of a workshop organized by the Independent Multidisciplinary Science Team, August 4-5, 1999 Author: Independent Multidisciplinary Science Team (Or.) Year: 1999, 2005 "December 10, 1999." Title: Defining and evaluating recovery of OCN coho salmon stocks : implications for rebuilding stocks under the Oregon Plan : summary of a workshop organized by the Independent Multidisciplinary Science Team, August 4-5, 1999 Author: Independent Multidisciplinary Science Team (Or.) Year: 1999, 2005 "December 10, 1999." Close

• 699. [Image] The Oregon conservation strategy

  	v, 419 p.; col.ill.; col.maps; "February 2006"; Foreword by Marla Rae, Chair, Oregon Fish and Wildlife Commission
  	Citation × Citation Citation Abstract Copy Title: The Oregon conservation strategy Year: 2006 v, 419 p.; col.ill.; col.maps; "February 2006"; Foreword by Marla Rae, Chair, Oregon Fish and Wildlife Commission Title: The Oregon conservation strategy Year: 2006 v, 419 p.; col.ill.; col.maps; "February 2006"; Foreword by Marla Rae, Chair, Oregon Fish and Wildlife Commission Close

• 700. [Image] Final economic analysis of critical habitat designation for the bull trout

  	FINAL ECONOMIC ANALYSIS OF CRITICAL HABITAT DESIGNATION FOR THE BULL TROUT September 2004 FINAL ECONOMIC ANALYSIS OF CRITICAL HABITAT DESIGNATION FOR THE BULL TROUT Prepared for: Division of Economics U. ...
  	Citation × Citation Citation Abstract Copy Title: Final economic analysis of critical habitat designation for the bull trout Author: U.S. Fish and Wildlife Service Year: 2004, 2005 FINAL ECONOMIC ANALYSIS OF CRITICAL HABITAT DESIGNATION FOR THE BULL TROUT September 2004 FINAL ECONOMIC ANALYSIS OF CRITICAL HABITAT DESIGNATION FOR THE BULL TROUT Prepared for: Division of Economics U. S. Fish and Wildlife Service 4401 N. Fairfax Drive Arlington, VA 22203 Prepared by: Bioeconomics, Inc. 315 S. 4th E. Missoula, MT 59801 TABLE OF CONTENTS EXECUTIVE SUMMARY ES- 1 1 INTRODUCTION AND BACKGROUND 1- 1 1.1 Description of Species and Habitat 1- 2 1.2 Proposed Critical Habitat 1- 5 1.3 Framework and Methodology 1- 6 1.3.1 Types of Economic Effects Considered 1- 6 1.3.2 Defining the Baseline 1- 9 1.3.3 Direct Compliance Costs 1- 10 1.3.4 Indirect Costs 1- 10 1.3.5 Benefits 1- 14 1.3.6 Analytic Time Frame 1- 15 1.3.7 General Analytic Steps 1- 15 1.4 Information Sources 1- 16 2 RELEVANT BASELINE INFORMATION 2- 1 2.1 Socioeconomic Profile of the Critical Habitat Areas 2- 1 2.1.1 Population 2- 1 2.1.2 Land Ownership and Major Uses 2- 2 2.1.3 Employment 2- 12 2.1.4 Economic and Demographic Characteristics of the 74 Counties Containing Bull Trout Critical Habitat 2- 15 2.1.5. Tribes of the Columbia and Klamath Basins 2- 18 2.2 Baseline Elements 2- 21 2.2.1 Recovery Plan 2- 21 2.2.2 Overlap with Other Listed Species 2- 22 2.2.3 Federal and State Statutes and Regulations 2- 25 2.2.4 Summary Discussion of Impacts of Baseline Regulations on Economic Analysis 2- 40 2.2.5 Discussion: Impacts of Existing Fisheries Policies on Timber and Grazing Activities 2- 43 3 FORECASTED ECONOMIC IMPACTS 3- 1 3.1 Categories of Economic Impacts 3- 1 3.1.1 Section 7 Consultations 3- 2 3.1.2 Technical Assistance 3- 4 3.1.3 Project Modifications 3- 5 3.1.4 Distributional and Regional Economic Effects 3- 5 3.2 Consultation History for Bull Trout Since Listing 3- 7 3.2.1 Action Agencies and Activities Involved in Past Bull Trout Consultations 3- 7 3.2.2 Formal Section 7 Consultations History on Bull Trout Since Listing . 3- 13 3.2.3 Informal Section 7 Consultations History on Bull Trout 3- 15 3.3 Project Modifications 3- 16 3.3.1 Modifications to FHWA Bridge Projects 3- 16 3.3.2 Modifications to Grazing Permits 3- 17 3.3.3 Modifications to Timber Harvest 3- 18 3.3.4 Modifications to Mining Operations 3- 20 3.3.5 Modifications to Agricultural Irrigation Projects 3- 21 3.3.6 Modifications to Dams and Hydroelectric Projects 3- 24 3.3.7 Modifications to Forest Management and Road Maintenance Projects 3- 29 3.3.8 Activities Unlikely to Involve Significant Modification 3- 29 3.4 Projected Future Section 7 Consultations Involving the Bull Trout 3- 29 3.4.1 Projected Future Formal Section 7 Consultations 3- 33 3.4.2 Projected Future Informal Section 7 Consultations 3- 36 ESTIMATING THE CO- EXTENSIVE COSTS OF THE DESIGNATION 4- 1 4.1 Summary of Estimated Impacts 4- 2 4.1.1 Annual Administrative Costs of Consultation 4- 2 4.1.2 Costs Associated with Development of HCPs Within Proposed Bull Trout Critical Habitat 4- 3 4.1.3 Annual Bull Trout Project Modification Costs 4- 4 4.1.4 Proposed Critical Habitat Units Expected to Generate the Greatest Economic Impacts 4- 5 4.2 Discussion of Impacts by Action Agency 4- 6 4.2.1 Army Corps of Engineers 4- 7 4.2.2 Bureau of Land Management 4- 9 4.2.3 Bonneville Power Administration 4- 10 4.2.4 Bureau of Reclamation 4- 25 4.2.5 Federal Highway Administration 4- 29 4.2.6 Federal Energy Regulatory Commission 4- 31 4.2.7 U. S. Forest Service 4- 52 4.2.8 Other Action Agencies 4- 79 4.3 Potential Impacts on Small Entities 4- 79 4.3.1 Identifying Activities That May Involve Small Entities 4- 81 4.3.2 Costs Associated with Agriculture Water Diversions 4- 83 4.3.3 Hydroelectric Facility Re- licensing 4- 84 4.3.4 Mining 4- 87 4.4 Potential Impacts on the Energy Industry 4- 88 4.4.1 Evaluation of Whether the Designation will Result in a Reduction in Electricity Production in Excess of One Billion Kilowatt- Hours Per Year or in Excess of 500 Megawatts of Installed Capacity 4- 89 4.4.2 Evaluation of Whether the Designation will Result in an Increase in the Cost of Energy Production in Excess of One Percent 4- 91 APPENDIX A: Detailed Description of Critical Habitat Units A- l APPENDIX B: Ownership of Lands Adjacent to Proposed Critical Habitat Unit and Subunit B- l APPENDIX C: Overlap of Proposed Bull Trout Critical Habitat and Salmon and Steelhead Habitat C- l APPENDIX D: Listing of All Suggested Project Modifications Found in Formal Biological Opinions: By Activity Type D- l APPENDIX E: Length ( stream) and area ( lakes) of proposed designated bull trout critical habitat that is within U. S. Forest Service Land and Forest Service Wilderness Areas E- l APPENDIX F: Breakdown of Total Annual Estimated Costs by Proposed Critical Habitat Unit F- l EXECUTIVE SUMMARY 1. The purpose of this report is to identify and analyze the potential economic impacts associated with the designation of critical habitat for the Columbia River and Klamath River Distinct Population Segments ( DPSs) of bull trout ( Salvelinus confluentus), hereafter " bull trout." This report was prepared by Bioeconomics, Inc. of Missoula, Montana, for the U. S. Fish and Wildlife Service's ( the Service) Division of Economics. 2. Section 4( b)( 2) of the Endangered Species Act ( the Act) requires the Service to designate critical habitat on the basis of the best scientific data available, after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. The Service may exclude areas from critical habitat designation when the benefits of exclusion outweigh the benefits of including the areas within critical habitat, provided the exclusion will not result in extinction of the species. KEY FINDINGS Total costs associated with both listing and critical habitat designation for the bull trout are forecast to be $ 200 million to $ 260 million over the next ten years. Total costs associated with both listing and critical habitat designation for the bull trout within the proposed Klamath Distinct Population Segment are forecast to be $ 5.3 million to $ 7.3 million over the next ten years. Total costs associated with both listing and critical habitat designation for the bull trout within the proposed Columbia Distinct Population Segment are forecast to be $ 195 million to $ 253 million over the next ten years. Federal agencies are expected to bear 70 to 75 percent of these costs; private entities will incur the remaining 25 to 30 percent. Project modification costs account for as much as 63 percent of forecast costs. Administrative cost represent the remaining 37 percent. U. S. Forest Service and Army Corps of Engineer- related activities account for approximately 70 percent of forecast project modification costs. Activities experiencing the greatest costs include timber harvesting, irrigation diversions, and dam and reservoir operations. Dam and reservoir- related consultations, including power facility re- licensing, account for 42 percent of forecast project modification costs ( excluding the cost associated with reduced irrigation diversions). Timber harvest, irrigation diversions, habitat conservation plans, and mining account for 29 percent, 12 percent, eight percent, and three percent of forecast costs, respectively. In terms of river miles, approximately 18 percent of the total forecast costs are associated with one percent of the proposed designation, 25 percent with five percent of the proposed designation, and 45 percent with ten percent of the proposed designation. When expressed in terms of the expected cost per river mile, the two most costly units are the Willamette River Basin ( Unit 4) and the Malheur River Basin ( Unit 13). ES- 1 Framework for the Analysis 3. The primary purpose of this analysis is to estimate the economic impact associated with the designation of critical habitat for the bull trout. This information is intended to assist the Secretary in making decisions about whether the benefits of excluding particular areas from the designation outweigh the benefits of including those areas in the designation. 1 This economic analysis considers the economic efficiency effects that may result from the designation, including habitat protections that may be co- extensive with the listing of the species. It also addresses distribution of impacts, including an assessment of the potential effects on small entities and the energy industry. This information can be used by decision- makers to assess whether the effects of the designation might unduly burden a particular group or economic sector. 4. This analysis focuses on the direct and indirect costs of the rule. However, economic impacts to land use activities can exist in the absence of critical habitat. These impacts may result from, for example, local zoning laws, State and natural resource laws, and enforceable management plans and best management practices ( BMPs) applied by other State and Federal agencies. For example, as discussed in detail in this report, regional management plans, such as the Northwest Forest Plan, PACFISH and INFISH provide significant protection to bull trout and its habitat while imposing significant costs within the region. Economic impacts that result from these types of protections are not included in this assessment as they are considered to be part of the regulatory and policy " baseline." 5. The measurement of direct compliance costs focuses on the implementation of section 7 of the Act. This section requires Federal agencies to consult with the Service to ensure that any action authorized, funded, or carried out will not likely jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of critical habitat. The administrative costs of these consultations, along with the costs of project modifications resulting from these consultations, represent the direct compliance costs of designating critical habitat. Importantly, this analysis does not differentiate between consultations that result from the listing of the species ( i. e., the jeopardy standard) and consultations that result from the presence of critical habitat ( i. e., the adverse modification standard). 6. The analysis examines activities taking place both within and adjacent to the proposed designation. It estimates impacts based on activities that are " reasonably foreseeable," including, but not limited to, activities that are currently authorized, permitted, or funded, or for which proposed plans are currently available to the public. Accordingly, the analysis bases estimates on activities that are likely to occur within a ten- year time frame, beginning on the day that the current proposed rule became available to the public ( November 30, 2002). The ten- year time frame was chosen for the analysis because, as the time horizon for an economic analysis is expanded, the assumptions on which the projected number of projects and cost impacts associated with those projects becomes increasingly 1 16U. S. C. § 1533( b)( 2). ES- 2 speculative. An exception to the 10 year analysis time horizon used in this analysis is for Federal Energy Regulatory Commission ( FERC) licenses, which are renewed for up to 50 years. Accordingly, this analysis estimates the annualized costs of the expected impacts associated with section 7 bull trout consultations involving FERC re- licensing over a 50 year time horizon. 7. The analysis is based on a wide range of information sources. Numerous individuals were contacted from the Service, as well as from the U. S. Forest Service ( USFS), Federal Highway Administration ( FHWA), Bureau of Land Management ( BLM), Army Corps of Engineers ( ACOE), Bureau of Reclamation ( BOR), Bonneville Power Administration ( BPA), Natural Resources Conservation Service ( NRCS), U. S. Environmental Protection Agency ( EPA), National Oceanic and Atmospheric Administration ( NOAA) and other Federal agencies. The analysis of the hydroelectric facilities and other dam structures in the region also relied in information from the Northwest Power and Conservation Council ( NWPCC), the Pacific Northwest Utility Coordinating Council as well as information from utilities owning dams in bull trout proposed critical habitat ( e. g., Avista Corporation ( Avista), Eugene Water and Electric Board, Pacificorp and Portland General Electric ( PGE)). Native American Tribes ( e. g., Confederated Salish and Kootenai Tribes), State agencies ( e. g., State Departments of Environmental Quality ( DEQ) and State Departments of Transportation ( DOTs)) and industry organizations ( e. g., American Forest Resource Council, American Farm Bureau and Northwest Mining Association) were also contacted, as were numerous individuals in the private sector on topics ranging from irrigation to forestry to bull trout conservation. Census Bureau and other Department of Commerce data was relied on to characterize the regional economy. 8. The bull trout was listed as a threatened species in 1998.2 Since that time, numerous Action agencies have participated in well over 200 formal consultations and thousands of informal consultations involving bull trout. The past consultation record was used as a starting point from which to predict future consultation activity. Action agencies provided additional information on likely changes in future consultation activity following designation of critical habitat. In some cases these agencies saw little change in future consultation levels. For example, FHWA projects are planned for many years in advance and bridge or road- related bull trout consultations are generally quite certain and foreseeable. In some cases ( e. g., mining activity, irrigation diversions) it was determined that the historical consultation record understated the potential level of future consultation activity for the species and adjustments to future predicted consultation levels were made. For dam and reservoir operations, a wide spectrum of information from agency representatives, as well as the actual FERC re- licensing schedules for privately operated hydropower facilities were used to augment historical consultation rates and develop future annual cost estimates associated with bull trout consultations on dam, reservoir and power- related activities. 2 This economic analysis applies only to the Columbia River and Klamath River DPSs of bull trout and is not a rangewide analysis. The rangewide listing of the bull trout occurred in 1999 and critical habitat will be proposed for the remainder of the range at a later date. ES- 3 Exhibit ES. l provides a summary of the wide range of activities that may be impacted by bull trout- related consultations. Exhibit ES. l PROJECTED ACTIVITIES AFFECTED BY BULL TROUT Action Agency Army Corps of Engineers Bureau of Land Management Bonneville Power Administration Bureau of Reclamation Federal Highway Commission Federal Energy Regulatory Commission U. S. Forest Service Other agencies, including NPS, BIA, U. S. Department of Agriculture ( USDA), U. S. Geological Survey ( USGS), U. S. Fish and Wildlife Service and NOAA Fisheries Activities Consulted on Dam and reservoir operations, streambank stabilization, dredging, bridge replacement, stream restoration. Forest management, grazing, timber harvest, resource maintenance and road construction, weed management, streambank stabilization, flood control projects. Federal Columbia River Power System ( FCRPS)- dam operation, fisheries restoration and augmentation, agricultural practices and irrigation systems. Dam and reservoir operations, irrigation diversions. Highway bridge replacement. Dam re- licensing and removal. Timber harvest, grazing, mining, resource maintenance and road construction, weed management, streambank stabilization, recreation, special use permits, watershed restoration, road decommissioning, irrigation diversions, culvert replacement, and prescribed fuel reduction programs. Assorted activities, primarily fisheries and stream and wetland restoration. Results of the Analysis 9. The economic impacts associated with the designation of critical habitat for the bull trout are expected to range from $ 200 million to $ 260 million over the next ten years ($ 20 million to $ 26 million per year). Federal agencies are expected to bear approximately 70 to 75 percent of the total costs of this designation. A significant portion of the land adjacent to the proposed designation is Federally owned ( 58 percent), 36 percent is under private ownership and the remainder is comprised of Tribal, State or local interests. Of the Federal lands, the majority is managed by the USFS ( 85 percent) and the BLM ( 12 percent). The remaining 25 to 30 percent of costs are expected to be borne by private entities. Exhibit ES. 2 shows the location of USFS and BLM managed land within the proposed designation. ES- 4 Exhibit ES. 2 ES- 5 10. In some cases, the cost associated with consultation is not borne by the Action agency, but passed onto other parties. For example, while farmers and ranchers do not consult on the operation of Federal irrigation impoundments, irrigators could be impacted by potential reductions in water deliveries to maintain instream flow during dry years. While the unit location of USFS- related water diversions is uncertain, it is likely to occur in the Salmon River ( Unit 16), Clark Fork ( Unit 2), Southwest Idaho River and Clearwater River ( Unit 15) Basins, as these units contain the largest portion of USFS managed lands. 11. Consultations that may involve private entities include those related to timber harvest, grazing, mining and power facility re- licensing. Some of the costs associated with these consultations, however, are expected to be borne directly by or passed onto the Federal government ( e. g., increased logging and yarding costs passed onto the USFS through lower stumpage bids for timber). Most of the forecast project modification costs resulting from designation ( 42 percent) are dam and reservoir related ( excluding USFS water diversions). These costs result from consultations on ACOE and BOR dams and reservoirs, BPA consultations on the FCRPS, and FERC re- licensing consultations. Exhibit ES. 3 illustrates the location of major dams within the proposed critical habitat. The remaining project modification costs are associated with timber harvest ( 29 percent), USFS- related water diversions ( 12 percent), habitat conservation plans ( eight percent), and placer gold mining ( three percent). Grazing, forest management, road and bridge construction and maintenance and other activities each account for less than two percent of forecast project modification costs. Exhibit ES. 4 provides the distribution of total costs by activity. 12. Costs can be expressed in terms of unit or river mile; both of these metrics are useful in describing economic impacts. 3 On a cost per unit basis the largest portion of forecast costs are expected to occur in Unit 4, the Willamette River Basin ( 18 percent). These costs are attributable to fish passage and temperature control projects and annual operating and maintenance and fish study costs at ACOE's facilities in the Upper Willamette River System ( Dexter, Lookout Point, Hills Creek and Blue River Dams). The next most costly unit is Unit 16, the Salmon River Basin ( 12 percent). Because this is the largest unit in terms of river miles and proportion of USFS managed land, and because future USFS activities are expected to generate approximately 70 percent of the consultation activity, this unit bears the greatest number of future bull trout- related consultations. Therefore, the administrative costs account for a large portion of the costs in this unit. Together, these two units account for 30 percent ( approximately $ 8.2 million) of forecast costs. The next three most costly units, Hells Canyon complex ( Unit 12) and the Clark Fork River ( Unit 2) and Malheur River ( Unit 13) Basins, each account for eight percent ( a unit cost range of approximately $ 2.1 million to $ 2.3 million) of forecast costs. In total, these five units account for almost 55 percent of forecast costs ( approximately $ 14.8 million). 3 Twelve of the units also contain more than 500,000 lake acres of critical habitat. These units account for approximately 55 percent of the potential economic impacts associated with the proposed designation ($ 15.4 million). The Clark Fork River Basin ( Unit 2) contains almost 60 percent of the lake acres ( more than 300,000 acres) and accounts for eight percent of the cost ( approximately $ 3 million). Because all 25 units contain river miles, the costs are expressed in terms of dollars per river mile for comparison. ES- 6 ES- 7 ES- 8 13. Project modifications or other restrictions that engender cost and revenue impacts involving commercial enterprises can have a subsequent detrimental effect on other sectors of the local economy, especially when the affected industry is central to the local economy. Industries within a geographic area are interdependent in the sense that they purchase output from other industries and sectors, while also supplying inputs to other businesses. Therefore, direct economic effects on a particular enterprise can affect regional output and employment in multiple industries. The extent to which regional economic impacts are realized depends largely on whether a significant number of projects are stopped or fundamentally altered. For example, impacts to the timber or grazing industries depend on whether required project modifications substantially reduce output within economic sectors below that which would be seen in the absence of the trout consultation. 14. Examination of BOs involving timber harvest and grazing show only small and sporadic reductions in either grazing opportunity or available timber harvest. Therefore, this analysis assumes that regional economic impacts associated with these activities will be unpredictable ( in terms of geographic location and timing) and small in the context of the overall economy of the Columbia River Basin. In the case of agricultural water diversions on Forest Service lands, regional economic impacts are not modeled due to uncertainty about the magnitude and potential location of impacts. 15. Exhibit ES- 5 highlights the relative contributions of each unit to total forecast costs. Exhibit ES- 6 then presents the unit cost by river mile. Considering the cost per river mile, the Willamette River ( Unit 4) and Malheur River ( Unit 13) Basins are the most costly units. Together these two units account for 25 percent of the costs ( approximately $ 7.0 million, annualized) over two percent of the proposed miles of the designation ( 451 miles). Overall, 10 percent of the river miles ( 1,910 miles) in eight units account for approximately 45 percent of the total costs ( approximately $ 12.5 million, annualized). 4 4 In terms of cost per lake acre, the Willamette River Basin is the most expensive unit ( Unit 4), followed by the Northeast Washington River ( Unit 22) and Upper Columbia River ( Unit 21) Basins. These three units account for approximately 25 percent of the cost ($ 6.8 million) and five percent of the river miles ( 1,020 miles) in the proposed designation. ES- 9 tn m W GO 16. Consideration of the regulatory baseline is particularly pertinent in the context of estimating economic costs attributable to section 7 for bull trout. Specifically, existing regulations such as the Federal Power Act ( FPA) and Wilderness Act of 1964, fisheries management directives ( Northwest Forest Plan, INFISH and PACFISH) and the presence of other listed species ( especially anadromous fish) provide for the protection of areas that could contribute to the recovery of bull trout and improve riparian habitat and water quality throughout the proposed designation. Thus, the costs of this designation is limited by the extent to which existing regulations already impose requirements on land use and resource management within the proposed designation. In addition, the cost estimates developed in this report reflect various allocations made throughout the analysis for projects benefitting more than one listed species. Since these allocations are important to the analysis, Exhibit ES. 7 describes how forecasted costs were allocated among bull trout and other listed species. Exhibit ES. 7 ALLOCATION OF ESTIMATED FUTURE PROJECT MODIFICATION COSTS Agency / Project ACOE - Upper Willamette River Dams and Reservoirs BPA - Federal Columbia River Power System FERC - re- licensing hydroelectric facilities USFS activities Allocation NOAA Fisheries and the Service are currently consulting on salmon, steelhead and bull trout in this proposed area. No clear allocation of costs can be made between these species, as most of the projects modifications would be sought under both the NOAA and Service consultations. Therefore, one- third of estimated costs are allocated to each species. This is likely to overstate the cost of bull trout conservation rather than understate it, since the primary driving force behind these project modifications is the salmon. While there is extensive discussion of the relative magnitude of potential bull trout versus salmon mitigation actions, because of the relatively modest project modification costs ( up to $ 400,000 associated with fishery studies) there is no allocation of costs to salmon. The estimation of section 7 bull trout costs associated with FERC re- licensing includes allocation of mitigation costs for specific dams to salmon, as well as to other aquatic species. As a result, a little more than 40 percent of total fishery-related costs are allocated to bull trout, and five percent specifically to bull trout section 7 consultation. While certain costs in the sample of timber consultations were allocated to other listed species ( e. g. grizzlies and cutthroat trout), there is no allocation of costs to anadromous species. Summary of Costs 17. Exhibit ES. 8 provides a detailed summary of the co- extensive costs of designation of critical habitat for the bull trout. These costs are presented on an annualized basis. A map of the watersheds that encompass each unit is provided in Exhibit ES. 9 to assist the reader in understanding the location and distribution of estimated costs. A detailed discussion of the estimated administrative and project modification costs by critical habitat unit is presented in the unit- by- unit summary section following Exhibit ES. 8. ES- 12 Exhibit ES. 8 SUMMARY OF SECTION 7 COSTS FOR THE BULL TROUT ( Annualized) Unit Unit 1 - Klamath River Basin Unit 2 - Clark Fork River Basin Unit 3 - Kootenai River Basin Unit 4 - Willamette River Basin Unit 5 - Hood River Basin Unit 6 - Deschutes River Basin Unit 7 - Odell Lake Unit 8 - John Day River Basin Unit 9 - Umatilla- Walla Walla River Basins Unit 10 - Grande Ronde River Basin Unit 11 - Imaha/ Snake River Basins Unit 12 - Hells Canyon Complex Unit 13 - Malheur River Basin Unit 14 - Coeur d'Alene Lake Basin Unit 15 - Clearwater River Basin Unit 16 - Salmon River Basin Unit 17 - Southwest Idaho River Basins Unit 18 - Little Lost River Basin Unit 19 - Lower Columbia River Basin Unit 20 - Middle Columbia River Basin Unit 21 - Upper Columbia River Basin Unit 22 - Northwest Washington River Basins Unit 23 - Snake River Basin in Washington Unit 24 - Columbia River Basin Unit 25 - Snake River Basin Multiple unit or unknown a Estimated Range of Cost ($ l, 000fs) $ 529 to $ 733 $ 1,321 to $ 2,192 $ 328 to $ 402 $ 4,497 to $ 4,891 $ 328 to $ 413 $ 430 to $ 719 $ 51 to $ 56 $ 446 to $ 600 $ 98 to $ 211 $ 467 to $ 580 $ 559 to $ 605 $ 1,939 to $ 2,338 $ 2,006 to $ 2,095 $ 429 to $ 693 $ 995 to $ 1,676 $ 2,059 to $ 3,319 $ 1,004 to $ 1,867 $ 150 to $ 176 $ 385 to $ 494 $ 391 to $ 494 $ 196 to $ 505 $ 965 to $ 1,397 $ 230 to $ 287 $ 243 to $ 504 $ 135 $ 1,303 Notes: These estimates include all section 7 costs, including those co- extensive with the listing and designation of critical habitat for the bull trout. Costs are reported in 2003 dollars. A more detailed presentation of these costs is provided in Appendix F. a Miscellaneous costs ($ 213,000 annually) and the costs associated with development of habitat conservation Dlans ($ 1,090,000 annuallv) have not been allocated to the unit level due to uncertainty as to their location. ES- 13 Exhibit ES- 9 ES- 14 Unit- bv- Unit Summary 18. The following discussion presents a unit- by- unit synopsis of the co- extensive costs of designation of critical habitat for the bull trout. Details on how these cost estimates were developed is provided in Section 4 of this report. 19. From an aggregate perspective, forecast project modification costs are dominated by dam related activities, totaling about 42 percent of all estimated costs. Typical costs include fish passage, changes in operations, habitat protection or restoration, and fishery studies at 36 FERC- licensed hydroelectric facilities and at more than 30 major Federal hydropower, irrigation and flood projects. The second largest category of costs is associated with timber harvest on Federal lands, representing about 29 percent of all estimated costs. These costs include harvest reduction, fishery study and monitoring costs, costs related to roads and culverts, and changes to log yarding systems. The remaining costs are split among a large number of activities including the development of habitat conservation plans, mining, agriculture and irrigation diversions, grazing, bridge construction and maintenance, and general forest management. Accordingly, the primary factor driving the distribution of costs across units is the location of significant dam projects for power, irrigation, and flood control. This factor is highlighted in the following unit- by- unit discussion. The second most important factor is the occurrence of federally- owned acreage within a given unit, particularly the acreage of non- wilderness lands managed by the USFS. This factor drives both timber costs and administrative consultation costs. 20. A significant component of the total estimated cost of this designation are the administrative costs associated with conducting both formal and informal consultations on the species ( approximately 37 to 50 percent of total forecast bull trout- related costs). These costs accrue to the Service as well as to action agencies and the public. In some cases these administrative costs constitute a majority of the estimated costs for a unit, suggesting that there will be many activities consulted on but few resulting project modifications. 21. This discussion is presented on a unit by unit basis. A perspective on how the units compare, in both absolute terms and in terms of cost per river mile of proposed critical habitat, is provided in Exhibits ES- 6 and ES- 7. For purposes of this summary, proposed units with per mile costs ( after adjusting each unit's costs for its respective unoccupied habitat) forecast to be less than half of the proposed designation- wide average are described as having " relatively low costs." Units with per mile costs forecast to be between 50 percent and 200 percent ( i. e., twice) the designation- wide average costs are described as having " relatively moderate costs." Units with per- mile costs forecast to be greater than twice the designation- wide average costs are described as having " relatively high costs." Note that these descriptors are intended as a general guide, and refer to total cost only. Individual economic sectors and entities within a unit may bear disproportionate shares of these costs, as discussed in Section 4. 22. Unit 1: Klamath River Basin - The Klamath River Basin is located in south- central Oregon. Proposed critical habitat within this unit includes 475 km ( 295 mi) of streams and ES- 15 3,775 ha ( 9,327 ac) of lake habitat. The Klamath River Basin Unit is largely contained within Klamath County Oregon. The town of Klamath Falls is the largest community within the county. The Klamath River Basin Unit has a relatively high percentage of proposed critical habitat that is currently either unoccupied or of unknown occupancy ( 72 percent). Approximately 69 percent of the stream miles proposed for designation are within Federal land. 23. The Klamath River Basin Unit is a relatively moderate cost unit. Estimated total annual bull trout- related costs within this unit range between $ 529,000 and $ 733,000. These estimates include $ 425,000 per year in administrative costs. It is estimated that costs associated with consultations on timber harvest and agricultural irrigation withdrawals will constitute the large majority of potential future project modification costs in the unit ( estimated at between 73 percent and 87 percent of total annual project modification costs). These agricultural diversion- related costs are expected to result from reductions in available irrigation water. Other activities are individually estimated to each account for less than $ 15,000 dollars per year in project modification costs. 24. Unit 2: Clark Fork River Basin - The Clark Fork River Basin Unit is the largest unit within the proposed designation. This unit includes most of Western Montana and the Idaho panhandle. This Unit includes the Missoula and Bitterroot River Valleys in Western Montana, the Kalispell- Flathead Lake Region, and the Lake Pend Orielle Region of North Idaho. These areas contain many of the larger towns and communities within Western Montana and North Idaho. Approximately 54 percent of the proposed streams and 33 percent of proposed lakes in Clark Fork Unit are within Federal lands. There is no unoccupied habitat within the proposed Clark Fork Critical Habitat Unit. 25. Forecast total annual costs associated with the bull trout within this unit are between $ 1.3 million and $ 2.2 million. These estimates include $ 800,000 per year in administrative costs. In addition, a number of agencies and activities will incur significant annual project modification costs associated with the bull trout in this unit. Specifically, • Timber harvest activity is expected to generate the largest share of future project modification costs in this unit ($ 270,000 to $ 680,000 per year). These costs include harvest reduction, fishery study and monitoring costs, costs related to road and culverts, and changes to log yarding systems. • Costs associated with forecast project modifications to irrigation diversions within this unit range from zero to $ 280,000. These costs represent potential costs to agricultural producers associated with reductions in available irrigation water. 26. Other significant forecast project modification costs within this unit are associated with mining ( up to $ 100,000 annually, principally involving watershed assessment costs), FERC hydro re- licensing ($ 50,000 to $ 91,000 annually), and FHWA bridge and road work ($ 45,000 per year, generally involving constraints on in- stream work periods). Forecast FERC- related costs are associated with several major hydroelectric facilities within the unit, ES- 16 including Kerr Dam on the Flathead River and Thompson Falls Dam on the Clark Fork. Additionally, bull trout- related modifications on operation of the FCRPS have resulted in changes in operations at Hungry Horse Dam ( a BOR facility on the S. Fork of the Flathead) and Albeni Falls ( an ACOE facility that controls the level of Lake Pend Orielle). Bull trout study costs specific to the Clark Fork Unit and associated with FCRPS consultation are expected to cost up to $ 97,000 annually. 27. Although the proposed Clark Fork River Basin Critical Habitat Unit has significant forecast total annual costs, these costs should be viewed in light of the large size of this proposed unit. In fact, the Clark Fork Unit is forecast to be one of the lowest cost units, when expressed per river mile of habitat proposed for designation. 28. Unit 3: Kootenai River Basin - A short stretch of the Kootenai River lies in the U. S., looping down out of British Columbia. The Kootenai Unit thus comprises only the northwestern corner of Montana, including Libby Dam, and the northeastern tip of the Idaho panhandle. This unit is contained within two counties, Boundary County, Idaho and Lincoln County, Montana. Within this proposed critical habitat unit, approximately 53 percent of the rivers and streams proposed for designation are on Federal land. There is no unoccupied bull trout habitat within this unit. 29. The Kootenai River Unit is a relatively low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Total forecast annual costs associated with the bull trout within this unit are between $ 328,000 and $ 402,000. Of this amount, the majority, approximately $ 290,000 annually, are forecast administrative costs. In addition, it is estimated that project modification costs within the Kootenai River Unit will total between $ 38,000 and $ 112,000 annually. Costs associated with timber harvest are expected to be the largest category of future project modification costs in this unit ($ 27,000 to $ 69,000 per year, including costs of harvest reduction, fishery study and monitoring costs, costs related to roads and culverts, and changes to log yarding systems). Costs resulting from modifications to agricultural irrigation diversions ( primarily reductions in irrigation withdrawals) could range from zero to $ 28,000. Other activities are individually estimated to each account for less than $ 5,000 per year in project modification costs. Bull trout- related modifications to operations of the FCRPS have resulted in changes in operations at Libby Dam. 30. Unit 4: Willamette River Basin - The Willamette River Basin Unit includes 337 km ( 209 mi) of stream and 1,600 ha ( 3,954 ac) of lake habitat in the McKenzie River and Middle Fork Willamette River subbasins of Western Oregon. The unit is located primarily within Lane County, but also extends into Linn County. The unit contains Eugene, Oregon and surrounding areas. Approximately 46 percent of the proposed waters within this unit are on Federal land and about 23 percent of the waters in the unit are currently either unoccupied by the bull trout or of unknown occupancy. 31. Forecast total annual costs associated with the bull trout within this unit are between $ 4.5 million and $ 4.9 million. Of this amount, approximately $ 125,000 are forecast ES- 17 administrative costs. Thus, most of the costs for this unit are associated with required project modifications. While project modification costs are forecast to be associated with timber harvest activities and agricultural diversions within this unit ( estimated between $ 22,000 and $ 55,000 annually), the vast majority of forecast costs are associated with dam and reservoir operations in the unit. 32. The ACOE is currently in consultation on 13 flood control facilities located in the Upper Willamette River system. Potential future costs of required modifications for bull trout will likely be driven by provisions for temperature control facilities at the Lookout Point, Hills Creek, and Blue River dams, and trap and haul passage at Lookout Point, Hills Creek, and possibly a fish ladder at Dexter Dam. It is estimated that these passage and temperature control modifications and operation at ACOE operated impoundments in the unit will cost between $ 4.3 and $ 4.5 million per year. It is further estimated that annual project modification costs associated with FERC re- licensing of hydroelectric facilities in the unit will cost between $ 70,000 and $ 144,000 annually. These costs are associated with several hydroelectric facilities operated by the City of Eugene: Trail Bridge and Carmen on the McKenzie River, and Blue River Dam. 33. The Willamette River Unit is the highest cost of the proposed units in terms of forecast cost per river mile of habitat proposed for designation ( greater than $ 20,000 per river mile, annually). These costs are associated with dam and reservoir modifications to ACOE projects. However, the ACOE is also consulting with NOAA Fisheries on the impacts of these facilities on chinook salmon and steelhead, these costs might occur even absent the bull trout. 34. Unit 5: Hood River Basin - The Hood River Unit lies entirely within Hood River County, Oregon and contains the communities of Hood River and The Dalles among a number of smaller towns. The Unit includes the mainstem Hood River and three major tributaries: the Clear Branch Hood River, West Fork Hood River, and East Fork Hood River. A relatively high 43 percent of the proposed habitat in the Hood River Unit is currently either unoccupied or of unknown occupancy. Overall, about 48 percent of the waters proposed for designation within this unit are located on Federal lands. 35. The Hood River Unit is a relatively moderate- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 328,000 and $ 413,000. Of this amount, a substantial portion are forecast administrative costs ( approximately $ 282,000). The remainder of the forecast costs are associated with required project modifications. Costs associated with FERC re- licensing of hydroelectric facilities ($ 24,000 to $ 67,000) and timber harvest on USFS lands ($ 16,000 to $ 40,000 per year) are expected to be the most significant categories of future project modification costs in the unit. FERC licensed facilities include Powerdale on the Hood River. Agricultural irrigation diversions in the unit could experience up to $ 16,000 in annual project modification costs. Other activities are individually estimated to account for less than $ 5,000 per year in project modification costs. ES- 18 36. Unit 6: Deschutes River Basin - The Deschutes River Basin Unit in central Oregon contains two critical habitat subunits: the lower Deschutes and the upper Deschutes, separated by Big Falls, an impassible barrier on the Deschutes River. The Lower Deschutes critical habitat subunit is in Wasco, Sherman, Jefferson, Deschutes, and Crook Counties. The Upper Deschutes River critical habitat subunit is located in Deschutes, Crook, and Klamath counties. Approximately 801 km ( 498 mi) of stream habitat in the Deschutes River basin is proposed for critical habitat designation. Overall, a relatively high 37 percent of the proposed habitat within the Deschutes River Unit is unoccupied. The entire upper Deschutes River Critical Habitat subunit is currently unoccupied by the species. A relatively low portion ( 35 percent) of the waters proposed for designation within this unit are on Federal land. This unit also has a substantial amount of Tribal land ( 23 percent of proposed waters). 37. The Deschutes River Unit is a relatively low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. It is forecast that total annual costs associated with the bull trout within this unit will be between $ 431,000 and $ 719,000. A relatively small portion of this amount, approximately $ 102,000 annually, are forecast administrative costs. The vast majority of these costs are associated with required project modifications. Specifically, costs associated with operation of BOR irrigation impoundments ($ 159,000 annually, largely associated with fishery studies), FERC re- licensing of hydroelectric facilities, ($ 106,000 to $ 280,000) and timber harvest on USFS lands ($ 42,000 to $ 105,000 per year resulting from reduced harvest, fishery studies, road and culvert costs, and changes in yarding systems) are expected to be the most significant categories of future project modification costs in this unit. The BOR- related costs are for studies at Crane Prairie and Wickiup Reservoirs on the Upper Deschutes River. Since both of these reservoirs are in the currently unoccupied Upper Deschutes subunit, dam and reservoir modifications are not reasonably foreseeable. Projected FERC re- licensing costs are for bull trout studies and passage at the Pelton- Round Butte Project on the Deschutes River. Agricultural irrigation diversion project modification costs associated with potential reductions in irrigation water availability could range from zero to $ 43,000 annually. Other activities are individually estimated to account for less than $ 15,000 dollars per year in project modification costs. 38. Unit 7: Odell Lake - The Odell Lake Unit in central Oregon lies entirely within the Deschutes National Forest in Deschutes and Klamath counties. This unit is the smallest of the proposed units within the designation. Total proposed critical habitat includes approximately 2,675 ha ( 6,611 ac) of lake habitat and 18.1 km ( 11.3 mi) of streams. There is no unoccupied habitat within this unit. 39. Total annual costs associated with the bull trout within the unit are forecast to be between $ 51,000 and $ 56,000. Of this amount, almost all ( approximately $ 50,000 annually) will be associated with the administrative costs of the consultation process. It is estimated that project modification costs within the Odell Lake Unit will total less than $ 5,000 annually. These project modification costs are forecast to be largely associated with USFS activities. ES- 19 40. Unit 8: John Day River Basin - The John Day River Basin Unit in eastern Oregon includes the North Fork, the Middle Fork, and mainstem portions of the John Day River and their tributary streams in Wheeler, Grant, and Umatilla counties. A total of 1,080 km ( 671 mi) of stream habitat is proposed for designation as critical habitat. Overall, 19 percent of the proposed areas within the John Day River Unit are currently unoccupied by the species. Approximately 54 percent of the waters proposed for designation within the John Day Unit are located on Federal land. 41. The John Day River Unit is a relatively low cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Total annual costs associated with the bull trout within this unit are forecast to be between $ 446,000 and $ 600,000. Of this amount, a large portion, approximately $ 278,000 annually, will be made up of administrative costs. The remainder of the forecast costs are associated with required project modifications. Specifically, project modifications associated with timber harvest on USFS lands ($ 57,000 to $ 143,000 per year from reductions in harvest, fisheries studies, road and culvert costs, and changes in yarding systems) and placer mining on USFS lands ( up to $ 88,000 per year associated with requirements for and limitations on allowed stream crossing activity) are expected to generate the greatest share of project modification costs in this unit. Costs associated with agricultural irrigation diversion reductions could range from zero to $ 58,000 annually. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. The John Day River Basin is one of two units identified in this study as a setting where bull trout related project modifications could have a significant impact on a small placer mining business, the other is the Hells Canyon Complex ( Unit 12). 42. Unit 9: Umatilla- Walla Walla River Basins - The Umatilla and Walla Walla Rivers Unit is located in northeastern Oregon and southeastern Washington. The unit includes 636 km ( 395 mi) of streams extending across portions of Umatilla, Union, and Wallowa counties in Oregon, and Walla Walla and Columbia counties in Washington. Overall, 17 percent of the proposed critical habitat within this unit is currently unoccupied by the species. A relatively low portion ( 32 percent) of the waters proposed for designation within the Umatilla- Walla Walla Unit are located on Federal land. 43. The Umatilla- Walla Walla River Unit is among the lowest cost units, in terms of consultation- related cost per river mile of habitat proposed for designation. It is estimated that total annual costs associated with the bull trout within this unit will be between $ 98,000 and $ 211,000. Of this amount, approximately $ 59,000 annually will be associated with the administrative costs of the consultation process and the remainder with required project modifications. Specifically, fisheries studies associated with FCRPS consultations could cost up to $ 43,000 annually. Project modification associated with timber harvest on USFS lands is expected to be another significant category of future costs in this unit ($ 26,000 to $ 65,000 per year). Agricultural irrigation diversions could experience up to $ 26,000 in annual project modification costs within this unit. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. In addition to the consultation and project modification costs, the Walla Walla Drainage is in ES- 20 the final stages of developing a basin- wide habitat conservation plan to protect bull trout, among other species. The plan has cost approximately $ 4 million to develop, and it is expected an additional $ 1 million will be spent to complete the plan during the next year or two. 44. Unit 10: Grande Ronde River Basin - The Grande Ronde Unit extends across Union, Wallowa, and Umatilla counties in northeastern Oregon, and Asotin, Columbia, and Garfield counties in southeastern Washington. This unit includes the Grande Ronde River from its headwaters to the confluence with the Snake River and a number of its tributaries, the largest being the Wallowa River. Approximately 1,030 km ( 640 mi) of stream habitat in the Grande Ronde River basin is proposed for critical habitat designation. Overall, seven percent of the proposed critical habitat within the Grand Ronde River Unit is currently unoccupied by the species. Approximately 52 percent of the waters proposed for designation within this unit are located on Federal land. 45. The Grand Ronde River Unit is a low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit will be between $ 467,000 and $ 580,000. Of this amount, the vast majority, approximately $ 417,000 annually, are forecast to be administrative costs. The remainder of the forecast costs are associated with required project modifications. Specifically, fisheries studies within the unit associated with FCRPS consultations could cost up to $ 19,000 annually. Timber harvest on USFS lands is expected to be another significant source of future project modification costs in this unit ($ 34,000 to $ 87,000 per year resulting from reduced harvest, fisheries studies, and road and culvert costs, and changes in yarding systems). Agricultural irrigation diversion costs could be up to $ 35,000. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 46. Unit 11: Imnaha/ Snake River Basins - The Imnaha/ Snake Unit extends across Wallowa, Baker, and Union counties in northeastern Oregon and Adams and Idaho counties in western Idaho. The unit contains approximately 306 km ( 190 mi) of proposed critical habitat. All of the proposed habitat within the Imnaha- Snake River Unit is currently occupied by the species. Approximately 51 percent of the waters proposed for designation within this unit are located on Federal land. 47. The Imnaha/ Snake River Unit is a moderate- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 559,000 and $ 605,000. Of this amount, the large majority are made up of administrative costs ( approximately $ 544,000, annually). The remainder of the forecast costs are associated with required project modifications. Specifically, fishery studies within the unit associated with FCRPS consultations could cost up to $ 18,000 annually. Timber harvest activities on USFS lands are expected to be another significant category of future project modification costs ($ 10,000 to $ 26,000 per year). Agricultural irrigation diversion related project modification costs could range from zero ES- 21 to $ 11,000. Other activities are individually estimated to each account for less than $ 5,000 dollars per year in project modification costs. 48. Unit 12: Hells Canyon Complex - The Hells Canyon Complex Unit encompasses basins in Idaho and Oregon draining into the Snake River and its associated reservoirs, from Hells Canyon Dam upstream to the confluence of the Weiser River. The Hells Canyon Complex unit includes a total of approximately 1,000 km ( 621 mi) of streams proposed as critical habitat. A relatively high portion ( about 48 percent) of the proposed critical habitat within the Hells Canyon Complex Unit is currently unoccupied by the species. Approximately 47 percent of the waters proposed for designation within this unit are located on Federal land. 49. The Hells Canyon Complex Unit is a relatively moderate- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. It is forecast that total annual costs associated with the bull trout within this unit will be between $ 1.9 million and $ 2.3 million. Of this amount, a majority are expected to be made up of administrative costs ( approximately $ 1.4 million, annually). In addition, significant categories of forecast project modification costs within this unit are associated with timber harvest on USFS lands ($ 92,000 to $ 233,000 per year resulting from reduced harvest, fishery studies, road and culvert costs, and changes in yarding systems), placer mining on USFS land ($ 69,000 associated with requirements for and limitations on allowed stream crossing activity), FERC hydroelectric re- licensing ($ 111,000 to $ 259,000), and BOR reservoir activities ($ 192,000 annually, primarily for study related costs). The BOR reservoirs in the unit include Phillips Reservoir and Thief Valley Reservoir; projected costs are for bull trout related studies. Major FERC- licensed hydroelectric facilities in the unit include Hells Canyon, Brownlee and Oxbow. Agricultural irrigation diversions could experience up to $ 95,000 in annual project modification costs within this unit. Other activities are individually estimated to each account for less than 20,000 dollars per year in project modification costs. The Hells Canyon complex is one of two units identified in this study as a setting where bull trout related project modifications could have a significant impact on a small placer mining business, the other is the John Day River Basin ( Unit 8). 50. Unit 13: Malheur River Basin - The Malheur Unit is in the Malheur River Basin in eastern Oregon, in Grant, Baker, Harney, and Malheur counties. A total of 389 km ( 241 mi) of streams and two reservoirs are proposed for critical habitat. About 25 percent of the proposed critical habitat within the Malheur River Unit is currently unoccupied by the species. Approximately 63 percent of the waters proposed for designation within the Malheur River Unit are located on Federal land. 51. The Malheur River Unit is the second highest cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 2.0 million and $ 2.1 million. Project modification costs make up a small portion of these costs, between $ 179,000 and $ 268,000 annually. The rest of the forecast costs are associated with administrative requirements. Major categories of forecast project modification costs within this unit are associated with ES- 22 timber harvest on USFS lands ($ 33,000 to $ 83,000 per year) and BOR reservoir activities ($ 133,000 annually). The BOR costs are for research as well as trap and haul fish passage that is ongoing at Beulah Reservoir on the Malheur River, and estimated research costs at Warm Springs Reservoir, which is currently unoccupied by bull trout. Possible reductions in agricultural irrigation diversions could cost from zero to $ 34,000 annually . Other activities are individually estimated to each account for less than $ 5,000 per year in project modification costs. 52. Unit 14: Coeur d'Alene Lake Basin - The Coeur d'Alene Lake Basin Unit in Idaho is broken into two subunits. The Coeur d'Alene Lake subunit lies within Kootenai, Shoshone, Benewah and Bonner counties. The St. Joe River subunit includes streams in Shoshone, Benewah, and Latah counties, Idaho. Thirty stream reaches or tributaries ( 677 km ( 421 mi)) and lakes comprising 12,727 ha ( 31,450 ac) of surface area are proposed as critical habitat within this unit. Of this, a relatively high portion ( 46 percent) is currently unoccupied by the species. Approximately 58 percent of the waters proposed for designation within this Unit are located on Federal land. 53. The Coeur d'Alene Lake Unit is relatively low cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 429,000 and $ 693,000. A large share of this amount, approximately $ 287,000 annually, is forecast to be made up of administrative costs. In addition, major categories of forecast project modification costs within the unit are associated with timber harvest on USFS lands ($ 97,000 to $ 245,000 per year resulting from reduced harvest, fishery studies, road and culvert costs, and changes in yarding systems), and FHWA bridge and road work ($ 23,000 associated with limitations on in- stream work periods). Modifications to agricultural irrigation diversions could result in costs from zero to $ 100,000. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 54. Unit 15: Clearwater River Basin - The Clearwater River Unit includes 3,063 km ( 1,904 mi) of streams and 6,722 ha ( 16,611 ac) of lakes proposed as critical habitat for bull trout in north- central Idaho. This large unit extends from the Snake River confluence at Lewiston on the west to headwaters in the Bitterroot Mountains along the Idaho/ Montana border on the east. About 13 percent of the proposed critical habitat within the Clearwater River Unit is currently unoccupied by the species. Approximately 78 percent of the waters proposed for designation within the Unit are located on Federal land. 55. Total forecast costs associated with consultation on bull trout within this unit are between $ 1.0 million and $ 1.7 million annually. Of this amount, approximately $ 572,000 is associated with administrative costs. In addition, major categories of forecast project modification costs within this unit are associated with timber harvest on USFS lands ($ 252,000 to $ 635,000 per year resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems), recreational suction mining on USFS land ($ 115,000 associated with reduced availability of stream access due to seasonal closures), highway bridge and road work ($ 25,000), and USFS management activities ($ 35,000 ES- 23 annually). Agricultural irrigation diversion project modification costs could range from zero up to $ 259,000 annually. These costs may result from reductions in irrigation deliveries. Other activities are individually estimated to each account for less than $ 15,000 dollars per year in project modification costs. 56. Although the proposed Clearwater River Basin Critical Habitat Unit is forecast to experience significant costs associated with the bull trout, these costs should be viewed in light of the large size of the proposed unit. In fact, the Clearwater Unit is one of the lowest cost of the proposed units, in terms of forecast costs per river mile of habitat proposed for designation. 57. Unit 16: Salmon River Basin - The Salmon River basin is a geographically large unit that extends across central Idaho from the Snake River to the Montana border. The critical habitat unit includes 7,688 km ( 4,777 mi) of streams extending across portions of Adams, Blaine, Custer, Idaho, Lemhi, Nez Perce, and Valley counties in Idaho. About six percent of the proposed critical habitat within the Salmon River Unit is currently unoccupied by the species. Approximately 86 percent of the waters proposed for designation within the Unit are located on Federal land. 58. Forecast total annual costs associated with the bull trout within this unit are between $ 2.1 million and $ 3.3 million. Of this amount, approximately $ 1.3 million is associated with administrative costs, with the rest made up of project modification costs. Major categories of forecast project modification costs are associated with timber harvest on USFS lands ($ 465,000 to $ 1.2 million per year resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems), highway bridge and road work ($ 57,000), and USFS general forest management activities ($ 65,000 annually). The cost of modifications to agricultural irrigation water deliveries could range from zero up to $ 479,000 annually. Costs associated with mining activities at Hecla Mining Company's Grouse Creek and Thompson Creek mines are estimated at $ 132,000 annually. Other activities are individually estimated to each account for less than $ 25,000 dollars per year in project modification costs. 59. Although the proposed Salmon River Basin Critical Habitat Unit has significant forecast costs associated with the bull trout, these costs should be viewed in light of the large size of the proposed unit. In fact, the Salmon River Unit is also one of the lowest cost of the proposed units, in terms of forecast costs per river mile of habitat proposed for designation. 60. Unit 17: Southwest Idaho River Basins - The Southwest Idaho Unit includes a total of approximately 2,792 km ( 1,735 mi) of streams in the Boise, Payette, and Weiser River basins. A number of southern Idaho counties are wholly or partially within this unit, including Ada, Adams, Boise, Camas, Canyon, Elmore, Gem, Payette, Valley, and Washington counties. The counties within the southern Idaho unit include both a significant portion of productive agricultural land as well as the largest population center in the state ( the Boise Valley). About 24 percent of the proposed critical habitat within the Southwest ES- 24 Idaho Unit is currently unoccupied by the species. Approximately 78 percent of the proposed streams and 66 percent of proposed lakes and reservoirs within the Southwest Idaho River Basins Unit are located on Federal land. 61. The Southwest Idaho River Basins Unit is a relatively low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 1.0 million and $ 1.9 million. Total administrative costs are forecast to be a relatively small portion of this total ($ 328,000 annually). The remainder of the forecast costs are expected to result from forecast project modifications. Specifically, project modification costs within this unit are forecast to be associated with timber harvest on USFS lands ($ 309,000 to $ 781,000 per year resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems) and BOR reservoir activities ($ 263,000 annually). Major BOR reservoirs in this unit include Anderson Ranch and Arrowrock Reservoirs on the Boise River, Cascade Reservoir on the North Fork Payette, and Deadwood Reservoir on the Payette River. Forecast project modification costs include bull trout life- cycle studies and monitoring at all the reservoirs, and trap and haul passage around the Boise River reservoirs. Costs associated with FERC relicensing at the Lucky Peak facility on the Boise River, and power facilities at the Cascade impoundment, are expected to cost between $ 31,000 and $ 58,000 annually. Modifications to agricultural irrigation diversions could range from zero to $ 318,000 annually. These costs could potentially be associated with reductions in irrigation water withdrawals. Other activities are individually estimated to each account for less than $ 30,000 dollars per year in project modification costs. 62. Unit 18: Little Lost River Basin - The Little Lost River Unit is within Butte, Custer, and Lemhi counties in east- central Idaho. Approximately 184.6 km ( 115.4 mi) of stream habitat in the Little Lost River Basin is proposed for critical habitat designation. About eight percent of the proposed critical habitat within the Little Lost River Unit is currently unoccupied by the species. Approximately 76 percent of the proposed streams within the Little Lost River Basin Unit are located on Federal land. 63. The Little Lost River Unit is forecast to be a relatively inexpensive unit compared to others in the designation, and is a moderate- cost unit in terms of forecast costs per river mile of habitat proposed for designation. It is estimated that total annual costs associated with the bull trout within this unit will be between $ 150,000 and $ 176,000. Of this amount, a large share, approximately $ 136,000 annually, is forecast to be comprised of administrative costs, with the remainder made up of project modification costs. The largest category of project modification costs within this unit is forecast to be associated with timber harvest on USFS lands ($ 10,000 to $ 24,000 per year). Project modifications to agricultural irrigation diversions could result in costs from zero to $ 10,000 annually. Other activities are individually estimated to each account for less than $ 5,000 dollars per year in project modification costs. 64. Unit 19: Lower Columbia River Basin - The Lower Columbia Unit consists of portions of the Lewis, White Salmon, and Klickitat Rivers, and associated tributaries in ES- 25 southwestern and south- central Washington. The unit extends across Clark, Cowlitz, Klickitat, Skamania, and Yakima counties. Approximately 340 km ( 210 mi) of streams and three reservoirs covering 5,054 ha ( 12,488 ac) are proposed for critical habitat designation. About 20 percent of the proposed critical habitat within the Lower Columbia River Unit is currently unoccupied by the species. A low portion ( 18 percent) of the proposed streams and 29 percent of the proposed lakes and reservoirs within the Lower Columbia River Basin Unit are located on Federal land. 65. When forecast total costs for this unit are viewed in light of its size, the Lower Columbia River Basins Unit is a moderate- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. It is estimated that total annual costs associated with the bull trout within the unit will be between $ 385,000 to $ 494,000. Total administrative costs associated with the consultation process are estimated to be a relatively large fraction of these costs ($ 304,000 annually). In addition, project modification costs are forecast to be associated with FERC hydroelectric facility re- licensing activities ($ 67,000 to $ 153,000 annually). These FERC re- licensing costs are for the significant hydroelectric developments on the Lewis River, including Yale, Merwin, Swift No. 1, and Swift No. 2. These costs are projected to include study costs, trap and haul passage, and habitat acquisition. Swift No, 2 is one of two hydroelectric projects identified in this study where bull trout- related project modifications could have a significant impact on a small business; the other is Box Canyon in the Northeast Washington River Basin ( Unit 22). Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 66. Unit 20: Middle Columbia River Basin - The Middle Columbia River unit encompasses the entire Yakima River basin located in south central Washington, draining approximately 15,900 square km ( 6,155 square mi). The basin occupies most of Yakima and Kittitas counties, about half of Benton County, and a small portion of Klickitat County. Approximately 846 km ( 529 mi) of stream habitat and 6,066 ha ( 14,986 ac) of lake and reservoir surface area are proposed as critical habitat within this unit. About 13 percent of the proposed critical habitat within the Middle Columbia River Unit is currently unoccupied by the species. Approximately 44 percent of the waters proposed for designation within the Middle Columbia River Basin Unit are located on Federal land. 67. The Middle Columbia River Unit is a relatively low- cost unit in terms of cost per stream mile. Forecast costs associated with the bull trout within this unit are between $ 391,000 and $ 494,000 annually. Of this amount, a very small portion, approximately $ 50,000 annually, will be associated with the administrative costs of the consultation process, while the remainder will be associated with project modifications. While there are projected to be project modification costs associated with timber harvest activities ( through consultation with the USFS; estimated to be between $ 36,000 and $ 91,000 annually), the majority of forecast costs for this unit are associated with dam and reservoir operations. The BOR operates a system of five dams in this basin ( Cle Elum Lake, Kachess Lake, Keechelus Lake, Tieton Dam, and Bumping Lake) which provide power and irrigation for this agriculturally important region. It is estimated that project modification costs ( periodic trap- ES- 26 and- haul passage to allow genetic interchange between isolated bull trout populations) at the BOR operated impoundments in the unit will cost approximately $ 290,000 per year. Other activities are individually estimated to account for a small portion of forecast annual project modification costs. 68. TheMiddle Columbia River Unit is a relatively low- cost unit in terms of cost per stream mile. 69. Unit 21: Upper Columbia River Basin - The Upper Columbia River Basin includes three subunits in central and northern Washington: the Wenatchee River subunit in Chelan County; the Entiat River subunit in Chelan County; and the Methow River subunit in Okanogan County. A total of 909.7 km ( 565.4 mi) of streams and 1,010 ha ( 2,497 ac) of lake surface area are proposed for critical habitat. About nine percent of the proposed critical habitat within the Upper Columbia River Unit is currently unoccupied by the species. Approximately 58 percent of the proposed streams and 41 percent of the proposed lakes and reservoirs within the Upper Columbia River Basin Unit are located on Federal land. 70. The Upper Columbia River Basins Unit is a low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within this unit are between $ 196,000 to $ 505,000 annually. Total administrative costs associated with the consultation process are estimated to be $ 122,000, with the remainder of the forecast costs made up of project modification requirements. Major categories of forecast project modification costs within this unit are associated with FCRPS fisheries studies ( zero to $ 155,000 per year), and USFS timber harvest activities ($ 57,000 to $ 144,000 annually resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems). The FCRPS fisheries studies are for bull trout radio telemetry, snorkel and general monitoring study costs in the Entiat, Methow, and Wenatchee Rivers. In addition, modifications to agricultural irrigation diversions could result in costs from zero to $ 59,000 annually. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 71. Unit 22: Northeast Washington River Basins - The Northeast Washington unit includes bull trout above Chief Joseph Dam on the Columbia River. A total of 373.1 km ( 231.9 mi) of streams and 1,166 ha ( 2,880 ac) of lake surface area are proposed as critical habitat within this unit. A high proportion ( 54 percent) of the proposed critical habitat within the Northeast Washington River Basins Unit is currently unoccupied by the species, and approximately 58 percent of the proposed streams and reservoirs within this unit are located on Federal land. 72. The Northeast Washington River Basins Unit is forecast to be a relatively high- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within this unit are between $ 965,000 to $ 1.4 million annually. Total annual administrative costs are estimated to be a large share of these costs ($ 676,000), with the remainder associated with project modifications. A major category of ES- 27 annual project modification costs within this unit involves FERC hydroelectric facility re-licensing activities ( up to $ 540,000 annually). The estimated FERC re- licensing costs are related to two major hydroelectric facilities on the Pend Orielle River: Box Canyon and Boundary. The Box Canyon re- licensing terms are currently in continuing settlement negotiations, and likely costs specific to this facility are not currently available. However, a recent FERC environmental impact statement ( EIS) estimates that the present value of bull trout related project modifications ( including habitat acquisition) could total upwards of $ 60 million for this relatively small ( 60 MW) facility. Box Canyon is one of two hydroelectric projects identified in this study where bull trout- related project modifications could have a significant impact on a small business; the other is Swift No. 2 in the Lower Columbia River Basin ( Unit 19). Modifications to agricultural irrigation diversions could impose costs from zero to $ 46,000 annually. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 73. Unit 23: Snake River Basin in Washington - The Snake River Washington Unit includes two critical habitat subunits located in southeast Washington: the Tucannon River subunit located in Columbia and Garfield counties, and the Asotin Creek subunit within Garfield and Asotin counties. A total of 326 km ( 203 mi) of stream reaches are proposed as critical habitat within this unit. About 23 percent of the proposed critical habitat within the Snake River Basin in Washington Unit is currently unoccupied by the species. Approximately 52 percent of the proposed streams within the Snake River Basin Unit are located on Federal land. 74. The Snake River Basin Unit is a relatively low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within the unit will be between $ 230,000 to $ 287,000. Total annual administrative costs associated with the bull trout are estimated to be a large portion of this total ($ 201,000). The major category of project modification costs within this unit is forecast to be associated with USFS timber harvest activities ($ 21,000 to $ 53,000 annually). Agricultural irrigation diversions could see up to $ 22,000 in annual project modification costs within this unit. Other activities are estimated to each account for less than $ 5,000 dollars per year in project modification costs. 75. Unit 24: Columbia River - This unit is located in the states of Oregon and Washington and includes Clatsop, Columbia, Multnomah, Hood River, Wasco, Sherman, Gilliam, Morrow, and Umatilla counties in Oregon and Pacific, Wahkiakum, Cowlitz, Clark, Skamania, Klickitat, Benton, Walla Walla, Franklin, Yakima, Grant, Kittitas, Chelan, Douglas, and Okanogan counties in Washington. All of this stretch of the Columbia River is currently considered occupied by the bull trout. A relatively low share of the land adjacent to the river in this unit is made up of Federally managed lands ( approximately 39 percent). 76. The Columbia River Unit is a relatively low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast total costs associated with the bull trout within this unit will be between $ 243,000 to $ 504,000 annually. Total annual ES- 28 administrative costs associated with this unit are relatively low ($ 50,000). The major category of annual project modification costs within the unit are forecast to be associated FERC hydroelectric facility re- licensing activities ( up to $ 362,000 annually). Major FERC-licensed hydroelectric projects on the mainstem Columbia River include Priest Rapids, Rocky Reach, and Wells. These very large facilities are operated by PUD's. Other activities are individually forecast to account for less than $ 15,000 dollars per year in project modification costs. 77. Unit 25: Snake River - The lower Snake River is located in Washington ( Franklin, Walla Walla, Columbia, Whitman, and Asotin counties) from its mouth to the confluence with the Clearwater River at the cities of Clarkston, Washington and Lewiston, Idaho. The Snake River forms the border between Washington and Idaho from Clarkston/ Lewiston upstream to the Oregon border. The Snake River forms the boundary between Idaho and Oregon from that point upstream to the limit of this critical habitat unit. This portion of the Snake River is within Nez Perce, Idaho, Adams, and Washington counties in Idaho, and Wallowa, Baker, and Malheur counties in Oregon. About 20 percent of the proposed critical habitat within the Snake River Unit is currently unoccupied by the species. Approximately 50 percent of the habitat proposed for designation within the Snake River Unit is located on Federal land. 78. The Snake River Unit is a relatively low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within this unit are approximately $ 135,000. Administrative costs associated with the consultation process are estimated to be nearly all of that amount, or $ 125,000 annually. Small Business Effects 79. Under the Regulatory Flexibility Act ( RFA) ( as amended by the Small Business Regulatory Enforcement Fairness Act ( SBREFA) of 1996), whenever a Federal agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities ( i. e., small businesses, small organizations, and small government jurisdictions). The following summarizes the potential effects of critical habitat designation on small entities: Reductions in contractual USFS water deliveries could significantly impact five ranching/ farming operations annually. However, the location of the reduction in water deliveries within the critical habitat designation is uncertain. Small hydroelectric producers in Washington, Oregon, Idaho and Montana could be affected by project modification costs at the time of facility re- licensing. Specifically, the resulting project modifications could have a significant economic impact on the financial operations of Cowlitz County public utility district ( PUD) ( Unit 19 - Lower Columbia River) and Pend Orielle County PUD ( Unit 22 - Northeast Washington River). ES- 29 • Section 7- related costs associated with instream work is expected to affect approximately 15 placer mines annually in the John Day River Basin ( Unit 8) and Hells Canyon Complex ( Unit 12). While the financial characteristics of these mining operations are unknown, this analysis assumes the economic effect will be significant for those operations that are impacted. Energy Industry Impacts 80. Pursuant to Executive Order No. 13211, Federal agencies are required to submit a summary of the potential effects of regulatory actions on the supply, distribution and use of energy. Two criteria are relevant to this analysis: 1) reductions in electricity production in excess of 1 billion kilowatt- hours per year or in excess of 500 megawatts ( MWs) of installed capacity and 2) increases in the cost of energy production in excess of one percent. The constraints placed on energy production within the region from compliance with bull trout section 7 consultations will not result in significant decreases in production or increases in energy costs within the region. Changes From Draft Economic Analysis 81. Information supplied though public comments to the Draft Economic Analysis along with additional information from Action agency and Service personnel on issues raised through public comment led to several changes to the analysis. This Final Economic Analysis contains the following significant changes from the draft report. 1) Additional information on Habitat Conservation Plans ( HCPs) currently under development within the proposed designation has been incorporated. Additional costs on the order of one million dollars annually have been added to the estimated costs reported. 2) The BOR supplied extensive comments on current and potential costs associated with consultation on its impoundments. Costs associated with potential project modifications to Yakima Drainage dams ( as well as for other BOR impoundments within the proposed designation) have been reduced in response to the new BOR information. 3) Information from Hecla Mining Company identified additional consultation- related costs for the Hecla Grouse Creek and Thompson Creek mines. These costs have been included in the section 4 discussion of USFS mining activity. 4) Information from USFS personnel from the Wallowa/ Whitman National Forest identified impacts associated with limitations on in- stream work windows for placer mining operations as baseline State of Oregon regulations that are independent of bull trout section 7 consultation. Estimated impacts to Oregon placer mining have been adjusted accordingly. ES- 30 5) Additionally, corrections to minor errors within the report, not impacting final cost estimates, have been made in response to public comments. Caveats to Economic Analysis 82. Exhibit ES. 10 presents the key assumptions of this economic analysis, as well as the potential direction and relative scale of bias introduced by the assumptions. 83. These caveats below describe factors that introduce uncertainty into the results of this analysis. ES. 10 CAVEATS TO THE ECONOMIC ANALYSIS Key Assumption Projected USFS timber harvest activity is based on recent regional history and ignores the declining long- term trend of the industry. USFS water diversion reductions occur annually and representative water costs reflect the high- end of water lease rates in Washington. Cost of USFS water diversion reductions and timber harvest project modifications are distributed across the units in proportion to USFS non- wilderness acreage. While this may have no effect on the total cost estimate, it may have an effect on the unit cost estimate. Total costs of providing technical assistance is expected to be small relative to other economic impacts; therefore, this analysis does not quantify the instances and costs of technical assistance efforts. Project modifications incorporating measures suggested by the Service and voluntarily agreed to by the applicant during the informal consultation process in order to minimize impact to the bull trout and/ or its habitat are not quantified in this analysis. Amortization of fishery- related capital investments are based on the life of the project rather than a shorter revenue recovery period. Changes in hydroelectric power revenues attributable to reductions in operational flexibility at Libby and Hungry Horse dams is not quantified Most of the project modification costs will either be borne directly by or passed onto the Federal government. The FPA, the Pacific Northwest Electric Power Planning and Conservation Act, and fisheries management directives ( Northwest Forest Plan, INFISH and PACFISH) provide baseline protection. Project modification costs allocated between bull trout and other listed species. Limited consultation with the NRCS is anticipated and based on a the record of past formal and informal consultation activity on the bull trout Effect on Cost Estimate + + +/- - - - - +/- +/- +/- - -: This assumption may result in an underestimate of real costs. + : This assumption may result in an overestimate of real costs. +/-: This assumption has an unknown effect on estimates. ES- 31 Estimated Cost of the Final Designation 84. The analysis contained in this report is consistent with the designation as described in the proposed rule; 5 however, the Service is expected to exclude some proposed areas of habitat to arrive at a final designation. The purpose of this section is to detail the expected changes to the proposed designation and show the implication of these changes on estimated consultation and project modification costs. 85. Exhibit ES. ll compares the spatial extent of the proposed and expected final designations for bull trout critical habitat for both river and stream miles and lake and reservoir acres. Overall, 1,925 miles of rivers and streams and approximately 55,000 acres of lakes and reservoirs are expected to be excluded from critical habitat in the final designation. The greatest reductions in critical habitat stream miles are expected to occur in the Deschutes River Unit ( 60.5 percent reduction), Hood River Unit ( 33.2 percent), Southwest Idaho River Basins Unit ( 32.8 percent), and the Hells Canyon Complex Unit ( 21.3 percent). Most of the reductions in lake and reservoir critical habitat acres are expected to occur in the Deschutes River, Southwest Idaho River Basins and Malheur River Units, all with more than a 70 percent reduction in designated lake and reservoir critical habitat compared to the original proposed designation. ExhibitES. il SUMMARY OF CHANGES IN BULL TROUT CRITICAL HABITAT FROM PROPOSED TO FINAL DESIGNATION Unit Unit 1 - Klamath River Basin Unit 2 - Clark Fork River Basin Unit 3 - Kootenai River Basin Unit 4 - Willamette River Basin Unit 5 - Hood River Basin Unit 6 - Deschutes River Basin Unit 7 - Odell Lake Unit 8 - John Day River Basin Unit 9 - Umatilla- Walla Walla River Basins Unit 10 - Grande Ronde River Basin Unit 11 - Imaha/ Snake River Basins Unit 12 - Hells Canyon Complex Unit 13 - Malheur River Basin Unit 14 - Coeur d'Alene Lake Basin Proposed Designation Stream Miles 296 3,372 368 200 103 439 15 639 396 644 191 599 233 403 Lake and Reservoir Acres 33,939 304,226 30,094 8,899 91 23,314 6,439 0 0 0 0 0 5,926 27,296 Final Designation Stream Miles 280 3,368 368 200 69 173 13 563 348 625 191 471 214 403 Lake and Reservoir Acres 33,939 304,225 30,094 8,899 91 3,407 6,439 0 0 0 0 0 1,769 27,296 5 U. S. Fish and Wildlife Service, Proposed Designation of Critical Habitat for the Klamath River and Columbia River Distinct Population Segments of Bull Trout, November 29, 2002 ( 67 FR 71235- 71284). ES- 32 Exhibit ES. ll SUMMARY OF CHANGES IN BULL TROUT CRITICAL HABITAT FROM PROPOSED TO FINAL DESIGNATION Unit Unit 15 - Clearwater River Basin Unit 16 - Salmon River Basin Unit 17 - Southwest Idaho River Basins Unit 18 - Little Lost River Basin Unit 19 - Lower Columbia River Basin Unit 20 - Middle Columbia River Basin Unit 21 - Upper Columbia River Basin Unit 22 - Northwest Washington River Basins Unit 23 - Snake River Basin in Washington Unit 24 - Columbia River Basin Unit 25 - Snake River Basin Total Proposed Designation Stream Miles 1,904 4,296 1,657 113 171 523 591 232 204 537 343 18,468 Lake and Reservoir Acres 16,610 3,683 41,307 0 12,078 14,987 2,553 1,279 0 0 0 532.724 Final Designation Stream Miles 1,655 3,835 1,114 110 145 519 578 232 189 537 343 16,543 Lake and Reservoir Acres 16,610 3,487 10,651 0 12,000 15,548 2,553 1,279 0 0 0 478,188 86. As noted, the costs reported in the body of this report are consistent with the proposed designation. Expected changes to the proposed designation and the impact of these exclusions on costs are summarized in Exhibit ES. 12, where estimates of annual section 7- related consultation costs for both the proposed and expected final bull trout critical habitat designations are shown. The expected changes to the final designation impacts estimated costs in two ways. 87. First, where future consultation and project modification costs were estimated for dams and reservoirs located within stream reaches that are expected to be excluded from the final critical habitat designation, the costs associated with these anticipated consultations are removed. Three critical habitat units have dams and reservoirs located on waters expected to be excluded in the final designation. The previously quantified costs associated with consultations on Lucky Peak and Cascade Dams and Reservoirs, and Warm Springs, Crane Prairie, and Wickiup Reservoirs have therefore been removed from the forecast total costs associated with the final critical habitat designation. Costs associated with consultations on Lucky Peak and Cascade Dams and Reservoirs have been removed from estimates for the Southwest Idaho River Basins Units, costs associated with consultation on Warm Springs Reservoir have been removed from estimates for the Malheur River Unit, and costs associated with consultations on Crane Prairie and Wickiup Reservoirs have been removed from estimates for the Deschutes River Unit. 88. Second, because the Service is expected to exclude areas of unknown occupancy from the final designation, the spatial extent of unoccupied habitat in each critical habitat ES- 33 unit is adjusted to reflect the expected final designation ( see Appendix F, Exhibit F. 11), and the forecast costs of the expected final designation reflect these changes. 89. Exhibit ES. 12 presents a summary of the annualized forecast total costs, by unit, likely to be associated with the final critical habitat designation over the next ten years. Overall, the removal of waters from the proposed to the expected final bull trout designation is expected to lower forecast section 7- related consultation and project modification costs by approximately $ 18 to $ 24 million over the next ten years ( nine percent). In six units where no changes in the proposed designation were made, there is no change in forecast costs. As a percentage of unit costs, the greatest reduction in forecast costs resulting from the exclusions is expected to occur in the Deschutes River Basin Unit, where forecast costs of the expected final designation are 43 to 55 percent of the costs originally forecast for the proposed designation. 90. The economic impacts associated with the final designation, discounted to present value using a rate of seven percent, are forecast to range from approximately $ 180 to $ 245 million over the next ten years, or $ 18.0 to $ 24.5 million annually. Total costs associated with the final designation for the Klamath Distinct Population Segment of bull trout are forecast to range from approximately $ 5 million to $ 7 million over the next ten years ($ 0.5 to 0.7 million annually), while costs associated with the final designation for the Columbia Distinct Population Segment of bull trout are forecast to range from approximately $ 175 million $ 235 million ($ 17.5 to $ 23.5 million annually). 91. These costs will be incurred primarily by Federal agencies responsible for section 7 consultations ( approximately 65 percent of forecast costs) and the Service ( approximately five to ten percent of forecast costs); private entities will incur the remaining 25 to 30 percent. Project modification costs account for as much as 50 to 60 percent of forecast costs, and administrative costs the remaining 40 to 50 percent. Dam and reservoir- related consultations, including power facility re- licensing, account for approximately 42 percent of forecast project modification costs ( excluding the cost associated with reduced irrigation diversions). Timber harvest, irrigation diversions, habitat conservation plans, and mining account for 20 percent, 12 percent, nine percent, and three percent of forecast project modification costs, respectively. 92. The main text of the report discusses impacts to small businesses expected under the rulemaking as proposed. Impacts to small businesses are primarily related to potential reductions in USFS water deliveries to farmers/ ranchers, project modifications triggered during hydroelectric facility re- licensing, and costs associated with activity restrictions for placer mining. Under the final designation, the reduction in small business impacts would parallel the extent to which these activities occur in habitat removed from the final designation and losses related to these activities reduced. ES- 34 Exhibit ES. 12 SUMMARY COMPARISON OF PROPOSED AND FINAL CRITICAL HABITAT DESIGNATION SECTION 7 COSTS FOR THE BULL TROUT ( Annualized $ l, 000fs) Unit Unit 1 - Klamath River Basin Unit 2 - Clark Fork River Basin Unit 3 - Kootenai River Basin Unit 4 - Willamette River Basin Unit 5 - Hood River Basin Unit 6 - Deschutes River Basin Unit 7 - Odell Lake Unit 8 - John Day River Basin Unit 9 - Umatilla- Walla Walla River Basins Unit 10 - Grande Ronde River Basin Unit 11 - Imaha/ Snake River Basins Unit 12 - Hells Canyon Complex Unit 13 - Malheur River Basin Unit 14 - Coeur d'Alene Lake Basin Unit 15 - Clearwater River Basin Unit 16 - Salmon River Basin Unit 17 - Southwest Idaho River Basins Unit 18 - Little Lost River Basin Unit 19 - Lower Columbia River Basin Unit 20 - Middle Columbia River Basin Unit 21 - Upper Columbia River Basin Unit 22 - Northwest Washington River Basins Unit 23 - Snake River Basin in Washington Unit 24 - Columbia River Basin Estimated Range of Cost Proposed Critical Habitat Designation Low Estimate $ 529 1,321 328 4,497 328 430 51 446 98 467 559 1,939 2,006 429 995 2,059 1,004 150 385 391 196 965 230 243 High Estimate $ 733 2,192 402 4,891 413 719 56 600 211 580 605 2,338 2,095 693 1,676 3,319 1,867 176 494 494 505 1,397 287 504 Estimated Range of Cost Final Critical Habitat Designation Low Estimate $ 507 1,321 328 3,463 248 195 51 411 81 444 559 1,443 1,792 279 881 1,942 698 144 308 376 178 663 177 243 High Estimate $ 703 2,192 402 3,766 312 401 56 553 175 551 605 1,740 1,874 450 1,483 3,130 1,348 169 396 475 460 959 221 504 ES- 35 Exhibit ES. 12 SUMMARY COMPARISON OF PROPOSED AND FINAL CRITICAL HABITAT DESIGNATION SECTION 7 COSTS FOR THE BULL TROUT ( Annualized $ l, 000fs) Unit Unit 25 - Snake River Basin Multiple unit or unknown a Estimated Range of Cost Proposed Critical Habitat Designation Low Estimate 135 1,303 High Estimate 135 1,303 Estimated Range of Cost Final Critical Habitat Designation Low Estimate 135 1,303 High Estimate 135 1,303 Notes: These estimates include all section 7 costs, including those co- extensive with the listing and designation of critical habitat for the bull trout. Costs are reported in 2003 dollars. a Miscellaneous costs ($ 213,000 annually) and the costs associated with development of HCP's ($ 1,090,000 annually) have not been allocated to the unit level due to uncertainty as to their location. ES- 36 INTRODUCTION AND BACKGROUND SECTION 1 93. In November 2002, the Service proposed to designate critical habitat for the Columbia River and Klamath River DPSs of bull trout ( Salvelinus confluentus), hereafter " bull trout." 6 The purpose of this report is to identify and analyze potential economic impacts associated with the proposed critical habitat designation. This report was prepared by Bioeconomics, Inc. of Missoula, Montana. 94. Section 4( b)( 2) of the Act requires the Service to designate critical habitat on the basis of the best scientific data available, after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. The Service may exclude areas from critical habitat designation when the benefits of exclusion outweigh the benefits of including the areas within critical habitat, provided the exclusion will not result in extinction of the species. 95. Under the listing of a species, section 7( a)( 2) of the Act requires Federal agencies to consult with the Service in order to ensure that activities they fund, authorize, permit, or carry out are not likely to jeopardize the continued existence of the species. The Service defines jeopardy as any action that would appreciably reduce the likelihood of both the survival and recovery of the species. For designated critical habitat, section 7( a)( 2) also requires Federal agencies to consult with the Service to ensure that activities they fund, authorize, permit, or carry out do not result in destruction or adverse modification of critical habitat. Adverse modification of critical habitat is currently construed as any direct or indirect alteration that appreciably diminishes the value of critical habitat for conservation of a listed species. 6 On January 26,2001, the Alliance for the Wild Rockies, Inc. and Friends of the Wild Swan, Inc. filed a lawsuit in the U. S. District Court of Oregon challenging the Service's failure to designate critical habitat for bull trout. The Service entered into a settlement agreement on January 14, 2002, which stipulated that the Service would make critical habitat determinations for five populations of bull trout ( Civil Case No: CV 01- 127- JO). The Service has proposed critical habitat for the Columbia River and Klamath River populations, which are the subject of this analysis. 1- 1 1.1 Description of Species and Habitat7 96. Bull trout { Salvelinus confluentus, family Salmonidae) is a char native to waters of western North America. The historic range of bull trout includes major river basins in the Pacific Northwest from about 41° north to 60° north latitude, extending south to the McCloud River in northern California and the Jarbidge River in Nevada, and north to the headwaters of the Yukon River in Northwest Territories, Canada. To the west, bull trout range includes Puget Sound, various coastal rivers of British Columbia, Canada, and southeast Alaska. Bull trout occur in portions of the Columbia River and Snake River basins, extending east to headwater streams in Montana and Idaho, and into Canada. Bull trout also occur in the Klamath River basin of south- central Oregon. East of the Continental Divide in Canada, the bull trout's range includes the headwaters of the Saskatchewan River in Alberta, and the MacKenzie River system in Alberta and British Columbia. 97. Bull trout were first described as Salmo spectabilis by Girard in 1856 from a specimen collected on the lower Columbia River near The Dalles, Oregon, and subsequently described under a number of names such as Salmo confluentus and Salvelinus malma. Bull trout and Dolly Varden ( Salvelinus malma) were previously considered a single species. However, in 1980, the American Fisheries Society formally recognized bull trout and Dolly Varden as separate species. Two of the most useful characteristics in separating the two species are the shape and size of the head. The head of bull trout is more broad and flat on top, unlike Dolly Varden. Bull trout have an elongated body and large mouth, with the maxilla ( jaw) extending beyond the eye and with well- developed teeth on both jaws and head of the vomer ( a bone in teleost fishes that form the front part of the roof of the mouth and often bears teeth). Bull trout have 11 dorsal fin rays, nine anal fin rays, and the caudal fin is slightly forked. Although they are often olive green to brown with paler sides, color is variable with locality and habitat. 98. Bull trout exhibit both resident and migratory life history strategies. Resident bull trout complete their entire life cycle in the tributary streams where they spawn and rear. Migratory bull trout spawn in tributary streams where juvenile fish rear from one to four years before migrating to either a larger river or lake, where they spend their adult life, returning to the tributary stream only to spawn. These migratory forms occur in areas where conditions allow for movement from upper watershed spawning streams to larger downstream waters that contain greater foraging opportunities. Bull trout that migrate to a downstream river are referred to as " fluvial" fish, while the term " adfluvial" is used to describe fish that migrate to a lake or reservoir. Resident and migratory forms may spawn in the same areas and either form can produce resident or migratory offspring. 7 Information on the bull trout and its habitat is taken from the U. S. Fish and Wildlife Service, Proposed Designation of Critical Habitat for the Klamath River and Columbia River Distinct Population Segments of Bull Trout, November 29, 2002 ( 67 FR 71235- 71284). 1- 2 99. The Klamath River population segment consists of bull trout in the Upper Klamath Lake, Sprague River, and Sycan River watersheds in Oregon. Historical records suggest that bull trout were once widely distributed and exhibited diverse life- history traits in the Klamath River basin. Currently, bull trout in this basin are non- migratory fish that are confined to headwater streams. The local populations that remain reside in an estimated 21 percent of the historic range of bull trout in the Klamath River basin, and they are isolated from one another. 100. The Columbia River population segment includes bull trout residing in portions of Oregon, Washington, Idaho, and Montana. The Bull Trout Draft Recovery Plan ( Draft Recovery Plan) ( Service 2002) identifies 22 recovery units within the Columbia River basin: the Willamette River ( upper tributaries including the McKenzie River), Lower Columbia River ( principally the Lewis, White Salmon, and Klickitat Rivers), Hood River, Deschutes River, Odell Lake, John Day River, Umatilla and Walla Walla Rivers, Middle Columbia River ( principally the Yakima River), Snake River ( including Asotin Creek and Tucannon River), Grande Ronde River, Clearwater River, Salmon River, Little Lost River, Imnaha River, Hells Canyon ( including Powder River), Malheur River, Southwest Idaho, Upper Columbia River ( principally the Wenatchee, Entiat, and Methow Rivers), Northeast Washington, Clark Fork River, Kootenai River, and Coeur d'Alene Lake. Bull trout are estimated to have once occupied about 60 percent of the Columbia River basin; they presently occur in approximately 45 percent of their historic range. Although still somewhat widely distributed in the Columbia River basin, bull trout occur in low numbers in many areas and populations are considered depressed or declining across much of their range. 101. Many factors have contributed to the decline of bull trout in the Columbia and Klamath River basins. However, several appear to be particularly significant: ( 1) fragmentation and isolation of local populations due to dams and water diversions that have eliminated habitat, altered water flow and temperature regimes, and impeded migratory movements; ( 2) degradation of spawning and rearing habitat in upper watershed areas, particularly alterations in sedimentation rates and water temperature resulting from past forest and rangeland management practices and intensive development of roads; and ( 3) the introduction and spread of non- native species, particularly brook trout ( Salvelinusfontinalis) and lake trout ( Salvelinus namaycush), which compete with bull trout for limited resources and, in the case of brook trout, hybridize with bull trout. 102. Bull trout have more specific habitat requirements than most other salmonids. Habitat components that influence bull trout distribution and abundance include water temperature, cover, channel form and stability, spawning and rearing substrate conditions, and migratory corridors. 103. Bull trout are found primarily in cold streams; water temperatures above 15° Celsius ( C) ( 59° Fahrenheit ( F)) are believed to limit bull trout distribution. Adult bull trout have been observed in large rivers throughout the Columbia River basin in water temperatures up to 20° C ( 68° F); however, there are documented steady and substantial declines in 1- 3 abundance in stream reaches where water temperature ranged from 15° to 20° C ( 59° to 68° F). In large rivers, bull trout are often observed " dipping" into the lower reaches of tributary streams, and it is suspected that cooler waters in these tributary mouths may provide important thermal refugia, allowing them to forage, migrate, and overwinter in waters that would otherwise be, at least seasonally, too warm. 104. Preferred spawning habitat consists of low- gradient stream reaches with loose, clean gravel, and water temperatures that range from 4° to 10° C ( 39° to 51° F). Such areas are often associated with cold- water springs or groundwater up- welling. Because bull trout eggs incubate about seven months in the gravel, they are especially vulnerable to fine sediments and water quality degradation. Increases in fine sediment appear to reduce egg survival and emergence. Juveniles are likely similarly affected, as they also live on or within the stream bed cobble. 105. Throughout their lives, bull trout require complex forms of cover, including large woody debris, undercut banks, boulders, and pools. Bull trout are opportunistic feeders, with food habits that are primarily a function of size and life- history strategy. Resident and juvenile migratory bull trout prey on terrestrial and aquatic insects, macro- zooplankton, and small fish. Adult migratory bull trout feed almost exclusively on other fish. 106. The ability to migrate is important to the persistence of bull trout. Maintaining the full complement of bull trout life history forms appears to be important for long- term population persistence in a dynamic and unpredictable environment. Migratory bull trout become much larger than resident fish in the more productive waters of larger streams and lakes, leading to increased reproductive potential. Migration also results in increased dispersion of the population which facilitates gene flow among local populations when individuals from different local populations interbreed, stray, or return to non- natal streams. Local populations that are extirpated by catastrophic events may also become re- established by bull trout migrants. 107. Introduced brook trout threaten bull trout through hybridization, competition, and possibly predation. Hybridization between brook trout and bull trout has been reported in Montana, Oregon, Washington, and Idaho. In addition, brook trout mature at an earlier age and have a higher reproductive rate than bull trout. This difference appears to favor brook trout over bull trout when they occur together, often leading to the decline or extirpation of bull trout. Brook trout also appear to adapt better to degraded habitat than bull trout and are more tolerant of high water temperatures. Non- native lake trout also negatively affect bull trout. In a study of 34 lakes in Montana, Alberta, and British Columbia, lake trout appeared to limit foraging opportunities and reduce the distribution and abundance of migratory bull trout in mountain lakes. 108. The Service determined the primary constituent elements of bull trout habitat from studies of their habitat requirements, life history characteristics, and population biology, as outlined above. These primary constituent elements are: 1- 4 Permanent water and associated substrate having low levels of contaminants such that normal reproduction, growth and survival are not inhibited; Water temperatures ranging from 2° to 15° C ( 37° to 59° F). Adequate thermal refugia may be necessary for persistence of bull trout if water temperatures commonly exceed this range. Specific temperatures within this range will vary depending on bull trout life history stage and form, geography, elevation, diurnal and seasonal variation, shade, such as that provided by riparian habitat, and local groundwater influence; • Complex stream channels with features such as woody debris, side channels, pools, and undercut banks to provide a variety of depths, velocities, and instream structures; • Substrates of sufficient amount, size, and composition to ensure success of egg and embryo overwinter survival, fry emergence, and young- of- the- year and juvenile survival. A minimal amount of fines less than 0.63 cm ( 0.25 in) in diameter and minimal substrate embeddedness are characteristic of these conditions; • A natural hydrograph, including high, low, peak, and base flows within historic ranges or, if regulated, a hydrograph that demonstrates the ability to support bull trout populations; • Springs, seeps, groundwater sources, and subsurface water connectivity to contribute to water quality and quantity; • Migratory corridors with minimal physical, biological or chemical barriers between spawning, rearing, overwintering, and foraging habitats, including intermittent or seasonal barriers induced by high water temperatures or low flows; • An abundant food base including terrestrial organisms of riparian origin, aquatic macroinvertebrates, and forage fish; and • Few or no predatory, interbreeding, or competitive non- native species present. An area need not include all of these elements to qualify for designation as critical habitat. 1.2 Proposed Critical Habitat 109. The areas proposed for designation as critical habitat for the bull trout provide one or more of the primary constituent elements described above. All of the proposed areas require special management considerations to ensure their contribution to the conservation of the bull trout. The critical habitat area consists of 18,469 river miles and 532,721 acres of lake and reservoir habitat within 25 units. While the lateral extent of proposed riverine 1- 5 critical habitat is the width of the stream channel defined by its bankfull elevation, the designation of critical habitat is expected to impact inland activity. How far inland the designation's effects extend is a more or less a site specific issue. For example, with regards to land- based activities such as timber sales or grazing practices, it is a matter of site specific physical processes such as sediment transport, the local topography, and the size of the drainage basin. Descriptions of each critical habitat unit are provided in Appendix A. 1.3 Framework and Methodology 110. The primary purpose of this analysis is to estimate the economic impact associated with the designation of critical habitat for bull trout. 8 This information is intended to assist the Secretary in making decisions about whether the benefits of excluding particular areas from the designation outweigh the benefits of including those areas in the designation. 9 In addition, this information allows the Service to address the requirements of Executive Orders 12866 and 13211, the RFA, as amended by the SBREFA. 10 111. This chapter provides the framework for this analysis. First, it defines the economic effects considered in the analysis. Second, it establishes the baseline against which these effects are measured. Third, it describes the measurement of direct compliance costs, which include costs associated with, and generated as a result of, section 7 consultations. Fourth, it identifies potential indirect economic effects of the rule resulting from ( 1) compliance with other parts of the Act potentially triggered by critical habitat, ( 2) compliance with other laws, and ( 3) time delays and regulatory uncertainty. Fifth, it discusses the need for an economic assessment of the benefits of critical habitat designation. Finally, the section concludes by discussing the time frame for the analysis and the general steps followed in the analysis. 1.3.1 Types of Economic Effects Considered 112. This economic analysis considers both the economic efficiency and distributional effects. For the purpose of this analysis, economic efficiency effects generally reflect the " opportunity costs" associated with the commitment of resources required to comply with the Act. For example, if the activities that can take place on a parcel of private land are limited as a result of a designation, and thus the market value of the land reduced, this reduction in value represents one measure of opportunity cost or change in economic efficiency. Similarly, the costs incurred by a Federal Action agency to consult with the Service under section 7 represent economic opportunity costs. 8 This analysis considers the effects of the regulatory action as proposed in the Federal Register on November 29, 2002 ( 67 FR 71236). M6U. S. C. § 1533( b)( 2). 10 Executive Order 12866, " Regulatory Planning and Review," September 30, 1993; Executive Order 13211, " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use," May 18, 2001; 5 U. S. C. § § 601 etseq; and Pub Law No. 104- 121. 1- 6 113. This analysis also addresses how the impacts are distributed, including an assessment of any local or regional economic impacts and the potential effects on small entities and the energy industry. This information can be used by decision- makers to assess whether the effects might unduly burden a particular group or economic sector. 114. For example, while the designation may have a relatively small impact when measured in terms of changes in economic efficiency, individuals employed in a particular sector of the economy in the geographic area of the designation may experience relatively greater effects. The difference between economic efficiency effects and distributional effects, as well as their application in this analysis, are discussed in greater detail below. Efficiency Effects 115. At the guidance of the OMB and in compliance with Executive Order 12866 " Regulatory Planning and Review," Federal agencies measure changes in economic efficiency in order to understand how society, as a whole, will be affected by a regulatory action. 11 In the context of this regulatory action, these efficiency effects represent the opportunity cost of resources used or benefits foregone by society as a result of critical habitat designation and other co- extensive regulations. 12 Economists generally characterize opportunity costs in terms of changes in producer and consumer surpluses in affected markets. 13 116. In some instances, compliance costs may provide a reasonable approximation for the efficiency effects associated with a regulatory action. For example, a landowner or manager may need to enter into a consultation with the Service to ensure that a particular activity will not adversely modify critical habitat. The effort required for the consultation represents an economic opportunity cost, because the landowner or manager's time and effort would have been spent in an alternative activity had the parcel not been included in the designation. When compliance activity is not expected to significantly affect markets — that is, not result in a shift in the quantity of a good or service provided at a given price, or in the quantity of a good or service demanded given a change in price ~ the measurement of compliance costs can provide a reasonable estimate of the change in economic efficiency. 11 Executive Order 12866, " Regulatory Planning and Review," September 30,1993; U. S. Office of Management and Budget, " Circular A- 4," September 17, 2003. 12 The term " co- extensive" is discussed in greater detail in Section 1.3.3. 13 For additional information on the definition of " surplus" and an explanation of consumer and producer surplus in the context of regulatory analysis, see Gramlich, Edward M, A Guide to Benefit- Cost Analysis ( 2nd Ed.), Prospect Heights, Illinois: Waveland Press, Inc., 1990; and U. S. EPA, Guidelines for Preparing Economic Analyses, EPA 240- R- 00- 003, September 2000, available at http:// yosemite. epa. gov/ ee/ epa/ eed. nsf/ webpages/ Guidelines. html. 1- 7 117. Where a designation is expected to significantly impact a market, it may be necessary to estimate changes in producer and consumer surpluses. For example, a designation that precludes the development of large areas of land may shift the price and quantity of housing supplied in a region. In this case, changes in economic efficiency can be measured by considering changes in producer and consumer surplus in the real estate market. 118. This analysis begins by measuring reasonably foreseeable compliance costs. As noted above, in some cases, compliance costs can provide a reasonable estimate of changes in economic efficiency. However, if the designation is expected to significantly impact markets, the analysis will consider potential changes in consumer and/ or producer surplus in affected markets. Distributional and Regional Economic Effects 119. Measurements of changes in economic efficiency focus on the net impact of the regulation, without consideration for how certain economic sectors or groups of people are affected. Thus, a discussion of efficiency effects alone may miss important distributional considerations concerning groups that may be disproportionately affected. OMB encourages Federal agencies to consider distributional effects separately from efficiency effects. 14 This analysis considers the potential for several types of distributional effects, including impacts on small entities; impacts on energy supply distribution and use; and regional economic impacts. It is important to note that these are fundamentally different measures of economic impact than efficiency effects, and thus cannot be added to or compared with estimates of changes in economic efficiency. Impacts on Small Entities and Energy Supply, Distribution and Use 120. This analysis considers how small entities, including small businesses, organizations, and governments, as defined by the RFA, might be affected by critical habitat designation and other co- extensive regulatory actions. 15 In addition, in response to Executive Order 13211 " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use," this analysis considers the impacts of critical habitat on the energy industry and its customers. 16 14 U. S. Office of Management and Budget, " Circular A- 4," September 17, 2003. 155U. S. C. § 60\ etseq. 16 Executive Order 13211, " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use," May 18, 2001. 1- 8 Regional Economic Effects 121. Regional economic impact analysis provides an assessment of the potential localized effects of critical habitat designation and other co- extensive regulations. Specifically, regional economic impact analysis produces a quantitative estimate of the potential magnitude of the initial change in the regional economy resulting from a regulatory action. Regional economic impacts are commonly measured using regional input/ output models. These models rely on multipliers that mathematically represent the relationship between a change in one sector of the economy ( e. g., hydroelectric power generation) and the effect of that change on economic output, income, or employment in other local industries ( e. g., manufacturers relying on the electricity generated). These economic data provide a quantitative estimate of the magnitude of shifts of jobs and revenues in the local economy. 122. The use of regional input/ output models can overstate the long- term impacts of a regulatory change. Most importantly, these models provide a static view of the economy of a region. That is, they measure the initial impact of a regulatory change on an economy but do not consider long- term adjustments that the economy will make in response to this change. For example, these models provide estimates of the number of jobs lost as a result of a regulatory change, but do not consider re- employment of these individuals over time. In addition, the flow of goods and services across the regional boundaries defined in the model may change as a result of the designation, compensating for a potential decrease in economic activity within the region. 123. Despite these and other limitations, in certain circumstances regional economic impact analysis may provide useful information about the scale and scope of localized impacts. It is important to remember that measures of regional economic effects generally reflect shifts in resource use rather than efficiency losses. These types of distributional effects, therefore, should be reported separately from efficiency effects ( i. e., not summed). In addition, measures of regional economic impact cannot be compared with estimates of efficiency effects. 1.3.2 Defining the Baseline 124. The purpose of this analysis is to measure the economic impact of compliance with the protections derived from the designation of critical habitat, including habitat protections that may be " co- extensive" with the listing of the species ( the term " co- extensive" is described in greater detail in the following section). Economic impacts to land use activities may exist in the absence of co- extensive protections. These impacts may result from, for example: • Local zoning laws; • State and natural resource laws; and 1- 9 • Enforceable management plans and BMPs applied by other State and Federal agencies. 125. Economic impacts that result from these types of protections are not included in this assessment; they are considered to be part of the " baseline." Existing laws, regulations, and policies are described in greater detail in Section 2.3 of this analysis. 1.3.3 Direct Compliance Costs 126. The measurement of direct compliance costs focuses on the implementation of section 7 of the Act. This section requires Federal agencies to consult with the Service to ensure that any action authorized, funded, or carried out will not likely jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of critical habitat. The administrative costs of these consultations, along with the costs of project modifications resulting from these consultations, represent the direct compliance costs of designating critical habitat. 127. This analysis does not differentiate between consultations that result from the listing of the species ( i. e., the jeopardy standard) and consultations that result from the presence of critical habitat ( i. e., the adverse modification standard). Consultations resulting from the listing of the species, or project modifications meant specifically to protect the species as opposed to its habitat, may occur even in the absence of critical habitat. However, in 2001, the U. S. 10th Circuit Court of Appeals instructed the Service to conduct a full analysis of all of the economic impacts of critical habitat designation, regardless of whether those impacts are attributable co- extensively to other causes. 17 Given the similarity in regulatory definitions between the terms " jeopardy" and " adverse modification," in practice it can be difficult to pre- determine the standard that drives a section 7 consultation. Consequently, in an effort to ensure that this economic analysis complies with the instructions of the 10th Circuit as well as to ensure that no costs of the proposed designation are omitted, the potential effects associated with all section 7 impacts in or near proposed critical habitat are fully considered. In doing so, the analysis ensures that any critical habitat impacts that are co- extensive with the listing of the species are not overlooked. 1.3.4 Indirect Costs 128. A designation may Title: Final economic analysis of critical habitat designation for the bull trout Author: U.S. Fish and Wildlife Service Year: 2004, 2005 FINAL ECONOMIC ANALYSIS OF CRITICAL HABITAT DESIGNATION FOR THE BULL TROUT September 2004 FINAL ECONOMIC ANALYSIS OF CRITICAL HABITAT DESIGNATION FOR THE BULL TROUT Prepared for: Division of Economics U. S. Fish and Wildlife Service 4401 N. Fairfax Drive Arlington, VA 22203 Prepared by: Bioeconomics, Inc. 315 S. 4th E. Missoula, MT 59801 TABLE OF CONTENTS EXECUTIVE SUMMARY ES- 1 1 INTRODUCTION AND BACKGROUND 1- 1 1.1 Description of Species and Habitat 1- 2 1.2 Proposed Critical Habitat 1- 5 1.3 Framework and Methodology 1- 6 1.3.1 Types of Economic Effects Considered 1- 6 1.3.2 Defining the Baseline 1- 9 1.3.3 Direct Compliance Costs 1- 10 1.3.4 Indirect Costs 1- 10 1.3.5 Benefits 1- 14 1.3.6 Analytic Time Frame 1- 15 1.3.7 General Analytic Steps 1- 15 1.4 Information Sources 1- 16 2 RELEVANT BASELINE INFORMATION 2- 1 2.1 Socioeconomic Profile of the Critical Habitat Areas 2- 1 2.1.1 Population 2- 1 2.1.2 Land Ownership and Major Uses 2- 2 2.1.3 Employment 2- 12 2.1.4 Economic and Demographic Characteristics of the 74 Counties Containing Bull Trout Critical Habitat 2- 15 2.1.5. Tribes of the Columbia and Klamath Basins 2- 18 2.2 Baseline Elements 2- 21 2.2.1 Recovery Plan 2- 21 2.2.2 Overlap with Other Listed Species 2- 22 2.2.3 Federal and State Statutes and Regulations 2- 25 2.2.4 Summary Discussion of Impacts of Baseline Regulations on Economic Analysis 2- 40 2.2.5 Discussion: Impacts of Existing Fisheries Policies on Timber and Grazing Activities 2- 43 3 FORECASTED ECONOMIC IMPACTS 3- 1 3.1 Categories of Economic Impacts 3- 1 3.1.1 Section 7 Consultations 3- 2 3.1.2 Technical Assistance 3- 4 3.1.3 Project Modifications 3- 5 3.1.4 Distributional and Regional Economic Effects 3- 5 3.2 Consultation History for Bull Trout Since Listing 3- 7 3.2.1 Action Agencies and Activities Involved in Past Bull Trout Consultations 3- 7 3.2.2 Formal Section 7 Consultations History on Bull Trout Since Listing . 3- 13 3.2.3 Informal Section 7 Consultations History on Bull Trout 3- 15 3.3 Project Modifications 3- 16 3.3.1 Modifications to FHWA Bridge Projects 3- 16 3.3.2 Modifications to Grazing Permits 3- 17 3.3.3 Modifications to Timber Harvest 3- 18 3.3.4 Modifications to Mining Operations 3- 20 3.3.5 Modifications to Agricultural Irrigation Projects 3- 21 3.3.6 Modifications to Dams and Hydroelectric Projects 3- 24 3.3.7 Modifications to Forest Management and Road Maintenance Projects 3- 29 3.3.8 Activities Unlikely to Involve Significant Modification 3- 29 3.4 Projected Future Section 7 Consultations Involving the Bull Trout 3- 29 3.4.1 Projected Future Formal Section 7 Consultations 3- 33 3.4.2 Projected Future Informal Section 7 Consultations 3- 36 ESTIMATING THE CO- EXTENSIVE COSTS OF THE DESIGNATION 4- 1 4.1 Summary of Estimated Impacts 4- 2 4.1.1 Annual Administrative Costs of Consultation 4- 2 4.1.2 Costs Associated with Development of HCPs Within Proposed Bull Trout Critical Habitat 4- 3 4.1.3 Annual Bull Trout Project Modification Costs 4- 4 4.1.4 Proposed Critical Habitat Units Expected to Generate the Greatest Economic Impacts 4- 5 4.2 Discussion of Impacts by Action Agency 4- 6 4.2.1 Army Corps of Engineers 4- 7 4.2.2 Bureau of Land Management 4- 9 4.2.3 Bonneville Power Administration 4- 10 4.2.4 Bureau of Reclamation 4- 25 4.2.5 Federal Highway Administration 4- 29 4.2.6 Federal Energy Regulatory Commission 4- 31 4.2.7 U. S. Forest Service 4- 52 4.2.8 Other Action Agencies 4- 79 4.3 Potential Impacts on Small Entities 4- 79 4.3.1 Identifying Activities That May Involve Small Entities 4- 81 4.3.2 Costs Associated with Agriculture Water Diversions 4- 83 4.3.3 Hydroelectric Facility Re- licensing 4- 84 4.3.4 Mining 4- 87 4.4 Potential Impacts on the Energy Industry 4- 88 4.4.1 Evaluation of Whether the Designation will Result in a Reduction in Electricity Production in Excess of One Billion Kilowatt- Hours Per Year or in Excess of 500 Megawatts of Installed Capacity 4- 89 4.4.2 Evaluation of Whether the Designation will Result in an Increase in the Cost of Energy Production in Excess of One Percent 4- 91 APPENDIX A: Detailed Description of Critical Habitat Units A- l APPENDIX B: Ownership of Lands Adjacent to Proposed Critical Habitat Unit and Subunit B- l APPENDIX C: Overlap of Proposed Bull Trout Critical Habitat and Salmon and Steelhead Habitat C- l APPENDIX D: Listing of All Suggested Project Modifications Found in Formal Biological Opinions: By Activity Type D- l APPENDIX E: Length ( stream) and area ( lakes) of proposed designated bull trout critical habitat that is within U. S. Forest Service Land and Forest Service Wilderness Areas E- l APPENDIX F: Breakdown of Total Annual Estimated Costs by Proposed Critical Habitat Unit F- l EXECUTIVE SUMMARY 1. The purpose of this report is to identify and analyze the potential economic impacts associated with the designation of critical habitat for the Columbia River and Klamath River Distinct Population Segments ( DPSs) of bull trout ( Salvelinus confluentus), hereafter " bull trout." This report was prepared by Bioeconomics, Inc. of Missoula, Montana, for the U. S. Fish and Wildlife Service's ( the Service) Division of Economics. 2. Section 4( b)( 2) of the Endangered Species Act ( the Act) requires the Service to designate critical habitat on the basis of the best scientific data available, after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. The Service may exclude areas from critical habitat designation when the benefits of exclusion outweigh the benefits of including the areas within critical habitat, provided the exclusion will not result in extinction of the species. KEY FINDINGS Total costs associated with both listing and critical habitat designation for the bull trout are forecast to be $ 200 million to $ 260 million over the next ten years. Total costs associated with both listing and critical habitat designation for the bull trout within the proposed Klamath Distinct Population Segment are forecast to be $ 5.3 million to $ 7.3 million over the next ten years. Total costs associated with both listing and critical habitat designation for the bull trout within the proposed Columbia Distinct Population Segment are forecast to be $ 195 million to $ 253 million over the next ten years. Federal agencies are expected to bear 70 to 75 percent of these costs; private entities will incur the remaining 25 to 30 percent. Project modification costs account for as much as 63 percent of forecast costs. Administrative cost represent the remaining 37 percent. U. S. Forest Service and Army Corps of Engineer- related activities account for approximately 70 percent of forecast project modification costs. Activities experiencing the greatest costs include timber harvesting, irrigation diversions, and dam and reservoir operations. Dam and reservoir- related consultations, including power facility re- licensing, account for 42 percent of forecast project modification costs ( excluding the cost associated with reduced irrigation diversions). Timber harvest, irrigation diversions, habitat conservation plans, and mining account for 29 percent, 12 percent, eight percent, and three percent of forecast costs, respectively. In terms of river miles, approximately 18 percent of the total forecast costs are associated with one percent of the proposed designation, 25 percent with five percent of the proposed designation, and 45 percent with ten percent of the proposed designation. When expressed in terms of the expected cost per river mile, the two most costly units are the Willamette River Basin ( Unit 4) and the Malheur River Basin ( Unit 13). ES- 1 Framework for the Analysis 3. The primary purpose of this analysis is to estimate the economic impact associated with the designation of critical habitat for the bull trout. This information is intended to assist the Secretary in making decisions about whether the benefits of excluding particular areas from the designation outweigh the benefits of including those areas in the designation. 1 This economic analysis considers the economic efficiency effects that may result from the designation, including habitat protections that may be co- extensive with the listing of the species. It also addresses distribution of impacts, including an assessment of the potential effects on small entities and the energy industry. This information can be used by decision- makers to assess whether the effects of the designation might unduly burden a particular group or economic sector. 4. This analysis focuses on the direct and indirect costs of the rule. However, economic impacts to land use activities can exist in the absence of critical habitat. These impacts may result from, for example, local zoning laws, State and natural resource laws, and enforceable management plans and best management practices ( BMPs) applied by other State and Federal agencies. For example, as discussed in detail in this report, regional management plans, such as the Northwest Forest Plan, PACFISH and INFISH provide significant protection to bull trout and its habitat while imposing significant costs within the region. Economic impacts that result from these types of protections are not included in this assessment as they are considered to be part of the regulatory and policy " baseline." 5. The measurement of direct compliance costs focuses on the implementation of section 7 of the Act. This section requires Federal agencies to consult with the Service to ensure that any action authorized, funded, or carried out will not likely jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of critical habitat. The administrative costs of these consultations, along with the costs of project modifications resulting from these consultations, represent the direct compliance costs of designating critical habitat. Importantly, this analysis does not differentiate between consultations that result from the listing of the species ( i. e., the jeopardy standard) and consultations that result from the presence of critical habitat ( i. e., the adverse modification standard). 6. The analysis examines activities taking place both within and adjacent to the proposed designation. It estimates impacts based on activities that are " reasonably foreseeable," including, but not limited to, activities that are currently authorized, permitted, or funded, or for which proposed plans are currently available to the public. Accordingly, the analysis bases estimates on activities that are likely to occur within a ten- year time frame, beginning on the day that the current proposed rule became available to the public ( November 30, 2002). The ten- year time frame was chosen for the analysis because, as the time horizon for an economic analysis is expanded, the assumptions on which the projected number of projects and cost impacts associated with those projects becomes increasingly 1 16U. S. C. § 1533( b)( 2). ES- 2 speculative. An exception to the 10 year analysis time horizon used in this analysis is for Federal Energy Regulatory Commission ( FERC) licenses, which are renewed for up to 50 years. Accordingly, this analysis estimates the annualized costs of the expected impacts associated with section 7 bull trout consultations involving FERC re- licensing over a 50 year time horizon. 7. The analysis is based on a wide range of information sources. Numerous individuals were contacted from the Service, as well as from the U. S. Forest Service ( USFS), Federal Highway Administration ( FHWA), Bureau of Land Management ( BLM), Army Corps of Engineers ( ACOE), Bureau of Reclamation ( BOR), Bonneville Power Administration ( BPA), Natural Resources Conservation Service ( NRCS), U. S. Environmental Protection Agency ( EPA), National Oceanic and Atmospheric Administration ( NOAA) and other Federal agencies. The analysis of the hydroelectric facilities and other dam structures in the region also relied in information from the Northwest Power and Conservation Council ( NWPCC), the Pacific Northwest Utility Coordinating Council as well as information from utilities owning dams in bull trout proposed critical habitat ( e. g., Avista Corporation ( Avista), Eugene Water and Electric Board, Pacificorp and Portland General Electric ( PGE)). Native American Tribes ( e. g., Confederated Salish and Kootenai Tribes), State agencies ( e. g., State Departments of Environmental Quality ( DEQ) and State Departments of Transportation ( DOTs)) and industry organizations ( e. g., American Forest Resource Council, American Farm Bureau and Northwest Mining Association) were also contacted, as were numerous individuals in the private sector on topics ranging from irrigation to forestry to bull trout conservation. Census Bureau and other Department of Commerce data was relied on to characterize the regional economy. 8. The bull trout was listed as a threatened species in 1998.2 Since that time, numerous Action agencies have participated in well over 200 formal consultations and thousands of informal consultations involving bull trout. The past consultation record was used as a starting point from which to predict future consultation activity. Action agencies provided additional information on likely changes in future consultation activity following designation of critical habitat. In some cases these agencies saw little change in future consultation levels. For example, FHWA projects are planned for many years in advance and bridge or road- related bull trout consultations are generally quite certain and foreseeable. In some cases ( e. g., mining activity, irrigation diversions) it was determined that the historical consultation record understated the potential level of future consultation activity for the species and adjustments to future predicted consultation levels were made. For dam and reservoir operations, a wide spectrum of information from agency representatives, as well as the actual FERC re- licensing schedules for privately operated hydropower facilities were used to augment historical consultation rates and develop future annual cost estimates associated with bull trout consultations on dam, reservoir and power- related activities. 2 This economic analysis applies only to the Columbia River and Klamath River DPSs of bull trout and is not a rangewide analysis. The rangewide listing of the bull trout occurred in 1999 and critical habitat will be proposed for the remainder of the range at a later date. ES- 3 Exhibit ES. l provides a summary of the wide range of activities that may be impacted by bull trout- related consultations. Exhibit ES. l PROJECTED ACTIVITIES AFFECTED BY BULL TROUT Action Agency Army Corps of Engineers Bureau of Land Management Bonneville Power Administration Bureau of Reclamation Federal Highway Commission Federal Energy Regulatory Commission U. S. Forest Service Other agencies, including NPS, BIA, U. S. Department of Agriculture ( USDA), U. S. Geological Survey ( USGS), U. S. Fish and Wildlife Service and NOAA Fisheries Activities Consulted on Dam and reservoir operations, streambank stabilization, dredging, bridge replacement, stream restoration. Forest management, grazing, timber harvest, resource maintenance and road construction, weed management, streambank stabilization, flood control projects. Federal Columbia River Power System ( FCRPS)- dam operation, fisheries restoration and augmentation, agricultural practices and irrigation systems. Dam and reservoir operations, irrigation diversions. Highway bridge replacement. Dam re- licensing and removal. Timber harvest, grazing, mining, resource maintenance and road construction, weed management, streambank stabilization, recreation, special use permits, watershed restoration, road decommissioning, irrigation diversions, culvert replacement, and prescribed fuel reduction programs. Assorted activities, primarily fisheries and stream and wetland restoration. Results of the Analysis 9. The economic impacts associated with the designation of critical habitat for the bull trout are expected to range from $ 200 million to $ 260 million over the next ten years ($ 20 million to $ 26 million per year). Federal agencies are expected to bear approximately 70 to 75 percent of the total costs of this designation. A significant portion of the land adjacent to the proposed designation is Federally owned ( 58 percent), 36 percent is under private ownership and the remainder is comprised of Tribal, State or local interests. Of the Federal lands, the majority is managed by the USFS ( 85 percent) and the BLM ( 12 percent). The remaining 25 to 30 percent of costs are expected to be borne by private entities. Exhibit ES. 2 shows the location of USFS and BLM managed land within the proposed designation. ES- 4 Exhibit ES. 2 ES- 5 10. In some cases, the cost associated with consultation is not borne by the Action agency, but passed onto other parties. For example, while farmers and ranchers do not consult on the operation of Federal irrigation impoundments, irrigators could be impacted by potential reductions in water deliveries to maintain instream flow during dry years. While the unit location of USFS- related water diversions is uncertain, it is likely to occur in the Salmon River ( Unit 16), Clark Fork ( Unit 2), Southwest Idaho River and Clearwater River ( Unit 15) Basins, as these units contain the largest portion of USFS managed lands. 11. Consultations that may involve private entities include those related to timber harvest, grazing, mining and power facility re- licensing. Some of the costs associated with these consultations, however, are expected to be borne directly by or passed onto the Federal government ( e. g., increased logging and yarding costs passed onto the USFS through lower stumpage bids for timber). Most of the forecast project modification costs resulting from designation ( 42 percent) are dam and reservoir related ( excluding USFS water diversions). These costs result from consultations on ACOE and BOR dams and reservoirs, BPA consultations on the FCRPS, and FERC re- licensing consultations. Exhibit ES. 3 illustrates the location of major dams within the proposed critical habitat. The remaining project modification costs are associated with timber harvest ( 29 percent), USFS- related water diversions ( 12 percent), habitat conservation plans ( eight percent), and placer gold mining ( three percent). Grazing, forest management, road and bridge construction and maintenance and other activities each account for less than two percent of forecast project modification costs. Exhibit ES. 4 provides the distribution of total costs by activity. 12. Costs can be expressed in terms of unit or river mile; both of these metrics are useful in describing economic impacts. 3 On a cost per unit basis the largest portion of forecast costs are expected to occur in Unit 4, the Willamette River Basin ( 18 percent). These costs are attributable to fish passage and temperature control projects and annual operating and maintenance and fish study costs at ACOE's facilities in the Upper Willamette River System ( Dexter, Lookout Point, Hills Creek and Blue River Dams). The next most costly unit is Unit 16, the Salmon River Basin ( 12 percent). Because this is the largest unit in terms of river miles and proportion of USFS managed land, and because future USFS activities are expected to generate approximately 70 percent of the consultation activity, this unit bears the greatest number of future bull trout- related consultations. Therefore, the administrative costs account for a large portion of the costs in this unit. Together, these two units account for 30 percent ( approximately $ 8.2 million) of forecast costs. The next three most costly units, Hells Canyon complex ( Unit 12) and the Clark Fork River ( Unit 2) and Malheur River ( Unit 13) Basins, each account for eight percent ( a unit cost range of approximately $ 2.1 million to $ 2.3 million) of forecast costs. In total, these five units account for almost 55 percent of forecast costs ( approximately $ 14.8 million). 3 Twelve of the units also contain more than 500,000 lake acres of critical habitat. These units account for approximately 55 percent of the potential economic impacts associated with the proposed designation ($ 15.4 million). The Clark Fork River Basin ( Unit 2) contains almost 60 percent of the lake acres ( more than 300,000 acres) and accounts for eight percent of the cost ( approximately $ 3 million). Because all 25 units contain river miles, the costs are expressed in terms of dollars per river mile for comparison. ES- 6 ES- 7 ES- 8 13. Project modifications or other restrictions that engender cost and revenue impacts involving commercial enterprises can have a subsequent detrimental effect on other sectors of the local economy, especially when the affected industry is central to the local economy. Industries within a geographic area are interdependent in the sense that they purchase output from other industries and sectors, while also supplying inputs to other businesses. Therefore, direct economic effects on a particular enterprise can affect regional output and employment in multiple industries. The extent to which regional economic impacts are realized depends largely on whether a significant number of projects are stopped or fundamentally altered. For example, impacts to the timber or grazing industries depend on whether required project modifications substantially reduce output within economic sectors below that which would be seen in the absence of the trout consultation. 14. Examination of BOs involving timber harvest and grazing show only small and sporadic reductions in either grazing opportunity or available timber harvest. Therefore, this analysis assumes that regional economic impacts associated with these activities will be unpredictable ( in terms of geographic location and timing) and small in the context of the overall economy of the Columbia River Basin. In the case of agricultural water diversions on Forest Service lands, regional economic impacts are not modeled due to uncertainty about the magnitude and potential location of impacts. 15. Exhibit ES- 5 highlights the relative contributions of each unit to total forecast costs. Exhibit ES- 6 then presents the unit cost by river mile. Considering the cost per river mile, the Willamette River ( Unit 4) and Malheur River ( Unit 13) Basins are the most costly units. Together these two units account for 25 percent of the costs ( approximately $ 7.0 million, annualized) over two percent of the proposed miles of the designation ( 451 miles). Overall, 10 percent of the river miles ( 1,910 miles) in eight units account for approximately 45 percent of the total costs ( approximately $ 12.5 million, annualized). 4 4 In terms of cost per lake acre, the Willamette River Basin is the most expensive unit ( Unit 4), followed by the Northeast Washington River ( Unit 22) and Upper Columbia River ( Unit 21) Basins. These three units account for approximately 25 percent of the cost ($ 6.8 million) and five percent of the river miles ( 1,020 miles) in the proposed designation. ES- 9 tn m W GO 16. Consideration of the regulatory baseline is particularly pertinent in the context of estimating economic costs attributable to section 7 for bull trout. Specifically, existing regulations such as the Federal Power Act ( FPA) and Wilderness Act of 1964, fisheries management directives ( Northwest Forest Plan, INFISH and PACFISH) and the presence of other listed species ( especially anadromous fish) provide for the protection of areas that could contribute to the recovery of bull trout and improve riparian habitat and water quality throughout the proposed designation. Thus, the costs of this designation is limited by the extent to which existing regulations already impose requirements on land use and resource management within the proposed designation. In addition, the cost estimates developed in this report reflect various allocations made throughout the analysis for projects benefitting more than one listed species. Since these allocations are important to the analysis, Exhibit ES. 7 describes how forecasted costs were allocated among bull trout and other listed species. Exhibit ES. 7 ALLOCATION OF ESTIMATED FUTURE PROJECT MODIFICATION COSTS Agency / Project ACOE - Upper Willamette River Dams and Reservoirs BPA - Federal Columbia River Power System FERC - re- licensing hydroelectric facilities USFS activities Allocation NOAA Fisheries and the Service are currently consulting on salmon, steelhead and bull trout in this proposed area. No clear allocation of costs can be made between these species, as most of the projects modifications would be sought under both the NOAA and Service consultations. Therefore, one- third of estimated costs are allocated to each species. This is likely to overstate the cost of bull trout conservation rather than understate it, since the primary driving force behind these project modifications is the salmon. While there is extensive discussion of the relative magnitude of potential bull trout versus salmon mitigation actions, because of the relatively modest project modification costs ( up to $ 400,000 associated with fishery studies) there is no allocation of costs to salmon. The estimation of section 7 bull trout costs associated with FERC re- licensing includes allocation of mitigation costs for specific dams to salmon, as well as to other aquatic species. As a result, a little more than 40 percent of total fishery-related costs are allocated to bull trout, and five percent specifically to bull trout section 7 consultation. While certain costs in the sample of timber consultations were allocated to other listed species ( e. g. grizzlies and cutthroat trout), there is no allocation of costs to anadromous species. Summary of Costs 17. Exhibit ES. 8 provides a detailed summary of the co- extensive costs of designation of critical habitat for the bull trout. These costs are presented on an annualized basis. A map of the watersheds that encompass each unit is provided in Exhibit ES. 9 to assist the reader in understanding the location and distribution of estimated costs. A detailed discussion of the estimated administrative and project modification costs by critical habitat unit is presented in the unit- by- unit summary section following Exhibit ES. 8. ES- 12 Exhibit ES. 8 SUMMARY OF SECTION 7 COSTS FOR THE BULL TROUT ( Annualized) Unit Unit 1 - Klamath River Basin Unit 2 - Clark Fork River Basin Unit 3 - Kootenai River Basin Unit 4 - Willamette River Basin Unit 5 - Hood River Basin Unit 6 - Deschutes River Basin Unit 7 - Odell Lake Unit 8 - John Day River Basin Unit 9 - Umatilla- Walla Walla River Basins Unit 10 - Grande Ronde River Basin Unit 11 - Imaha/ Snake River Basins Unit 12 - Hells Canyon Complex Unit 13 - Malheur River Basin Unit 14 - Coeur d'Alene Lake Basin Unit 15 - Clearwater River Basin Unit 16 - Salmon River Basin Unit 17 - Southwest Idaho River Basins Unit 18 - Little Lost River Basin Unit 19 - Lower Columbia River Basin Unit 20 - Middle Columbia River Basin Unit 21 - Upper Columbia River Basin Unit 22 - Northwest Washington River Basins Unit 23 - Snake River Basin in Washington Unit 24 - Columbia River Basin Unit 25 - Snake River Basin Multiple unit or unknown a Estimated Range of Cost ($ l, 000fs) $ 529 to $ 733 $ 1,321 to $ 2,192 $ 328 to $ 402 $ 4,497 to $ 4,891 $ 328 to $ 413 $ 430 to $ 719 $ 51 to $ 56 $ 446 to $ 600 $ 98 to $ 211 $ 467 to $ 580 $ 559 to $ 605 $ 1,939 to $ 2,338 $ 2,006 to $ 2,095 $ 429 to $ 693 $ 995 to $ 1,676 $ 2,059 to $ 3,319 $ 1,004 to $ 1,867 $ 150 to $ 176 $ 385 to $ 494 $ 391 to $ 494 $ 196 to $ 505 $ 965 to $ 1,397 $ 230 to $ 287 $ 243 to $ 504 $ 135 $ 1,303 Notes: These estimates include all section 7 costs, including those co- extensive with the listing and designation of critical habitat for the bull trout. Costs are reported in 2003 dollars. A more detailed presentation of these costs is provided in Appendix F. a Miscellaneous costs ($ 213,000 annually) and the costs associated with development of habitat conservation Dlans ($ 1,090,000 annuallv) have not been allocated to the unit level due to uncertainty as to their location. ES- 13 Exhibit ES- 9 ES- 14 Unit- bv- Unit Summary 18. The following discussion presents a unit- by- unit synopsis of the co- extensive costs of designation of critical habitat for the bull trout. Details on how these cost estimates were developed is provided in Section 4 of this report. 19. From an aggregate perspective, forecast project modification costs are dominated by dam related activities, totaling about 42 percent of all estimated costs. Typical costs include fish passage, changes in operations, habitat protection or restoration, and fishery studies at 36 FERC- licensed hydroelectric facilities and at more than 30 major Federal hydropower, irrigation and flood projects. The second largest category of costs is associated with timber harvest on Federal lands, representing about 29 percent of all estimated costs. These costs include harvest reduction, fishery study and monitoring costs, costs related to roads and culverts, and changes to log yarding systems. The remaining costs are split among a large number of activities including the development of habitat conservation plans, mining, agriculture and irrigation diversions, grazing, bridge construction and maintenance, and general forest management. Accordingly, the primary factor driving the distribution of costs across units is the location of significant dam projects for power, irrigation, and flood control. This factor is highlighted in the following unit- by- unit discussion. The second most important factor is the occurrence of federally- owned acreage within a given unit, particularly the acreage of non- wilderness lands managed by the USFS. This factor drives both timber costs and administrative consultation costs. 20. A significant component of the total estimated cost of this designation are the administrative costs associated with conducting both formal and informal consultations on the species ( approximately 37 to 50 percent of total forecast bull trout- related costs). These costs accrue to the Service as well as to action agencies and the public. In some cases these administrative costs constitute a majority of the estimated costs for a unit, suggesting that there will be many activities consulted on but few resulting project modifications. 21. This discussion is presented on a unit by unit basis. A perspective on how the units compare, in both absolute terms and in terms of cost per river mile of proposed critical habitat, is provided in Exhibits ES- 6 and ES- 7. For purposes of this summary, proposed units with per mile costs ( after adjusting each unit's costs for its respective unoccupied habitat) forecast to be less than half of the proposed designation- wide average are described as having " relatively low costs." Units with per mile costs forecast to be between 50 percent and 200 percent ( i. e., twice) the designation- wide average costs are described as having " relatively moderate costs." Units with per- mile costs forecast to be greater than twice the designation- wide average costs are described as having " relatively high costs." Note that these descriptors are intended as a general guide, and refer to total cost only. Individual economic sectors and entities within a unit may bear disproportionate shares of these costs, as discussed in Section 4. 22. Unit 1: Klamath River Basin - The Klamath River Basin is located in south- central Oregon. Proposed critical habitat within this unit includes 475 km ( 295 mi) of streams and ES- 15 3,775 ha ( 9,327 ac) of lake habitat. The Klamath River Basin Unit is largely contained within Klamath County Oregon. The town of Klamath Falls is the largest community within the county. The Klamath River Basin Unit has a relatively high percentage of proposed critical habitat that is currently either unoccupied or of unknown occupancy ( 72 percent). Approximately 69 percent of the stream miles proposed for designation are within Federal land. 23. The Klamath River Basin Unit is a relatively moderate cost unit. Estimated total annual bull trout- related costs within this unit range between $ 529,000 and $ 733,000. These estimates include $ 425,000 per year in administrative costs. It is estimated that costs associated with consultations on timber harvest and agricultural irrigation withdrawals will constitute the large majority of potential future project modification costs in the unit ( estimated at between 73 percent and 87 percent of total annual project modification costs). These agricultural diversion- related costs are expected to result from reductions in available irrigation water. Other activities are individually estimated to each account for less than $ 15,000 dollars per year in project modification costs. 24. Unit 2: Clark Fork River Basin - The Clark Fork River Basin Unit is the largest unit within the proposed designation. This unit includes most of Western Montana and the Idaho panhandle. This Unit includes the Missoula and Bitterroot River Valleys in Western Montana, the Kalispell- Flathead Lake Region, and the Lake Pend Orielle Region of North Idaho. These areas contain many of the larger towns and communities within Western Montana and North Idaho. Approximately 54 percent of the proposed streams and 33 percent of proposed lakes in Clark Fork Unit are within Federal lands. There is no unoccupied habitat within the proposed Clark Fork Critical Habitat Unit. 25. Forecast total annual costs associated with the bull trout within this unit are between $ 1.3 million and $ 2.2 million. These estimates include $ 800,000 per year in administrative costs. In addition, a number of agencies and activities will incur significant annual project modification costs associated with the bull trout in this unit. Specifically, • Timber harvest activity is expected to generate the largest share of future project modification costs in this unit ($ 270,000 to $ 680,000 per year). These costs include harvest reduction, fishery study and monitoring costs, costs related to road and culverts, and changes to log yarding systems. • Costs associated with forecast project modifications to irrigation diversions within this unit range from zero to $ 280,000. These costs represent potential costs to agricultural producers associated with reductions in available irrigation water. 26. Other significant forecast project modification costs within this unit are associated with mining ( up to $ 100,000 annually, principally involving watershed assessment costs), FERC hydro re- licensing ($ 50,000 to $ 91,000 annually), and FHWA bridge and road work ($ 45,000 per year, generally involving constraints on in- stream work periods). Forecast FERC- related costs are associated with several major hydroelectric facilities within the unit, ES- 16 including Kerr Dam on the Flathead River and Thompson Falls Dam on the Clark Fork. Additionally, bull trout- related modifications on operation of the FCRPS have resulted in changes in operations at Hungry Horse Dam ( a BOR facility on the S. Fork of the Flathead) and Albeni Falls ( an ACOE facility that controls the level of Lake Pend Orielle). Bull trout study costs specific to the Clark Fork Unit and associated with FCRPS consultation are expected to cost up to $ 97,000 annually. 27. Although the proposed Clark Fork River Basin Critical Habitat Unit has significant forecast total annual costs, these costs should be viewed in light of the large size of this proposed unit. In fact, the Clark Fork Unit is forecast to be one of the lowest cost units, when expressed per river mile of habitat proposed for designation. 28. Unit 3: Kootenai River Basin - A short stretch of the Kootenai River lies in the U. S., looping down out of British Columbia. The Kootenai Unit thus comprises only the northwestern corner of Montana, including Libby Dam, and the northeastern tip of the Idaho panhandle. This unit is contained within two counties, Boundary County, Idaho and Lincoln County, Montana. Within this proposed critical habitat unit, approximately 53 percent of the rivers and streams proposed for designation are on Federal land. There is no unoccupied bull trout habitat within this unit. 29. The Kootenai River Unit is a relatively low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Total forecast annual costs associated with the bull trout within this unit are between $ 328,000 and $ 402,000. Of this amount, the majority, approximately $ 290,000 annually, are forecast administrative costs. In addition, it is estimated that project modification costs within the Kootenai River Unit will total between $ 38,000 and $ 112,000 annually. Costs associated with timber harvest are expected to be the largest category of future project modification costs in this unit ($ 27,000 to $ 69,000 per year, including costs of harvest reduction, fishery study and monitoring costs, costs related to roads and culverts, and changes to log yarding systems). Costs resulting from modifications to agricultural irrigation diversions ( primarily reductions in irrigation withdrawals) could range from zero to $ 28,000. Other activities are individually estimated to each account for less than $ 5,000 per year in project modification costs. Bull trout- related modifications to operations of the FCRPS have resulted in changes in operations at Libby Dam. 30. Unit 4: Willamette River Basin - The Willamette River Basin Unit includes 337 km ( 209 mi) of stream and 1,600 ha ( 3,954 ac) of lake habitat in the McKenzie River and Middle Fork Willamette River subbasins of Western Oregon. The unit is located primarily within Lane County, but also extends into Linn County. The unit contains Eugene, Oregon and surrounding areas. Approximately 46 percent of the proposed waters within this unit are on Federal land and about 23 percent of the waters in the unit are currently either unoccupied by the bull trout or of unknown occupancy. 31. Forecast total annual costs associated with the bull trout within this unit are between $ 4.5 million and $ 4.9 million. Of this amount, approximately $ 125,000 are forecast ES- 17 administrative costs. Thus, most of the costs for this unit are associated with required project modifications. While project modification costs are forecast to be associated with timber harvest activities and agricultural diversions within this unit ( estimated between $ 22,000 and $ 55,000 annually), the vast majority of forecast costs are associated with dam and reservoir operations in the unit. 32. The ACOE is currently in consultation on 13 flood control facilities located in the Upper Willamette River system. Potential future costs of required modifications for bull trout will likely be driven by provisions for temperature control facilities at the Lookout Point, Hills Creek, and Blue River dams, and trap and haul passage at Lookout Point, Hills Creek, and possibly a fish ladder at Dexter Dam. It is estimated that these passage and temperature control modifications and operation at ACOE operated impoundments in the unit will cost between $ 4.3 and $ 4.5 million per year. It is further estimated that annual project modification costs associated with FERC re- licensing of hydroelectric facilities in the unit will cost between $ 70,000 and $ 144,000 annually. These costs are associated with several hydroelectric facilities operated by the City of Eugene: Trail Bridge and Carmen on the McKenzie River, and Blue River Dam. 33. The Willamette River Unit is the highest cost of the proposed units in terms of forecast cost per river mile of habitat proposed for designation ( greater than $ 20,000 per river mile, annually). These costs are associated with dam and reservoir modifications to ACOE projects. However, the ACOE is also consulting with NOAA Fisheries on the impacts of these facilities on chinook salmon and steelhead, these costs might occur even absent the bull trout. 34. Unit 5: Hood River Basin - The Hood River Unit lies entirely within Hood River County, Oregon and contains the communities of Hood River and The Dalles among a number of smaller towns. The Unit includes the mainstem Hood River and three major tributaries: the Clear Branch Hood River, West Fork Hood River, and East Fork Hood River. A relatively high 43 percent of the proposed habitat in the Hood River Unit is currently either unoccupied or of unknown occupancy. Overall, about 48 percent of the waters proposed for designation within this unit are located on Federal lands. 35. The Hood River Unit is a relatively moderate- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 328,000 and $ 413,000. Of this amount, a substantial portion are forecast administrative costs ( approximately $ 282,000). The remainder of the forecast costs are associated with required project modifications. Costs associated with FERC re- licensing of hydroelectric facilities ($ 24,000 to $ 67,000) and timber harvest on USFS lands ($ 16,000 to $ 40,000 per year) are expected to be the most significant categories of future project modification costs in the unit. FERC licensed facilities include Powerdale on the Hood River. Agricultural irrigation diversions in the unit could experience up to $ 16,000 in annual project modification costs. Other activities are individually estimated to account for less than $ 5,000 per year in project modification costs. ES- 18 36. Unit 6: Deschutes River Basin - The Deschutes River Basin Unit in central Oregon contains two critical habitat subunits: the lower Deschutes and the upper Deschutes, separated by Big Falls, an impassible barrier on the Deschutes River. The Lower Deschutes critical habitat subunit is in Wasco, Sherman, Jefferson, Deschutes, and Crook Counties. The Upper Deschutes River critical habitat subunit is located in Deschutes, Crook, and Klamath counties. Approximately 801 km ( 498 mi) of stream habitat in the Deschutes River basin is proposed for critical habitat designation. Overall, a relatively high 37 percent of the proposed habitat within the Deschutes River Unit is unoccupied. The entire upper Deschutes River Critical Habitat subunit is currently unoccupied by the species. A relatively low portion ( 35 percent) of the waters proposed for designation within this unit are on Federal land. This unit also has a substantial amount of Tribal land ( 23 percent of proposed waters). 37. The Deschutes River Unit is a relatively low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. It is forecast that total annual costs associated with the bull trout within this unit will be between $ 431,000 and $ 719,000. A relatively small portion of this amount, approximately $ 102,000 annually, are forecast administrative costs. The vast majority of these costs are associated with required project modifications. Specifically, costs associated with operation of BOR irrigation impoundments ($ 159,000 annually, largely associated with fishery studies), FERC re- licensing of hydroelectric facilities, ($ 106,000 to $ 280,000) and timber harvest on USFS lands ($ 42,000 to $ 105,000 per year resulting from reduced harvest, fishery studies, road and culvert costs, and changes in yarding systems) are expected to be the most significant categories of future project modification costs in this unit. The BOR- related costs are for studies at Crane Prairie and Wickiup Reservoirs on the Upper Deschutes River. Since both of these reservoirs are in the currently unoccupied Upper Deschutes subunit, dam and reservoir modifications are not reasonably foreseeable. Projected FERC re- licensing costs are for bull trout studies and passage at the Pelton- Round Butte Project on the Deschutes River. Agricultural irrigation diversion project modification costs associated with potential reductions in irrigation water availability could range from zero to $ 43,000 annually. Other activities are individually estimated to account for less than $ 15,000 dollars per year in project modification costs. 38. Unit 7: Odell Lake - The Odell Lake Unit in central Oregon lies entirely within the Deschutes National Forest in Deschutes and Klamath counties. This unit is the smallest of the proposed units within the designation. Total proposed critical habitat includes approximately 2,675 ha ( 6,611 ac) of lake habitat and 18.1 km ( 11.3 mi) of streams. There is no unoccupied habitat within this unit. 39. Total annual costs associated with the bull trout within the unit are forecast to be between $ 51,000 and $ 56,000. Of this amount, almost all ( approximately $ 50,000 annually) will be associated with the administrative costs of the consultation process. It is estimated that project modification costs within the Odell Lake Unit will total less than $ 5,000 annually. These project modification costs are forecast to be largely associated with USFS activities. ES- 19 40. Unit 8: John Day River Basin - The John Day River Basin Unit in eastern Oregon includes the North Fork, the Middle Fork, and mainstem portions of the John Day River and their tributary streams in Wheeler, Grant, and Umatilla counties. A total of 1,080 km ( 671 mi) of stream habitat is proposed for designation as critical habitat. Overall, 19 percent of the proposed areas within the John Day River Unit are currently unoccupied by the species. Approximately 54 percent of the waters proposed for designation within the John Day Unit are located on Federal land. 41. The John Day River Unit is a relatively low cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Total annual costs associated with the bull trout within this unit are forecast to be between $ 446,000 and $ 600,000. Of this amount, a large portion, approximately $ 278,000 annually, will be made up of administrative costs. The remainder of the forecast costs are associated with required project modifications. Specifically, project modifications associated with timber harvest on USFS lands ($ 57,000 to $ 143,000 per year from reductions in harvest, fisheries studies, road and culvert costs, and changes in yarding systems) and placer mining on USFS lands ( up to $ 88,000 per year associated with requirements for and limitations on allowed stream crossing activity) are expected to generate the greatest share of project modification costs in this unit. Costs associated with agricultural irrigation diversion reductions could range from zero to $ 58,000 annually. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. The John Day River Basin is one of two units identified in this study as a setting where bull trout related project modifications could have a significant impact on a small placer mining business, the other is the Hells Canyon Complex ( Unit 12). 42. Unit 9: Umatilla- Walla Walla River Basins - The Umatilla and Walla Walla Rivers Unit is located in northeastern Oregon and southeastern Washington. The unit includes 636 km ( 395 mi) of streams extending across portions of Umatilla, Union, and Wallowa counties in Oregon, and Walla Walla and Columbia counties in Washington. Overall, 17 percent of the proposed critical habitat within this unit is currently unoccupied by the species. A relatively low portion ( 32 percent) of the waters proposed for designation within the Umatilla- Walla Walla Unit are located on Federal land. 43. The Umatilla- Walla Walla River Unit is among the lowest cost units, in terms of consultation- related cost per river mile of habitat proposed for designation. It is estimated that total annual costs associated with the bull trout within this unit will be between $ 98,000 and $ 211,000. Of this amount, approximately $ 59,000 annually will be associated with the administrative costs of the consultation process and the remainder with required project modifications. Specifically, fisheries studies associated with FCRPS consultations could cost up to $ 43,000 annually. Project modification associated with timber harvest on USFS lands is expected to be another significant category of future costs in this unit ($ 26,000 to $ 65,000 per year). Agricultural irrigation diversions could experience up to $ 26,000 in annual project modification costs within this unit. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. In addition to the consultation and project modification costs, the Walla Walla Drainage is in ES- 20 the final stages of developing a basin- wide habitat conservation plan to protect bull trout, among other species. The plan has cost approximately $ 4 million to develop, and it is expected an additional $ 1 million will be spent to complete the plan during the next year or two. 44. Unit 10: Grande Ronde River Basin - The Grande Ronde Unit extends across Union, Wallowa, and Umatilla counties in northeastern Oregon, and Asotin, Columbia, and Garfield counties in southeastern Washington. This unit includes the Grande Ronde River from its headwaters to the confluence with the Snake River and a number of its tributaries, the largest being the Wallowa River. Approximately 1,030 km ( 640 mi) of stream habitat in the Grande Ronde River basin is proposed for critical habitat designation. Overall, seven percent of the proposed critical habitat within the Grand Ronde River Unit is currently unoccupied by the species. Approximately 52 percent of the waters proposed for designation within this unit are located on Federal land. 45. The Grand Ronde River Unit is a low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit will be between $ 467,000 and $ 580,000. Of this amount, the vast majority, approximately $ 417,000 annually, are forecast to be administrative costs. The remainder of the forecast costs are associated with required project modifications. Specifically, fisheries studies within the unit associated with FCRPS consultations could cost up to $ 19,000 annually. Timber harvest on USFS lands is expected to be another significant source of future project modification costs in this unit ($ 34,000 to $ 87,000 per year resulting from reduced harvest, fisheries studies, and road and culvert costs, and changes in yarding systems). Agricultural irrigation diversion costs could be up to $ 35,000. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 46. Unit 11: Imnaha/ Snake River Basins - The Imnaha/ Snake Unit extends across Wallowa, Baker, and Union counties in northeastern Oregon and Adams and Idaho counties in western Idaho. The unit contains approximately 306 km ( 190 mi) of proposed critical habitat. All of the proposed habitat within the Imnaha- Snake River Unit is currently occupied by the species. Approximately 51 percent of the waters proposed for designation within this unit are located on Federal land. 47. The Imnaha/ Snake River Unit is a moderate- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 559,000 and $ 605,000. Of this amount, the large majority are made up of administrative costs ( approximately $ 544,000, annually). The remainder of the forecast costs are associated with required project modifications. Specifically, fishery studies within the unit associated with FCRPS consultations could cost up to $ 18,000 annually. Timber harvest activities on USFS lands are expected to be another significant category of future project modification costs ($ 10,000 to $ 26,000 per year). Agricultural irrigation diversion related project modification costs could range from zero ES- 21 to $ 11,000. Other activities are individually estimated to each account for less than $ 5,000 dollars per year in project modification costs. 48. Unit 12: Hells Canyon Complex - The Hells Canyon Complex Unit encompasses basins in Idaho and Oregon draining into the Snake River and its associated reservoirs, from Hells Canyon Dam upstream to the confluence of the Weiser River. The Hells Canyon Complex unit includes a total of approximately 1,000 km ( 621 mi) of streams proposed as critical habitat. A relatively high portion ( about 48 percent) of the proposed critical habitat within the Hells Canyon Complex Unit is currently unoccupied by the species. Approximately 47 percent of the waters proposed for designation within this unit are located on Federal land. 49. The Hells Canyon Complex Unit is a relatively moderate- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. It is forecast that total annual costs associated with the bull trout within this unit will be between $ 1.9 million and $ 2.3 million. Of this amount, a majority are expected to be made up of administrative costs ( approximately $ 1.4 million, annually). In addition, significant categories of forecast project modification costs within this unit are associated with timber harvest on USFS lands ($ 92,000 to $ 233,000 per year resulting from reduced harvest, fishery studies, road and culvert costs, and changes in yarding systems), placer mining on USFS land ($ 69,000 associated with requirements for and limitations on allowed stream crossing activity), FERC hydroelectric re- licensing ($ 111,000 to $ 259,000), and BOR reservoir activities ($ 192,000 annually, primarily for study related costs). The BOR reservoirs in the unit include Phillips Reservoir and Thief Valley Reservoir; projected costs are for bull trout related studies. Major FERC- licensed hydroelectric facilities in the unit include Hells Canyon, Brownlee and Oxbow. Agricultural irrigation diversions could experience up to $ 95,000 in annual project modification costs within this unit. Other activities are individually estimated to each account for less than 20,000 dollars per year in project modification costs. The Hells Canyon complex is one of two units identified in this study as a setting where bull trout related project modifications could have a significant impact on a small placer mining business, the other is the John Day River Basin ( Unit 8). 50. Unit 13: Malheur River Basin - The Malheur Unit is in the Malheur River Basin in eastern Oregon, in Grant, Baker, Harney, and Malheur counties. A total of 389 km ( 241 mi) of streams and two reservoirs are proposed for critical habitat. About 25 percent of the proposed critical habitat within the Malheur River Unit is currently unoccupied by the species. Approximately 63 percent of the waters proposed for designation within the Malheur River Unit are located on Federal land. 51. The Malheur River Unit is the second highest cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 2.0 million and $ 2.1 million. Project modification costs make up a small portion of these costs, between $ 179,000 and $ 268,000 annually. The rest of the forecast costs are associated with administrative requirements. Major categories of forecast project modification costs within this unit are associated with ES- 22 timber harvest on USFS lands ($ 33,000 to $ 83,000 per year) and BOR reservoir activities ($ 133,000 annually). The BOR costs are for research as well as trap and haul fish passage that is ongoing at Beulah Reservoir on the Malheur River, and estimated research costs at Warm Springs Reservoir, which is currently unoccupied by bull trout. Possible reductions in agricultural irrigation diversions could cost from zero to $ 34,000 annually . Other activities are individually estimated to each account for less than $ 5,000 per year in project modification costs. 52. Unit 14: Coeur d'Alene Lake Basin - The Coeur d'Alene Lake Basin Unit in Idaho is broken into two subunits. The Coeur d'Alene Lake subunit lies within Kootenai, Shoshone, Benewah and Bonner counties. The St. Joe River subunit includes streams in Shoshone, Benewah, and Latah counties, Idaho. Thirty stream reaches or tributaries ( 677 km ( 421 mi)) and lakes comprising 12,727 ha ( 31,450 ac) of surface area are proposed as critical habitat within this unit. Of this, a relatively high portion ( 46 percent) is currently unoccupied by the species. Approximately 58 percent of the waters proposed for designation within this Unit are located on Federal land. 53. The Coeur d'Alene Lake Unit is relatively low cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 429,000 and $ 693,000. A large share of this amount, approximately $ 287,000 annually, is forecast to be made up of administrative costs. In addition, major categories of forecast project modification costs within the unit are associated with timber harvest on USFS lands ($ 97,000 to $ 245,000 per year resulting from reduced harvest, fishery studies, road and culvert costs, and changes in yarding systems), and FHWA bridge and road work ($ 23,000 associated with limitations on in- stream work periods). Modifications to agricultural irrigation diversions could result in costs from zero to $ 100,000. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 54. Unit 15: Clearwater River Basin - The Clearwater River Unit includes 3,063 km ( 1,904 mi) of streams and 6,722 ha ( 16,611 ac) of lakes proposed as critical habitat for bull trout in north- central Idaho. This large unit extends from the Snake River confluence at Lewiston on the west to headwaters in the Bitterroot Mountains along the Idaho/ Montana border on the east. About 13 percent of the proposed critical habitat within the Clearwater River Unit is currently unoccupied by the species. Approximately 78 percent of the waters proposed for designation within the Unit are located on Federal land. 55. Total forecast costs associated with consultation on bull trout within this unit are between $ 1.0 million and $ 1.7 million annually. Of this amount, approximately $ 572,000 is associated with administrative costs. In addition, major categories of forecast project modification costs within this unit are associated with timber harvest on USFS lands ($ 252,000 to $ 635,000 per year resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems), recreational suction mining on USFS land ($ 115,000 associated with reduced availability of stream access due to seasonal closures), highway bridge and road work ($ 25,000), and USFS management activities ($ 35,000 ES- 23 annually). Agricultural irrigation diversion project modification costs could range from zero up to $ 259,000 annually. These costs may result from reductions in irrigation deliveries. Other activities are individually estimated to each account for less than $ 15,000 dollars per year in project modification costs. 56. Although the proposed Clearwater River Basin Critical Habitat Unit is forecast to experience significant costs associated with the bull trout, these costs should be viewed in light of the large size of the proposed unit. In fact, the Clearwater Unit is one of the lowest cost of the proposed units, in terms of forecast costs per river mile of habitat proposed for designation. 57. Unit 16: Salmon River Basin - The Salmon River basin is a geographically large unit that extends across central Idaho from the Snake River to the Montana border. The critical habitat unit includes 7,688 km ( 4,777 mi) of streams extending across portions of Adams, Blaine, Custer, Idaho, Lemhi, Nez Perce, and Valley counties in Idaho. About six percent of the proposed critical habitat within the Salmon River Unit is currently unoccupied by the species. Approximately 86 percent of the waters proposed for designation within the Unit are located on Federal land. 58. Forecast total annual costs associated with the bull trout within this unit are between $ 2.1 million and $ 3.3 million. Of this amount, approximately $ 1.3 million is associated with administrative costs, with the rest made up of project modification costs. Major categories of forecast project modification costs are associated with timber harvest on USFS lands ($ 465,000 to $ 1.2 million per year resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems), highway bridge and road work ($ 57,000), and USFS general forest management activities ($ 65,000 annually). The cost of modifications to agricultural irrigation water deliveries could range from zero up to $ 479,000 annually. Costs associated with mining activities at Hecla Mining Company's Grouse Creek and Thompson Creek mines are estimated at $ 132,000 annually. Other activities are individually estimated to each account for less than $ 25,000 dollars per year in project modification costs. 59. Although the proposed Salmon River Basin Critical Habitat Unit has significant forecast costs associated with the bull trout, these costs should be viewed in light of the large size of the proposed unit. In fact, the Salmon River Unit is also one of the lowest cost of the proposed units, in terms of forecast costs per river mile of habitat proposed for designation. 60. Unit 17: Southwest Idaho River Basins - The Southwest Idaho Unit includes a total of approximately 2,792 km ( 1,735 mi) of streams in the Boise, Payette, and Weiser River basins. A number of southern Idaho counties are wholly or partially within this unit, including Ada, Adams, Boise, Camas, Canyon, Elmore, Gem, Payette, Valley, and Washington counties. The counties within the southern Idaho unit include both a significant portion of productive agricultural land as well as the largest population center in the state ( the Boise Valley). About 24 percent of the proposed critical habitat within the Southwest ES- 24 Idaho Unit is currently unoccupied by the species. Approximately 78 percent of the proposed streams and 66 percent of proposed lakes and reservoirs within the Southwest Idaho River Basins Unit are located on Federal land. 61. The Southwest Idaho River Basins Unit is a relatively low- cost unit, in terms of forecast costs per river mile of habitat proposed for designation. Forecast total annual costs associated with the bull trout within this unit are between $ 1.0 million and $ 1.9 million. Total administrative costs are forecast to be a relatively small portion of this total ($ 328,000 annually). The remainder of the forecast costs are expected to result from forecast project modifications. Specifically, project modification costs within this unit are forecast to be associated with timber harvest on USFS lands ($ 309,000 to $ 781,000 per year resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems) and BOR reservoir activities ($ 263,000 annually). Major BOR reservoirs in this unit include Anderson Ranch and Arrowrock Reservoirs on the Boise River, Cascade Reservoir on the North Fork Payette, and Deadwood Reservoir on the Payette River. Forecast project modification costs include bull trout life- cycle studies and monitoring at all the reservoirs, and trap and haul passage around the Boise River reservoirs. Costs associated with FERC relicensing at the Lucky Peak facility on the Boise River, and power facilities at the Cascade impoundment, are expected to cost between $ 31,000 and $ 58,000 annually. Modifications to agricultural irrigation diversions could range from zero to $ 318,000 annually. These costs could potentially be associated with reductions in irrigation water withdrawals. Other activities are individually estimated to each account for less than $ 30,000 dollars per year in project modification costs. 62. Unit 18: Little Lost River Basin - The Little Lost River Unit is within Butte, Custer, and Lemhi counties in east- central Idaho. Approximately 184.6 km ( 115.4 mi) of stream habitat in the Little Lost River Basin is proposed for critical habitat designation. About eight percent of the proposed critical habitat within the Little Lost River Unit is currently unoccupied by the species. Approximately 76 percent of the proposed streams within the Little Lost River Basin Unit are located on Federal land. 63. The Little Lost River Unit is forecast to be a relatively inexpensive unit compared to others in the designation, and is a moderate- cost unit in terms of forecast costs per river mile of habitat proposed for designation. It is estimated that total annual costs associated with the bull trout within this unit will be between $ 150,000 and $ 176,000. Of this amount, a large share, approximately $ 136,000 annually, is forecast to be comprised of administrative costs, with the remainder made up of project modification costs. The largest category of project modification costs within this unit is forecast to be associated with timber harvest on USFS lands ($ 10,000 to $ 24,000 per year). Project modifications to agricultural irrigation diversions could result in costs from zero to $ 10,000 annually. Other activities are individually estimated to each account for less than $ 5,000 dollars per year in project modification costs. 64. Unit 19: Lower Columbia River Basin - The Lower Columbia Unit consists of portions of the Lewis, White Salmon, and Klickitat Rivers, and associated tributaries in ES- 25 southwestern and south- central Washington. The unit extends across Clark, Cowlitz, Klickitat, Skamania, and Yakima counties. Approximately 340 km ( 210 mi) of streams and three reservoirs covering 5,054 ha ( 12,488 ac) are proposed for critical habitat designation. About 20 percent of the proposed critical habitat within the Lower Columbia River Unit is currently unoccupied by the species. A low portion ( 18 percent) of the proposed streams and 29 percent of the proposed lakes and reservoirs within the Lower Columbia River Basin Unit are located on Federal land. 65. When forecast total costs for this unit are viewed in light of its size, the Lower Columbia River Basins Unit is a moderate- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. It is estimated that total annual costs associated with the bull trout within the unit will be between $ 385,000 to $ 494,000. Total administrative costs associated with the consultation process are estimated to be a relatively large fraction of these costs ($ 304,000 annually). In addition, project modification costs are forecast to be associated with FERC hydroelectric facility re- licensing activities ($ 67,000 to $ 153,000 annually). These FERC re- licensing costs are for the significant hydroelectric developments on the Lewis River, including Yale, Merwin, Swift No. 1, and Swift No. 2. These costs are projected to include study costs, trap and haul passage, and habitat acquisition. Swift No, 2 is one of two hydroelectric projects identified in this study where bull trout- related project modifications could have a significant impact on a small business; the other is Box Canyon in the Northeast Washington River Basin ( Unit 22). Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 66. Unit 20: Middle Columbia River Basin - The Middle Columbia River unit encompasses the entire Yakima River basin located in south central Washington, draining approximately 15,900 square km ( 6,155 square mi). The basin occupies most of Yakima and Kittitas counties, about half of Benton County, and a small portion of Klickitat County. Approximately 846 km ( 529 mi) of stream habitat and 6,066 ha ( 14,986 ac) of lake and reservoir surface area are proposed as critical habitat within this unit. About 13 percent of the proposed critical habitat within the Middle Columbia River Unit is currently unoccupied by the species. Approximately 44 percent of the waters proposed for designation within the Middle Columbia River Basin Unit are located on Federal land. 67. The Middle Columbia River Unit is a relatively low- cost unit in terms of cost per stream mile. Forecast costs associated with the bull trout within this unit are between $ 391,000 and $ 494,000 annually. Of this amount, a very small portion, approximately $ 50,000 annually, will be associated with the administrative costs of the consultation process, while the remainder will be associated with project modifications. While there are projected to be project modification costs associated with timber harvest activities ( through consultation with the USFS; estimated to be between $ 36,000 and $ 91,000 annually), the majority of forecast costs for this unit are associated with dam and reservoir operations. The BOR operates a system of five dams in this basin ( Cle Elum Lake, Kachess Lake, Keechelus Lake, Tieton Dam, and Bumping Lake) which provide power and irrigation for this agriculturally important region. It is estimated that project modification costs ( periodic trap- ES- 26 and- haul passage to allow genetic interchange between isolated bull trout populations) at the BOR operated impoundments in the unit will cost approximately $ 290,000 per year. Other activities are individually estimated to account for a small portion of forecast annual project modification costs. 68. TheMiddle Columbia River Unit is a relatively low- cost unit in terms of cost per stream mile. 69. Unit 21: Upper Columbia River Basin - The Upper Columbia River Basin includes three subunits in central and northern Washington: the Wenatchee River subunit in Chelan County; the Entiat River subunit in Chelan County; and the Methow River subunit in Okanogan County. A total of 909.7 km ( 565.4 mi) of streams and 1,010 ha ( 2,497 ac) of lake surface area are proposed for critical habitat. About nine percent of the proposed critical habitat within the Upper Columbia River Unit is currently unoccupied by the species. Approximately 58 percent of the proposed streams and 41 percent of the proposed lakes and reservoirs within the Upper Columbia River Basin Unit are located on Federal land. 70. The Upper Columbia River Basins Unit is a low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within this unit are between $ 196,000 to $ 505,000 annually. Total administrative costs associated with the consultation process are estimated to be $ 122,000, with the remainder of the forecast costs made up of project modification requirements. Major categories of forecast project modification costs within this unit are associated with FCRPS fisheries studies ( zero to $ 155,000 per year), and USFS timber harvest activities ($ 57,000 to $ 144,000 annually resulting from reduced harvest, fishery studies, road and culvert costs and changes in yarding systems). The FCRPS fisheries studies are for bull trout radio telemetry, snorkel and general monitoring study costs in the Entiat, Methow, and Wenatchee Rivers. In addition, modifications to agricultural irrigation diversions could result in costs from zero to $ 59,000 annually. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 71. Unit 22: Northeast Washington River Basins - The Northeast Washington unit includes bull trout above Chief Joseph Dam on the Columbia River. A total of 373.1 km ( 231.9 mi) of streams and 1,166 ha ( 2,880 ac) of lake surface area are proposed as critical habitat within this unit. A high proportion ( 54 percent) of the proposed critical habitat within the Northeast Washington River Basins Unit is currently unoccupied by the species, and approximately 58 percent of the proposed streams and reservoirs within this unit are located on Federal land. 72. The Northeast Washington River Basins Unit is forecast to be a relatively high- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within this unit are between $ 965,000 to $ 1.4 million annually. Total annual administrative costs are estimated to be a large share of these costs ($ 676,000), with the remainder associated with project modifications. A major category of ES- 27 annual project modification costs within this unit involves FERC hydroelectric facility re-licensing activities ( up to $ 540,000 annually). The estimated FERC re- licensing costs are related to two major hydroelectric facilities on the Pend Orielle River: Box Canyon and Boundary. The Box Canyon re- licensing terms are currently in continuing settlement negotiations, and likely costs specific to this facility are not currently available. However, a recent FERC environmental impact statement ( EIS) estimates that the present value of bull trout related project modifications ( including habitat acquisition) could total upwards of $ 60 million for this relatively small ( 60 MW) facility. Box Canyon is one of two hydroelectric projects identified in this study where bull trout- related project modifications could have a significant impact on a small business; the other is Swift No. 2 in the Lower Columbia River Basin ( Unit 19). Modifications to agricultural irrigation diversions could impose costs from zero to $ 46,000 annually. Other activities are individually estimated to each account for less than $ 10,000 dollars per year in project modification costs. 73. Unit 23: Snake River Basin in Washington - The Snake River Washington Unit includes two critical habitat subunits located in southeast Washington: the Tucannon River subunit located in Columbia and Garfield counties, and the Asotin Creek subunit within Garfield and Asotin counties. A total of 326 km ( 203 mi) of stream reaches are proposed as critical habitat within this unit. About 23 percent of the proposed critical habitat within the Snake River Basin in Washington Unit is currently unoccupied by the species. Approximately 52 percent of the proposed streams within the Snake River Basin Unit are located on Federal land. 74. The Snake River Basin Unit is a relatively low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within the unit will be between $ 230,000 to $ 287,000. Total annual administrative costs associated with the bull trout are estimated to be a large portion of this total ($ 201,000). The major category of project modification costs within this unit is forecast to be associated with USFS timber harvest activities ($ 21,000 to $ 53,000 annually). Agricultural irrigation diversions could see up to $ 22,000 in annual project modification costs within this unit. Other activities are estimated to each account for less than $ 5,000 dollars per year in project modification costs. 75. Unit 24: Columbia River - This unit is located in the states of Oregon and Washington and includes Clatsop, Columbia, Multnomah, Hood River, Wasco, Sherman, Gilliam, Morrow, and Umatilla counties in Oregon and Pacific, Wahkiakum, Cowlitz, Clark, Skamania, Klickitat, Benton, Walla Walla, Franklin, Yakima, Grant, Kittitas, Chelan, Douglas, and Okanogan counties in Washington. All of this stretch of the Columbia River is currently considered occupied by the bull trout. A relatively low share of the land adjacent to the river in this unit is made up of Federally managed lands ( approximately 39 percent). 76. The Columbia River Unit is a relatively low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast total costs associated with the bull trout within this unit will be between $ 243,000 to $ 504,000 annually. Total annual ES- 28 administrative costs associated with this unit are relatively low ($ 50,000). The major category of annual project modification costs within the unit are forecast to be associated FERC hydroelectric facility re- licensing activities ( up to $ 362,000 annually). Major FERC-licensed hydroelectric projects on the mainstem Columbia River include Priest Rapids, Rocky Reach, and Wells. These very large facilities are operated by PUD's. Other activities are individually forecast to account for less than $ 15,000 dollars per year in project modification costs. 77. Unit 25: Snake River - The lower Snake River is located in Washington ( Franklin, Walla Walla, Columbia, Whitman, and Asotin counties) from its mouth to the confluence with the Clearwater River at the cities of Clarkston, Washington and Lewiston, Idaho. The Snake River forms the border between Washington and Idaho from Clarkston/ Lewiston upstream to the Oregon border. The Snake River forms the boundary between Idaho and Oregon from that point upstream to the limit of this critical habitat unit. This portion of the Snake River is within Nez Perce, Idaho, Adams, and Washington counties in Idaho, and Wallowa, Baker, and Malheur counties in Oregon. About 20 percent of the proposed critical habitat within the Snake River Unit is currently unoccupied by the species. Approximately 50 percent of the habitat proposed for designation within the Snake River Unit is located on Federal land. 78. The Snake River Unit is a relatively low- cost unit, in terms of forecast cost per river mile of habitat proposed for designation. Forecast costs associated with the bull trout within this unit are approximately $ 135,000. Administrative costs associated with the consultation process are estimated to be nearly all of that amount, or $ 125,000 annually. Small Business Effects 79. Under the Regulatory Flexibility Act ( RFA) ( as amended by the Small Business Regulatory Enforcement Fairness Act ( SBREFA) of 1996), whenever a Federal agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities ( i. e., small businesses, small organizations, and small government jurisdictions). The following summarizes the potential effects of critical habitat designation on small entities: Reductions in contractual USFS water deliveries could significantly impact five ranching/ farming operations annually. However, the location of the reduction in water deliveries within the critical habitat designation is uncertain. Small hydroelectric producers in Washington, Oregon, Idaho and Montana could be affected by project modification costs at the time of facility re- licensing. Specifically, the resulting project modifications could have a significant economic impact on the financial operations of Cowlitz County public utility district ( PUD) ( Unit 19 - Lower Columbia River) and Pend Orielle County PUD ( Unit 22 - Northeast Washington River). ES- 29 • Section 7- related costs associated with instream work is expected to affect approximately 15 placer mines annually in the John Day River Basin ( Unit 8) and Hells Canyon Complex ( Unit 12). While the financial characteristics of these mining operations are unknown, this analysis assumes the economic effect will be significant for those operations that are impacted. Energy Industry Impacts 80. Pursuant to Executive Order No. 13211, Federal agencies are required to submit a summary of the potential effects of regulatory actions on the supply, distribution and use of energy. Two criteria are relevant to this analysis: 1) reductions in electricity production in excess of 1 billion kilowatt- hours per year or in excess of 500 megawatts ( MWs) of installed capacity and 2) increases in the cost of energy production in excess of one percent. The constraints placed on energy production within the region from compliance with bull trout section 7 consultations will not result in significant decreases in production or increases in energy costs within the region. Changes From Draft Economic Analysis 81. Information supplied though public comments to the Draft Economic Analysis along with additional information from Action agency and Service personnel on issues raised through public comment led to several changes to the analysis. This Final Economic Analysis contains the following significant changes from the draft report. 1) Additional information on Habitat Conservation Plans ( HCPs) currently under development within the proposed designation has been incorporated. Additional costs on the order of one million dollars annually have been added to the estimated costs reported. 2) The BOR supplied extensive comments on current and potential costs associated with consultation on its impoundments. Costs associated with potential project modifications to Yakima Drainage dams ( as well as for other BOR impoundments within the proposed designation) have been reduced in response to the new BOR information. 3) Information from Hecla Mining Company identified additional consultation- related costs for the Hecla Grouse Creek and Thompson Creek mines. These costs have been included in the section 4 discussion of USFS mining activity. 4) Information from USFS personnel from the Wallowa/ Whitman National Forest identified impacts associated with limitations on in- stream work windows for placer mining operations as baseline State of Oregon regulations that are independent of bull trout section 7 consultation. Estimated impacts to Oregon placer mining have been adjusted accordingly. ES- 30 5) Additionally, corrections to minor errors within the report, not impacting final cost estimates, have been made in response to public comments. Caveats to Economic Analysis 82. Exhibit ES. 10 presents the key assumptions of this economic analysis, as well as the potential direction and relative scale of bias introduced by the assumptions. 83. These caveats below describe factors that introduce uncertainty into the results of this analysis. ES. 10 CAVEATS TO THE ECONOMIC ANALYSIS Key Assumption Projected USFS timber harvest activity is based on recent regional history and ignores the declining long- term trend of the industry. USFS water diversion reductions occur annually and representative water costs reflect the high- end of water lease rates in Washington. Cost of USFS water diversion reductions and timber harvest project modifications are distributed across the units in proportion to USFS non- wilderness acreage. While this may have no effect on the total cost estimate, it may have an effect on the unit cost estimate. Total costs of providing technical assistance is expected to be small relative to other economic impacts; therefore, this analysis does not quantify the instances and costs of technical assistance efforts. Project modifications incorporating measures suggested by the Service and voluntarily agreed to by the applicant during the informal consultation process in order to minimize impact to the bull trout and/ or its habitat are not quantified in this analysis. Amortization of fishery- related capital investments are based on the life of the project rather than a shorter revenue recovery period. Changes in hydroelectric power revenues attributable to reductions in operational flexibility at Libby and Hungry Horse dams is not quantified Most of the project modification costs will either be borne directly by or passed onto the Federal government. The FPA, the Pacific Northwest Electric Power Planning and Conservation Act, and fisheries management directives ( Northwest Forest Plan, INFISH and PACFISH) provide baseline protection. Project modification costs allocated between bull trout and other listed species. Limited consultation with the NRCS is anticipated and based on a the record of past formal and informal consultation activity on the bull trout Effect on Cost Estimate + + +/- - - - - +/- +/- +/- - -: This assumption may result in an underestimate of real costs. + : This assumption may result in an overestimate of real costs. +/-: This assumption has an unknown effect on estimates. ES- 31 Estimated Cost of the Final Designation 84. The analysis contained in this report is consistent with the designation as described in the proposed rule; 5 however, the Service is expected to exclude some proposed areas of habitat to arrive at a final designation. The purpose of this section is to detail the expected changes to the proposed designation and show the implication of these changes on estimated consultation and project modification costs. 85. Exhibit ES. ll compares the spatial extent of the proposed and expected final designations for bull trout critical habitat for both river and stream miles and lake and reservoir acres. Overall, 1,925 miles of rivers and streams and approximately 55,000 acres of lakes and reservoirs are expected to be excluded from critical habitat in the final designation. The greatest reductions in critical habitat stream miles are expected to occur in the Deschutes River Unit ( 60.5 percent reduction), Hood River Unit ( 33.2 percent), Southwest Idaho River Basins Unit ( 32.8 percent), and the Hells Canyon Complex Unit ( 21.3 percent). Most of the reductions in lake and reservoir critical habitat acres are expected to occur in the Deschutes River, Southwest Idaho River Basins and Malheur River Units, all with more than a 70 percent reduction in designated lake and reservoir critical habitat compared to the original proposed designation. ExhibitES. il SUMMARY OF CHANGES IN BULL TROUT CRITICAL HABITAT FROM PROPOSED TO FINAL DESIGNATION Unit Unit 1 - Klamath River Basin Unit 2 - Clark Fork River Basin Unit 3 - Kootenai River Basin Unit 4 - Willamette River Basin Unit 5 - Hood River Basin Unit 6 - Deschutes River Basin Unit 7 - Odell Lake Unit 8 - John Day River Basin Unit 9 - Umatilla- Walla Walla River Basins Unit 10 - Grande Ronde River Basin Unit 11 - Imaha/ Snake River Basins Unit 12 - Hells Canyon Complex Unit 13 - Malheur River Basin Unit 14 - Coeur d'Alene Lake Basin Proposed Designation Stream Miles 296 3,372 368 200 103 439 15 639 396 644 191 599 233 403 Lake and Reservoir Acres 33,939 304,226 30,094 8,899 91 23,314 6,439 0 0 0 0 0 5,926 27,296 Final Designation Stream Miles 280 3,368 368 200 69 173 13 563 348 625 191 471 214 403 Lake and Reservoir Acres 33,939 304,225 30,094 8,899 91 3,407 6,439 0 0 0 0 0 1,769 27,296 5 U. S. Fish and Wildlife Service, Proposed Designation of Critical Habitat for the Klamath River and Columbia River Distinct Population Segments of Bull Trout, November 29, 2002 ( 67 FR 71235- 71284). ES- 32 Exhibit ES. ll SUMMARY OF CHANGES IN BULL TROUT CRITICAL HABITAT FROM PROPOSED TO FINAL DESIGNATION Unit Unit 15 - Clearwater River Basin Unit 16 - Salmon River Basin Unit 17 - Southwest Idaho River Basins Unit 18 - Little Lost River Basin Unit 19 - Lower Columbia River Basin Unit 20 - Middle Columbia River Basin Unit 21 - Upper Columbia River Basin Unit 22 - Northwest Washington River Basins Unit 23 - Snake River Basin in Washington Unit 24 - Columbia River Basin Unit 25 - Snake River Basin Total Proposed Designation Stream Miles 1,904 4,296 1,657 113 171 523 591 232 204 537 343 18,468 Lake and Reservoir Acres 16,610 3,683 41,307 0 12,078 14,987 2,553 1,279 0 0 0 532.724 Final Designation Stream Miles 1,655 3,835 1,114 110 145 519 578 232 189 537 343 16,543 Lake and Reservoir Acres 16,610 3,487 10,651 0 12,000 15,548 2,553 1,279 0 0 0 478,188 86. As noted, the costs reported in the body of this report are consistent with the proposed designation. Expected changes to the proposed designation and the impact of these exclusions on costs are summarized in Exhibit ES. 12, where estimates of annual section 7- related consultation costs for both the proposed and expected final bull trout critical habitat designations are shown. The expected changes to the final designation impacts estimated costs in two ways. 87. First, where future consultation and project modification costs were estimated for dams and reservoirs located within stream reaches that are expected to be excluded from the final critical habitat designation, the costs associated with these anticipated consultations are removed. Three critical habitat units have dams and reservoirs located on waters expected to be excluded in the final designation. The previously quantified costs associated with consultations on Lucky Peak and Cascade Dams and Reservoirs, and Warm Springs, Crane Prairie, and Wickiup Reservoirs have therefore been removed from the forecast total costs associated with the final critical habitat designation. Costs associated with consultations on Lucky Peak and Cascade Dams and Reservoirs have been removed from estimates for the Southwest Idaho River Basins Units, costs associated with consultation on Warm Springs Reservoir have been removed from estimates for the Malheur River Unit, and costs associated with consultations on Crane Prairie and Wickiup Reservoirs have been removed from estimates for the Deschutes River Unit. 88. Second, because the Service is expected to exclude areas of unknown occupancy from the final designation, the spatial extent of unoccupied habitat in each critical habitat ES- 33 unit is adjusted to reflect the expected final designation ( see Appendix F, Exhibit F. 11), and the forecast costs of the expected final designation reflect these changes. 89. Exhibit ES. 12 presents a summary of the annualized forecast total costs, by unit, likely to be associated with the final critical habitat designation over the next ten years. Overall, the removal of waters from the proposed to the expected final bull trout designation is expected to lower forecast section 7- related consultation and project modification costs by approximately $ 18 to $ 24 million over the next ten years ( nine percent). In six units where no changes in the proposed designation were made, there is no change in forecast costs. As a percentage of unit costs, the greatest reduction in forecast costs resulting from the exclusions is expected to occur in the Deschutes River Basin Unit, where forecast costs of the expected final designation are 43 to 55 percent of the costs originally forecast for the proposed designation. 90. The economic impacts associated with the final designation, discounted to present value using a rate of seven percent, are forecast to range from approximately $ 180 to $ 245 million over the next ten years, or $ 18.0 to $ 24.5 million annually. Total costs associated with the final designation for the Klamath Distinct Population Segment of bull trout are forecast to range from approximately $ 5 million to $ 7 million over the next ten years ($ 0.5 to 0.7 million annually), while costs associated with the final designation for the Columbia Distinct Population Segment of bull trout are forecast to range from approximately $ 175 million $ 235 million ($ 17.5 to $ 23.5 million annually). 91. These costs will be incurred primarily by Federal agencies responsible for section 7 consultations ( approximately 65 percent of forecast costs) and the Service ( approximately five to ten percent of forecast costs); private entities will incur the remaining 25 to 30 percent. Project modification costs account for as much as 50 to 60 percent of forecast costs, and administrative costs the remaining 40 to 50 percent. Dam and reservoir- related consultations, including power facility re- licensing, account for approximately 42 percent of forecast project modification costs ( excluding the cost associated with reduced irrigation diversions). Timber harvest, irrigation diversions, habitat conservation plans, and mining account for 20 percent, 12 percent, nine percent, and three percent of forecast project modification costs, respectively. 92. The main text of the report discusses impacts to small businesses expected under the rulemaking as proposed. Impacts to small businesses are primarily related to potential reductions in USFS water deliveries to farmers/ ranchers, project modifications triggered during hydroelectric facility re- licensing, and costs associated with activity restrictions for placer mining. Under the final designation, the reduction in small business impacts would parallel the extent to which these activities occur in habitat removed from the final designation and losses related to these activities reduced. ES- 34 Exhibit ES. 12 SUMMARY COMPARISON OF PROPOSED AND FINAL CRITICAL HABITAT DESIGNATION SECTION 7 COSTS FOR THE BULL TROUT ( Annualized $ l, 000fs) Unit Unit 1 - Klamath River Basin Unit 2 - Clark Fork River Basin Unit 3 - Kootenai River Basin Unit 4 - Willamette River Basin Unit 5 - Hood River Basin Unit 6 - Deschutes River Basin Unit 7 - Odell Lake Unit 8 - John Day River Basin Unit 9 - Umatilla- Walla Walla River Basins Unit 10 - Grande Ronde River Basin Unit 11 - Imaha/ Snake River Basins Unit 12 - Hells Canyon Complex Unit 13 - Malheur River Basin Unit 14 - Coeur d'Alene Lake Basin Unit 15 - Clearwater River Basin Unit 16 - Salmon River Basin Unit 17 - Southwest Idaho River Basins Unit 18 - Little Lost River Basin Unit 19 - Lower Columbia River Basin Unit 20 - Middle Columbia River Basin Unit 21 - Upper Columbia River Basin Unit 22 - Northwest Washington River Basins Unit 23 - Snake River Basin in Washington Unit 24 - Columbia River Basin Estimated Range of Cost Proposed Critical Habitat Designation Low Estimate $ 529 1,321 328 4,497 328 430 51 446 98 467 559 1,939 2,006 429 995 2,059 1,004 150 385 391 196 965 230 243 High Estimate $ 733 2,192 402 4,891 413 719 56 600 211 580 605 2,338 2,095 693 1,676 3,319 1,867 176 494 494 505 1,397 287 504 Estimated Range of Cost Final Critical Habitat Designation Low Estimate $ 507 1,321 328 3,463 248 195 51 411 81 444 559 1,443 1,792 279 881 1,942 698 144 308 376 178 663 177 243 High Estimate $ 703 2,192 402 3,766 312 401 56 553 175 551 605 1,740 1,874 450 1,483 3,130 1,348 169 396 475 460 959 221 504 ES- 35 Exhibit ES. 12 SUMMARY COMPARISON OF PROPOSED AND FINAL CRITICAL HABITAT DESIGNATION SECTION 7 COSTS FOR THE BULL TROUT ( Annualized $ l, 000fs) Unit Unit 25 - Snake River Basin Multiple unit or unknown a Estimated Range of Cost Proposed Critical Habitat Designation Low Estimate 135 1,303 High Estimate 135 1,303 Estimated Range of Cost Final Critical Habitat Designation Low Estimate 135 1,303 High Estimate 135 1,303 Notes: These estimates include all section 7 costs, including those co- extensive with the listing and designation of critical habitat for the bull trout. Costs are reported in 2003 dollars. a Miscellaneous costs ($ 213,000 annually) and the costs associated with development of HCP's ($ 1,090,000 annually) have not been allocated to the unit level due to uncertainty as to their location. ES- 36 INTRODUCTION AND BACKGROUND SECTION 1 93. In November 2002, the Service proposed to designate critical habitat for the Columbia River and Klamath River DPSs of bull trout ( Salvelinus confluentus), hereafter " bull trout." 6 The purpose of this report is to identify and analyze potential economic impacts associated with the proposed critical habitat designation. This report was prepared by Bioeconomics, Inc. of Missoula, Montana. 94. Section 4( b)( 2) of the Act requires the Service to designate critical habitat on the basis of the best scientific data available, after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. The Service may exclude areas from critical habitat designation when the benefits of exclusion outweigh the benefits of including the areas within critical habitat, provided the exclusion will not result in extinction of the species. 95. Under the listing of a species, section 7( a)( 2) of the Act requires Federal agencies to consult with the Service in order to ensure that activities they fund, authorize, permit, or carry out are not likely to jeopardize the continued existence of the species. The Service defines jeopardy as any action that would appreciably reduce the likelihood of both the survival and recovery of the species. For designated critical habitat, section 7( a)( 2) also requires Federal agencies to consult with the Service to ensure that activities they fund, authorize, permit, or carry out do not result in destruction or adverse modification of critical habitat. Adverse modification of critical habitat is currently construed as any direct or indirect alteration that appreciably diminishes the value of critical habitat for conservation of a listed species. 6 On January 26,2001, the Alliance for the Wild Rockies, Inc. and Friends of the Wild Swan, Inc. filed a lawsuit in the U. S. District Court of Oregon challenging the Service's failure to designate critical habitat for bull trout. The Service entered into a settlement agreement on January 14, 2002, which stipulated that the Service would make critical habitat determinations for five populations of bull trout ( Civil Case No: CV 01- 127- JO). The Service has proposed critical habitat for the Columbia River and Klamath River populations, which are the subject of this analysis. 1- 1 1.1 Description of Species and Habitat7 96. Bull trout { Salvelinus confluentus, family Salmonidae) is a char native to waters of western North America. The historic range of bull trout includes major river basins in the Pacific Northwest from about 41° north to 60° north latitude, extending south to the McCloud River in northern California and the Jarbidge River in Nevada, and north to the headwaters of the Yukon River in Northwest Territories, Canada. To the west, bull trout range includes Puget Sound, various coastal rivers of British Columbia, Canada, and southeast Alaska. Bull trout occur in portions of the Columbia River and Snake River basins, extending east to headwater streams in Montana and Idaho, and into Canada. Bull trout also occur in the Klamath River basin of south- central Oregon. East of the Continental Divide in Canada, the bull trout's range includes the headwaters of the Saskatchewan River in Alberta, and the MacKenzie River system in Alberta and British Columbia. 97. Bull trout were first described as Salmo spectabilis by Girard in 1856 from a specimen collected on the lower Columbia River near The Dalles, Oregon, and subsequently described under a number of names such as Salmo confluentus and Salvelinus malma. Bull trout and Dolly Varden ( Salvelinus malma) were previously considered a single species. However, in 1980, the American Fisheries Society formally recognized bull trout and Dolly Varden as separate species. Two of the most useful characteristics in separating the two species are the shape and size of the head. The head of bull trout is more broad and flat on top, unlike Dolly Varden. Bull trout have an elongated body and large mouth, with the maxilla ( jaw) extending beyond the eye and with well- developed teeth on both jaws and head of the vomer ( a bone in teleost fishes that form the front part of the roof of the mouth and often bears teeth). Bull trout have 11 dorsal fin rays, nine anal fin rays, and the caudal fin is slightly forked. Although they are often olive green to brown with paler sides, color is variable with locality and habitat. 98. Bull trout exhibit both resident and migratory life history strategies. Resident bull trout complete their entire life cycle in the tributary streams where they spawn and rear. Migratory bull trout spawn in tributary streams where juvenile fish rear from one to four years before migrating to either a larger river or lake, where they spend their adult life, returning to the tributary stream only to spawn. These migratory forms occur in areas where conditions allow for movement from upper watershed spawning streams to larger downstream waters that contain greater foraging opportunities. Bull trout that migrate to a downstream river are referred to as " fluvial" fish, while the term " adfluvial" is used to describe fish that migrate to a lake or reservoir. Resident and migratory forms may spawn in the same areas and either form can produce resident or migratory offspring. 7 Information on the bull trout and its habitat is taken from the U. S. Fish and Wildlife Service, Proposed Designation of Critical Habitat for the Klamath River and Columbia River Distinct Population Segments of Bull Trout, November 29, 2002 ( 67 FR 71235- 71284). 1- 2 99. The Klamath River population segment consists of bull trout in the Upper Klamath Lake, Sprague River, and Sycan River watersheds in Oregon. Historical records suggest that bull trout were once widely distributed and exhibited diverse life- history traits in the Klamath River basin. Currently, bull trout in this basin are non- migratory fish that are confined to headwater streams. The local populations that remain reside in an estimated 21 percent of the historic range of bull trout in the Klamath River basin, and they are isolated from one another. 100. The Columbia River population segment includes bull trout residing in portions of Oregon, Washington, Idaho, and Montana. The Bull Trout Draft Recovery Plan ( Draft Recovery Plan) ( Service 2002) identifies 22 recovery units within the Columbia River basin: the Willamette River ( upper tributaries including the McKenzie River), Lower Columbia River ( principally the Lewis, White Salmon, and Klickitat Rivers), Hood River, Deschutes River, Odell Lake, John Day River, Umatilla and Walla Walla Rivers, Middle Columbia River ( principally the Yakima River), Snake River ( including Asotin Creek and Tucannon River), Grande Ronde River, Clearwater River, Salmon River, Little Lost River, Imnaha River, Hells Canyon ( including Powder River), Malheur River, Southwest Idaho, Upper Columbia River ( principally the Wenatchee, Entiat, and Methow Rivers), Northeast Washington, Clark Fork River, Kootenai River, and Coeur d'Alene Lake. Bull trout are estimated to have once occupied about 60 percent of the Columbia River basin; they presently occur in approximately 45 percent of their historic range. Although still somewhat widely distributed in the Columbia River basin, bull trout occur in low numbers in many areas and populations are considered depressed or declining across much of their range. 101. Many factors have contributed to the decline of bull trout in the Columbia and Klamath River basins. However, several appear to be particularly significant: ( 1) fragmentation and isolation of local populations due to dams and water diversions that have eliminated habitat, altered water flow and temperature regimes, and impeded migratory movements; ( 2) degradation of spawning and rearing habitat in upper watershed areas, particularly alterations in sedimentation rates and water temperature resulting from past forest and rangeland management practices and intensive development of roads; and ( 3) the introduction and spread of non- native species, particularly brook trout ( Salvelinusfontinalis) and lake trout ( Salvelinus namaycush), which compete with bull trout for limited resources and, in the case of brook trout, hybridize with bull trout. 102. Bull trout have more specific habitat requirements than most other salmonids. Habitat components that influence bull trout distribution and abundance include water temperature, cover, channel form and stability, spawning and rearing substrate conditions, and migratory corridors. 103. Bull trout are found primarily in cold streams; water temperatures above 15° Celsius ( C) ( 59° Fahrenheit ( F)) are believed to limit bull trout distribution. Adult bull trout have been observed in large rivers throughout the Columbia River basin in water temperatures up to 20° C ( 68° F); however, there are documented steady and substantial declines in 1- 3 abundance in stream reaches where water temperature ranged from 15° to 20° C ( 59° to 68° F). In large rivers, bull trout are often observed " dipping" into the lower reaches of tributary streams, and it is suspected that cooler waters in these tributary mouths may provide important thermal refugia, allowing them to forage, migrate, and overwinter in waters that would otherwise be, at least seasonally, too warm. 104. Preferred spawning habitat consists of low- gradient stream reaches with loose, clean gravel, and water temperatures that range from 4° to 10° C ( 39° to 51° F). Such areas are often associated with cold- water springs or groundwater up- welling. Because bull trout eggs incubate about seven months in the gravel, they are especially vulnerable to fine sediments and water quality degradation. Increases in fine sediment appear to reduce egg survival and emergence. Juveniles are likely similarly affected, as they also live on or within the stream bed cobble. 105. Throughout their lives, bull trout require complex forms of cover, including large woody debris, undercut banks, boulders, and pools. Bull trout are opportunistic feeders, with food habits that are primarily a function of size and life- history strategy. Resident and juvenile migratory bull trout prey on terrestrial and aquatic insects, macro- zooplankton, and small fish. Adult migratory bull trout feed almost exclusively on other fish. 106. The ability to migrate is important to the persistence of bull trout. Maintaining the full complement of bull trout life history forms appears to be important for long- term population persistence in a dynamic and unpredictable environment. Migratory bull trout become much larger than resident fish in the more productive waters of larger streams and lakes, leading to increased reproductive potential. Migration also results in increased dispersion of the population which facilitates gene flow among local populations when individuals from different local populations interbreed, stray, or return to non- natal streams. Local populations that are extirpated by catastrophic events may also become re- established by bull trout migrants. 107. Introduced brook trout threaten bull trout through hybridization, competition, and possibly predation. Hybridization between brook trout and bull trout has been reported in Montana, Oregon, Washington, and Idaho. In addition, brook trout mature at an earlier age and have a higher reproductive rate than bull trout. This difference appears to favor brook trout over bull trout when they occur together, often leading to the decline or extirpation of bull trout. Brook trout also appear to adapt better to degraded habitat than bull trout and are more tolerant of high water temperatures. Non- native lake trout also negatively affect bull trout. In a study of 34 lakes in Montana, Alberta, and British Columbia, lake trout appeared to limit foraging opportunities and reduce the distribution and abundance of migratory bull trout in mountain lakes. 108. The Service determined the primary constituent elements of bull trout habitat from studies of their habitat requirements, life history characteristics, and population biology, as outlined above. These primary constituent elements are: 1- 4 Permanent water and associated substrate having low levels of contaminants such that normal reproduction, growth and survival are not inhibited; Water temperatures ranging from 2° to 15° C ( 37° to 59° F). Adequate thermal refugia may be necessary for persistence of bull trout if water temperatures commonly exceed this range. Specific temperatures within this range will vary depending on bull trout life history stage and form, geography, elevation, diurnal and seasonal variation, shade, such as that provided by riparian habitat, and local groundwater influence; • Complex stream channels with features such as woody debris, side channels, pools, and undercut banks to provide a variety of depths, velocities, and instream structures; • Substrates of sufficient amount, size, and composition to ensure success of egg and embryo overwinter survival, fry emergence, and young- of- the- year and juvenile survival. A minimal amount of fines less than 0.63 cm ( 0.25 in) in diameter and minimal substrate embeddedness are characteristic of these conditions; • A natural hydrograph, including high, low, peak, and base flows within historic ranges or, if regulated, a hydrograph that demonstrates the ability to support bull trout populations; • Springs, seeps, groundwater sources, and subsurface water connectivity to contribute to water quality and quantity; • Migratory corridors with minimal physical, biological or chemical barriers between spawning, rearing, overwintering, and foraging habitats, including intermittent or seasonal barriers induced by high water temperatures or low flows; • An abundant food base including terrestrial organisms of riparian origin, aquatic macroinvertebrates, and forage fish; and • Few or no predatory, interbreeding, or competitive non- native species present. An area need not include all of these elements to qualify for designation as critical habitat. 1.2 Proposed Critical Habitat 109. The areas proposed for designation as critical habitat for the bull trout provide one or more of the primary constituent elements described above. All of the proposed areas require special management considerations to ensure their contribution to the conservation of the bull trout. The critical habitat area consists of 18,469 river miles and 532,721 acres of lake and reservoir habitat within 25 units. While the lateral extent of proposed riverine 1- 5 critical habitat is the width of the stream channel defined by its bankfull elevation, the designation of critical habitat is expected to impact inland activity. How far inland the designation's effects extend is a more or less a site specific issue. For example, with regards to land- based activities such as timber sales or grazing practices, it is a matter of site specific physical processes such as sediment transport, the local topography, and the size of the drainage basin. Descriptions of each critical habitat unit are provided in Appendix A. 1.3 Framework and Methodology 110. The primary purpose of this analysis is to estimate the economic impact associated with the designation of critical habitat for bull trout. 8 This information is intended to assist the Secretary in making decisions about whether the benefits of excluding particular areas from the designation outweigh the benefits of including those areas in the designation. 9 In addition, this information allows the Service to address the requirements of Executive Orders 12866 and 13211, the RFA, as amended by the SBREFA. 10 111. This chapter provides the framework for this analysis. First, it defines the economic effects considered in the analysis. Second, it establishes the baseline against which these effects are measured. Third, it describes the measurement of direct compliance costs, which include costs associated with, and generated as a result of, section 7 consultations. Fourth, it identifies potential indirect economic effects of the rule resulting from ( 1) compliance with other parts of the Act potentially triggered by critical habitat, ( 2) compliance with other laws, and ( 3) time delays and regulatory uncertainty. Fifth, it discusses the need for an economic assessment of the benefits of critical habitat designation. Finally, the section concludes by discussing the time frame for the analysis and the general steps followed in the analysis. 1.3.1 Types of Economic Effects Considered 112. This economic analysis considers both the economic efficiency and distributional effects. For the purpose of this analysis, economic efficiency effects generally reflect the " opportunity costs" associated with the commitment of resources required to comply with the Act. For example, if the activities that can take place on a parcel of private land are limited as a result of a designation, and thus the market value of the land reduced, this reduction in value represents one measure of opportunity cost or change in economic efficiency. Similarly, the costs incurred by a Federal Action agency to consult with the Service under section 7 represent economic opportunity costs. 8 This analysis considers the effects of the regulatory action as proposed in the Federal Register on November 29, 2002 ( 67 FR 71236). M6U. S. C. § 1533( b)( 2). 10 Executive Order 12866, " Regulatory Planning and Review," September 30, 1993; Executive Order 13211, " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use," May 18, 2001; 5 U. S. C. § § 601 etseq; and Pub Law No. 104- 121. 1- 6 113. This analysis also addresses how the impacts are distributed, including an assessment of any local or regional economic impacts and the potential effects on small entities and the energy industry. This information can be used by decision- makers to assess whether the effects might unduly burden a particular group or economic sector. 114. For example, while the designation may have a relatively small impact when measured in terms of changes in economic efficiency, individuals employed in a particular sector of the economy in the geographic area of the designation may experience relatively greater effects. The difference between economic efficiency effects and distributional effects, as well as their application in this analysis, are discussed in greater detail below. Efficiency Effects 115. At the guidance of the OMB and in compliance with Executive Order 12866 " Regulatory Planning and Review," Federal agencies measure changes in economic efficiency in order to understand how society, as a whole, will be affected by a regulatory action. 11 In the context of this regulatory action, these efficiency effects represent the opportunity cost of resources used or benefits foregone by society as a result of critical habitat designation and other co- extensive regulations. 12 Economists generally characterize opportunity costs in terms of changes in producer and consumer surpluses in affected markets. 13 116. In some instances, compliance costs may provide a reasonable approximation for the efficiency effects associated with a regulatory action. For example, a landowner or manager may need to enter into a consultation with the Service to ensure that a particular activity will not adversely modify critical habitat. The effort required for the consultation represents an economic opportunity cost, because the landowner or manager's time and effort would have been spent in an alternative activity had the parcel not been included in the designation. When compliance activity is not expected to significantly affect markets — that is, not result in a shift in the quantity of a good or service provided at a given price, or in the quantity of a good or service demanded given a change in price ~ the measurement of compliance costs can provide a reasonable estimate of the change in economic efficiency. 11 Executive Order 12866, " Regulatory Planning and Review," September 30,1993; U. S. Office of Management and Budget, " Circular A- 4," September 17, 2003. 12 The term " co- extensive" is discussed in greater detail in Section 1.3.3. 13 For additional information on the definition of " surplus" and an explanation of consumer and producer surplus in the context of regulatory analysis, see Gramlich, Edward M, A Guide to Benefit- Cost Analysis ( 2nd Ed.), Prospect Heights, Illinois: Waveland Press, Inc., 1990; and U. S. EPA, Guidelines for Preparing Economic Analyses, EPA 240- R- 00- 003, September 2000, available at http:// yosemite. epa. gov/ ee/ epa/ eed. nsf/ webpages/ Guidelines. html. 1- 7 117. Where a designation is expected to significantly impact a market, it may be necessary to estimate changes in producer and consumer surpluses. For example, a designation that precludes the development of large areas of land may shift the price and quantity of housing supplied in a region. In this case, changes in economic efficiency can be measured by considering changes in producer and consumer surplus in the real estate market. 118. This analysis begins by measuring reasonably foreseeable compliance costs. As noted above, in some cases, compliance costs can provide a reasonable estimate of changes in economic efficiency. However, if the designation is expected to significantly impact markets, the analysis will consider potential changes in consumer and/ or producer surplus in affected markets. Distributional and Regional Economic Effects 119. Measurements of changes in economic efficiency focus on the net impact of the regulation, without consideration for how certain economic sectors or groups of people are affected. Thus, a discussion of efficiency effects alone may miss important distributional considerations concerning groups that may be disproportionately affected. OMB encourages Federal agencies to consider distributional effects separately from efficiency effects. 14 This analysis considers the potential for several types of distributional effects, including impacts on small entities; impacts on energy supply distribution and use; and regional economic impacts. It is important to note that these are fundamentally different measures of economic impact than efficiency effects, and thus cannot be added to or compared with estimates of changes in economic efficiency. Impacts on Small Entities and Energy Supply, Distribution and Use 120. This analysis considers how small entities, including small businesses, organizations, and governments, as defined by the RFA, might be affected by critical habitat designation and other co- extensive regulatory actions. 15 In addition, in response to Executive Order 13211 " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use," this analysis considers the impacts of critical habitat on the energy industry and its customers. 16 14 U. S. Office of Management and Budget, " Circular A- 4," September 17, 2003. 155U. S. C. § 60\ etseq. 16 Executive Order 13211, " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use," May 18, 2001. 1- 8 Regional Economic Effects 121. Regional economic impact analysis provides an assessment of the potential localized effects of critical habitat designation and other co- extensive regulations. Specifically, regional economic impact analysis produces a quantitative estimate of the potential magnitude of the initial change in the regional economy resulting from a regulatory action. Regional economic impacts are commonly measured using regional input/ output models. These models rely on multipliers that mathematically represent the relationship between a change in one sector of the economy ( e. g., hydroelectric power generation) and the effect of that change on economic output, income, or employment in other local industries ( e. g., manufacturers relying on the electricity generated). These economic data provide a quantitative estimate of the magnitude of shifts of jobs and revenues in the local economy. 122. The use of regional input/ output models can overstate the long- term impacts of a regulatory change. Most importantly, these models provide a static view of the economy of a region. That is, they measure the initial impact of a regulatory change on an economy but do not consider long- term adjustments that the economy will make in response to this change. For example, these models provide estimates of the number of jobs lost as a result of a regulatory change, but do not consider re- employment of these individuals over time. In addition, the flow of goods and services across the regional boundaries defined in the model may change as a result of the designation, compensating for a potential decrease in economic activity within the region. 123. Despite these and other limitations, in certain circumstances regional economic impact analysis may provide useful information about the scale and scope of localized impacts. It is important to remember that measures of regional economic effects generally reflect shifts in resource use rather than efficiency losses. These types of distributional effects, therefore, should be reported separately from efficiency effects ( i. e., not summed). In addition, measures of regional economic impact cannot be compared with estimates of efficiency effects. 1.3.2 Defining the Baseline 124. The purpose of this analysis is to measure the economic impact of compliance with the protections derived from the designation of critical habitat, including habitat protections that may be " co- extensive" with the listing of the species ( the term " co- extensive" is described in greater detail in the following section). Economic impacts to land use activities may exist in the absence of co- extensive protections. These impacts may result from, for example: • Local zoning laws; • State and natural resource laws; and 1- 9 • Enforceable management plans and BMPs applied by other State and Federal agencies. 125. Economic impacts that result from these types of protections are not included in this assessment; they are considered to be part of the " baseline." Existing laws, regulations, and policies are described in greater detail in Section 2.3 of this analysis. 1.3.3 Direct Compliance Costs 126. The measurement of direct compliance costs focuses on the implementation of section 7 of the Act. This section requires Federal agencies to consult with the Service to ensure that any action authorized, funded, or carried out will not likely jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of critical habitat. The administrative costs of these consultations, along with the costs of project modifications resulting from these consultations, represent the direct compliance costs of designating critical habitat. 127. This analysis does not differentiate between consultations that result from the listing of the species ( i. e., the jeopardy standard) and consultations that result from the presence of critical habitat ( i. e., the adverse modification standard). Consultations resulting from the listing of the species, or project modifications meant specifically to protect the species as opposed to its habitat, may occur even in the absence of critical habitat. However, in 2001, the U. S. 10th Circuit Court of Appeals instructed the Service to conduct a full analysis of all of the economic impacts of critical habitat designation, regardless of whether those impacts are attributable co- extensively to other causes. 17 Given the similarity in regulatory definitions between the terms " jeopardy" and " adverse modification," in practice it can be difficult to pre- determine the standard that drives a section 7 consultation. Consequently, in an effort to ensure that this economic analysis complies with the instructions of the 10th Circuit as well as to ensure that no costs of the proposed designation are omitted, the potential effects associated with all section 7 impacts in or near proposed critical habitat are fully considered. In doing so, the analysis ensures that any critical habitat impacts that are co- extensive with the listing of the species are not overlooked. 1.3.4 Indirect Costs 128. A designation may Close