WaterClaim

December 15, 2006 McCook

Governor Heineman opened the meeting by saying:

Consumptive Use (CU) is a factor as is the drought
We need to find a solution within a sustainable framework
It is a priority to work with NRDs
State should not pay all bill, the NRDs share in the responsibility
We must lower our CU
We should have the shared goal of lower CU.
Some say, can’t we just give KS money? No, they want water
Our early estimates show we may be over our allocation by 200,000 AF by the end of 2007
We need to focus on hitting our annual target each year.
It will be painful but we must reduce CU.
What does it take to be in compliance?
I have asked the DNR to answer
It requires a combination of tools
Vegetation management
Bureau of Reclamation is working to find best use of surface water
CREP
Challenges are in all parts of the State
962 is a good bill
We purchased surface water
The hearings on the Platte River helped everyone understand the issues
Drought and the increase in acres cause of the problems
Want UNL to help with research
Working with pivot companies to help reduce CU
Funding is critical – and the funding need will be reflected in the budget request
Wants decisions made by local government
Other NRDs and other throughout the State don’t believe the State should pay
The issue affects the entire State – I will argue that the State should pay some.
But State will not pay 100% of the solution
I believe the State should establish a Water Cash Fund
For LB 962, Platte River, and Republican River needs
The money should come from General Fund dollars
The NRDs must match by regulating more.

Ann Bleed
I have been asked to provide possible solution to bring the Basin into compliance within 5 years
We are looking at both long term and 3 years
Solutions included increased regulation on both surface and groundwater
The plan assumes the worst case scenario of a 200,000 AF allocation which is what it has about been for the last two years.
Suggests as an idea to consider
15% reduction in upland pumping
50% reduction in quick response pumping
This would result in compliance in about 5 years.
The NRDs preferred to reduce the allocations instead of the irrigated acres
Reduction is adjusted to need – less in the east and more in the west.

Suggested allocations

URNRD upland 11.3 QR 2.8 to 5.7 20% of acres are QR
MRNRD upland 9.0 QR 2.7 to 5.3 35% of acres are QR
LRNRD upland 9.6 QR 2.4 to 4.8 42% of acres are QR

(the % of land that is QR is my editorial note)

Questions from NRDs, senators, irrigations districts

Mark Christensen –
There are more solutions than the State is looking at
Have you considered shutting off QR acres and allowing the wells to be redrilled in upland areas?

Ann Bleed – That buys time

Mark Christensen – Drought tolerant corn
Ann Bleed – UNL is researching this as a possible help

Dan Smith – You mentioned funding – how much?

Governor Heineman – Looking at a 10 to 15 year budget needs. Should come out of General Funds. Will put in budget by mid-January

Nelson Trambly – Quick math. Dry land worth $800 an acre. Wet is worth $2,100 an acre = property valuation loss of 143 million. The trip to Cuba to get a few sales isn’t much compared to this.

Governor Heineman – Other groups are looking for money too. K through 12 is looking for a 6% to 8% increase in funding.

Mike Clements – How much money do you plant to budget?

Governor Heineman – Will have an answer by January 11 at the State of the State

Jerry Mustion – LB 217 passed in 1978 says “you cannot differentiate between alluvial and upland wells”

Dave Cookson – short answer is yes we can. The laws have been modified since 1978 and now permit that to happen. 46-739

Dan Smith – We don’t have as much money as the Platte. A $0.01 cent increase gives us less than $500,000.

Governor Heineman – We have to look at the entire State. It is critical that the rest of the State is educated as to what the need is.

Ann Bleed – State uses a 5 year average because that is what the Settlement Agreement uses.

Jerry Mustion – Does the Settlement take droughts into consideration?

Ann Bleed – Yes – but no one expected it to be this dry.
The reductions we are considering would bring the State into compliance in 5 years.
It includes CREP producing 5,100 AF benefit
If all 70,000 acres of CREP are enrolled then another 8,200 AF
Reduce phreatophytes by 10% would help the river by another 10,000 after 5 years

? - How much of today’s CU is due to the pumping prior to 2000?

Ann Bleed – 1943 compact was not changed by Settlement. Depletions prior to 2002 that occurred from pumping prior to 2002 were waived but depletions from pumping prior to 2002 but which occur now from that prior pumping do count against us.

Brad Wolf LR – We need a moratorium on the rest of the State because this will help the Republican River Basin

Ann Bleed – Pumping outside of the Republican River Basin has an extremely minimal effect on the Republican River Basin. There are other reasons for a moratorium though.

Jeff Wallin – Compliance doesn’t happen for 5 years under your proposal. What happens within those 5 years. What penalty and who pays?

Ann Bleed – If we show KS that we are serious about doing something then perhaps KS will be nice.

Governor Heineman – If we make a good faith effort by making the types of reductions suggested then I am willing to go to KS and ask them to do the honorable thing. If we don’t make this good faith efforts then KS will probably ignore our requests. KS wants the water not the money.

Mike Clements – What is the DNR position on augmentation

Ann Bleed – DNR will work with the NRDs to help. There are legal difficulties with the Settlement though

Tom Baker – Senator Janson opposed the $0.03 cent levy Post 2001 wells can be treated differently. Should retire some surface irrigation districts.

Mark Christensen –
Water is the #1 issue
2 to 4 inch allocation will mean bankruptcy
All my land is QR
CREP – grass uses as much water as corn
CPRE land should have no plants on it.
Trees have spread
Transfers are necessary
Soil type matters

Tom Hanson
This solution will take out the dark hairs (meaning the younger generation)
COOPs will die
Schools will die
These communities are fragile
Cities are the eaters and we are the producers
Ethanol dependent on water
Important that things done right on the Republican because the Platte will be next
Don’t cut Agriculture’s throat

Tom Carlson
Want rural NE to survive and thrive.
Need to multiple the number of taxpayers by bring people into the State
At first alarmed by the Governors proposal but then began to see some light
Problem is not enough flow in the river
We must deliver water to KS
Invasive species are a problem
All NE wants rivers flows returned
Want 3 year plan to clear invasive species on Republican
“I like the idea of reducing allocations and not reducing acres.” [that is not a typo]
We need to deliver grain to ethanol plants

Nelson Trambly - When people tell you they don’t understand why help. Tell Omaha and Lincoln that they have to put 20% of their inventory in storage and not be able to use it.

Lunch Break

Jasper Fanning – Upper
The proposal today was 100% regulation
Unfair regulation
This is something that we cannot live with
Economy is fragile, more fragile than the aquifer
The economy cannot withstand big swings like the aquifer can
Augmentation needs to be looked at

Mike Clements - Lower
Unacceptable
Perhaps we should consider compensated regulation
Look at augmentation
Ethanol plants very concerned
Will have a devastating effect on the economy
Need to take another look at this
Want to work with Governor
But must come up with a more comprehensive/holistic approach

Brad Lundeen for Tri
Manager home sick like most of the of us in this room
Tri has put a moratorium on all well in district

Ann Bleed
This is not a plan. This is a report of what it takes if we comply via regulation
We must do what we can to reduce regulation via voluntary reduced use and augmentation

Mark Christensen
The Republican River Basin lost around $260 to $300 million dollars today with this announcement.
No one will purchase QR land now until the issue is resolved at more than premium dry land rates.
This will devastate our schools and counties

Mike Clements – When do you want to do this?

Ann Bleed
2007 allocations stay the same
In August of 2007 we take the idea to KS and ask say if we do this will you accept it
This would then be for 2008 and on

Mike Clements – If we retired acres instead of reducing allocations how many acrea?

Ann Bleed – Don’t know but easy to compute. Or we could reduce use on post 2001 wells

Jasper Fanning – Why is there a range in the QR allocations?

Mike Thompson for DNR – Range because we had a range of number for acres

? – The reductions you suggest are closer to an 80% reduction not the 50% you are saying

Ann Bleed – That is because it is a 50% reduction in volume pumped but when you spread that out over a larger set of acres then it results in the 80% reduction on a per acre basis. But it is still a 50% reduction in pumping.

Dan Smith – You have good acre numbers

Ann Bleed – There is a question on that

Dan Smith – I don’t like that thought

[Steve Smith editorial note, apparently the high end range of the QR allocations suggested are based on the old NASS acre numbers that the DNR used to use. If however, they use the acres the NRDs have certified this year then the low end of the range would apply. The reason to provide the range is because the DNR is questioning the NRD acre certifications and perhaps to make the 2.5 inches or so sound less bad.]

Matt Harrison – Governor you have said that Nebraska will soon out produce IL in ethanol production. How given your proposal?

Governor Heineman – We will. In spite of the reductions we can still out grow IL in ethanol production.

Matt Harrison –
The severest cuts are in the QR areas
There has been no new development in QR in my area [lower republican below Harlan Dam]
Why cut my area
Ann you said that 15% of the depletions to the stream were caused by groundwater at another conference so why groundwater making all cuts

Ann Bleed
I have said as much as 75% of the depletions to the stream are caused by conservation. But we don’t know that for sure
The effects of conservation are unknown
There are no serious discussion of regulating conservation
Perhaps we eliminate post 2001 wells
QR regulation is not fair but it is legal and it is fast
I favor a water use fee that taxes everyone to help compensate the QR for their loss

Matt Harrison - This isn’t fair

Ann Bleed – What should we do?

Matt Harrison – Transfers into the Basin

Ann Bleed – To do transfers we have to convince the source Basin. We have to do something.

Tom Carlson –
We should set a basin-wide 9.5 inch allocation and then everyone should volunteer to give another half inch.
That creates a 9.0 inch allocation
We then pump 50,000 AF into the river

Russ Pankonin – Governor – Do you support water transfers?

Governor Heineman – I keep an open mind. I know Mark Christensen is introducing a water bill. We will see if he can get 25 votes.

Benjie Loomis – Conservation is good but has a significant effect. Are you seeking federal funds to help?

Governor Heineman – Yes, we are looking into it.

Questions from the audience

Claude Cappel –
QR wells make up a large percent of the wells in the Middle Republican.
All should share the same allocation
Allow people to buy and sell water
Can’t allow upland wells to only take a 15% reduction or all QR will soon be shut off
Everyone should share the same allocation

Don Adams
In the 1980’s corporate Omaha had problems.
Enron left
UP threatened to leave
ConAgra threatened to leave
Omaha chamber called for help
Got LB775 which is a massive corporate tax break
Well over a billion in forgone taxes
Omaha now flourishing
80 to 90% of the benefit of LB775 is for Omaha and Lincoln
Rural senators voted for the bill because urban needed it
State found 150 million for Low Level Radioactive Waste
Not fair to devastate rural Nebraska and NRDs
Where is the education lobby?
Water policy with the Cooperative agreement on the Platte and now with this plan on the Republican will kill ethanol

Dale Helms
Canal water user and crop insurance salesman
Lost acres to CREP – 25,000 to 30,000 in premiums
Reds should step up and help because of dams and conservation

Roger Girdle –
Everyone has to be treated equal
Agree with Claude Cappel
QR and upland, cut both equally
QR hear longest and operates the cheapest
State is responsible and has known for a long time
Willing to pay $10 to $20 an acre to solve problem, State should match

Governor Heineman
Thank you for being here
I am the Governor and will not blame previous administrations
Major issues
Ethanol
Water
High taxes

Notes taken by

Steve Smith, Director
WaterClaim
PO Box 698
Imperial, NE 69033
308 882 3020
www.waterclaim.org

"The one who says it cannot be done should never interrupt the one who is doing it."