US tells Calif. to cut water use to save fish

* Federal report says Calif salmon risk extinction

* 5-7 pct cut in water deliveries to cities, farms seen

* Ruling stokes debate over conservation vs construction (Adds Schwarzenegger comments)

By Peter Henderson

SAN FRANCISCO, June 4 (Reuters) - Californians' thirst for water has pushed salmon and other fish to the brink of extinction, a federal agency ruled on Thursday as it directed officials to cut water supplies to cities and farms to save several species.

California's rivers used to brim with trout, salmon, sturgeon and more, but the federal, state and local governments built a monumental system of dams and pipelines in the most populous state that turned a desert into productive farmland and left some rivers dry.

The state faces a water crisis and a third year of drought. Add climate change and a growing population to the mix, and the fate of some salmon runs looks untenable without change, the National Marine Fisheries Service said in a report ordered as part of a long-running court battle over the salmon.

It called for a 5 percent to 7 percent cut in water diversions for cities and agriculture from key state and federal water suppliers. Water conservation, recycling and groundwater use could offset the cuts, the report said, but water agencies described a tougher situation.

That reflects a larger argument about whether the state can conserve its way out of crisis or should build more dams and canals to capture the last trickles that bypass the system.

"It is becoming increasingly more difficult to operate our projects," U.S. Bureau of Reclamation regional director Don Glaser, the top federal water planner in the area, said after the report was released.

State and federal water projects this year have slashed deliveries to 40 percent of most requests, due to fish issues and drought, and agricultural losses are seen near $1 billion.

'DIFFICULT TASK'

The salmon ruling follows a similar one that protects a fish known as the Delta Smelt that lives in the Sacramento Delta, which is fed by major rivers. Some 370,000 acre feet of water were left in rivers to help the smelt in 2009, according to a group of state municipalities called the State Water Contractors. That's similar to what the salmon ruling is expected to affect.

"It's a difficult task to make sure a species doesn't go extinct, and sometimes that is at some societal cost," said Maria Rea, the main author of the report. Pumping restrictions are focused in spring and fall, so the current agricultural year will not be affected, Rea said.

But Gov. Arnold Schwarzenegger said the decision put fish above people and the economy.

"The piling on of one federal court decision after another in a species-by-species approach is killing our economy and undermining the integrity of the Endangered Species Act," he said in a statement.

The fisheries agency plan is to keep more water behind big dams during the year to ensure a supply of cold water in which salmon spawn, restrict some pumping, and find ways for fish to get to historical spawning grounds upriver from dams.

That could range from fish ladders to catching fish and trucking them up and around a dam.

The National Resources Defense Council, an environmental advocacy group, said the ruling was a step in the right direction, that water cutbacks were manageable, and that the state would have to make them with or without the fish.

"We can reduce our reliance on the Delta now, invest in alternative water supplies we are going to need in the future anyway and save this ecosystem and the 150-year-old salmon fishery, or we can wait a few years... in which case it might be too late," NRDC attorney Kate Poole said. (for more environmental news see our Environment blog at blogs.reuters.com/environment) (Reporting by Peter Henderson)