California water plan aims change Gold Rush thinking

OAKLAND, California (Reuters) - California legislators on Wednesday struck a truce in their water wars that could set off the biggest spending spree on water in half a century and aims to satisfy environmentalists, unemployed farmers and the cities of Los Angeles and San Francisco.

The theme of the package is that human and environmental uses of water are equal priorities.

But critics, including the environmental group the Sierra Club, have called the bills and an $11 billion bond a pricey sham that left a new council to govern the largest estuary on the West Coast without funding or power. They said it would spark more fighting.

The most populous U.S. state is also one of the driest with high demand for water from rice farms and fruit and vegetable crops to Silicon Valley microchip plants.

Court fights over keeping water in streams for declining fish populations and three years of drought have exacerbated tensions in the state, which frequently teeters on the edge of financial crisis and resorted to handing out IOUs this year during another budget crunch.

There is no guarantee that voters will approve the $11 billion bond passed by the legislature.

From its car pollution standards to its climate change agenda, California is an environmental leader but lags much of the world in water. New conservation rules may change that.

Measures include monitoring ground water, requiring 20 percent urban conservation by 2020 and setting up a council to run the Sacramento Delta estuary, the biggest wetlands on the West Coast and a water supply for most of the state.

"We're working off of laws that were established in the Gold Rush era," said Environmental Defense West Coast Director Laura Harnish. "There was no sense of constraint."

She called the package common sense management and supported using conservation and a mandate to finally determine how much water fish and wildlife need in rivers to survive.

Other environmental groups, including the Natural Resources Defense Council, also supported the plan but many avoided backing the bond and a new dam that is likely to follow.

MOUNTAIN RUNOFF FEEDS RIVERS

California's water system is simple: mountains in the eastern part of the state feed rivers from snow and rain.

Dams and the Delta trap water, mostly in the north, and feed it to farms in the middle of the state and cities on the coasts -- especially Los Angeles, whose willingness to do anything for water was fictionalized in the movie "Chinatown."

Los Angeles' real-life water grab created a wealthy agricultural industry from dry wasteland.

In addition to spending billions of dollars on a new dam, ecosystem restoration and to help regions share water, the plan may open the way to a new canal that would take river water around the Delta to other canals and cost tens of billions more.

That factor led most Delta representatives to oppose the package, which could create the biggest set of water projects since a statewide canal started in the 1960s.

The plan set higher environmental standards for building the so-called peripheral canal but also clarified the path to its creation, which State Water Department Director Lester Snow said made both sides happy.

"We just want reliability," said Jeffrey Kightlinger, General Manager of the Metropolitan Water District of Southern California, which backed the bills and the canal. Los Angeles has reduced water use and now supports the environment as a way to avoid legal tangles.

"We look at it as very enlightened self-interest," Kightlinger said.

Sierra Club water analyst Jim Metropulos has said provisions like effective ground water monitoring were gutted and the committee to coordinate policy around the Delta was unfunded, powerless and appointed by a lame-duck governor with no accountability.

Lawsuits which have focused on environmental use of water would turn to interpretation of the new laws, he said.

"This is a Band-Aid. What the Delta needs is a heart transplant," he said, adding that conservation goals were riddled with loopholes.

Governor Arnold Schwarzenegger hailed passage of the package, calling it an historic achievement.

(Reporting by Peter Henderson; Editing by Bill Trott and Chris Wilson)

(for more environmental news see our Environment blog at blogs.reuters.com/environment)