Behind Standoff on Water Rights: A Century of Policy and Habit

THE battle to reform federal range land has come down to that most precious commodity in the arid West: water.

The administration wants to overturn nearly a century of government policy and practice by imposing conservation and environmentally sensitive water management. Ranchers, farmers, and other traditional water users, fearful that water control will shift from state governments and local interests to environmental ideologues and Washington bureaucrats, are resisting mightily.

Now there is a political standoff. The House has passed a compromise version of administration-proposed legislation to raise grazing fees, which also includes firmer federal control over water rights. But a bipartisan group of Western lawmakers has filibustered it in the Senate.

During the Reagan years, Interior Secretary James Watt allowed ranchers leasing federal lands to control water rights on property that, in theory, at least, belonged to all Americans. Bruce Babbitt, the present secretary, wants to reverse the policy, but he says the range-land reforms he seeks will be ``pursuant to state law'' regarding water rights.

His assurances last week were enough to assuage some opponents, including Colorado Gov. Roy Romer (D). But Sen. Pete Domenici (R) of New Mexico, who has led Senate opposition, calls it ``a smoke screen'' to hide the intent of the proposal.

When it comes to controlling water management in the West, traditionalists may have good reason to be wary of Mr. Babbitt.

As Arizona governor, he was credited with hammering out compromises on water. But as League of Conservation Voters head, he was critical of federal water policy - particularly the Bureau of Reclamation, which has built and operated dams, canals, and other Western water projects since it was created in 1902.

Speaking to a group at the University of Colorado years ago, Babbitt said of the Bureau of Reclamation: ``Its practices have been the most environmentally destructive of all the public-land agencies.'' It ``remains locked in a tight embrace with the apparatchiks of Western agriculture, who are dedicated to protecting the political power of their organizations....''

MORE recently, Babbitt blasted ``a time-honored Western tradition ... the search for more water from ever-more-distant sources with greater environmental destruction. For too long,'' he said at the National Press Club in April, ``the answer to every water issue in the West has been yet another federally subsidized water project, repayable at below-market interest rates, by proceeds from heavily discounted water charges.''

The answer, Babbitt and other reformers say, is to encourage, if not impose, market principles to resource allocation and, thereby, promote conservation. In other words, charge the true cost of developing and transporting water supplies and allow legitimate users to buy and sell water rights at market rates.

In this effort, Babbitt has powerful allies. One is Rep. George Miller (D) of California. Since his election to Congress in the 1970s, he has fought to reform federal reclamation law so that those intended to receive water from federal projects under the 1902 law - family farmers and ranchers on small- to mid-sized operations - get preference over large agribusinesses. Mr. Miller is now chairman of the House Committee on Natural Resources, and his one-time chief of staff heads the Bureau of Reclamation in the Clinton administration.

Under Miller, ``Burec'' commissioner Dan Beard was the key congressional staff member who oversaw changes to the Central Valley Project in California - changes that provided more water for wildlife habitat, a move resisted by many in the agriculture community.

Last week, Babbitt and Mr. Beard announced major bureau changes, including a shift from heavy construction to conservation efforts and a work-force cut of hundred of jobs. ``We can't expect taxpayers to support huge, expensive water-development projects,'' Beard says. ``It doesn't make economic sense.''

Clinton officials want to dispel the notion that they intend to steamroller Western water users. ``Incentives, rather than regulations, will be encouraged whenever possible,'' Beard says. But they recognize that changing a century of habit and policy will be difficult. ``Doing so will be about as easy as transitioning the Kremlin to a market economy,'' Babbitt has said.