Klamath energy pricing and irrigation

July 9, 2004

CORVALLIS - The issue of water allocation in the Upper Klamath Basin encompasses many complex questions, among them: How the price of energy affects the viability of irrigated agriculture in the region.

klamath landscape.

Oregon State University economist William Jaeger has published a new brief that examines the effect of changing energy prices on irrigated agriculture in this basin straddling the border between California and Oregon.

The analysis was prompted by the potential increase in energy prices currently paid by irrigators in the region under a 1956 contract, negotiated by PacifiCorp's predecessor in exchange for rights to operate hydropower facilities on the Klamath. Those prices - from one-fifth to one-10th the price paid by other irrigators in Oregon - are being reviewed as part of the relicensing process for the Klamath River hydropower operations, scheduled to be completed by 2006.

The analysis suggests that most of these irrigated lands are highly productive, and would continue to be profitable to irrigate even with higher energy prices. However, farming on some of the land that is sprinkler-irrigated might become unprofitable if energy prices rise. This loss of profitability could lead to water transfers such as water banking to become attractive for some irrigators.

"The analysis draws on two-and-a-half years of work with Klamath farmers, agencies and local experts," said Jaeger, one of a team of scientists from OSU and the University of California who produced a much longer report on water allocation in the Klamath Project in 2002.

"As a 'brief,' this document is not meant to provide a comprehensive evaluation of all aspects of the issues," said Jaeger. "It's meant to be a forward-looking analysis of how possible changes in energy pricing could affect profitability of irrigated agriculture in the basin."

This report is the third in a series of briefs written in response to questions from the Klamath Basin community following publication of the larger report.

"People in the basin are facing some big issues and these briefs provide pertinent facts in condensed form," said Bill Braunworth, Extension agriculture program leader. "We anticipate that additional briefs could be prepared on other aspects of water allocation in the Klamath Basin."

This brief, "Energy Pricing and Irrigated Agriculture in the Upper Klamath Basin," along with other briefs and the larger report "Water Allocation in the Klamath Project, 2001," can be found at http://extension.oregonstate.edu/catalog/html/sr/sr1037/.

Author: Peg Herring
Source: William Jaeger