The 6-3 vote that a Texas Panhandle water district took last week to allow Texas legend T. Boone Pickens and a group of ranchers to ship underground water out of the district stands out as more than a case of interesting local politics. It reveals the complexities that abound as communities around the globe worry about having enough water and start viewing water as a commodity like oil.

The history is this: Mr. Pickens started putting together a group of ranchers in the 1990s in the eastern parts of the Panhandle, where ranch land rolls across canyons and grass stretches out like a sea. Their purpose has been to sell water underneath their land to buyers throughout the state.

Mr. Pickens argues, with good reason, that the water the group wants to draw from the Ogallala Aquifer underneath the striking ranchland has no farming value. It is good only for raising cattle, which require much less water than the crops that farmers grow elsewhere in the Panhandle.

He also argues that some families can keep their ranchland because of the money they receive from selling their water. Otherwise, they might have to sell to corporate ag interests.

So far, so good. All legal under Texas law.

But no one has bought the group's water. One reason is that it could cost $1.8 billion to ship it as far as San Antonio. Also, Texas towns have other businesses that want to sell them water.

The buying and selling of water will become even more prominent in states like California, Arizona and Texas, where rapidly expanding populations need water -- fast. In fact, it could become one of the more interesting market forces. And it could help big cities like Phoenix and Los Angeles, as well as small rural towns, gain access to water. Mr. Pickens said he could help West Texas towns desperate for water get enough of the natural resource for the next 100 years.

Still, all sorts of challenges arise once water becomes treated like a commodity.

For one thing, what happens to the people whose communities lose their water to another town? The Panhandle water district has a rule that won't allow Mr. Pickens to pump more than 50 percent of the aquifer in its area during the next 50 years. That is a good reform. But will other communities provide their own parameters?

Another issue is the accurate pricing of water. Some governments in the United States as well as in less-developed countries control their water supplies in a way that fosters waste. They price the water so low that consumers have little incentive to save. Or governments in nations like India and Egypt offer subsidies for irrigation that create little incentive to use water wisely.

The International Monetary Fund and the World Bank have pushed Third World nations to drop such wasteful policies. And in the United States, some cities like Dallas have adopted a progressive fee schedule that requires major users to pay higher rates for their water consumption.

The privatization of public water systems has become another way to distribute water efficiently. Some argue that we should consider water a public trust, but private companies perhaps can create a realistic price for water.

Even then, difficulties abound. The Worldwatch Institute's Sandra Postel described in a September Foreign Policy article how water rates jumped significantly after a private company took over the corrupt, mismanaged water system of Cochabamba, Bolivia. Civil unrest erupted. Soldiers had to intervene. And soon the water services were returned to public hands.

Private water companies and their financiers may want to remember that example. As Ms. Postel writes, "Unless governments and lenders ... steer private sector involvement toward equity as well as efficiency and toward social justice as well as shareholder profit, more violence like that in Cochabamba may be forthcoming."

C.E. Williams of the Panhandle Groundwater Conservation District that just approved Mr. Pickens' plan offers a good summation. "We are blazing new trails without a road map," he says of the challenges of turning water into a commodity. Very true. But this trend and its evolution will impact communities here and abroad as they search for the most valuable natural resource of all: water.

WATER WOES BECKON BUSH INTERVENTION

George W. Bush can't like this situation.

On one side sits his center-right partner Vicente Fox, the president of Mexico, the nation Mr. Bush has cultivated for political and strategic reasons. On the other side rests his home state, with its politicians and constituents, who have supported him the longest.

Those two forces are locked in an increasingly tense face-off over Mexico's water debt to the United States. Since 1944, Mexico and the United States have put water into the Rio Grande under the terms of a treaty that operates in five-year installments. But Mexico has run up a significant backlog during the past two five-year segments, and it owes the United States 1.5 million acre-feet of water. (An acre-foot is the amount it takes to submerge one acres in one foot of water.)

Presidents Bush and Fox have discussed the matter several times. Texas Governor Rick Perry has lobbied Mexican officials. Senator Kay Hutchison has tried to broker an agreement. And Mr. Fox has promised a solution. Nevertheless, the squabble remains. The biggest losers are the farmers who work on both sides of the Rio Grande. South Texas producers need the water. So do Northern Mexico farmers. Desperately so.

One irrigation district in the Lower Rio Grande Valley already has shut down. And JoJo White, who manages a water district near Brownsville, notes that many South Texas farmers will finish their harvests by the end of July. They need water -- fast.

Mexico responds by citing droughts. Indeed, rainfall hasn't been Northern Mexico's friend. But the International Boundary and Water Commission reports that Mexico has more than 250,000 acre-feet in its account at the Falcon and Amistad dams along the Rio Grande. Not enough to retire the debt. But enough to put 100,000 acre-feet, if not more, into the river right away.

Along with real human dimensions, the problem raises complicating political issues. Start with the relationship between Mexico and the United States. Mr. Bush came to office hoping to improve the two neighbors' rapport. Part of the thrust came from his experience as governor of Texas, where he saw that Mexico could become like an Asian tiger on our doorstep if it further modernizes. It could open an even greater gateway into Latin America for U.S. goods and services.

Mr. Bush also knew that the New York-Washington foreign policy establishment instinctively turns toward Europe. And that LA-Seattle business powers look to Asia. An opening in the history books awaited him. So did a chance to attract more Hispanics. Making Mexico a focus of foreign policy could expand the GOP's appeal to Hispanics.

But the president can put all of those hopes aside if the United States and Mexico can't settle their water dispute. September 11 already has stalled immigration reforms that Presidents Bush and Fox had hoped to pursue. One more trouble spot could further slow down bilateral progress. On top of all that is the domestic side of the equation. If Mexico doesn't release some water soon, the situation could affect matters for Mr. Bush at home.

South Texas farmers already have protested. The issue has been put directly to candidates for governor of Texas and the Senate. Some farmers are considering a class-action suit against the U.S. government for failing to get water delivered. And Rep. Solomon Ortiz, D-Corpus Christi, wrote U.S. Trade Representative Robert Zoellick on Friday to ask him to look at the amount of produce coming into the United States from Chihuahua. The governor of that Northern Mexico state has resisted pressure to release much water into the Rio Grande, irritating some Americans who believe he is using it for his own state's crops.

Problems. Problems.

In the short term, a compromise could defuse the situation. Mexico should immediately release 100,000 to 200,000 acre-feet of water, while the United States should help Mexico get funds to improve its irrigation systems so that water isn't wasted. But the longer-term answer may have to include a new treaty. Meanwhile, with the Mideast and Kashmir lighting up like candles, Mr. Bush can't like having another international test. He will have to spend political capital close to home in a way he just as soon not have to do.

U.S., MEXICO SETTLE WATER RIFT

WASHINGTON -- U.S. and Mexican officials said Friday that they had reached a water agreement, ending months of wrangling that dominated the agenda between the two neighbors and placed their presidents in awkward positions. But the two sides declined to release details of the agreement until Saturday at the earliest and offered no reason for the delay.

"An agreement has been reached by both governments," said one official who requested anonymity.

Under the agreement, Mexico will immediately release 90,000 acre-feet of water from the Amistad Reservoir in Del Rio, Texas, according to sources familiar with the agreement. The sources spoke on the condition of anonymity. That is less than the 100,000 acre-feet that Texas leaders had been demanding. But officials familiar with the pact said that, because the water is coming from nearby Del Rio, seepage and evaporation -- a common problem -- will be minimal. U.S. officials have said the system loses about 40 percent of its water between reservoir and end-users.

In Austin Governor Rick Perry said, "Although the 90,000 acre-feet of water to be released represents only about 6 percent of what Mexico owes under the treaty, it will help Rio Grande farmers and producers make it through the summer and offers hope for future water releases."

In return for the water, Mexican and U.S. border communities will receive financing from the North American Development Bank, or NADBank, for water projects, according to the sources. Mexican officials have said they need up to $450 million in such help. It's unclear how much financing the U.S. border communities will receive, sources familiar with the agreement said.

"In the long term, we need to upgrade the water delivery system on both sides of the border; and I will work to see that NADBank funds water conservation projects on both sides of the border equally," said Republican Senator Kay Bailey Hutchison of Texas. "This is a good beginning," she said. "Now we must work even harder to find a permanent solution to the mounting water debt that's devastating our Valley farmers."

For months, the United States has accused Mexico of failing to fulfill its obligations under a 1944 international treaty that required it to supply Texas farmers with more than 100 million gallons each year from the Rio Grande. When the agreement was signed, the border had a population of about 200,000 people. Today, that population is more than 21 million people, representing an enormous drain for the Rio Grande and raising delicate questions about how the two sides will continue to share water, given the severe drought that has plagued the Southwest for nearly 10 years. In addition, Mexican officials say their shoddy water infrastructure has squandered thousands of gallons of water annually.

"As the drought continues and border populations increase, Texas, the United States and Mexico must continue to work to ensure compliance with the 1944 Water Treaty and to improve water management and conservation on both sides of the border," said Mr. Perry, who says the loss of water has cost Texas $1 billion and 30,000 jobs.

Mexican government officials have insisted that Mexico doesn't technically owe the United States any water until late September. In Donna, Texas, citrus farmer Jimmie Steidinger said the water that Mexico plans to deliver would help only about 15 percent of the 600,000 acres of irrigated farmland in the Lower Rio Grande Valley.

"It's kind of a drop in the bucket," he said. "They should have delivered this water back when they had it, but they just hogged it all up and took it from us."

[Staff writer Brenda Rodriguez in McAllen Texas, contributed to this report.]

WASHINGTON -- Having sealed a deal to partly resolve Texas' immediate water crisis, U.S. and Mexican officials Saturday turned to long-term reforms in the hopes of avoiding another bitter quarrel that could threaten the relationship.

Analysts on both sides of the border said that water is about to surpass drug trafficking and illegal immigration as the most pressing issue between the countries. The two governments will be forced to address water shortages on the border, a region where continued population growth and industrial development is far outpacing water supply.

Saturday, both governments announced details of a much anticipated water agreement that calls for Mexico to release 90,000 acre-feet of water from its joint reservoir within the next 48 hours. In return, both governments pledge to invest an estimated $210 million within the next four years in measures for water conservation efforts on both sides of the border -- including monies to revamp Mexico's leaky water irrigation infrastructure. The monies include an immediate expenditure of roughly $80 million, $40 million for each side of the border.

"The agreement reached contributes to resolving the water problems along the border, taking into account immediate needs as well as concrete actions to be taken in the medium and long term," said Richard Boucher, spokesman for the State Department.

Equally important, under the pact, the United States agreed to lend Mexico all or part of those 90,000 acre-feet of water, roughly 29 billion gallons, if the drought continues by Oct. 26, to fill the reserves of drinking water for Mexican border cities. Mexican officials are quietly betting that Mexico's traditional rainy season won't make such a transfer necessary. But just in case, one Mexican official said, "We need to make clear to our border residents that they will not be without water if the drought persists by the end of the year."

Resolution of the water problem is only beginning, experts warn. Rain has been less than a third of normal levels, and though the rainy season is around the corner, few believe it will bring enough to make a difference. In some places, such as South Texas, the area is as much as 9.71 inches below normal. The water crisis reflects a harsh reality that communities worldwide are just grappling with: Water is the new oil. As global population skyrockets and rivers and reservoirs dry up, a nasty fight is bubbling over the source of life. "The problem of water will not be resolved with ths payment," acknowlkedged one Mexican official. "This is just the beginning. Down the road, water conservation and management are the key."

Mexican leaders argue that prolonged droughts have prevented them from honoring the 1944 treaty calling for Mexico and the United States to share water from the Rio Grande in Texas and the Colorado River in the western United States. Along the 1,250-mile long Texas-Mexico border, scarce water is about to become a bigger threat than drugs, predicts Armand Peschard-Sverdrup, Mexico project director at the Center for Strategic and International Studies. The Washington, D.C.-based research organization is about to issue a report on the water dilemma.

"Water is probably the most complex issue in the bilateral agenda," Mr. Peschard-Sverdrup said. "It is more so than drugs because it impacts a lot of citizens. It has more than international dimension because it touches local, state and federal government. As the old adage goes, 'Man's gotta eat, and man's gotta drink'. Water has the potential of impacting every household. It's a dangerous issue."

While the finger pointing continues -- with Mexico insisting it is not legally obliged to start paying the water debt until September and Texas charging that Mexico is hoarding water -- some border communities have moved beyond the nasty exchange of words. In El Paso and Ciudad Juarez, for example, officials from both governments have begun an unprecedented intense water conservation plan, understanding that the Rio Grande shouldn't divide, but should unite the communities. In both communities, ongoing joint water conservation and strategic talks take place. El Paso is leading the way with bold measures such as paying residents to replace water-intensive lawns with desert landscaping.

The drought in the Southwest has been called the worst in a century. Across northern Mexico, thousands of herds of cattle lie dead. Plants and crops are withering away. Small, dusty villages lie abandoned after the exodus of tens of thousands of Mexicans who, unable to plant their crops headed for the United States in search of jobs. Says Porfirio Serrano Franco, who used to plant corn in Durango and now toils as a bricklayer in Allen, "It's like planting seeds on cement, nothing grows. Without water, there are no jobs."

Much of the crucial funding for the water agreement will come from a joint trust fund in the North American Development Bank, or NADBank, a San Antonio-based international joint lending institution that was formed as part of the North American Free Trade Agreement to fund development projects along the border.

Senator Kay Bailey Hutchison, R-Texas, insisted that the long-term critical solution lies in "upgrading the water delivery sistem on both sides of [the] border". And she said, "I will work to see that NADBank funds water conservation projects on both side of the border equally."

Even so, Jo Jo White, general manager of an irrigation district that overlaps Cameron and Hidalgo counties in the South Texas Valley, said the water agreement was "bittersweet". It could take years before the Texas Valley sees the NADBank monies, he said. "What do we do in the meantime? We'll just wither away."

***

The Dallas Morning News, Lead Editorial, 3 July 2002

WATER DEBT -- Mexico Needs To Have A Deadline.

While some on this side of the border already are blasting the new water agreement between Mexico and the United States as little more than a drop in the bucket, this may be one instance where it is better to think of the glass as half-full rather than half-empty.

After months of negotiations on the heels of years of Mexico missing water payments to the United States under a 1944 agreement, there was refreshing news that the countries had reached an agreement last week. Under the deal, Mexico agreed to immediately release 90,000 acre-feet of water from the Amistad Reservoir near Del Rio. That falls short of the 100,000 acre-feet that U.S. negotiators had sought, but the fact that it comes from the Amistad means that it won't have far to travel and so evaporation will be less of a problem.

If only the whole water-sharing flap could be solved that easily. But Texans and Mexicsans are not going to be so lucky. Resolving this international crisis and getting Mexico to pay back all the water it owes -- 1.5 million acre-feet -- in the midst of a drought will be a long and difficult diplomatic road. And yet there is no denying that this recent agreement is an important first step. In return for this first installment on the water debt, the border communities in both the United States and Mexico reportedly will receive in the neighborhood of $50 million to $100 million in financing for long-term water conservation projects from the North American Development Bank.

Left unresolved for now is whether a treaty signed over a half-century ago still has relevance today, or whether the 1944 agreement should be replaced by a new pact. That is an important question worthy of thoughtful deliberation, but it is also best left for another day. The current treaty provides the existing framework for how the two countries should go about sharing this precious natural resource, and it should be preserved, enforced and adhered [to] by both parties. Once the water debt is cleared, there will be plenty of time to negotiate new agreements.

For now, there needs to be a timetable to allow Mexico to repay the rest of the debt. Technically, the entire amount owed comes due in October. While it is highly unlikely that Mexico will be in any position by then to get itself out of the red, that deadline would seem to be a good time for our neighbor to make another payment. And soon thereafter, another. And then another until the debt is paid.

*****

The Dallas Morning News, Viewpoint By Ruben Navarrette, 5 July 2002

U.S.-MEXICO WATER TREATY IS OUTDATED

Well, this is refreshing news. After months of haggling and hand-wringing, Mexican officials agreed late last week to give the faucet a nudge and immediately transfer, under terms of a 1944 water-sharing pact, 90,000 acre-feet of water to the United States. Of course, given that Mexico's accumulated water debt is about 1.5 million acre-feet, the announcement that it was handing over less than 10 percent of what it owes was hardly cuase for celebration by drought-stricken Texas farmers. They say the water is needed to save their crops.

As part of the agreement, Mexico reportedly will get between $50 million and $100 million in financing from the North American Development Bank to help its border communities drag their water use and conservation programs into the 21st century.

The idea of bribing someone to get him to pay his bills is something that many Americans have trouble swallowing. But what really could make them choke is the provision stating that, if the drought now afflicting Mexican border communities continues, the United States may have to "loan" some or all of the 90,000 acre-feet back to Mexico until water levels are restored.

Just who negotiated this deal for the Mexicans? If this team had been sitting across the negotiating table from us at the conclusion of the U.S.-Mexican War in 1848, the Americans wouldn't have ended up with California. In fact, they might have had to give up Virginia.

Texas farmers are hollering louder than ever for Mexico to be put on a formal repayment schedule. They note that the United States had help up its end of the treaty, providing Mexico each year with four times the water the Americans expect in return.

Many of them even take issue with one of their champions in Congress. Sen. Kay Bailey Hutchison of Texas probably should have thought twice before calling the transfer of the 90,000 acre-feet a "good beginning". In reality, the farmers say, the "settlement" is an insult and an indicator that Mexico doesn't take its water debt seriously. If that is true, they ask, why have a treaty at all?

Why indeed. The fact that the United States now is willing to help pull Mexico out of the well by agreeing to "loan" water to which Americans are legally entitled should tell you something about just how wacky the water issue has become. But what would you expect? The 1944 agreement was tainted from the beginning, wrapping up the last of the loose ends of the land grab that produced the American Southwest. The Mexicans were brought to the table by the Americans to make all nice and legal the issues surrounding how to share a valuable resource that once belonged to Mexico exclusively.

No matter. The Mexicans signed the water treaty, and they should be held to it. Just like the United States has had to honor every single treaty it ever signed with the American Indians. OK, bad example.

What no one could have foreseen -- back in 1944, when the border population was manageable and Mexico was obedient to the United States -- was that the border region would, in the next 50 years, become so completely transformed. An area that was, at the time of the agreement, home to 200,000 people now has a population of 20 million. What hasn't come along nearly as fast is development of water conservation programs on either side of the border. Mexican authorities never should have been so willing to let the northern states shoulder the burden of fulfilling the treaty obligations. And treaty or not, Texas farmers never should have allowed themselves to become this dependent on water from a foreign source.

So, short of enlisting the talents of a rainmaker, what's the solution? Simple. Scrap the water treaty and call both parties back to the table to work out a new deal that is better and fairer and takes into account the new realities of the modern world -- not to mention the new relationship between the United States and Mexico.

If that, too, falls apart, both countries can keep their own water reserves and go their separate ways. At the current 4-1 water-exchange ratio, that wouldn't be good for the Mexicans. But whom are we kidding? The current situation isn't good for anyone.