Water managers are tracking the elevations of Lake Powell and Lake Mead, two of the largest reservoirs in the U.S., as a historic megadrought made worse by climate change grips Western states.

Lake Powell currently sits just over 3,525 feet above sea level. And 35 feet below that threshold, the Glen Canyon Dam, which created Lake Powell, is at increased risk of damage and being unable to produce electricity for the 5 million people it serves.

“We're talking about the second-largest reservoir ever constructed by the United States," Justin Mankin, an NOAA Drought Task Force co-lead and assistant professor at Dartmouth, told Yahoo Finance. "The thing is like 200 miles long when it's full. It's held back by one of the largest concrete structures ever built by humans, the Glen Canyon Dam. So the idea that this massive structure, which I think is pretty emblematic of America's best-ever effort to kind of transform water supply in the American West,... is failing is really putting us in uncharted territory, legally and politically and socially, economically.”

Mankin added that "what we're seeing is the beginning or some point in the process of what is going to be a really long and painful collapse of the Western water economy as we know it."

Since 2000, the Western U.S. has been facing the worst 22-year drought in 1,200 years, the severity of which has been at least partially attributed to human-caused climate change. According to a report by NOAA's Drought Task Force, the economic losses from the drought in 2020 alone amount to between $515 million and $1.3 billion. When wildfires are factored in — since drought can be a catalyst for fires and fuel their spread — the costs rise to between $11.4 billion and $23 billion.

California, Colorado, New Mexico, Utah, Arizona, and the Navajo Nation have all declared drought states of emergency as of 2021.

"This is just another year in a long string of drought, and it just had a compounding and cascading effect on the environment here," Andrew Hoell, a meteorologist at the NOAA Physical Sciences Labratory and co-lead of the NOAA Drought Task Force, told Yahoo Finance.

Low precipitation and high temperatures over a period of time "depletes your resilience, depletes your water resources," Hoell added. "And this is really where we're at right now where we're seeing lower reservoir levels, lower river flows... so there's just a lot of things going on that are really producing a really bad situation in a lot of different ways."

The 'central bank for Western water'

Lake Powell is one reservoir in a complex water system along the Colorado River, which supplies water to 40 million people and provides irrigation for 5.5 million acres of farmland. As the Colorado River's streamflows diminish, the effects ripple throughout the basin.

In this way, Lake Powell is like "this central bank for Western water," Mankin said. Just as a bank might borrow to keep operations running during lean times, the reservoir borrows water from other sources when its own account has run dry.

"So when Lake Powell runs out of water and starts to siphon water from a smaller reservoir, like Flaming Gorge upstream, maybe that's workable for a little while, but the costs of that debt are really, really high," Mankin explained. "And so, just like the longer a household is in debt, the harder it gets, the same thing is with these reservoirs. These reservoir deficits are long-term structural issues, and these kind of short-term solutions are kind of insufficient."

The Bureau of Reclamation stated that it would not take further action at this time as Lake Powell's water levels should recover with spring runoff. However, the Bureau projects Lake Powell to dip below 3,525 feet again later this year and said it will consider additional measures, if necessary.

Last year, Reclamation sent additional water from the Blue Mesa and Flaming Gorge reservoirs to protect Lake Powell's elevation. In January, it also held back releases from Glen Canyon Dam.

These actions were in accordance with the Colorado River Basin Drought Contingency Plan, which was implemented by the Department of the Interior in 2019 and signed by California, Arizona, Colorado, Nevada, Wyoming, New Mexico, and Utah.

Glen Canyon Dam operating at a 'razor-thin margin'

This winter, which is the West's wet season, offered little reprieve to the parched Upper Colorado River Basin.

“This year the Colorado River Basin has experienced extremely variable conditions with a record high snowpack one month, followed by weeks without snow,” Reclamation Acting Commissioner David Palumbo said in a statement. “This variable hydrology and a warmer, drier West have drastically impacted our operations and we are faced with the urgent need to manage in the moment.”

The U.S. Bureau of Reclamation, which owns the dam, said it expects Lake Powell to potentially dip two to three feet into the "buffer zone" in March. Power will still flow to the dam's customers in Arizona, Colorado, New Mexico, Utah, and Wyoming, Becki Bryant, the Upper Colorado Basin Region Public Affairs Officer, told Yahoo Finance.

And although the baseload from Glen Canyon Dam could be offset by other power sources for a time, Mankin asserted that the link between water reserves and power is a much larger problem due to shortfalls all along the Colorado River, including at other junctures like Blue Mesa, Flaming Gorge, Navajo, and even Hoover Dam.

Mankin stressed that water managers are faced with "an impossible task": balancing water crises in the short term and adapting to greater water demands and rising temperatures over the long term.

"The current drought has really kind of hammered home how the entire water economy of the American West has kind of been operating at this super razor-thin margin," he explained.

Lake Powell's changing landscape for tourists

A popular destination for waterskiers, kayakers, and boaters, Lake Powell's water elevation also threatens the local tourism sector as it rebounds from the COVID-19 pandemic.

In Arizona and Utah, the National Park Service is hurrying to construct new boat ramps to keep up with the shrinking shoreline. Currently, just one of 15 boat ramps at the Glen Canyon recreation area is open, leading to long lines for boaters.

Last August, low water levels and closed boat launch ramps led houseboat rental companies to cancel bookings, according to USA Today.

Lake Mead is similarly afflicted, as is the $336 million in local spending generated from the National Park's some 7 million visitors. The National Park Service alerted visitors to plan ahead due to low water levels.

At the same time, depleting water levels are revealing the white "bathtub ring" of mineral deposits and new canyons of natural beauty.

In the meantime, drought-stricken states are exploring water conservation measures, in some cases enacting water cuts. For instance, a 2021 Nevada law banned the use of Colorado River water to irrigate "useless" grass at commercial, multi-family, and government properties. The law does not affect homeowners' yards or parks.

And Colorado River water shortages are also leading some Arizona farmers to plant fewer crops this year, according to Arizona Central.

It is difficult to predict when the next wet season will alleviate some of the water supply concerns, even on a temporary basis, Hoell said.

Given the amount of precipitation needed to make up for the years of drought and evaporative effects of higher temperatures, Mankin stated that the region is looking at exceptional drought conditions "definitely through the year" and "almost certainly into 2023."

Grace is an assistant editor for Yahoo Finance.

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