**Testimony of President Joe Shirley, Jr.**

**Navajo Nation**

**Before the Senate Committee on Energy and Natural Resources**

**Concerning S. 1171 -- Northwest New Mexico Rural Water Projects Act**

**June 27, 2007**

Thank you Chairman Bingaman, Ranking Member Domenici, and members of the
Committee on Energy and Natural Resources. My name is Joe Shirley, Jr.,
and I am President of the Navajo Nation, a federally recognized Indian
nation with the largest reservation in the United States. I appreciate
this opportunity to share with you the Navajo Nation's strong support
for the Senate Bill 1171, the Northwest New Mexico Rural Water Projects
Act. I also wish to convey the gratitude of the Navajo Nation to
Senators Bingaman and Domenci for their commitment to improving the
lives of the Navajo People and for their leadership in sponsoring this
important legislation.

The Northwestern New Mexico Rural Water Projects Act serves two
important purposes. First, it would authorize the Secretary of the
Interior to execute, on behalf of the United States, the Settlement
Agreement to quantify the Navajo Nation's water rights in the San Juan
River Basin in New Mexico. The Settlement Agreement was overwhelmingly
approved by the Navajo Nation Council in December of 2004 and executed
with the State of New Mexico in April of 2005. It reflects almost a
decade of negotiations to carefully balance a variety of demands on a
limited resource. Second, the Act authorizes construction of much needed
water projects for the Navajo Nation. As such, this legislation
represents an important step forward in moving the Navajo Nation towards
self-sufficiency, and may represent the most significant act of Congress
concerning the Navajo people since the ratification of our Treaty with
the United States in 1868, 139 years ago this month.

As witnesses to this important event, I am here with Mr. George Arthur,
Chair of the Resources Committee of the Navajo Nation Council, Mr.
Lorenzo Bates, Chair of the Budget and Finance Committee of the Navajo
Nation Council, Ray Gilmore, Chair of the Navajo Nation Water Rights
Commission, and Katie Gilbert, Navajo Nation Water Rights Commissioner.
In addition, Navajo Code Talker Frank Chee Willeto from the Pueblo
Pintado Chapter and Gloria Skeet from the Bread Springs Chapter have
joined me as well. In the Treaty of 1868, the Navajo leaders pledged
their honor to keep peace with the United States and, in return, the
United States pledged to assist the Navajo People in creating a
permanent homeland on their reservation lands. No lands can be a
permanent homeland without an adequate supply of water, especially
potable water.

**The Settlement Agreement**

When New Mexico Governor Richardson and I signed the Settlement
Agreement in April 2005, the State of New Mexico and the Navajo Nation
set into motion the means to resolve a century-old controversy
concerning water rights in the San Juan River basin, which could have
persisted for decades to come through long, protracted litigation. The
State of New Mexico and the Navajo Nation spent years crafting a
settlement that would protect exiting uses from the San Juan River while
ensuring that the Navajo Nation would receive a firm supply of drinking
water to sustain the Navajo Reservation as a permanent homeland for the
Navajo People. Senate Bill 1171 authorizes the Secretary of the
Interior, on behalf of the United States, to join Governor Richardson
and me in a Settlement Agreement that quantifies the Navajo Nation's
water rights in the San Juan River Basin in New Mexico in a manner that
represents a win-win outcome for all parties, including the Navajo
Nation, the non-Navajo water users, the State of New Mexico and the
United States.

The San Juan River basin contains all the elements that have made
Western water issues so contentious over the years: a limited supply of
water, competition between Indian and non-Indian irrigators, the
presence of federally protected endangered fish species, and not one,
but four federal Reclamation projects. In other basins, that same
mixture of interests has lead to contentious litigation and even
violence. But in the San Juan River basin, the Navajo Nation has worked
in cooperation with its neighbors on issues such as native fish
recovery, shortage sharing during periods of drought, and water
development for municipal and power interests. The history of this
cooperation is reflected throughout the Settlement Agreement.

For example, the Settlement Agreement contains provisions to protect the
interests of the non-Navajo water users in the basin. The Navajo
farmlands at the Hogback and Fruitland irrigation projects, downstream
of the non-Indian water users on the river, possess the senior priority
on the river. Thus, during the dry summer months, when there is
insufficient water in the river to satisfy all water uses, the Navajo
Nation could exercise its senior priority to make a "call" on the river
and stop the upstream diversions. To minimize the likelihood of calls on
the upstream diversions, under the Settlement Agreement, the Navajo
Nation has committed to utilize a portion of its Navajo Reservoir supply
at the Hogback and Fruitland projects to ensure that more "run of the
river" water would be available for the non-Navajo water users. Without
the settlement, a call would be necessary during the irrigation season
almost every two years, but with the settlement, the risk that a call
will be made is less than one year out of twenty (20).

The Settlement Agreement also includes specific provisions to firm the
water supply for existing federal Reclamation projects including the
Animas-La Plata Project and the San Juan-Chama Project. The Animas-La
Plata Project is an important project for the basin, and is a necessary
component of the settlement approved by Congress for the Colorado Ute
Tribes. The San Juan-Chama Project provides drinking water for the
cities of Albuquerque and Santa Fe. This transbasin diversion also helps
New Mexico meet its compact obligations to the State of Texas and
provides a supply of water that can be used for two separate water
rights settlements involving the Pueblo of Taos and four northern
Pueblos in the *Aamodt* litigation.

In terms of protecting federal interests in New Mexico, including the
San Juan-Chama Project, the importance of the Settlement Agreement to
the United States cannot be overstated.

**The Navajo-Gallup Water Supply Project**

The centerpiece of the Bill, however, is the authorization for
construction of the Northwest New Mexico Rural Water Project, commonly
known as the Navajo-Gallup Water Supply Project. This project will
provide a firm, sustainable supply of municipal water for the Navajo
Reservation, the City of Gallup and the Jicarilla Apache Nation. Many of
the 80,000 Navajo men, women, and children who live within the project
service area, including Navajo Code Talker Frank Chee Willeto, presently
haul water for drinking and cooking. Although construction of the
project will not necessarily eliminate all water hauling on the
reservation, this project will allow the Indian Health Service to expand
distribution systems to provide potable water delivery to more homes,
and creates growth corridors within the Navajo Nation where future
communities can be built with ready access to roads, electricity and
potable water. As such, this project represents a critical component of
the Navajo Nation's economic development strategy. While construction of
the pipeline may not represent a condition sufficient to ensure economic
prosperity for the Navajo People, surely such prosperity will never be
possible in the absence of a sustainable potable water supply.

In March of this year, the Department of the Interior released the
Planning Report and Draft Environmental Impact Statement for this
project. I thank Secretary Kempthorne and his Counselor Michael Bogert
for their leadership in releasing this critical document, in addition to
the release of the hydrologic determination that there is sufficient
water for the project.

Earlier this month, I spoke at the public hearing in Farmington, New
Mexico, concerning the project in order to deliver the message that the
Navajo Nation strongly supports the construction of the Navajo Gallup
Water Supply Project. At the hearing, I was moved by the testimony of
the Navajo people, most of them water haulers. I believe that the
federal officials at the hearings were also moved by their testimonies.
Mr. Frank Chee Willeto, a Navajo veteran and former Navajo Code Talker,
who recently received the Congressional Silver Medal, eloquently
testified that he and other veterans, despite financial assistance from
the Veterans' Administration and the Navajo Nation, were unable to
secure a loan for his home due to the absence of water in his community
for fire protection. Ms. Gloria Skeet spoke eloquently about how Bread
Springs Chapter, south of Gallup, needs the project because her
community currently faces water shortages. Ms. Skeet, a former educator,
sees that the construction of the project will allow our children to
build productive and meaningful lives at home. I also viewed drawings by
Navajo school children from Lake Valley Chapter depicting trucks hauling
drinking water to their homes. These drawings will be submitted to the
Committee in our supplemental statement. Based on these testimonies, I
reiterate my message that the Navajo Nation strongly supports the
construction of the Navajo-Gallup Water Supply Project.

**OMB Concerns about Costs**

We recently invited representatives from the Administration, including
the Department of the Interior and the Office of Management and Budget,
to witness first-hand the hardships endured by Navajo families who must
drive considerable distance to haul water from public watering points.
They heard and saw everything I have just described to you. They also
heard about the negative health effects that occur when they do not have
access to potable water, including the story of Lucy Cayetano who
suffers from various illnesses because she does not have easy access to
potable water. Studies have shown empirically that the lack of potable
water is a critical health issue for the Navajo people, but I also
wonder what the psychological effects will be for our children who
believe that water comes from trucks, rather than from drinking
fountains or faucets.

We believe the Administration representatives received a realistic,
first-hand understanding of the enormity of the problem the lack of
water brings. However, we also understand that the Office of Management
and Budget believes the Navajo-Gallup Water Supply Project to be "too
expensive." Their belief is apparently based on the Planning Report for
the project, in which the Bureau of Reclamation estimates that this
project could cost as much as \$714 million or more. While this is
unquestionably a huge amount of money, the anticipated cost of the
project and the other components of the Navajo Nation's water rights
settlement must be put into perspective.

As stated earlier, the Navajo Reservation is the largest Indian
Reservation with the largest population of on-reservation members of any
Indian tribe in the United States. Providing potable water for such a
large reservation is indeed a costly venture, but studies conducted by
the Bureau of Reclamation demonstrate that this project fares favorably
when compared with other recently authorized water pipelines on a
per/acre-foot and per capita basis. This information will be provided to
the Committee in our supplemental statement.

We understand that OMB seeks to impose on this settlement an overly
restrictive interpretation of the Administration's criteria and
procedures for participating in this settlement. In particular, OMB
apparently seeks to limit the federal contribution for this water rights
settlement to their assessment of the monetary liability of the United
States if it is sued by the Navajo Nation. Such a policy is a radical
departure from previous Administrations, and is not even consistent with
the position taken by the Administration in the three settlements
recently signed into law by President Bush -- the Arizona Water Rights
Settlement Act, the Snake River Water Rights Settlement and the Zuni
Tribe Water Rights Settlement. This inconsistency was described in a
recent joint letter to OMB from Chairman Bingaman and Senator Domenici.
Once again, I thank the Senators for their dedication to this settlement
by having pointed out to OMB these inconsistencies.

Moreover, OMB's interpretation flies in the face of the Administration's
past support for the Rural Water Supply Act of 2005 in which the federal
government would assume up to 75% of the cost of rural water projects.
The federal contribution for such projects is not limited by any
calculus of liability to the project participants. OMB's policy is
especially appalling considering the trust responsibility and treaty
obligations owed by the United States to the Navajo Nation. The United
States Supreme Court has characterized these responsibilities as "moral
obligations of the highest responsibility and trust." Simply put, the
federal government should not be allowed to shirk its trust
responsibility or its treaty commitments with Indian nations by hiding
behind a veil constructed of legalese that can be applied to the
detriment of the poorest of the poor in America.

Of particular concern to the Navajo Nation is that OMB is now objecting
to the construction of infrastructure projects as a mechanism for
settling Indian water rights, even though the Administration apparently
supports the concept of encouraging Indian water rights settlements. In
the desert Southwest, where the available water resources are largely
exhausted, the only way for settlements to work is by infusing the
limited natural resource pool with the financial resources to allow the
existing water supplies be used more advantageously. As a general
premise, these settlements do not reallocate water from existing
non-Indian water users for the benefit of an Indian tribe. In the San
Juan River basin, there is very little unused water for the purpose of
settling the Navajo claims. Under the terms of the Settlement Agreement,
the Navajo Nation is awarded only the water it has historically used,
the water set aside for the Nation's use at the Navajo Indian Irrigation
Project, and the water for the Navajo-Gallup Water Supply Project. The
Settlement Agreement is premised on the Navajo Nation receiving a
substantial amount of "wet water" development to forgo claims for
additional water. In short, without the federal government contributing
the monetary resources to make this settlement work, the settlement
would not be possible.

Although we do not believe OMB should apply the criteria and procedures
for participating in settlements in such a restrictive way, we are
confident that if OMB considers all of the ramifications of letting this
settlement fail, the ultimate costs to the federal government could be
staggering. Consider first, the claims of the Navajo Nation. The Navajo
Nation's water rights claims are based on legal precedent established by
the United States Supreme Court. The Navajo Nation's water rights claims
could exceed the amount of water apportioned to New Mexico by the Upper
Colorado River Basin Compact, which was ratified by Congress in 1949.
These claims have been described by various legal scholars as
"hypothetical shocks to the Colorado River system." If this is true,
there are only two outcomes, neither of which are favorable to the
United States. If the courts ultimately rule that the Navajo claims are
limited by the compact because of the ratification by the United States,
the Navajo Nation has a substantial claim against the United States for
the lost water rights. On the other hand, if the courts ultimately rule
that the Navajo Nation is entitled to water in excess of New Mexico's
apportionment, then the entire system of allocation of Colorado River
water would be in jeopardy exposing the United States to incalculable
liability to a multitude of water users in the seven Colorado River
states. The beauty of the Settlement Agreement is that by keeping the
Navajo Nation's water rights within the State of New Mexico's compact
allocation, the "hypothetical shocks to the Colorado River system" are
avoided. But without the substantial water development infrastructure
authorized by Senate Bill 1171, such a settlement is not possible.

If the settlement were to fail, and the Navajo Nation were forced to
pursue the litigation of its claims, the United States would still be
exposed to horrific liabilities even if the Navajo Nation were to obtain
only modest water rights. The federal government historically promoted
the utilization of waters from the San Juan River by non-Navajos through
such projects as the San Juan-Chama diversion, the Hammond Irrigation
Project, the Jicarilla Apache Water Rights Settlement, and the Animas-La
Plata Project. However, because the Navajo Nation is the senior water
user in the basin, an award of even a modest amount of water to the
Navajo Nation would disrupt the water supplies for each of these federal
interests and leave the United States exposed to considerable liability.
As I mentioned earlier, the San Juan-Chama Project serves a myriad of
federal interests in addition to providing a water supply to the cities
of Albuquerque and Santa Fe. While OMB may frame the issue in terms of
whether we can afford this settlement, we believe the issue is whether
we can afford not to have the settlement. Under any measure, the
Congress simply cannot afford to let this settlement fail.

Currently, forty percent (40%) of the families on the Navajo Reservation
are forced to transport water from regional water pumping stations to
their homes to ensure that their families have potable water. In the
wake of Hurricane Katrina, Congress rightly recognized the emergency
that existed when so many people were deprived of potable water and
infrastructure. Congress moved to fix this emergency through the
authorization of billions of dollars to restore the water infrastructure
in New Orleans and various coastal communities. The tragic circumstance
experienced by the residents of New Orleans deserved swift and decisive
action on the part of the federal government. Unfortunately, on the
Navajo Nation, the lack of potable water and infrastructure is a
condition that has existed for a long time. It appears that OMB is again
applying a double standard when it comes to funding water infrastructure
to remedy acute water supply problems. OMB did not ask Congress to
consider the limits of its liability to victims of Katrina or to
consider whether a federal trust responsibility required such action in
order to avoid spending the money necessary to fix the problem. In the
case of Katrina, Congress did the right thing. We ask Congress to do the
right thing again by enacting Senate Bill 1171.

**Arizona Concerns**

Finally, we know that the State of Arizona has concerns about the
language in S. 1171 that deals with delivery of water to Window Rock,
Arizona. The Settlement Agreement and the provisions of S. 1171 preserve
all rights for the State of Arizona to negotiate all of the terms and
conditions for water delivery to Window Rock as part of a separate
agreement with the Navajo Nation. We do not believe, as Arizona does,
that a "comprehensive" settlement of all of the Navajo Nation's water
rights claims is necessary to protect Arizona's interests. In the first
instance, a "comprehensive" settlement should include all of the Navajo
Nation's interests in Utah as well as the Upper and Lower Colorado River
Basins in Arizona. The Navajo Nation has been actively attempting to
quantify its Lower Basin claims through negotiations with Arizona water
interests, but no negotiations concerning Upper Basin claims have been
attempted. We have advised the Arizona water interests that we are
willing to pursue a negotiated settlement of the Lower Basin claims, but
we are not willing to jeopardize the authorization of our settlement
with the State of New Mexico to accommodate the Arizona interests.
Moreover, we have serious doubts whether a settlement of the Arizona
claims can be achieved. It appears that after passage of the Arizona
Water Settlements Act, there is very little Colorado River water
remaining for purposes of a settlement with the Navajo Nation.
Nevertheless, we are committed to continued dialogue with the Arizona
interests to determine if a settlement is possible and to resolve any
remaining issues they may have concerning the settlement with the State
of New Mexico.

**Conclusion**

For more than one hundred and thirty nine years, the Navajo Nation and
the Navajo People have taken their treaty obligations seriously. In
times of crisis, brave Navajo men and women have rushed to the country's
aide, and fought and died not only for the preservation of the American
ideal, but also to preserve the Navajo culture and to secure a Navajo
homeland. A homeland for the Navajo People is not merely a piece of land
between our four sacred mountains but a place where our culture, our
language, our people can grow and live. Without water, viable economic
and social communities wither and die. I am asking you today to honor
the Treaty of 1868 and help bring water to the Navajo Nation.