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30 July 2026

Special Water Supply Edition: California Environmental Law & Policy Update

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Allen Matkins Leck Gamble Mallory & Natsis

Contributor

Allen Matkins, founded in 1977, is a California-based law firm with more than 200 attorneys in four major metropolitan areas of California: Los Angeles, Orange County, San Diego, and San Francisco. The firm's areas of focus include real estate, construction, land use, environmental and natural resources, corporate and securities, real estate and commercial finance, bankruptcy, restructurings and creditors' rights, joint ventures, and tax; labor and employment, and trials, litigation, risk management, and alternative dispute resolution in all of these areas. For more information about Allen Matkins please visit www.allenmatkins.com.
California faces mounting water challenges as Lake Mead and Lake Powell reach historic lows, prompting innovative solutions like interstate water sharing and desalination programs. Meanwhile, state lawmakers debate how to balance the water demands of AI-driven data centers with conservation needs, and regulators advance major infrastructure projects including the controversial Delta Conveyance Tunnel and Sites Reservoir amid environmental concerns.
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Focus

Federal government clears path for controversial Mojave Desert water pipeline

Los Angeles Times - July 9

The U.S. Bureau of Land Management (BLM) has signed off on a company’s plan to convert an oil and gas pipeline to pump groundwater from the Mojave Desert to California cities for the first time, a lucrative venture that critics say threatens natural springs and wildlife. BLM released documents saying that Cadiz Inc.’s plan to repurpose 162 miles of the pipeline to transport water “will not significantly affect” the environment.

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News

The Colorado River’s 2 biggest reservoirs just hit a new record low

The Salt Lake Tribune – July 17

The combined storage in the nation’s two largest reservoirs, Lake Powell and Lake Mead, has dropped to a level not seen since 1956, when Glen Canyon Dam was still under construction, according to new research from the Center for Colorado River Studies at Utah State University. The two reservoirs hold almost 60% of the water stored in the Colorado River system. As of July 12, Mead was 27% full and Powell was 24% full, according to BLM.

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Nevada signs water sharing agreement with Arizona, California

Nevada Current – June 4

On June 3, the federal government and water agencies in Nevada, Arizona, and California agreed to develop a framework for an interstate pilot program that could let agencies in Arizona and Nevada tap San Diego’s Claude “Bud” Lewis Carlsbad Desalination Plant. The desalination plant, operated by the San Diego County Water Authority, can produce 54 million gallons a day. The proposed program would allow California’s share of the Colorado River to be transferred to other states in years San Diego has a surplus of water.

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California lawmakers seek more transparency on data center water use

The Sacramento Bee – July 15

As artificial intelligence fuels a new wave of data center development across California, lawmakers are grappling with how to support the growing industry while protecting the state’s limited water supplies. Two bills moving through the Legislature would give state and local officials a more complete picture of data centers’ water demands. Assembly Bill 2469 would require developers to disclose projected water use before local governments approve new facilities, while Assembly Bill 2619 would require operators to report actual water use annually once the facilities open.

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Federal judge denies environmental groups’ pause on California water projects

Courthouse News Service – July 9

A federal judge declined on July 9 to halt Northern California water infrastructure projects that a group of environmental nonprofits say will harm several vulnerable fish species, including Chinook salmon. Denying a temporary restraining order, U.S. District Judge Jennifer Thurston said neither the plaintiffs nor the U.S. Bureau of Reclamation provided her an argument on how to interpret the terms of an Endangered Species Act biological opinion for the Central Valley Project. The U.S. Bureau of Reclamation declined to comment.

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Federal government helping add water to Lake Mead, SoCal water agency says

NBC4 Los Angeles – July 14

In an effort to address historically low water levels at Lake Mead, the Metropolitan Water District of Southern California has approved an agreement with the federal government to help add water to the reservoir. On July 14, Metropolitan's Board of Directors approved an agreement with BLM, which will provide the agency up to $65 million to keep up to 200,000 acre-feet of its Colorado River supplies in the lake this year.

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Yolo County water dispute ends with settlement after multiple lawsuits

Abridged – May 27

Yolo County officials have reached a settlement with the California Department of Water Resources over the water rights for a large farm in the area. The deal comes after Yolo County and the Yolo Subbasin Groundwater Agency sued to slow down the state department’s purchase of up to 16,000 acre-feet of Sacramento River surface water.

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Federal agencies green-light Delta Tunnel, but just construction

SFGate – June 5

The California Department of Water Resources on June 5 received permits known as biological opinions from the U.S. Fish and Wildlife Service and the National Marine Fisheries Service concluding that construction of the Delta Conveyance Tunnel, a proposed 45-mile extension to the State Water Project, can proceed under conditions designed to protect endangered species and sensitive habitat. The tunnels must also receive a permit to operate from the State Water Resources Control Board, and water board hearings on the project are ongoing.

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State poised to nix pumping along Friant-Kern Canal in Tulare County by early 2027

SJV Water – July 16

Growers who farm within two miles of the Friant-Kern Canal in southern Tulare County should be prepared for a pumping moratorium as early as April 2027, water managers learned at a meeting hosted by the State Water Resources Control Board on July 16. The move is part of Phase I of the Board’s proposed pumping plan, which zeroes in on damage to the canal caused by overpumping. The cost of that damage already tops $797 million, according to a presentation at the meeting.

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Could water rights scuttle Sites?

Maven's Notebook – July 20

In late June, the controversial new Sites Reservoir project in Northern California received a commitment for nearly $269 million in additional state funding, even as the State Water Resources Control Board weighs comments on a draft water rights decision for the project issued this spring. The upshot of those deliberations could jeopardize the financial viability of the project, which proponents say is vital to California’s water security and critics call yet another threat to the Estuary’s embattled ecosystem.

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