Arizona is about to enter a new era when it comes to water rights and distribution.

The state’s main source of surface water — the Colorado River — has been dwindling as a result of climate change and increased water demand.

That means less water for approximately 40 million people in two countries, seven states and 30 Native American tribes. And the rules that govern how states face water cuts are set to expire on Dec. 31, 2026.

The seven states involved have struggled to reach an agreement regarding the future of these cuts. But whatever the outcome may be of negotiations or potential litigation between these seven states, experts say that Valley residents face significant water risks, including:

  • Arizona could lose up to 40% of its water supply.
  • The Central Arizona Water Project could be significantly cut and would deliver less water.
  • The reuse of water will become paramount to the state, including turning wastewater into drinking water.

One Arizona State University expert says not to panic but be prepared to open your wallet.

Rhett Larson, the Richard Morrison Professor of Water Law at ASU’s Sandra Day O’Connor College of Law, estimates water prices could significantly increase in some parts of the Valley if Arizona cannot come to an equitable and sustainable agreement with the other six states on how to share in decreased flows of the Colorado River.

“Arizona is not running out of water. We are running out of cheap water,” said Larson, who is also a senior research fellow with the Kyl Center for Water Policy at ASU’s Morrison Institute for Public Policy. “This means not just higher water rates, but also difficult choices on economic trade-offs — for example, higher food prices due to less water for agriculture but lower housing prices with more water for residential growth.”

ASU News spoke to several water policy scholars to get a behind-the-scenes look at how the seven states are working together on the new agreement, what are some viable options in case of a shortfall, and what Arizona’s future looks like when it comes to its most precious resource.

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A ticking clock

Over the past century, the Colorado River’s flow has declined by about 20%. With rising temperatures and declining Rocky Mountain snowpack, scientists have predicted flow reductions of up to 30% by mid-century.

The seven states within the Colorado River basin are under increasing pressure to develop long-term management strategies, as the existing agreements are set to expire at the end of 2026. A significant challenge lies in managing the persistent drought while balancing the requirements of stakeholders, including agricultural interests, urban water consumers, environmental needs and Indigenous rights holders.

In response to a prolonged drought, diminishing storage capacities and increasing demands for Colorado River water, the secretary of the interior issued a directive in May 2005 for reclamation to formulate enhanced strategies aimed at optimizing the coordinated management of the reservoirs within the Colorado River system.

On April 23, 2007, all seven states signed an interim agreement that memorialized the consensus recommendation to the secretary. Those rules have remained in place for the last 18 years, but the flow of recent events demand dramatic action.

“There’s no way that this ends without lower water supplies in Arizona,” Larson said. “Even the best-case scenario means that Arizona will have to make do with less water.”

However, Larson said there’s been progress as of late. He said there is a proposal on the table where the upper basin states would shift the way the water is measured to align more closely with reality.

“There have been some promising breakthroughs, but it could also collapse into litigation,” said Larson, who is representing Arizona in the agreement.

In addition to his roles at ASU, Larson is also an attorney for the Arizona Municipal Water Users Association, serves on Arizona’s Water Infrastructure Finance Authority Water Conservation Grant Fund Committee and sits on the board of directors of the Arizona-Mexico Commission.

“There’s a decent chance the states of the basin will sue each other in the United States Supreme Court, and who knows how that will play out?” he said.

Options on the table

If the seven Colorado River basin states can’t come to an agreement by the deadline, Arizona does have other water options. Some are legal, some are logistical and some are long shots. And they all come with a price tag.

“Trends are pointing to the fact that the Colorado River is becoming drier and I think it would be safe to say that the Central Arizona Project won’t be as large a provider of water as at present,” said Enrique Vivoni, ASU’s Fulton Professor of Hydrosystems Engineering in the School of Sustainable Engineering and the Built Environment and the director of the Center for Hydrologic Innovations. “So, if that’s the case, it means Arizona will have to start thinking about replacing that water supply. That would require investments.”

Vivoni, whose research focuses on hydrology and water resources, said Arizona has several water augmentation options at its disposal. They include groundwater extraction, water desalination, reservoir expansion, wastewater reclamation and interbasin transfers from other areas.

All these options require complex agreements and investments.

For example, Vivoni said groundwater extraction would require major investment in infrastructure, such as new wells and pipelines to bring water supplies to existing systems. The desalination option could involve paying to build a plant in Mexico in exchange for a portion of their Colorado River water. Expansion of Arizona’s Bartlett Reservoir capacity will require raising the dam to retain more Verde River water.

“All of these options require capital expenses and large operations and maintenance costs on an annual basis,” Vivoni said. “It’s going to require some hard choices. There will be some winners and some losers, and it’s going to require some behavioral changes by individuals, residents, communities, industry and cities.”

Pressure on groundwater

In addition to the costs of tapping groundwater, ASU researchers recently reported that the state’s unseen groundwater losses have been great as well.

Karem Abdelmohsen, Jay Famiglietti and colleagues used orbiting satellites to measure changes in groundwater from 2002 to 2024 in the Colorado River basin, in comparison to losses in streamflow and reservoir storage.

The satellite study found that groundwater depletion accounted for more than half of the total water storage loss in the upper Colorado River basin and more than two-thirds of losses in the lower Colorado River basin, which is greater than the losses in lakes Powell and Mead.

“The rate of depletion has actually accelerated over the last decade,” said Famiglietti, science director for ASU’s Arizona Water Innovation Initiative.

With less access to water from the Colorado River, demand for groundwater will grow. Famiglietti said that the effectiveness of groundwater management varies across the Colorado River basin states, leaving the resource open to overexploitation.

Cautious optimism abounds

If the seven states don’t come to an agreement soon, one possible scenario is that the secretary of the interior would make unilateral decisions on cuts and deliveries. Such actions would likely lead to lawsuits challenging the secretary’s authority to do so.

“Not having a consensus agreement in place means we could go from relative certainty about the conditions of shortage to total uncertainty,” said Kathryn Sorensen, who oversees the research efforts of the Kyl Center for Water Policy, serves as a professor of practice at the Watts College of Public Service and Community Solutions and contributes to the Global Futures Laboratory. “What we don’t want is someone making those decisions for us.”

That lack of certainty could lead to many drawbacks, according to Sarah Porter, director of the Kyl Center for Water Policy.

“Being in the dark about this situation could lead to higher (water) prices,” Porter said. “It could also lead to a disruption in economic development and the state’s prosperity. Not having clarity regarding how much water will be available over the long term could impact the state’s ability to attract industry. If there’s too much uncertainty about our long-term water supplies, then we’re not a good bet for investment.”

But water scarcity is not a new issue for Arizona. The state has a history of managing limited resources for collective benefit.

And that’s reason for hope as the state faces these current challenges.

“If you look at the history of water management in the Phoenix area, it’s a story of adaptation and overcoming obstacles and finding ways to be innovative,” Sorensen said. “We know how to do more with less, and we’re good at it.”

We’re also good at problem-solving and finding solutions, Porter said.

“I’m very optimistic about our water future because we’ve had over 100 years as a seven-state basin to figure out solutions,” Porter said. “I’m also optimistic because I’ve seen how creative and dedicated Arizona municipal water managers are — they’re resourceful, prepared and have their short- and long-term plans in place.

“I think there’s going to be water to help us enjoy a good quality of life and a thriving economy for central Arizona for a long time.”