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Two fundamental resources of the American West, water and energy, were the focus of the fifth annual State of the West Symposium held on November 12. The SIEPR fellow and Stanford public policy lecturer David Crane opened the symposium with a keynote talk (video) assessing the economic state of the American West. Stanford economist Frank Wolak has been working on water pricing formulas to help public utilities replace revenue they are losing to water conservation.
The second panel of the afternoon featured a spirited debate between opponents and supporters of fossil-fuel export facilities on the West coast (video). The conservation lawyer Jay Manning touted the successes of the Pacific coast states from California to British Columbia in promoting renewable energy policies, from cap and trade in California to carbon taxes in B.C. Collaboratively organized by the Bill Lane Center for the American West and the Stanford Institute for Economic Policy Research (SIEPR), the half-day event took place at SIEPR's headquarters on the Stanford campus.
Crane noted that while energy dependent economies in North Dakota and Alaska have suffered from declining oil and gas prices, other western states like California, Nevada, Washington, and Oregon saw robust employment growth over the past year. Mead also stressed the importance of ensuring that the West can meet the food needs of the future, despite the shrinking number of young people going into agriculture.

Mead, the grandson of Wyoming Governor and Senator Clifford Hansen, was given a folksy introduction by his fellow Equality State political scion, the voluble former Senator Alan Simpson, the son of Wyoming Senator and Governor Milward Simpson. Mead emphasized the need for maintaining collegiality in working with the other western governors. Crane added that a number of western states are seeing tax revenues approach levels not seen since before the Great Recession; at the same time, he pointed out how spending priorities have changed since the economic crisis.
Duggan explored the feasibility of water transfers and markets as a possible approach for addressing the western drought (video).
In electricity, said Wolak, the transmission network takes bids and uses them to run a market that balances supply and demand in real time. He added that a priority is for Chinese plants to start using pollution control devices, which they have already installed but are reluctant to use because of the corresponding reduction in energy output. For example, California now devotes a much smaller share of its budget to long-term investments like transportation, parks, and education, in favor of meeting the increasing demands of Medicaid, pension obligations, and prison costs. Felicia Marcus, chair of California's State Water Resources Control Board and a veteran water regulator, lamented the difficulty of achieving productive dialogue on water when most players only see one part of the larger picture.

The challenge, though, is getting back exactly what you put in, he said, and dealing with possible effects on ecosystems. Benson pointed out the growing share that renewable energy sources are taking in western states like California. If you look at myself, Governor Brown and Governor Inslee [of Washington], we have fundamental disagreements on coal, but we have to work together on forest health and issues that don't recognize state boundaries.
But the gain would be worth it, Wolak continued, saying that the money that goes to pay for armies of water lawyers could instead go to a tariff that would fund local water transfers.

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