Targeting a billionaire’s dams

On Sept. 24, 1908, the Klamath Falls (Ore.) Evening Herald ran a front-page article reporting on the observations of people who’d arrived recently from the town of Keno, about 20 miles to the southwest: “Parties coming in from Keno state that the run of salmon in the Klamath River this year is the heaviest it has ever been. There are millions of fish below the falls near Keno, and it is said that a man with a gaff could easily land a hundred of the salmon in an hour….”

Today a person standing below the falls near Keno would never see a fish, thanks to a series of four large hydroelectric-power dams—Iron Gate, Copco 1 & 2 and J.C. Boyle—on the river below Keno, near the California-Oregon border. Since 1918, when the first of the dams was built, the fish have been blocked from more than 350 miles of prime spawning and rearing habitat.

The Klamath is one of the West’s greatest rivers. It flows from headwaters high in Oregon’s Cascade Range through a mountain plateau, known as the Upper Basin, down into Northern California and its Lower Basin, where it passes through Karuk, Yarok and Hoopa Indian lands, joins with the Trinity River, and eventually enters the ocean south of Crescent City.

There still are salmon and steelhead in the Klamath, but in numbers that are only a fraction of their historic abundance, and with some species near extinction. Where once as many as a million fish journeyed up the river each year, making it the third-largest anadromous fishery on the West Coast, now fewer than 100,000 spawn in the Klamath or one of its tributaries.

And their numbers are continuing to decline, causing harmful impacts not only on the billion-dollar Pacific Coast salmon industry, but also on the American Indian tribes whose cultures have been organized around the salmon since time immemorial. The tribes have treaty rights to the fish, but those in the Upper Basin have seen no salmon in the river for nearly a century.

A recent series of events, however, has created conditions that could change all that.

First, in 2001, federal regulators, concerned about low river flows that could harm salmon, angered farmers in the Upper Basin by cutting off their flow of water.

Then, in 2002, after political pressure forced regulators to restore the farmers’ water, the Klamath River suffered the largest salmon die-off in U.S. history, some 68,000 fish. California Fish & Game officials blamed the outbreak of a fatal gill-rot disease on low water flows resulting from the federal water policies.

As a result of the die-off, commercial salmon fishing along a 700-mile stretch of the California and Oregon Coast was curtailed for several years—cut by as much as 90 percent in 2006, for example. The financial pain suffered by coastal counties has been severe.

The competition for Klamath River water is one reason why the fish are dying off, but environmentalists, fishing groups and the tribes believe the dams play a larger role. They block the fish from much of their former spawning grounds, heat river water to temperatures lethal to salmon, and provide habitat for massive blooms of toxic algae, a health risk to both fish and humans.

Since 2004, the dams have been going through a 50-year relicensing process with the Federal Energy Regulatory Commission. During that process, anti-dam activists have been trying to pressure PacifiCorp—the Portland, Ore.-based utility company that owns the dams—to tear them down.

If the activists are successful, it will be the biggest dam-removal project in U.S. history, and would revitalize one of the nation’s greatest rivers and bring new live to the subsistence economies of the Indians. But it would also mean removing four emissions-free plants that provide power sufficient for 70,000 homes, about 2 percent of PacifiCorp’s output.

What makes this effort especially interesting is that PacifiCorp is owned by one of the icons of capitalism, a man who is legendary not only for his Midas-like ability to make money, but also for his reputation for integrity and a desire to use capitalism to help better lives.

He’s Warren Buffett, the billionaire “Sage of Omaha,” whose hugely successful investment company, Berkshire Hathaway Inc., has made him the second-wealthiest person in the world, after his good friend Bill Gates. PacifiCorp is owned by Mid-American Energy, a subsidiary of Berkshire Hathaway.

Buffett is that rarity in the world of the super-rich, a man who seems uninterested in the pleasures that come from wealth. He lives modestly in the same three-bedroom house he’s owned for decades, is still married to his first wife, and has agreed to let the Bill and Melinda Gates Foundation give away most of his wealth, some $35 billion, to worthy causes.

When anti-dam activists, including many Klamath River Indians, journeyed to Omaha in June to present their case at the annual BH stockholders’ meeting, they hoped Buffett would live up to his reputation and do the right thing.

The vice chairman of the Karuk Tribe, Leaf Hillman, put it succinctly. Referring to a newspaper article in which the Gates Foundation was quoted as stating that “Warren [Buffett] has not only an amazing intellect, but also a strong sense of justice,” Hillman commented: “Until Mr. Buffett removes his dams, which are driving our fish into extinction, I will be forced to question his sense of justice.”

The stockholders’ meeting was held at an Omaha arena large enough to accommodate the 27,000 people in attendance. As Tara Logan describes it in an article written for the Internet digest Alternet, Buffett took questions from the “adoring crowd of people made wealthy by his business decisions.”

“Everyone basically stood up and talked about how wonderful he was and how they were going to name their first-born son Warren,” Craig Tucker, an organizer for the Karuk Tribe, told Logan.

Then Ronnie Pelligrini, of Eureka, stood up and “told Buffett how her family, who fish for Pacific salmon, lost 90 percent of their income last year because the fishery was virtually closed for 700 miles of coastline,” Logan reports.

And Windy George, of the Hoopa Tribe, stood up with five girls dressed for the Brush Dance, a traditional healing dance, and asked Buffett to meet with the tribes to understand what the loss of salmon meant to the native people.

That meeting did not take place. Buffett later told reporters that, while he appreciated the tribes’ position, it was up to federal agencies to determine whether the dams should be removed. For their part, the tribes promised they would be back next year—and every year until the dams come down.

Ultimately, the decision is FERC’s to make. In the meantime, the Department of Commerce and Department of the Interior have filed mandates requiring PacifiCorp to install fishways and ladders on its dams. “We’ve said we’re willing to put in fish ladders,” confirmed Jan Mitchell, a PacifiCorp spokeswoman.

That could cost as much as $200 million, and anti-dam groups hope the mandates will encourage PacifiCorp to take the less expensive route of simply removing the dams.

The Klamath dams generate about $20 million a year for PacifiCorp. But a California Energy Commission report released in December 2006 said installing fish ladders would wipe out that income and then some. In addition, federal officials have mandated that water diversions to the J.C. Boyle power plant be decreased for the benefit of trout populations in the river; that, too, will decrease PacifiCorp’s income.

PacifiCorp disputes the CEC study, noting for example that it fails to consider the fact that there are 20 million to 25 million cubic yards of sediment behind the dams that, if washed downstream, could wreak havoc on the river.

This March, Bill Fehrman, PacifiCorp’s then-president, stated, “[Dam removal] is complex. It’s not a simple matter of removing some concrete slabs. This is now low-cost power used by our customers with virtually zero emissions. … Replacing the power will necessarily cost our customers more money.”

Still, the issue of dam removal is not entirely off the table. Fehrman acknowledged as much in August 2006, when he said in a press release, “We have heard the tribes’ concerns. We are not opposed to dam removal or other settlement opportunities as long as our customers are not harmed and our property rights are respected.”

PacifiCorp has been engaged for months in settlement talks with Klamath stakeholders, including farmers, that parallel the formal relicensing process, but Mitchell said she couldn’t comment on their progress for reasons of confidentiality.

In August, anti-dam groups upped the pressure on PacifiCorp by suing the North Coast Regional Water Quality Control Board for failing to regulate toxic discharges from PacifiCorp’s dams and reservoirs.

The groups targeted the reservoirs behind the Iron Gate and Copco dams, charging that they have seen some of the most toxic blooms of algae ever recorded in the United States. “Health experts warn that even modest exposure to the toxin produced by the algae … can lead to skin rashes, vomiting, and diarrhea,” reads a press release. “High doses of the toxin, such as those found in the Klamath reservoirs each summer, could lead to massive liver failure and even death in humans.”

“Hopefully we can arrive at an agreement that removes the dams and this case will be moot,” said Tucker, “but until we are sure that PacifiCorp is willing to negotiate in good faith, we will continue to throw everything we have at them.”

Mitchell declined to comment on the lawsuit, saying it was company policy not to discuss litigation.

Two other lawsuits, one challenging the discharges from the fish hatchery at Iron Gate, the other a public nuisance suit seeking damages for the negative impacts of the dams on the lives of people living downstream, also have been filed.

For PacifiCorp, the Klamath dams are both asset and liability. Last year the company acknowledged, in testimony before the California Public Utilities Commission, that it now manages the system as much to fulfill its many environmental compliance mandates as to generate power, and “at worst … must spill water throughout its system and incur risk management costs” and can’t rely on the unpredictable flows from upstream irrigation projects.

Tribal leaders know this moment is a perfect storm. It was pure coincidence that the water shut-off of 2001, the fish die-off of 2002 and the coastal fishing ban of 2006 all happened about the same time as the relicensing of the dams. Together, they gave graphic evidence of the fragile health of the Klamath basin, and galvanized the formation of a unique coalition of tribes, fishing groups, environmentalists and farmers eager for change.

As Tucker put it, the series of events was “a rotating crisis in which we just moved the pain around, and the only one not feeling the pain was the company causing it, PacifiCorp.”

He said settlement talks lately have been productive and that the parties hope to sign an agreement before the end of this year. He couldn’t be specific about the terms, but he sounded optimistic. The real hurdle, he said, is the ideological reluctance to set a precedent by actually removing some dams.

“What we need to communicate is that not all dams are created equal,” he said. “If we look at the impact these dams have and compare that with what is in the best interest of the public, as FERC relicensing requires, these dams are the best candidates for removal in America.”

The relicensing is a “once in a lifetime opportunity for the tribes’ treaty rights to finally be upheld,” said Klamath Tribal Chairman Allen Foreman. “It is our right and our way of life. The federal government has a trust responsibility to the tribes, and we have a responsibility to the fish and the people. … We must understand that all things on this earth have a purpose … the water, the air, the fish, the people … we are all connected.”