Energy & Environment — New Arizona governor faces major water challenges

Water cuts are forcing Arizona’s incoming governor to get moving on water issues. Meanwhile, we’ll look at a new report’s estimate on the impacts of the Keystone Pipeline cancellation.

This is Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Subscribe here.

Hobbs hits the ground running amid water cuts

Arizona’s newly inaugurated Gov. Katie Hobbs (D) has no time to waste as she faces the daunting challenge of addressing the state’s use of water from the overallocated Colorado River.

Arizona is one of three states in the river’s lower basin, along with California and Nevada. Historic drought, intensified by climate change, has battered the region for the entire 21st century, and last year, the river’s waters dropped to a level that triggers automatic allocation cuts from the federal Bureau of Reclamation.  

Arizona was issued the largest cut of any state, at 21 percent. The cuts took effect on Jan. 1, the day before Hobbs took office, forcing her to hit the ground running on the issue.  

Ultimately, she will need to oversee decisions about how the state allocates its dwindling supply from the key river, balancing competing interests between rural agricultural communities and booming cities.  

One of the “first and most important thing[s]” directly under Hobbs’s control is something she’s already done, according to Dave White, director of Arizona State University’s Global Institute of Sustainability and Innovation. Ahead of her inauguration, Hobbs confirmed she’d retain Tom Buschatzke as director of the state Department of Water Resources.  

The details: 

  • Buschatzke, appointed by Hobbs’s predecessor Doug Ducey (R) in 2015, has been “an integral and important leader in water policy and management in the state” as well as representing the state in interstate negotiations over Colorado River allocation, White said, making his continued presence vital to continuity on water policy.
  • If basin states cannot reach a new agreement, updating the century-old compact that governs the river’s waters, the federal government has raised the prospect of imposing cuts itself, separate from the Bureau of Reclamation cuts.
  • As a result of that decision, “we’re not losing momentum here, which is very important,” said Sharon Megdal, director of The University of Arizona Water Resources Research Center.   

What the state water director says: In an interview with The Hill, Buschatzke said that by remaining in his position he would be able to continue building on the relationships with other negotiators he has already established.

“It’s really important to have that basic relationship throughout the basin and I think it will serve Arizona well and it will serve Gov. Hobbs well as she helps define the policy direction that the state is following,” Buschatzke said.   

What comes next? Buschatzke said Arizona was well-prepared for the Bureau of Reclamation cuts, but “the real issue [is] much more needs to be done to stabilize the system, and it’s uncertain as to how big a number we’re going to come up with to stabilize the system.”

“I will continue to advocate for collaborative solutions to get as much voluntary compensated conservation or into Lake Mead to avoid mandatory cuts from the federal government,” he said. 

Read more about the issues at play here.  

Keystone cancelation cost jobs: agency 

A review from the Energy Department determined that the cancellation of the Keystone XL pipeline ultimately resulted in fewer jobs, but found the move’s impacts on consumer prices were “inconclusive.” 

The department conducted a literature review of several studies on the impacts that the Keystone XL Pipeline would have had, including studies sponsored by the federal government as well as the company behind the pipeline, TC Energy. 

On his first day in office, President Biden canceled a permit that was needed for the pipeline’s construction — leading to the project’s ultimate demise. The move sparked praise from environmental organizations but condemnation from Republicans and the energy industry.  

The findings: 

  • The new report found that the pipeline was expected to create about 50 permanent jobs once it was operational.
  • It also said that studies estimated the construction period would support between 16,149 and 59,468 jobs, though it said that the high-end estimate “overstates” jobs because it included jobs outside the United States.
  • It also said that estimates of the broader economic impacts “show wide variations” across studies and so they are “not directly comparable” due to major differences in modeling assumptions. Specifically, it said that the impacts on consumer prices were inconclusive in light of changes that have happened in the U.S. and Canadian oil markets since the pipeline was proposed. 

The new assessment was dated December 2022, but was announced by the offices of Republican Sens. Steve Daines (Mont.) and Jim Risch (Idaho) on Thursday.  

“The Department of Energy finally admitted to the worst kept secret about the Keystone Pipeline: President Biden’s decision to cancel the Keystone XL Pipeline sacrificed thousands of American jobs,” Risch said in a statement.

What the administration is saying: A spokesperson for the Energy Department described the job impacts as “limited,” citing the permanent jobs figure. 

“The U.S. Department of Energy released a report evaluating existing analysis on economic and job effects of the XL portion of Keystone pipeline. It concluded there were limited job impacts, with approximately 50 permanent jobs estimated to have been created were the pipeline operational,” the spokesperson said in an emailed statement. 

Read more about the report here.  


Rep. Kevin McCarthy (R-Calif.) once again failed to claim the Speaker’s gavel on the 10th vote the House has conducted, a number of Speakership ballots that hasn’t been seen since before the Civil War. 

His vote total appears largely unchanged. He received 200 votes. Twenty Republicans voted for someone else, as on every other ballot on Wednesday and Thursday, and one voted “present.” 

This means that the voting is expected to drag on until Republicans can come to an agreement. 

The speakership requires a majority vote — 218 if all members are present.  

Follow along with updates on from The Hill’s staff here.  


  • DOE official warns of solar supply chain risks (Axios
  • Has the Amazon Reached Its ‘Tipping Point’? (The New York Times Magazine
  • Why can’t the West just pipe in water from the Mississippi or Missouri rivers to save the Colorado River? (The Denver Post
  • National Bird Day: These are some of the species most at risk of extinction in the US (ABC News
  • EPA targets plastics company in PFAS probe (E&E News

🍻 Lighter click: Cheers? 

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.  

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