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Seven western states and the federal government yesterday signed a big agreement on water resources. It's being called the most significant agreement since the Colorado River's water was divided up 75 years ago. This is an acknowledgement that the most precious resource in the West may be drying up and everybody has to share the pain.

NPR's Ted Robbins reports from Las Vegas.

TED ROBBINS: The agreement to better manage the Colorado River was signed at Caesars Palace, the imitation Roman resort in the middle of the Nevada desert. Did the states hit the jackpot? Well, with the drought and climate change, it's more like the house telling gamblers that their source of credit is being cut off.

Mr. JEFF KIGHTLINGER (Southern California Metropolitan Water District): You know, we see the future and it's not looking all that pretty.

ROBBINS: Jeff Kightlinger heads the Southern California Metropolitan Water District, which gets about a third of its water from the Colorado River. In all, about 30 million people in the Southwest depend on the river.

Mr. KIGHTLINGER: I don't know that we'll ever back to the way we were just as short ago as 2000. You know, we are - both major reservoirs - Lake Mead and Lake Powell - for the first time ever are below 50 percent.

ROBBINS: The agreement coordinates flows from the giant reservoirs - Powell and Mead. Before, Powell was managed largely to satisfy Colorado, Utah, New Mexico and Wyoming upstream. Mead was managed largely for Arizona, Nevada and California downstream.

Pat Mulroy, who heads the Southern Nevada Water Authority, says the agreement heads off fights over that and lots of other issues.

Ms. PAT MULROY (Southern Nevada Water Authority): And here you have the potential of a ugly, ugly court case that would have involved virtually all the western states, or at least seven of the major western states. And we've been able to reach a common accord and a sense that we're in this together.

ROBBINS: The states have agreed to more or less share equally if water allocations are cut, which some say could happen as soon as 2010. The agreement also gives the states the right to build water projects for each other. For instance, Nevada plans to build reservoirs and desalinization plants for other places so it can use more river water. Before, only the federal government built dams and reservoirs.

Interior Secretary Dirk Kempthorne signed the agreement, praising it with the river as a metaphor.

Secretary DIRK KEMPTHORNE (U.S. Department of Interior): As the Colorado River navigates a 1,500 mile journey down mountains, through canyons and across desert landscapes, you have navigated the shoals of history.

ROBBINS: Kempthorne acknowledged that climate change could limit the resource, but he said the West population will grow in spite of it.

Sec. KEMPTHORNE: We're going to continue to have growth - that is a reality. And so you need to manage for that. This gives us some tools.

ROBBINS: There are conservation measures in the agreement. But John Weisheit with the environmental group Living Rivers wonders why growth and thus more water use is inevitable.

Mr. JOHN WEISHEIT (Living Rivers): What's wrong with saying, I'm sorry, we ran out of water. You can't live here. There - it would be appropriate to say that. That's what the people who live here would like to hear, so that they can continue to live here and enjoy the lifestyle that yet remain.

ROBBINS: But Weisheit was about the only glum face at Caesars Palace. When the pact was signed, a roomful of water managers stood and cheered.

(Soundbite of applause)

ROBBINS: As Las Vegas's Pat Mulroy put it, nobody got what they wanted but everyone got what they needed.

Ted Robbins, NPR News, Las Vegas.

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