Environmental Protection Agency Administrator William K. Reilly has decided to veto construction of the Two Forks Dam, according to a draft of the decision, killing a huge water project in Colorado that came to symbolize the struggle between environmental and development interests nationwide.
The decision, expected to be released in a few days, dashes longstanding plans for the largest non-federal water project in the West and ends a political journey as circuitous as the South Platte River, which the city of Denver wanted to block and pool 30 miles upstream to supply water for its burgeoning suburbs.
The billion-dollar dam would have flooded much of Cheesman Canyon, a picturesque stretch of wilderness between two forks of the river known to fishermen and conservationists as "the St. Peter's Basilica of trout fishing" and a mecca for hiking and boating.
In rejecting the project, Reilly cited "unacceptable adverse effects" of the dam, including "significant loss and damage" to the area's fisheries and recreational opportunities, according to the draft obtained by The Washington Post. He said that extensive measures suggested by the dam's proponents to lessen the damage "fall short of adequately addressing the adverse impacts."
Furthermore, he concluded, Denver has "practicable, less environmentally damaging alternatives" to provide water for its new settlements in the dry, front range of the Rocky Mountains.
The decision is certain to set off a firestorm of criticism by Denver's political and business leaders, who began seeking federal approvals for the locally funded dam nearly a decade ago after federal funds for water diversion projects dried up. The Denver Water Board and 40 suburban water supply agencies called the project vital to sustaining residential and business growth in the region.
"It's unbelievably shortsighted," Monte Pascoe, a Denver Water Board commissioner, said after being informed of the decision yesterday. "You're saying squeeze more out of the existing system and get right up to a drought before you recognize the problem. It's a typical federal government way of going about business."
Pascoe said the dam's proponents will decide whether to appeal the ruling judicially after reviewing it. Up to $40 million has been spent in pursuit of federal permits necessary for such a project despite local funding. The Clean Water Act requires federal permits.
Until Reilly took over the EPA, the Two Forks project was on a smoother track. The Reagan administration indicated its approval but left Washington just before the permit process ran its course. In March 1989, the Army Corps of Engineers approved a permit to build the dam, setting up a final decision by the EPA, which has the authority to veto projects in which wetlands are developed.
The EPA usually leaves such decisions to its regional administrators, and in the Two Forks case, Jim Scherer, a Reagan appointee who heads the agency's Rocky Mountain region, indicated that he was ready to sanction the dam project.
But Reilly, a career conservationist freshly sworn in to office, intervened after hearing of Scherer's plans. Saying he was not convinced that the project would "avoid environmental harm to the extent practicable," Reilly launched an EPA review process and turned over the case to the head of the EPA's Atlanta office.
The last-minute intervention outraged influential Republicans, including Sen. William L. Armstrong (Colo.), but was cheered by environmentalists who said the project endangered a natural shrine just to assure Denver suburbanites water for their lawns.
The fate of Two Forks became a touchstone of the Bush administration's commitment to environmental protection, which has been sidestepped to accommodate economic interests in other decisions.
In August, Lee A. DeHihns III of the EPA's Atlanta office recommended that the dam be rejected, citing the "significant loss of aquatic and recreational values" along the trout stream and the availability of alternative sources of water.
Reilly, sifting through 800 pages of material and four boxes of documents submitted by Two Forks petitioners, accepted DeHihns's recommendation.
In the 48-page draft, Reilly said that plans for a 1.1 million acre-foot dam -- the biggest of three proposed configurations -- would directly affect a 30-mile stretch of the South Platte known nationally for thriving rainbow and brown trout and used widely for mountain hiking, camping, canoeing, picnicking and scenic viewing.
Transforming the river and adjacent wetlands into a dam would flood hundreds of acres of the river, he said, removing the habitat for 38,000 pounds of trout and eliminating 90 percent of stream fishing and 77 percent of boating.
Reilly concluded that two less ambitious plans calling for smaller areas of flooding still resulted in significant losses to the fisheries and recreational outlets.
As for plans to "mitigate" the losses -- proponents suggested everything from stocking the reservoir with game fish to developing a 55-mile long park -- Reilly said the proposals "lack adequate depth and exactitude" and concluded that "even under the best of circumstances," the displacement would be significant.