Variability in water supplies is perceived as a major impediment to economic growth in both agricultural and energy sectors in the Intermountain West. A chance-constrained programming model of water allocations among agricultural, energy, municipal and industrial, and environmental activities for the Upper Colorado River Basin and the Great Basin in Utah was developed to analyze economically optimal water use as energy production increases. Estimates of the probabilities of various amounts of water production, representing different drought conditions, were used as right-hand sides in the model. Results indicate that water is not a constraining factor and that little, if any, water development is warranted, even during relatively intense periods of drought.


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