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John Locher, Associated Press
Assistant Secretary of the Interior Anne Castle speaks at The Business of Water conference Friday, Aug. 29, 2014, in Las Vegas. Castle spoke about water issues along the Colorado River system.

LAS VEGAS — A top federal water administrator said Friday that several myths stand in the way of broad agreements needed to deal with increasing demand for water in the drought-stricken and over-allocated Colorado River basin.

Assistant Secretary of the Interior Anne Castle told the "Business of Water" conference in Las Vegas that there's no one-step way to avoid the possibility of cuts in water deliveries in the next few years to states including Arizona and Nevada.

With the crucial Lake Mead reservoir at 38 percent capacity and the Southwest in the grip of the driest 15-year period in more than a century, Castle said it will take multiple, incremental agreements to balance the water rights of cities, farmers, Indian tribes and states.

"Compromise is the only way we're going to get ourselves out of this drought," she said. "This is difficult state politics."

Businesses can use their relationships and economic clout to require responsible water behavior, she added.

Castle is a top water administrator in the agency that oversees the federal Bureau of Reclamation, which controls dams and canals serving the region that's home to 40 million people and has 4 million acres of farmland.

The water basin serves Wyoming, Colorado, Utah, Nevada, California, Arizona and New Mexico. Mexico and 29 Indian tribes along the Colorado River also have senior rights to river water.

Most people understand there is a drought, Castle said. But most don't understand the interwoven nature of water rights.

Farmers get first dibs on most of the water harnessed by the more than 100 dams in the basin, under agreements dating back to the Colorado River Compact of 1922. Since that time, cities such as Denver, Salt Lake City, Phoenix, San Diego, Los Angeles and Las Vegas have grown rapidly.

Some 16.5 million acre-feet of water are promised to the various entities. But Castle noted that's more than the river system's annual intake of some 15 million acre-feet of rainfall and snowmelt — an amount that has been declining during drought years. One acre-foot of water is about enough to serve two average Las Vegas-area homes for a year.

Castle said combined water storage in dams on the Colorado River is about 60 million acre-feet. That amount has been drawn down from full in 2000 to about 51 percent today, at 30.4 million acre-feet.

Castle said other myths are that cities just need to stop wasting water on fountains, golf courses and swimming pools, and that water is too valuable to use on farms.

Cities in the Southwest are actually models in water efficiency, reuse and conservation, Castle said. And cutting water to farms in areas such as the Imperial Valley of California would cripple vegetable and fruit production and hurt an economy that she called the foundation of the basin.

States alone won't be able to deal with shortages, she said.

"Myths can be dangerous. They allow us to slip into complacency," she said. "We're all in this together."

U.S. Sen. Harry Reid, the Senate majority leader, also was set to speak Friday to the conference held at the Springs Preserve by Colorado-based Protect the Flows and Nuestro Rio, an organization of Latino elected officials in several Southwest states.

The two-day conference drew more than 100 corporations, Main Street businesses, municipal water agencies and business associations, organizers said.