Environmentalists had hoped to convince Colorado Gov. Roy R. Romer that a natural canyon is worth more than a man-made lake, no matter how much water it holds. They failed, but their fight against the proposed Two Forks Dam on the South Platte River may signal the end of an era. The controversy here pits environmentalists who want to save a canyon against city planners who say they need water for future development.
Water-policy experts on both sides of the Two Forks debate say the expense and political fallout of merely pushing the project past the governor - whose decision may still be overturned by Colorado voters, environmental lawsuits or several federal agencies - will make those backing projects of this scale in the future balk before proceeding with similar plans.
``The next water supply will be very expensive,'' says Marcia Hughes, lawyer for the Metropolitan Water Providers, a coalition of 42 suburban governments that helped lobby for the permit. ``If you look at the amount of time it's taking to get the required permits, you've got to believe it's going to take us twice as long on the next one.''
Dam builders set aside $50 million to mitigate the damage of Two Forks, although the federal government wants this increased to $84 million.
``Whatever final decisions are made on Two Forks, it represents a critical change from the past practice of just giving blanket approval to big projects like this,'' said biologist Carse Pustmueller of the National Audubon Society.
``We now realize,'' agrees Charles Wilkinson, a Colorado University law professor specializing in western resource law, ``that the greatest potential source of water is not more dams but conservation in our existing uses.''
If built, the dam would supply Denver and its suburbs with nearly 32 billion gallons of water each year, enough to meet the city's needs at least through the year 2010, planners say.
But the Audubon Society and other environmental organizations believe the controversy surrounding the project proves that Western cities no longer can depend on costly, environmentally-destructive dams to meet the water needs of unrestrained growth. If they are right, the en vironmentalists themselves, who over the past decade have acquired increasing sway in fighting such projects, are largely responsible for the change, say water-policy analysts.
Another crucial factor in the slowdown of water projects in the United States is that the best sites - those that provide low-cost water - have been used up.
In addition, federal funding, which for decades financed dam construction in the West, has been withdrawn.
Since President Reagan took office almost all federal money for water projects has gone to complete work in progress, rather than to finance new structures. When new construction has been approved, state and local governments have been required to provide matching funds.
In the latest example of budget-cutting, the Senate Energy and Water Development Subcommittee approved a spending bill two weeks ago that appropriates no money to begin construction of new water projects next year.
``We are still going to have storage facilities, but we are going to be much more careful about how we evaluate the loss to a community in terms of where and how we store water,'' Democratic Governor Romer said in an interview before giving his qualified support to the project June 10.
His recommendation to the US Army Corps of Engineers to issue the permit came despite public opinion polls indicating substantially more Coloradans oppose the project than support it. There are predictions that the issue may have to be settled by voters in a statewide referendum. Romer said the dam should be built, but only as a ``last resort'' and only if city water suppliers first adopt strict conservation measures.
Meanwhile, the conditions he placed on the project were criticized by dam supporters.
``The governor had an opportunity to show the kind of leadership that would resolve the issue, and instead he has set the stage for more controversy, delay, and perhaps years of wrangling,'' said Sen. William Armstrong (R) of Colorado.
Like cities throughout the arid West, Denver has had to rely on increasingly complex and controversial schemes to provide its residents with water. To be financed by raising Denver tap fees and selling bonds, the dam would cost an estimated $500 million to $1 billion.
A mile downstream from the confluence of the South Platte River with its North Fork in Pike National Forest, it would rise 555 feet above the stream bed and span nearly a third of a mile at its crest. The 30-mile-long reservoir created would be the largest standing body of water in the state, holding 1.1 million acre-feet of water. (An acre-foot comprises 323,000 gallons, or about the amount of water consumed annually by a family of four.)
The Denver Water Board and the Metropolitan Water Providers say Two Forks is the only reliable way to avoid water shortages forecast for the 1990s.
The Denver business community, including its labor unions, believes the project will stimulate economic growth and create jobs.
But opponents of the dam accuse its supporters of exaggerating projections of future metropolitan water consumption. And environmentalists argue that the scenic Cheesman Canyon, which would be inundated, comprises an irreplaceable habitat for elk, mule deer, bighorn sheep, and an endangered species of butterfly.
They say reduced flows farther downstream on both sides of the Divide will damage wetlands essential to endangered whooping cranes and other waterfowl in Nebraska, and threaten several endangered fish species in western Colorado.
The Corps of Engineers and the US Forest Service, which must issue construction permits, said they are unlikely to reverse Romer's decision. But the Environmental Protection Agency, which holds final veto power, has criticized the corps's $37 million environmental impact statement for not providing an adequate plan to mitigate ecological damage.
For proponents of the dam, however, the most worrisome obstacle is the environmentalists' determination to fight it at any cost.
``We will work on the federal agencies and their permit decision, and if they again support Two Forks then we'll go ... to federal court,'' said Dan Luecke of the Environmental Defense Fund.