WHEN the Gill Trail leaves State Highway 67 some 6,000 feet above sea level, it winds up the Eastern Slope of the Rocky Mountains across terra-cotta-colored soil under tall, well-spaced pines. Crossing a high ridge, it turns and parallels the North Fork of the South Platte River - by all accounts one of the finest trout fishing streams in the nation, and surely one of the wildest and most scenic. Pausing to catch his breath, Daniel Luecke looks across the river, winding several hundred feet below, to the far wall of the canyon. ``Right where we're standing,'' he says, turning to his visitor, ``we would be under water.''
As director of the Rocky Mountain Regional Office of the Environmental Defense Fund, the bearded and blue-jeaned Dr. Luecke hikes in here frequently. His purpose: to explain to visitors the extent of the flooding if the Two Forks dam, proposed for a site some 20 miles downstream, were built. These days, his explanations ring with relief: The Environmental Protection Agency (EPA) now appears certain to veto the project.
Proponents and opponents agree that the EPA decision will put paid to a water project that is the largest - and probably the most politically polarizing - in Colorado's history. But they also agree that the story of Two Forks is about much more than water. It's a tale of changing times: in the once-booming Denver economy; at the hitherto impregnable Denver Water Board; at an EPA revivified by President Bush's appointment of William K. Reilly as its administrator; and within the environmental movement.
``I see it as the dance of the dinosaurs,'' says Luecke, speaking of the dam's proponents, a coalition of political and business interests that over the past decade have spent $40 million seeking their permit to build. ``They haven't gotten the message that it's a new ball game.''
Some 50 miles away, in a muscular stretch of industrial Denver, the modern office building of the Denver Water Board nudges up against a railroad yard and a dusty cement plant. A vivid example of what irrigation can do to a semiarid plain, it's an oasis of gardens, trees, and well-watered lawns, complete with fountain and miniature waterfall inside its three-story atrium. It's also the home of the ``water buffaloes'' who run the board. Appointed by the mayor for six-year terms, the five-member board is so carefully separated by charter from political or financial oversight that neither its contracts nor budgets are subject to review. Yet it provides the one commodity without which the West cannot live and over which it continually feuds: water.
`IN this part of the world, we don't get water year around,'' says the executive assistant to the manager of the board, Charlie Jordan, a mustachioed ex-Georgian. The region's water, Mr. Jordan explains, comes during 60 days in the spring, when the high-mountain snows melt. But all of Colorado's major rivers begin in the state and flow out. So all the water goes elsewhere - unless it can be stored.
The result: a sometimes frantic use-it-or-lose-it mentality that predates statehood and - some say - still governs water policy. In the last 100 years, with the help of massive federal support for so-called ``water projects,'' that way of thinking has thrown up dams across narrow canyons around the state.
And that, the water providers insist, has made the state what it is today. When farmers first settled along the South Platte River on the mile-high prairie that was to become Denver, they captured in a pithy phrase the seasonal fluctuations of that waterway: The river, they said, was ``too thin to plow and too thick to drink.''
Now water drawn from the Colorado River, coming through tunnels and canals across the Continental Divide, keeps the river running all year. It also ensures that water rights continue to be the stock in trade of Colorado's development.
Based on the ``doctrine of prior appropriation'' - the practice that determines who gets first crack at sucking a given amount of water from a waterway - these rights can involve significant sums of money. Adjudicating them keeps water courts busy. It also gives rise to a particularly Western phenomenon, known as ``water lawyers.'' Common throughout the West, they are especially concentrated in Colorado, where 70 percent of the nation's water lawyers are said to work.
All of which, through the years, have made water projects politically popular with the local populations. It has led the Denver Water Board to continue buying up water rights and real estate hundreds of miles from its doorstep to ensure a steady flow to the bustling, bursting population of Denver, without which development could not progress. It has insulated the Denver Water Board - if not from criticism, at least from any doubt as to the necessity of its expansive plans.
Those plans, in recent decades, have outgrown the water demands from the city proper: The Denver Water Department, governed by the board, now operates a water system with an estimated replacement value of $4 billion and sells more than half its water to the suburbs.
In doing so, it has amassed a cash reserve that now totals $130 million. In 1981, convinced that the region's growth would continue to rocket upward, the board and a group of 41 surrounding suburban governments and water districts, known as the Metropolitan Water Providers, put forward a plan to dam the South Platte.
PREVIOUS plans for similar dams had been vetoed in the 1950s and again in 1974. This one, centered on a 615-foot-high, $1 billion dam in a steep canyon just below the confluence of the main stem of the river and its north fork, would back up water along the main stem for 21 miles - enough to cover 10,000 acres of land, and to cover even multiple years of the droughts that ravage this region every several decades.
Working steadily through the stages of the permit process, the board and the providers won approval from the Army Corps of Engineers. They also seemed all but assured of approval from the EPA's Denver regional chief, James Scherer. But the process, stretching on too long, outlived the Reagan administration and its hands-off EPA. It also encountered the summer of 1988, when unusual heat and pollution problems put the environment on the front pages for weeks on end.
Last winter, Two Forks stopped being a local issue. On Jan. 30, the heads of nine national environmental organizations wrote a brief, potent letter to the EPA's Mr. Reilly, who previously headed the Conservation Foundation. In March, in a decision out of Washington that stunned the water interests and sent environmentalists into pirouettes of joy, Reilly initiated a review of what he called ``the potentially unacceptable adverse environmental effects of the Two Forks project.''
Moving the case out of state, he handed it over to his Atlanta-based regional decision officer, Lee A. DeHihns III. On Aug. 29, Mr. DeHihns issued a 25-page decision, proposing that the project be vetoed because of its effects on ``fisheries, recreation, and wildlife habitat.''
WHY the veto? There are almost as many finger-pointings among the water interests - and congratulations among the environmentalists - as there are anglers on the North Fork.
For the Denver Water Board's Mr. Jordan, the problem lies in words. ``I think to a large degree our failure in Two Forks is a failure in public communication,'' he says. ``I don't think the public appreciates that there's a problem.''
Indeed, the extent of the ``problem'' facing Denver is open to debate. When then-Governor Richard Lamm convened a round table to examine the issue in 1981, Denver was on a growth curve. Within several years, however, the bottom fell out of the energy business, and the metals market took a dive. That left the state's oil- and mining-dependent economy in the lurch. The boom turned to bust - which, according to Mr. Lamm (now a University of Denver professor, who serves on the board of the for-profit American Water Development Corporation) has been the West's legacy.
``This is a region of extremes,'' he says, noting that ``the history of the West is the history of drought.'' Right now, Lamm says, ``we don't need Two Forks,'' which he describes as ``very expensive water.'' But public attitudes could change with the onset of a major drought in the region - one of which, according to tree-ring evidence from earlier centuries, lasted 40 years. To the argument that you must plan for catastrophic drought, he says, ``there's essentially no answer. You could fill up every canyon on the Front Range in the name of drought.''
Jordan, however, points out that both the economic bust cycle and the fear of drought are overlaid by several other factors. Nationwide, rising incomes track almost exactly with increased water use - and Denver incomes have been rising even as the population growth has fallen off. He also notes the nationwide trend toward smaller households, and points out that ``water use is much more constant by household than it is by people.'' So drought or not, he sees a need for Denver to increase its water supplies.
Dan Luecke does not disagree. The environmental community's plan, however, calls for a three-pronged attack on the problem: new projects much smaller than the massive Two Forks, changes in the way the whole system operates, and a strong dose of conservation. On the first point, the environmental impact statement filed with the EPA shows that existing reliable, cost-effective water sources could supply - each year - 150,000 acre-feet (the amount of water needed to flood an acre of land one foot deep). It also shows that Two Forks would supply only 98,000 acre-feet annually.
On the environmentalists' latter point, conservation, the Denver Water Board comes in for sharp criticism. About 62,000 households are still operating without water meters. And the board's figures for future use show consumption rising from 195 gallons per capita per day in 1980 to an estimated 206 gallons by the year 2010 - and the latter figure assumes that some conservation measures are in effect.
But the debate, these days, is less about numbers than about Luecke's second point: how the system works. Both sides agree that it needs changing. Given local traditions, and the need to continue supplying water even as the system evolves, that won't be easy: Lamm likens it to ``changing a tire on an automobile that's going 60 miles an hour.''
Both sides also agree that what made the difference in this case was not simply a set of laws, but the person appointed to implement them. Had it not been for the EPA's Reilly, the Two Forks project might still be alive.
``I was always told we were a nation of laws and not men,'' says Larry W. Berkowitz, attorney for the suburban city of Littleton, Colo., and president of the Metropolitan Denver Water Authority, a group of water providers south and west of Denver. ``What I've seen is the exact opposite.''
Flipping through a pile of correspondence on the conference table in his book-lined office, he snaps out a picture of a Datsun with a bumper sticker saying, ``Stop Two Forks Dam.'' The license number, he points out, belongs to a key staffer in the EPA's Denver office - proof, he says, that the water interests have not been ``given a fair shake.''
``I have a real problem with the environmentalists,'' he says with unmistakable vehemence. ``I perceived that we would go into this cooperatively. It seems that you come to an understanding on the local level with an environmental group - but on the national level you don't have an agreement.''
Reminded that the environmental groups are now talking about finding common ground for a solution, he snorts. ``I don't believe it's possible to find common ground,'' he says. ``After what we just went through, do you believe any public official would spend another dime on an environmental impact statement - knowing that all it's going to take is a letter from some environmental groups to stop it?'' He is currently seeking a probe by the United States General Accounting Office of the EPA's handling of the entire Two Forks process.
All of which seems sour grapes to many environmentalists. To them, the message is clear: The age-old political clout of the water interests, they say, is on the wane. That is particularly true of the Denver Water Board, says Robert M. Weaver, conservation consultant to the board, which is suddenly being pressed to be more accountable for its actions. ``There's a lot of talk of that now,'' he says. ``Even the City Council is scheduling a work session to deal with the governance problems associated with the Denver Water Board.''
But what's really happening, in Mr. Weaver's view, is a kind of sea change in public attitudes and civic maturity. In general, he says, ``it is getting tougher and tougher to build big projects without stepping on somebody's toes. We no longer have the freedom to do the things that we used to be able to do easily in this part of the country. We've got a lot of folks out here with frontier mentalities, but we're no longer living on the frontier. You can't do much without affecting your neighbor. And your neighbor has recourse.''
BACK up in the canyon, Al and Mary Barnes know that. Their modest retirement home commands a glorious mountain view across the North Fork of the river in the town of Scraggy View, a scattering of houses and farms midway between Nighthawk and Ox Yoke. Since 1972 they've been fighting what would have been 350 feet of water above their roof.
``We're elated over this,'' says Mr. Barnes, a retired Air Force officer, about the pending veto. ``But quite frankly we don't trust the Denver Water Board. They can pull rabbits out of hats.'' He's well aware that the board owns a number of parcels of land in the valley - including the house just above theirs, which rents for $400 a month. The board, he says, is not currently buying any more houses. But neither is it selling.
``People come into the valley by accident,'' says Mrs. Barnes, ``and their first comment is, `This is where Two Forks is going to be? Who in the world ever engineered this to be anything other than what it is?'''
David Taylor, director of the Colorado office of Trout Unlimited, says the same thing for different reasons. Part of the area proposed for Two Forks Lake, he says, offers ``the finest trout fishing within such close proximity to a major metropolitan area in the United States.''
He also notes that tourism is now a $6 billion-a-year industry in Colorado, replacing mining and energy as the No. 1 earner. Rivers like the South Platte, he says, are ``one reason people move to this state.''
All that may be true, say the water providers. But that doesn't change the fundamental fact that, whatever the future, Denver will need more water.
In his office at the Denver Water Board, Charlie Jordan puts the question pointedly. ``Where,'' he asks, ``is the old, dirty, trashed-up canyon that it's alright for us to inundate? Every one has its champions and its residents. That's where people live - in the canyons, not on the mountaintops.''