The Upper Colorado River Basin has abundant deposits of fossil fuels and minerals; numerous projects are in progress, planned or projected, to extract these resources. The first question that needs to be answered to make it possible for these projects to become reality is the availability of water. The Upper Colorado River Basin states are presently depleting approx 3,650,000 acre-ft (4.5 x ... [Show full abstract] 10/sup 9/ m/sup 3/) of water out of the total 6,300,000 acre-ft (7.8 x 10/sup 9/ m/sup 3/) available to them. Of the 2,650,000 acre-ft (3.26 x 10/sup 9/ m/sup 3/) remaining about 1,710,000 acre-ft (2.11 x 10/sup 9/ m/sup 3/) has been committed to various projects within the Upper Basin States. This leaves about 940,000 acre-ft (1.2 x 10/sup 9/ m/sup 3/) annually available for future development. It is difficult to specify the exact amount because of the uncertainty of the amount of water to satisfy the Indian water rights and the amount of water that will ultimately be depleted by the various projects, which already have approved water rights that are not developed and depleting water from the river. However, this should not limit energy development since the cost of water for energy development is a small portion of the total cost of the project. It should be possible for the energy companies to buy the existing water rights from agricultural related enterprises and change those uses to development of the energy resources. The free market system has functioned well in the past and will undoubtedly continue to function in the future. There may be areas within the Upper Colorado River Basin, particularly Arizona, where water may not be available for purchase and will have to come from the original entitlement as covered in this paper.