[pdglenn]

> giving landowners farther upstream and closer to the waterworks greater ability to extract water

This is not exactly correct. Water rights in the west are governed by prior appropriation. It's in a sense first-come, first-served, but has to do with who first made "beneficial use" of the water, not who is farther upstream.

"Disputes arose when newcomers made diversions upstream from existing operations, because water was so scarce that dividing the flow among multiple miners could make it useless to all. Early farmers faced identical conflicts. The solution, through much of the West, was a new conception of water rights whose central tenet was “first in time, first in right.” Proximity to the source counted for nothing, because miners and farmers sometimes had to move water long distances. The critical factor was the date of first use."[1]

[1]http://www.newyorker.com/magazine/2015/05/25/the-disappearin...

[s_q_b]

That's all correct, and there can be considerable complexity over primary vs. secondary rights, etc.