By Sharon Bernstein

SACRAMENTO, California (Reuters) - California pledged on Monday to restore 80,000 acres of the depleted Sacramento-San Joaquin River Delta as part of a massive project to send fresh water from mountain streams in the north to farmers and residents in the parched south.

The $16 billion plan was released as the state struggles in what appears to be shaping up as its driest year on record, with some farmers and urban water districts promised just 5 percent of the water that they had requested for next year.

The ambitious program would divert water from the Sacramento River above the delta, sending it through massive underground tunnels to provide water for two-thirds of the state's population, from San Jose to San Diego, and thousands of farms.

"This is a rational, balanced plan to help meet the needs of all Californians for generations to come," California Natural Resources Secretary John Laird said.

If the plan is put into place, it would change the state's system for water delivery from the region, which currently involves pumping it from the delta itself in a practice that harms the fragile ecosystem and leaves farmers and residents with widely varying amounts of water from year to year.

Under the new proposal, about half the water would be pumped from above the delta and sent through the tunnels.

The state aims to protect 56 plant and animal species as part of its plan, including Chinook salmon that swim upstream through the delta to spawn. Habitat for the plants and animals declined after years of pumping water from the delta for use in the state's drier regions.

Water has long been a contentious issue in California, where it has been diverted from mountain lakes and streams to irrigate farms and slake the thirst of metropolitan areas. Many of the state's efforts to deal with the issue are controversial, including the long-awaited delta plan.


Environmentalists complain that construction of the two tunnels would cause years of disruption while still failing to protect the delta.

State Senator Lois Wolk, a Democrat whose district includes much of the delta, was highly critical of the plan, saying it would sharply increase the price of water while failing to protect the ecosystem.

"The cost for the twin tunnels continues to increase while the amount of water that can be safely diverted from the Delta continues to decrease," Wolk said.

For farmers, the project represents a mixed bag, said Mark Atlas, an attorney specializing in water issues for the Sacramento firm Downey Brand. Those who grow crops in the state's San Joaquin Valley stand to receive more water each year than they do now. But their counterparts in the northern part of the state might wind up with less water, he said.

Tom Coleman, a pistachio farmer in the San Joaquin Valley, questioned the effectiveness and usefulness of the project, saying the delta needs to be flushed through with the fresh water that would be diverted to the tunnels.

He prefers the state to continue the practice of pumping from the delta, while allowing for some relaxation of an interpretation of the federal Endangered Species Act that for 20 years has limited the amount of water that could be pumped in dry years.

Given the regulatory process and anticipated legal challenges, the state estimates that the soonest construction could begin on the tunnels would be 2017. To move forward, the proposal and accompanying environmental impact report must first undergo a period of public comment, and once finalized win support from a host of federal and state agencies, including the U.S. Fish and Wildlife Service.

(Reporting by Sharon Bernstein; Editing by Cynthia Johnston, Matthew Lewis and Lisa Shumaker)