Inter-state water transactions

This story, illustrates some of the challenges facing the US. In the article, the only demand that gets recognized is the use of water to supply a growing population. In the same manner that the Colorado river is completely consumed, where does the natural environment fit into their management scheme? Would decisions about water management be made differently if there wasn’t a state boundary there? With regard to managing water, political boundaries are completely arbitrary and yet, they set the agenda in the US as it is the only legal platform from which to begin a discussion about water “rights”.