A "No Fishing" sign sits improbably along a dry desert road in Nevada. The largest man-made reservoir in the U.S., Lake Mead, once extended this far—but the watery destination of anglers and boaters has shrunk so much that the lakeshore now is about a half-mile away. (View an interactive map of the region.)

The recession of the massive lake that straddles Nevada and Arizona is symbolic of a long-standing problem that just got a lot worse: The Colorado River's record-low flows and the shrunken reservoirs of lakes Mead and Powell (pictured above) for the first time have triggered big cuts in the amount of water allowed to flow downstream. The loss has prompted one alarmed official to float the idea that Western states ask for federal aid.

A new report has brought a sense of urgency to the slow-moving disaster represented by the shrinking Colorado River.

For days and weeks, water officials fretted that the federal Bureau of Reclamation's anticipated 24-month study would deliver bad news, and it did. The agency—a division of the Department of Interior that provides water and power in the West—announced today it would cut water released from Lake Powell's Glen Canyon Dam by 750,000 acre-feet next year. That's about enough water to serve 1.5 million homes.

"Unprecedented," said Scott Huntley, spokesperson for the Las Vegas-based Southern Nevada Water Authority, whose chief, Pat Mulroy, has mentioned the idea of seeking federal aid.

A business coalition warned of an "unprecedented water crisis within the next few years," thanks to the situation in lakes Mead and Powell, the latter of which straddles Arizona and Utah.

It's the first time in the history of the nearly 50-year-old Glen Canyon Dam that water going downstream would be cut. "This is the worst 14-year drought period in the last hundred years," said Upper Colorado regional director Larry Walkoviak in a press release.

Among the effects, said Gary Wockner of SavetheColorado.org, are negative impacts on fish, wildlife, and the ecosystem in the Grand Canyon. "The river is already severely endangered due to way too many dams and diversions," said Wockner. "The impact on the health of the Colorado River is unsustainable."

(Learn more about issues affecting the Colorado River.)

The Race for Water Is On

Las Vegas effectively has two straws into Lake Mead, which is roughly 300 miles (480 kilometers) downstream of Lake Powell, to get its water. One of those straws could stop working once the lake drops too far—somewhere between 1,050 feet (320 meters) and 1,075 feet (328 meters) above sea level, it's thought. Perhaps as early as autumn 2014, Lake Mead is expected to drop to 1,075 feet (down 25 feet from the current level).

Anticipating trouble earlier, the city's water authority has been busy installing a third straw to reach a deeper part of Lake Mead.

"It's essentially a race for us," Huntley said, as the lake "is going to drop more precipitously than seen in the past."

If things continue to worsen as climate change brings more evaporation and less rain over time, other issues will come into focus for the seven states and part of Mexico that rely on the Colorado River. Power production at Hoover Dam would stop if the water's elevation drops enough, for example.

"You won't be able to put water through the turbines," Huntley said. "You don't have enough really to be much more than a river at that point, as opposed to a storage reservoir."

What the Report Means

"It's a kick in the pants or a blow to the head to make us pay attention to both short-term and long-term projections of supply and demand imbalances," Brad Udall said of the Bureau of Reclamation report. Udall is the director of the University of Colorado Law School's Getches-Wilkinson Center for Natural Resources, Energy, and the Environment.

Record drought and overuse of water from the meager Colorado River have taken a toll. Tree-ring reconstructions of stream flow suggest the past 14 years rank among the lowest stream-flow periods in 1,200 years, according to Udall and Michael Connor, commissioner of the Bureau of Reclamation.

"Something very, very unusual is going on," said Udall, who suspects climate change is playing a part.

It's as if a giant sucked up an astonishing amount of water with a straw. Some 8.23 million acre-feet of water is supposed to flow each year into Lake Mead from Lake Powell to serve Nevada, Arizona, California, and Mexico, per long-standing interstate and international agreements. But the past 14 years have been tough.

"Basically, Mead has lost the equivalent of one entire year's worth of flow," Udall said. "It's missing 8 million acre-feet of water." (An acre-foot of water is equivalent to one acre with 12 inches of water on it.)

Lake Powell also is missing a year's worth (about 15 million acre-feet). Drought is the main culprit for Lake Powell, Udall said, while Lake Mead's issue is overuse.

The Colorado River Basin "is one of the most critical sources of water in the West," Connor said in written comments submitted to a Senate subcommittee hearing in July. The river and its tributaries quench the thirsts of 40 million people and nearly 5.5 million acres of farmland, plus seven national wildlife refuges, four national recreation areas, and 11 national parks.

Good News, Bad News

The good news is if big snows and rains come in the next year, the feared short-term crisis would be averted—dams could end up delivering normal amounts of water downstream. And even if the dreaded cuts in water do occur, it probably won't be so bad short term, Udall predicts. That's because Arizona has been banking water underground.

"There would be a belt-tightening by a small group of water users in Arizona and Nevada, a price increase for a larger group in Arizona...and water use would likely remain constant," thanks to groundwater pumping, the website CircleofBlue.org reports. At least for a while.

The bad news is if the water shortage drags on for years, people in Nevada, Arizona, and California "would have to answer some very difficult questions," Udall said.

By current river law, Lake Mead must deliver a certain amount of water downstream, but the lake is draining faster than it's refilling. At some point, if the situation doesn't improve, the fear is it may come to deciding this: Do we cut off water supply to Las Vegas to two million people because the reservoir has dropped too low? Or does someone else pay?

"The [logical] answer is you keep supplying water to Las Vegas and you short someone else," Udall said. But the complicated and often controversial "law of the river" that governs who gets the water from the Colorado isn't always straightforward, and can cause "angst," as Udall puts it.

The law currently says Arizona would have to bear the brunt of any reductions in flow, while Las Vegas could see some more modest restrictions. California, on the other hand, "escapes scot free," said Udall, meaning farmers there would be the last to see any restrictions.

According to a shortage-sharing agreement signed in 2007, if Lake Mead drops below 1075 feet (328 meters), automatic water cuts will kick in for Arizona, Nevada, and Mexico.

Agriculture...and Climate Change

Most Colorado River water is used for agriculture. That's good in the view of Tina Shields, who manages Colorado River resources for the Imperial Irrigation District in southern California, which mostly serves farmers in a region just above where the Colorado flows into Mexico. (See a series on the Colorado River Delta.)

Shields says people from cities are greedily eyeing farmers' water. "We shouldn't be jeopardizing our food supply to allow urban growth to occur," Shields counters.

To some degree it may feel like the same old fights will wage on. But Udall says water stress may eventually force major changes. He said there are warning signs that climate change is already steering the fight to where it's never been before.

"Climate change has the potential to throw curveballs—to throw extreme events at us the likes of which we've never seen and we're not prepared to deal with," said Udall.