This article from The New York Times Magazine takes an in-depth look at the water shortages facing the country.
"In the Southwest this past summer, the outlook was equally sobering. A catastrophic reduction in the flow of the Colorado River - which mostly consists of snowmelt from the Rocky Mountains - has always served as a kind of thought experiment for water engineers, a risk situation from the outer edge of their practical imaginations. Some 30 million people depend on that water. A greatly reduced river would wreak chaos in seven states: Colorado, Utah, Wyoming, New Mexico, Arizona, Nevada and California. An almost unfathomable legal morass might well result, with farmers suing the federal government; cities suing cities; states suing states; Indian nations suing state officials; and foreign nations (by treaty, Mexico has a small claim on the river) bringing international law to bear on the United States government. In addition, a lesser Colorado River would almost certainly lead to a considerable amount of economic havoc, as the future water supplies for the West's industries, agriculture and growing municipalities are threatened. As one prominent Western water official described the possible future to me, if some of the Southwest's largest reservoirs empty out, the region would experience an apocalypse, 'an Armageddon.'"