SACRAMENTO, Calif. (AP) A national environmental group recommended Jan. 7 that California overhaul its water-delivery system by building a canal around the Sacramento-San Joaquin River Delta.

A report by The Nature Conservancy endorsed piping Sacramento River water around the delta, which is suffering from degraded water quality and declining fish populations. The conservancy said a canal could help restore the region’s natural habitat.

It’s the first endorsement of the canal by a major environmental group and provides a boost to Gov. Arnold Schwarzenegger’s argument that there might be a better way to send water from Northern California to two-thirds of the state residents.

“We felt now was a good time to help shift the debate from whether or not to build a canal to how do we build a canal,” said Anthony Saracino, the conservancy’s water program director.

Water from Northern California is currently funneled through the delta’s fragile maze of levees, islands, river channels and sloughs. Scientists say the system is susceptible to rising sea levels, earthquakes and levee breaks that could interrupt key water supplies to some 25 million Californians.

Various groups also support a new canal as a strategy to avoid wildlife and water quality problems now blamed on the massive pumps that pull water from the delta and send it to the San Francisco Bay area and Southern California.

Saracino said a canal should be a stopgap measure for the next 50 years until cities around the state develop their own water supplies.

Most environmentalists fear water diversions would deprive the region’s fish, wildlife and farms of much-needed fresh water. A canal is also opposed by delta farmers, Northern Californians wary of a Southern California water grab and many state lawmakers.

The conservancy’s report comes a week after the governor’s top water advisers embraced a canal as one of the ways to restore the delta while also ensuring reliable water deliveries. They recommended construction begin as soon as 2011 after pending environmental studies are completed by the Department of Water Resources.

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