Phase I of a two-phase pre-appraisal-level study of the potential reduction in carriage losses from the canal system of the Arch Hurley Conservancy District has been funded by the US Bureau of Reclamation. Water supply shortages have been a problem over the 50-year history of the Tucumcari Project. The principal problem has been the loss of over half of the District’s surface water supply in the canal and distribution system that carries Canadian River water from Conchas Reservoir to the irrigated farms in the District. Phase I has been designed to identify sites of significant leakage from the 70 plus miles of canals that service the farm-delivery laterals and to quantify, to the extent possible, the magnitude of the canal seepage losses. A secondary goal has been to estimate the November 2005 costs of reducing canal seepage losses. Strip-maps of the canal system were generated from aerial photographs and from USGS quad sheets. Materials from infrared photographs, from regional soils studies, and from area geography were added to maps and tables depicting conditions along the canal route. The project staff conducted a number of field studies at sites identified by infrared photography showing potential sources of water losses. During the summers of 2004 and 2005, field examinations of trees and grasses were made in areas that appeared to be sites of past leakage. Interpretations were made of the canal area soils and the geologic structure. During the summer and fall of 2005, canal flow-losses were measured in the field on two occasions: early July and again in September. The strip-maps and tables generated in this study also contain information on leakage studies done by others and on line and grade of the canal. A new technique was used to compare infrared indications of leakage-associated vegetation during the 2003 period, when no irrigation water was released, and 2001 when a full supply was available to the District. This technique, known as change detection analysis, eliminated the need for extensive canal flow measurements. The study found the cost of “saving” 12,600 acre-feet of water, now lost to canal seepage from the Main Conchas Canal, to be a little more than $25 million or about $2,000 per acre-foot of water saved. Further reduction of seepage losses will require the lining of laterals within the irrigation District. The 2005 cost of lining laterals was estimated to be $500 to $1,000 per acre-foot. Reducing total system losses can be achieved most effectively by lining laterals used to supply farm turnouts.