But in this instance, the city built on gambling has a decidedly weak hand.
Under a provision inserted into a 2004 Nevada lands bill, water can't be pumped from the underground aquifer until an agreement is in place between Nevada and Utah.
After years of oftentimes tense negotiations between interests on both sides of the state line, Herbert announced Wednesday he "cannot in good conscience sign the agreement," because of overwhelming opposition from ranchers and local and county officials in the area.
"I still believe that having an agreement between Nevada and Utah is a good thing. I think it sets parameters. It's a negotiated settlement that I think you'd hope that you'd have something that is mutually acceptable," Herbert said in an interview Thursday on KUER's Radio West. "I always hope there is an opportunity for us to push the reset button and have dialogue and understanding. It's better than conflict."
The Southern Nevada Water Authority expressed its displeasure with the decision, arguing it had negotiated the agreement in good faith and saying it planned to explore its options.
But experts say many of those options carry considerable risk and the likeliest outcome is that Nevada will be forced back to the negotiating table with Utah demanding more concessions in the deal.
"In the past, there has been a little bit of I don't want to call it saber-rattling a suggestion they'll pursue a litigation strategy, which is hard," Birdsong said. "There are definite risks in a litigation strategy."
Robert Adler, who teachers water law at the University of Utah, said that, in theory, Nevada could proceed with its project and begin pumping water out of the Nevada side, forcing Utah to file a lawsuit to stop it. That would be a groundbreaking move and set the stage for costly and largely unprecedented litigation, he said.
Birdsong said Nevada could try to sue, arguing that the 2004 law passed by Congress required Utah to negotiate in good faith and officials have refused to do so.
Nevada would "have to convince the court there's implicit in the statute a duty for Utah to negotiate, and that's an interesting question, whether Congress can force a state to negotiate," he said.
Another option would be for Nevada to launch the process of going to the U.S. Supreme Court, seeking what is called an equitable apportionment of the disputed water between the states.
But the high court is often reluctant to wade into those issues, said Birdsong. If it were to get involved, it would appoint a special master to gather data and evidence and prepare a recommendation to the court, a process that could take years before reaching the justices, and it is not clear that Nevada would have a strong case, he said.
"It's kind of a game of chicken going forward," said Adler. "Absent an interstate agreement, the only way to resolve the dispute is through litigation, which is uncertain for everyone."
There is no great urgency to get the deal done, said Birdsong, because even under the proposed agreement, there would have been 10 years of study before the pumping would begin.
That creates some breathing room and makes it more likely that both sides will return to the negotiating table.
That is the most desirable outcome, according to Steve Erickson of the Great Basin Water Network, which has fought what it calls Nevada's "water grab."
"We should be able to work together to come up with better solutions than this pipeline boondoggle," he said.
Erickson said his group is continuing its campaign in southern Nevada, trying to convince water users there that the cost of the pipeline would result in a major rate hike up to $90 a month per household.
He said his group also plans to sue the Nevada state water engineer, arguing he granted permission to pump too much water out of the valleys surrounding Snake Valley, and also to sue the U.S. Bureau of Land Management over its decision to grant a right-of-way for the pipeline out of the region.
Erickson said his chief concern is that Senate Majority Leader Harry Reid, D-Nev., might use his muscle to strip out the 2004 requirement that the two states agree to terms for the water use, giving Nevada a green light to move ahead without Utah's blessing.
Rep. Chris Stewart, R-Utah, whose district includes the Utah portion of the Snake Valley, said he supports Herbert's decision to reject the water pact.
"Over the last few months, I have spent a lot of time meeting with locals who would be affected by the proposed water transfer," he said. "I look forward to working with state and local officials in seeking more uniformly accepted solutions."
Matt Canham contributed to this report.
Drawing the line on water
The proposed Snake Valley water agreement would have given Utah and Nevada each access to 66,000 acre-feet of water more than 21 billion gallons.
The Southern Nevada Water Authority hoped to pump water from the Snake Valley and four nearby valleys into a multi-billion-dollar pipeline and south to Las Vegas.
Under a provision inserted into a 2004 Nevada lands bill, an agreement must be in place before water can be pumped from the aquifer, giving Utah a powerful lever in negotiations.