Despair, because a federal agency is expected this week to recommend either canceling or severely curtailing the 2006 commercial and sport fishing seasons because of collapsing stocks on the Klamath River. Hope, because for the first time in years, genuine progress is being made on a long-term solution to the problem.

Though the situation is mired in competing scientific theories, lawsuits and political skirmishing, the bottom line is fairly simple: There are plenty of Chinook salmon in the ocean now, but most of them originated in the Sacramento River. Salmon from the Klamath River, once a producer of millions of fish, are at all-time lows, compelling federal protections. Fewer than 30,000 Klamath Chinook salmon are expected to return to the river this year, well below the 35,000 fish biologists say are needed to sustain the runs.

And because both populations mingle in the open sea, fishing for Sacramento River Chinook could imperil the Klamath salmon that remain.

Though some biologists say part of the decline is due to poor marine conditions, most researchers say the main problem with the Klamath's salmon is the river itself. Over the years, it has become inhospitable to fish. Much of its water is diverted for agriculture, reducing flows critical to salmon.

The water that remains is excessively warm, heated by reservoirs in the river's upper reaches. It is also contaminated with both natural and agricultural nutrients, as well as a toxic blue-green algae that thrives in the tepid reservoirs.

"There are a whole host of challenges," said Steve Thompson, the U.S. Fish and Wildlife Service's operations director for California and Nevada. "The simple fact is that more demands have been put on the river than it can support."

Poor river conditions have beleaguered the river's salmon for decades, but things came to an ugly head in September 2002, when warm water and infestations of a small aquatic parasite, Ceratomyxa shasta, killed about 70,000 mature Chinook and an unknown number of Coho salmon. The next spring, low water and parasites wiped out thousands of young salmon.

Though the two incidents are not directly related, the fish kills came on the heels of a farmer rebellion. After a court decision in 2000 that deprived them of water, basin irrigators staged protests. The next year, the Bush administration turned the spigot back on to the fields, again reducing water availability for fish.

And now, with the Pacific Fishery Management Council poised this week to recommend to the U.S. Secretary of Commerce to close all or most of the 2006 season, commercial, tribal and sport fisheries face oblivion. Restaurants and consumers also will feel the pinch. Nor are farmers secure. A federal court last week directed immediate implementation of a plan to increase flows to the river to protect Coho salmon, a Pacific Coast species smaller than the Chinook, which is listed as threatened under the U.S. Endangered Species Act.

Further demands could be made on agricultural water to sustain the Klamath's Chinook runs and provide more water to the Klamath and Tule Lake National Wildlife Refuges, two important reserves for migratory waterfowl.

Though stakeholders have fought in the past, the current situation has drained much of the bile from the dialogue. If there is a silver lining to the cloud threatening the salmon season, it is this: Everyone is desperate for a solution, and compromise seems possible as never before.

Two things have made an agreement possible. First, in April, the major hydropower dams on the river are scheduled for a 50-year reauthorization by the Federal Energy Regulatory Commission. If the dams are to be improved for fish passage -- or removed entirely -- it has to happen now, under new guidelines issued by the commission.

The dams are owned by PacifiCorp, which has applied to the commission for their relicensing. Ultimately, FERC could approve relicensing the dams, which would allow them to operate for the next five decades. Or it could require such expensive fish passage mitigation that PacifiCorp might negotiate for dam removal.

Just as significant as dam relicensing are discussions among farmers, fishermen, native tribes, environmentalists, federal and state regulatory agencies, and local governments.

"For the first time, people in the watershed are having a tough, respectful dialogue about solutions," Thompson said.

The weather is still cold and blustery in the river's upper basin, and irrigation is weeks off. But water is foremost in the farmers' thoughts.

"I think it's becoming clear that government isn't going to be able to find a solution for this," said Mike Byrne, a cattle rancher from Malin, a minuscule town just north of the Oregon/California border. "I think the people are going to have to do it."

Byrne, whose family has been ranching in Malin since the late 19th century, said the only way to devise a settlement is "to make sure everyone is taken care of, that no one group bears the entire burden."

For fisheries advocates, dam removal tops the "must do" list.

"There's every good reason to take Iron Gate and Copco (dams) out," said Glen Spain, the president of the Pacific Coast Federation of Fishermen's Associations, referring to the two largest reservoirs on the river. "They heat the river to lethal levels, and they're breeding grounds for toxic algae and C. shasta, the parasite that kills the salmon."

Environmentalists were cheered last week when the U.S. Department of the Interior and the National Oceanic and Atmospheric Administration called for fish passage around the dams. The positions of the agencies bolster the cause for dam removal, because fish ladders are widely viewed as an inadequate remedy to the Klamath's problems.

PacifiCorp hasn't yet indicated its position. David Kvamme, a spokesman for PacifiCorp, said the company has been involved in dam relicensing on six northwestern rivers, and has agreed to dam removal on three of them.

"We are involved in confidential talks with Klamath stakeholders right now, so we can't discuss details," Kvamme said. "But we're open to anything that is practical and in the interests of our customers, shareholders and the state commissions that work with us."

The dams deliver electricity to the basin. But that doesn't mean the agricultural community would necessarily oppose dam removal, said Greg Addington, executive director of the Klamath Water Users Association.

"We need to know we have guarantees on water, and, if the dams come out, on power from other sources,'' Addington said. "And if (federally endangered or threatened fish) return to the basin, we may need protection from endangered species regulation. But if we can be sure we have a safe harbor, nothing is off the table."

Water releases also are a point of contention. The U.S. Bureau of Reclamation says it diverts up to 300,000 acre feet of water from the Klamath system for farmers. The Oregon Water Resources Department has assessed the amount at about 400,000 acre feet.

In any event, Reclamation notes, that's only about 5 percent of the river's average annual flow.

But Paul Heikkila, a biologist with Oregon State University, said the figures are deceptive.

"They basically incorporate all the water that goes down the watershed, including the huge runoffs from winter storm events," Heikkila said.

The real issue, Heikkila said, is the timing of releases. Currently, he said, the bureau holds back water during the late winter and early spring, when young salmon need higher flows.

"And they also provide insufficient summer flows, allowing the river to heat up and encourage C. shasta infestation in returning adult fish," he said.

Perhaps no group feels the paucity of Klamath fish more acutely than the three Indian tribes -- the Karuk, Hupa and Yurok -- which live on ancestral lands below Iron Gate Reservoir.

For the Yurok, the Klamath's fish -- not just salmon, but sturgeon, steelhead trout, suckers and lamprey eels -- have been a source of both physical and spiritual sustenance. The tribe -- which is a key participant in the current stakeholder negotiations -- has enforced conservation fishing closures on its own members. But despair among the Yuroks runs deep as stocks continue to dwindle.

"I go on my back deck and look at the river, and all I feel is horror," said Ray Mattz, a tribal councilman.

Salmon was once the essential staple for the Yuroks, said tribal member Tommy Willson -- but now, he said, there aren't even enough fish to use as sacraments during religious ceremonies.

"I've fished on this river all my life," said Willson, who started a program to provide Yurok elders with smoked salmon.

"The elders were so happy when they started getting fish from us," he said. "But in the last few years, the salmon numbers have been so low that we can't take care of all the old people who need our help. For us, that's a terrible thing."

On any given day, several tribal members can be found working the mouth of the Klamath River. Right now, they're setting gill nets for steelhead and snagging eel-like lampreys with handmade gaffs that have handles carved to represent the lamprey's distinctive head -- tubular, with circular gill openings and a sucker-like mouth.

On the beach near the Klamath's mouth recently, Mattz chatted with Glenn and Dennis Scott, Yuroks who were trying to catch a few lamprey and steelhead.

"No luck so far," said Glenn Scott, who remained sunny and optimistic despite the poor fishing. "When I was younger, you could come out here and fill four or five gunnysacks with eels," Scott said. "Now, you're lucky to catch one for supper."

His nephew, Dennis, pulled a gill net, hoping a steelhead or two might be entwined among the mesh. The only thing he caught was a large log.

"See more and more of those," he said, "and fewer and fewer fish."

E-mail Glen Martin at glenmartin@sfchronicle.com.