Since all the other questions that you asked today were about Collapse, I assume that this question is about that book as well. I will answer using quotes from the book, but my answer will be the same as the other answer. That is, Option C is the option that is not a cause of water scarcity in the Bitterroot Valley.
In Chapter 1 of Collapse, Diamond goes through a list of factors that cause water scarcity in the Bitterroot Valley. I only have this book on Kindle and therefore cannot give you page numbers where these factors are found. The first factor that Diamond mentions is global warming. He says
The ultimate reason for decreasing amounts of water is climate change: Montana is becoming warmer and drier.
Diamond goes on to talk about how this change has been very obvious in Glacier National Park, where glaciers have been shrinking and even disappearing altogether. This means that Option D is an actual problem and is therefore not the right answer.
After discussing global warming, Diamond turns to the next factor. Here, he says
…the water is “overallocated.” That is… the sum of the water rights allocated to all landowners exceeds the flow of water available…
Diamond goes on to say that this overallocation is due in part to the rise of new residential subdivisions to go along with all of the farmers who need to irrigate. This means that Option B is not the right answer.
Finally, Diamond talks about the number of wells being drilled. He says that a problem is the problem of
…more wells drilled into the same aquifer and lowering its level.
Diamond says that this is exacerbated by the laws in Montana which do not regulate the impact of wells drilled by one person on existing aquifers. This means that Option A is not the correct option.
Thus, we can see that Diamond cites three of these four options as factors that cause water scarcity in the Bitterroot Valley. That means that the remaining option, Option C, is the correct answer.
I have done some searching on the subject of water issues in the Bitterroot Valley in western Montana. There are certainly water use issues in the area, with this year being a particularly dry year. Irrigation ditches and canals appear to be getting very low, thus leading to the potential loss of crop irrigation for farmers at the end of the season.
Both A and B appear to be directly related to the problem. Growth in Montana has actually been pretty large, with the population doubling in the state since the 1950's. The problem is that much of the growth in the state has not been in the larger cities like Billings, Missoula, or Helena. Instead, it has been in more rural areas like the Bitterroot Valley. In fact, when the valley was being settled earlier in the previous century, agriculture and orchard farming was encouraged in the area, leading to a large amount of...
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farmland being established over time. The irrigation needs of the farmland and the housing that requires water wells drilled into the aquifer all have lead to water issues in the valley.
Answer D is also directly related to the problem. Many mountainous areas in the western US depend on melting snowpack for fresh water use in the warmer parts of the year as they slowly melt and recharge streams and rivers. Since the snowfall in these areas has become more erratic in recent years, the snowpack level has decreased in the winters, thus leading to less freshwater in the warmer months.
I believe that the answer is C. The dam project and the extensive waterways and canals that have been built over the years are actually designed to feed more water into the Bitterroot Valley, not take away from. Nearby Lake Como was increased in size by the building of a dam. This has allowed for the controlled release of water from the lake into the valley's irrigation canal system. It appears that the biggest problem has been the lack of rain and melting snowpack has lead to slower recharge levels of the lake, thus making it difficult to meet the demands of farmers and residences in the valley.