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Vanishing Lake Mead

Lake Mead in Black Canyon shows the "bathtub ring" of bleached rock exposed by low water. Photo by John May.

Lake Mead in Black Canyon shows the “bathtub ring” of bleached rock exposed by low water. Photo by John May.

During my vacation, I passed through Las Vegas. Because Lake Mead is such an important part of the California water story, I drove out to see the famous “bathtub ring” for myself. I thought you might like to see some photos of what I saw.

Lake Mead is, indeed, low. As I write (10/22/15), the lake is at 1076 feet above sea level, 143 feet below full pool. It is the lowest level on this date for the last 10 years. By volume, the lake is 63% empty and 37% full. Since the lake was filled, the average elevation for this date is 1164, so it is 88 feet below its normal level for this date (Lake Mead Water Database).

The first photo at right shows Lake Mead in Black Canyon, just upstream of Hoover Dam. The pontoons in the water are to keep boats away from the dam. The rock is normally black. The white area is rock that has been bleached by the waters of Lake Mead. Normally, it is underwater. It is hard to get a sense of scale in this photo.

[Click on photo for larger view.]

At Hoover Dam, low water in Lake Mead has exposed bleached rock that used to be covered by water. Photo by John May.

At Hoover Dam, low water in Lake Mead has exposed bleached rock that used to be covered by water. Photo by John May.

The second photo shows the “bathtub ring” and part of the dam. If you look carefully, you can see a concrete structure on top of the dam to the left of the intake tower. A black car is passing in front of the concrete structure, and you can use it to get a sense of scale here. The water should come almost all the way up the dam.

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Large tracts of land have been exposed by the low water levels at Lake Mead.

Large tracts of land have been exposed by the low water levels at Lake Mead. Photo by John May

The third photo shows the Lake Mead Marina and the “beach” that has been exposed by the falling water. Full pool is just below the road that goes off into the distance. When the lake is full, most of the brown area below the road is covered by water.

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The old Las Vegas water intake has almost been uncovered by the low water level.

The old Las Vegas water intake has almost been uncovered by the low water level. Photo by John May.

The fourth photo shows the water intake for the Las Vegas Valley Water District. The district provides water to more than 1 million people living in the area (Wikipedia). As you can see, the water of Lake Mead usually comes to just under the structure on the end of the metal arm. But it is far lower now. In fact, it is so low that the end of the metal pipes, which function like straws in a glass of water, are in danger of being uncovered. On 9/24/15, the water district finished construction of a new intake pipe that has its intake some 218 feet below the lake’s current level (CBS News, 9/24/15).

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Las Vegas Bay, once pearched on a hill overlooking a scenic bay, is now about a mile from the water.

Las Vegas Bay Campground, once perched on a hill overlooking a scenic bay, is now about a mile from the water. Photo by John May.

The boat ramp at Las Vegas Bay is high and dry.

The boat ramp at Las Vegas Bay is high and dry. Photo by John May.

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The fifth and sixth photos show the area at Las Vegas Bay. This is a campsite and boat-launch area. As the fifth photo shows (left), the boat ramp is high and dry, no water to be seen anywhere. In the sixth photo (right), the sandy area at the bottom is the area just below the boat ramp. You can see the lake about a mile away around the corner, with a small creek coming up what is ordinarily the bay. About half way up the slope at right you can see a point at which whiter rock and sand below give way to darker rock and sand above. This is the normal level of the lake. Water usually covers everything, all the way across to the other side.

Hope you enjoy the photos.

Sources:

CBS News. 2015. Las Vegas Uncaps Lake Mead’s “Third Straw” for Water Supply. Viewed online 10/22/15 at http://www.cbsnews.com/news/las-vegas-uncaps-lake-meads-third-straw-for-water-supply.

Lake Mead Water Database. This in an online data portal providing information about the water level of Lake Mead. If you access this site, be careful about the date in the top heading of the webpage. For some reason, it does not seem to update properly, while the rest of the information seems to update properly. The date of the most recent measurement is given as the top value in the list of recent measurements. Accessed online 10/20/15 at http://lakemead.water-data.com.

2015. Las Vegas Valley Water District. Wikipedia. Accessed online 10/20/15 at https://en.wikipedia.org/wiki/Las_Vegas_Valley_Water_District.

Drought in California Part 15: Summary and Discussion

This is the last post in my series on Drought in California. I’ve been writing the series for just over 3 months – I can’t believe it has been that long! I’ve looked at California’s climate, projections for how California’s climate might change through mid-century, California’s water infrastructure, California’s water supply, and patterns of water consumption in California. I’ve calculated the size of the water deficit that California might experience by mid-century, and I’ve looked at various ways California might attempt to cover the deficit: enacting policies to stop population growth, stealing water from the environment, diverting additional water from rivers, desalinating water, reducing agricultural water consumption, and reducing urban water consumption.

I’m not aware of anything like my analysis. If you are, I would love to read it, and I think other readers of this blog might like to, also. Please comment and let us know where to find it.

It looks to me like California faces some really difficult challenges. By mid-century, they are going to face a decline in water supply due to climate change. Put the decline in supply together with the fact that the population is predicted to grow, and the fact that they already overdraft their water, and they face a very large future water deficit. California has built an amazing water infrastructure, but there are problems associated with every possible alternative for covering the water deficit. Only a few seemed realistically possible to me: desalination, urban conservation, and agricultural conservation.

I constructed three scenarios for policies California might follow, but again, only one of them seemed realistic to me: conserving water in both the urban and agricultural sectors, desalinating enough water to cover the resulting urban demand, and diverting the remaining water resources to agriculture. This scenario would provide sufficient water to urban areas, but California would lose slightly more than half of its agricultural sector. I calculated the impacts such a scenario might have on California’s economy, and found that it would probably cause the economy to start shrinking. The result would be a recession, and eventually a depression. The impact would be worst in the agricultural sector, but it would be felt statewide.

The bulk of the projected water deficit comes from a decline in the snowpack that is projected to occur due to climate change. Obviously, if that projection turns out to be wrong, the entire analysis would have to change. Even if it holds true, it is likely to be a slow-motion train wreck. As I have been writing this series, an El Niño has formed, and El Niños are typically associated with lots of rain in California. It hasn’t happened yet, but many are hoping for a wet winter.

For my analysis, it doesn’t matter a bit. The projected 40% decline in the snowpack is a 30-year average. There will be wetter years, not every year will be as bad as this year. Thus, the problems I foresee are likely have a slow onset, except for economic effects. The economy depends on psychology, and asset prices do so especially. Psychology can (and usually does) change very quickly – ask anybody who invests in the stock market! At some point, I expect people to lose confidence in California. When? Before mid-century, but precisely when I don’t know. Until then, the economy will be okay. After that, it won’t. Everybody thinks they will be able to get out in time, but they never do. It is like being caught in an avalanche: there is no avalanche until the rocks are already sliding down the mountain. But then it is too late, and the avalanche slides down the mountain very fast!

As I said, I don’t know of any other analysis like mine, thus it has been a really worthwhile exercise. But it has been a lot of territory for one person to cover, especially someone who is neither an engineer, a water expert, nor a climate expert. Along the way I have had to rely on publicly available data sources. Some of them have been of the highest quality available, but others have been less reliable. There have been instances when data was not available, and I have had to make assumptions or “guesstimates.” Further, the analysis has sometimes had to predict how people will respond to the problems they will face. Predicting human behavior is notoriously hard to do. Yet if people respond differently than anticipated, the whole analysis will have to be redone.

All of these issues affect the quality of my analysis, and the reliability of my conclusions. The two areas most seriously affected are the calculation of the future water deficit and the calculation of economic effects. Take what I have written as an interesting exercise, but only the future will reveal what will actually happen.

Thanks for reading this long excursion away from what this blog usually focuses on. I’m going on vacation now for a couple of weeks. When I return in late October, I plan to get back to reporting on large-scale studies about Missouri’s environment.

Drought in California Part 14: A Scenario California May Follow

In Part 13 of this series, I reviewed the basic facts of California’s future water deficit as I understand them. Then I outlined 2 scenarios of how California might respond, and developed estimates of how each would affect the California economy. But I felt that both scenarios, while instructive, were probably not realistic representations of what California might actually do. In this post I develop estimates for a third scenario that I think is more realistic.

In developing a 3rd scenario, the most important question to be answered is how much desalination California will pursue. Desalinating water to cover the deficit in urban areas would be first priority, I believe. They consume the smaller fraction of water, economic activity is concentrated in them, and the largest ones are located close to the coast, where the desalination plants would have to be located.

Agriculture is a different story, however. As I discussed in Part 7, it is conceptually possible for California to desalinate sufficient water to cover the entire deficit. Now let’s think about some practicalities. The counties with the largest agricultural output are Fresno, Kern, Tulare, Monterey, Merced, Stanislaus, San Joaquin, Kings, Ventura, and Imperial.

The farming regions of Monterey and Ventura Counties are low-lying and are close to the ocean. The water would not have to be lifted a significant amount, and the pipeline to connect desalinated water into the water distribution system would not have to be excessively long.

The farming region of Imperial County is low lying – below sea level, actually. However, it is cut-off from the Pacific Ocean by the Peninsular Ranges, and it would be very expensive and energy intensive to lift the water over the ranges. The Imperial Valley is only about 80 miles from the Gulf of California. However, the 80 miles belong to Mexico. Thus, the desalination plants would have to be in Mexico, with whom significant conflict already exists over water from the Colorado River. Further, because the Gulf of California is not open ocean, the issue of whether the waste brine could be disposed of safely would become a larger concern.

The remaining 7 counties lie in the southern portion of the Central Valley. All are more than 50 miles from the coast. They are cut off from the coast by the Coastal Ranges except at one point: the San Francisco Bay Delta. We have noted the important role played by the delta in the delivery of water through the California State Water System and the Central Valley Aqueduct. Water coming down the Sacramento River empties into the delta and crosses the delta north-to-south to the Clifton Court Forebay, where it is pumped into the canals and aqueducts that deliver it to the San Juan Valley and Southern California. Theoretically, desalination plants could be located along the shore of San Francisco Bay. Sea water could be delivered to them from the Pacific Ocean through pipelines laid through the Golden Gate. The brine would be returned to the ocean in separate pipelines via the same route. Fresh water would enter pipes that travel into the delta, and eventually to the Clifton Court Forebay. From there, desalinated water would feed through existing infrastructure into the existing water distribution system. The system would not have to be greatly enlarged because the desalinated water would be replacing reduced supply. Many engineering challenges would have to be overcome, but none that seem impossible.

The problems involved in delivering desalinated water to agricultural areas would be political and environmental as much as they would be physical and financial: could the desalination plants be located and designed in such a way that they did not harm sensitive ecological areas? Could they be located in ways that did not harm the beautiful, high-priced coastal areas where they would be located? Could Mexico’s cooperation be secured?

So, the question becomes: would California choose to desalinate enough water to cover only the urban deficit, redirecting currently existing supplies to agriculture? There would still be an agricultural water deficit, resulting in the loss of farms and farm economy, though it would be smaller. Or would California desalinate enough water to cover the whole deficit?

In Part 14 of this series, I noted that estimates say that California can conserve or recycle 4.2 million acre-feet of urban water, representing 17% of the total deficit, but 48% of the urban deficit. I also guessed (and it was little more than an informed guess) that California had the potential to conserve 10% of agricultural water without affecting the economic viability of farms or reducing crop yields. This amounted to 2.8 million acre-feet per year, 11% of the total deficit and 15% of the agricultural deficit. This potential for conservation adds a complication to the question of how much water would California choose to desalinate: would California choose to minimize conservation and emphasize desalination, retaining a freer, less constrained lifestyle? Or would California choose to minimize desalination and maximize conservation, reducing the immense task of developing the infrastructure needed for desalination, with its associated costs, but constraining and degrading the California lifestyle?

If California chooses to desalinate sufficient water to cover the entire deficit, then the costs will be much as I discussed them in Part 5: $25.6 billion yearly. That is roughly equal to 23% of the annual state budget, or 1% of the annual gross state product. But, I believe that California will not do that. It will prove too difficult to build the infrastructure required to desalinate enough water to cover the entire 25.1 million acre-feet deficit I project for the future. It would need to occur at the same time that the world is transitioning away from fossil fuel to renewable energy, which is itself a massive infrastructure program. In addition to the solar farms that will be constructed for the transition away from fossil fuels, building solar farms to power the desalination plants would prove to be too much.

Scenario 3

In this scenario, California will emphasize conservation. That will reduce urban water demand from the current 8.8 million acre-feet to 4.6 million acre-feet. In this scenario, California will desalinate this much water, enough to cover all urban demand after conservation. Future urban water supplies from currently existing sources will be less than they are today, but by desalinating this much water, California will nevertheless free 2.8 million acre-feet of water from current sources to redistribute to agriculture. This water is currently being delivered to urban areas via the California State Water System, which flows through the Central Valley, California’s largest agricultural area.

The cost of desalinating this much water will be approximately $4.7 billion dollars.

With the additional 2.8 million acre-feet of supply, and with a 10% reduction in water demand due to conservation, the agricultural deficit will be reduced to 13.5 million acre-feet. This represents 53% of current agricultural water consumption, and I will assume that California will experience a 53% loss of its agricultural sector. In Part 13 of this series I noted that the annual sales of farm products was $46.2 billion, but because many other industries depend on agricultural production, the actual value of agriculture to the California economy is about $90.2 billion. Thus, a 53% loss would translate to about $47.8 billion in economic losses each year.

Add the cost to desalinate urban water and the agricultural loss, and the total becomes $52.5 billion. This is approximately equal to 2.2% of California’s gross state product. (I am equating the cost of desalination to a decline in economic output of equal size. This is not precisely correct, for desalination will result in the economic inputs of building and operating the necessary infrastructure. However, for the average Californian, the cost of water will simply increase. They will pay more, but receive no additional services. It will function similarly to a tax increase, or an increase in the price of oil. In addition, the amount involved is small compared to the losses in the agricultural sector.)

California GDP Growth 2007-2014. Data Source: Bureau of Economic Analysis.

California GDP Growth 2007-2014. Data Source: Bureau of Economic Analysis.

A 2.2% hit is a big hit. From 2007-2013 California’s GDP growth (in current dollars) averaged 2.7%. But measuring in current dollars means that some of the growth includes inflation. If you adjust for inflation, then over that period GDP growth has averaged 0.9%. (Bureau of Economic Analysis 2014a) Thus, a 2.2% hit would result in an average 1.3% decline in real GDP every year. And even if the effect of the water deficit were only half as large as I estimate, it would still result in an average yearly GDP decline of 0.2%.

Since a recession is often defined as two consecutive quarters of declining GDP, and depression is defined either as a recession lasting two or more years, or as a decline of 10% or more in GDP, the scenario I envision would certainly mean an ongoing recession in California, and eventually a full-blow depression (Wikipedia a, Wikipedia b). I will not go into detail regarding the effects of depression, they are terrible. But I will go so far as to say that unemployment will drastically increase, and people will be forced to leave the state to find work. At the same time, people will stop moving to the state, resulting in a net out-migration. It is almost certain that asset values will collapse, both due to the economic decline and the surplus resulting from the out-migration.

The agriculture sector will be hit the hardest, that seems clear. However, because many other industries depend on agriculture, and because urban water consumers will have increased water costs, the effects will be felt throughout the economy.

Now, some may argue that by selecting the years 2007-2013, I have biased the results. These years include the Great Recession, and California was hit hard. These people would argue that these years yield an unrealistically low estimate of annual GDP increase. I would reply that, as noted in Part 12 of this series, California’s economic growth has been in a long-term decline for almost 40 years. If one were going to project from the long-term record, then one might expect California’s GDP growth to slow to zero or contract, even without the effects of the water deficit.

Thus, it seems likely that the current drought, exacerbated by future declines in water supply due to climate change, will have serious and ongoing effects on California’s economy.

Sources:

Bureau of Economic Analysis. 2014a. Regional Data. http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1. This is a data portal. For the current dollars data in this post, I selected GDP in current dollars, All industries, California, and 2006-2014. For the inflation adjusted date in this post, I selected GDP in chained 2009 dollars, All industries, California, and 2006-2014.

Wikipedia a. Depression (economics). Viewed 9/29/2015 at https://en.wikipedia.org/wiki/Depression_%28economics%29.

Wikipedia b. Recession. Viewed 9/29/2015 at https://en.wikipedia.org/wiki/Recession.

Drought in California Part 13: Some Options California Won’t Try

To figure out what effects the drought will have on California’s economy, one must guess how California will respond. First, let’s review a few facts that were developed in the previous parts of this series: by sometime around mid-century, California will face an annual water deficit that averages 25.1 million acre-feet each year, which represents about 39% of the state’s current water supply (Part 3). Agriculture consumes roughly 28.3 million acre-feet of water per year, 76% of California’s total consumption, while urban users consume about 8.8 million acre-feet, 26% of total consumption (Parts 6, 7 and 8). One can therefore attribute 19.1 million acre-feet of the deficit to agriculture, and 6 million acre-feet to urban consumers.

Urban conservation and recycling have the potential to conserve 4.2 million acre-feet of water per year. That would represent only 17% of the total water deficit, but it would represent 48% of the urban deficit. The analyses I read suggested this amount of water could be conserved without materially affecting the economy or quality of life in California, but I thought otherwise. Looking at the strategies seemed to make it clear that urban conservation at this level would make California more costly, and it would degrade the lifestyle for which California is famous. The result is that California would become a less attractive place to live (Part 8).

The potential of agricultural conservation was controversial, ranging from only 500,000 acre-feet per year to well over 3.4 million acre-feet per year. I felt the reality lay somewhere between the extremes, but probably closer to the lower estimate than the upper (Part 7). One can only guess what will actually be achieved, therefore I will assume that California will be able to reduce agricultural water consumption 10% without affecting the economy or crop yields. Since California’s farms consume 28.3 million acre-feet per year, that would represent 2.8 million acre-feet, about 11% of the total projected deficit, and about 15% of the deficit attributable to agriculture.

I concluded that the only strategy that could provide meaningful additional water was desalination. Desalinating enough water to cover the entire deficit is conceptually possible, but it would involve a massive infrastructure project that would have to overcome many difficult hurdles. It would also be expensive, with an annual cost of $25.6 billion dollars. That is roughly equivalent to 23% of the state budget, or 1% of the state GDP. (Note that these costs are annual – they would occur every year. See Part 5 of this series.) (Parts 4 and 5)

Scenario 1: Economic loss = $800 billion (35% of gross state product), 6.6 million people unemployed (44% of the workforce).

If California does nothing, then the state will suffer a 39% deficit in water supply. That is roughly equivalent to the scenario explored in the Seitman Foundation Study. You may recall from Part 11 that this study explored the economic consequences of a loss of Colorado River water to the 7-county region that receives it (which I am calling the CRWR). The Colorado supplies about 62% of the total water in the region (92% of agricultural water and 37% of urban water). The size of the water deficit my analysis envisions is about 63% as large as the loss envisioned in the Seitman Foundation Study. The Seitman Foundation Study concluded that losing water from the Colorado River loss would result in an economic loss equivalent to 55% of all economic activity in the CRWR, and 70% unemployment. The analysis used a linear model, so it can be extrapolated to the state as a whole: California would suffer economic losses equivalent to 55% x .63 = 35% of all economic activity, and 70% x .63 = 44% unemployment. Given that the Gross State Product is $2.31 trillion (Part 12) and total state employment is 15.1 million (Bureau of Labor Statistics, May 2014) the loss would amount to $800 billion of losses and 6.6 million people unemployed. It would be an economic catastrophe!

Well, we know California will NOT do nothing. It is an unrealistic scenario, they are already taking action.

California’s economic output is concentrated in its urban areas, agriculture accounts for only about 1.5% of California’s GDP. The same is true for population – the bulk of California’s population is concentrated in its urban areas. Thus, California may simply divert water from agriculture to urban consumption. There are a couple of ways it might be done, which would have only slightly different effects.

Scenario 2: Economic loss = $44.2 billion (1.9% of gross state product), 280,000 unemployed, plus unknown effects of higher food prices.

California could simply take water away from agriculture and divert it to urban areas by fiat. California’s current water withdrawals are 37.1 million acre-feet, of which about 8.8 million acre-feet represent urban consumption and 28.3 million acre-feet represent agricultural consumption. But with a 39% reduction in water supply, withdrawals could only be 22.6 million acre-feet. Covering urban consumption completely would leave 13.8 for agriculture, or 49% of current supply. This would mean a loss of about 49% of California’s farms. Since agriculture represents about 1.5% of the California economy, this would represent a loss of about 0.74% of the total California economy.

Losses would exceed that amount, however, because agriculture is closely linked to many other industries – food processing, farm equipment and supplies, financial services, textiles, and transportation, for instance. The total value of agriculture to the California economy was estimated at $90.2 billion in 2009. A 49% loss would equate to $44.2 billion, or 1.9% of California’s economic output at the time. Employment in agriculture and agriculture-related industries was estimated at 1.4 million jobs. If we imagine that 20% of those would be lost, then it would represent a 0.28% increase in unemployment statewide. (Agricultural Issues Center 2009) Agricultural areas would be hit the hardest. Most likely they would depopulate.

I’m not able to estimate the effect that a 49% loss of California farm production would have on prices. Most likely, food production from other states would compensate for some of the loss, but not all of it. It is likely that food prices would increase, and the effects would be greatest on those food products for which California dominates national production (grapes, wines, nuts, several fruits and vegetables). Higher food prices would act as a break on economic activity by reducing the amount of money people have to spend on other goods and services. The effects could be disastrous for low-income families.

During the Great Recession, the U.S. economy contacted by about 3% (Federal Reserve of St. Louis 2015). Further, the effect was brief: after 3 months GDP began growing again, and within 7 months it had surpassed its previous high. The economic hit we are discussing here would be smaller in size (1.9% vs. 3%), but permanent.

A different way that California could obtain the same end result would be for farmers to sell their water allocations to urban areas. If this were to work, then farmers who were selling water to urban areas could not have their water cut off. Some sort of legal arrangement would have to be worked out so that they received first priority on water deliveries. Thus, it would require abolishing the system of water rights that has been in effect for over 100 years. The water delivery numbers would be the same as those in Scenario 2: urban areas would remain completely covered, and about 49% of the current water supply to farms would be lost. The difference is that the farmers would be compensated for it, though farm-related industries would not. Farm workers and workers in related industries would still suffer unemployment. Agricultural regions would still suffer, and most likely depopulate. Thus, the benefits would not really flow to the farm workers or the farming regions, but rather be concentrated in the owners. With no reason to be on their farms, the owners might even live elsewhere. Urban areas would foot the bill for the water, and in this sense they would pay twice. The loss in farm acreage would still result in food price increases similar to those discussed above, but in addition, urban consumers would pay increased costs for water – perhaps significantly increased. Thus, the inhibiting effect on the economy would be even greater, though not possible for me to quantify.

I think Scenario 2 is also unlikely to occur. It doesn’t take into account the potential to obtain additional water from desalination, it doesn’t take into account the effects that the loss of 49% of California’s agricultural production would have on the food supply in the United States, and it doesn’t consider issues of fairness – it is unfair to concentrate all the hardship into one sector of the economy. Supplying sufficient water to urban areas will still remain a top priority, but a mix of strategies will be used.

In the next post, I will develop a 3rd scenario that I think represents a reasonable guess at what California might actually do.

Sources:

Agricultural Issues Center. 2009. The Measure of California Agriculture. Chapter 5, Agriculture’s Role in the Economy. Davis, CA: Agricultural Issues Center, University of California, Davis. Downloaded 9/14/2015 from http://aic.ucdavis,edu/publications/moca/moca_current/moca09chapter5.pdf.

Bureau of Labor Statistics. May 2014. “May 2014 State Occupational Employment and Wage Estimates: California.” Occupational Employment Statistics. Viewed online 9/15/2015 at www.bls.gov/oes/current/oes_ca.htm#00-0000.

Federal Reserve of St. Louis. 2015. Gross Domestic Product. Downloaded 9/14/2015 from https://research.stlouisfed.org/fred2/series/GDP#. This is a web page and data portal. The data can be downloaded by selecting the Export tab, and “Graph Data.”

Drought in California Part 12: The California Economy in General

This is Part 12 in my series Drought in California. It will focus on a few facts about California’s economy that will be needed if we are to construct an estimate of the economic impact of the drought.

California’s economy is usually described in superlatives. Gross Domestic Product (GDP) is the total output of goods and services in a region. When the region is a state, sometimes it is called State GDP, and sometimes it is called Gross State Product. California’s Gross State Product was $2.31 trillion in 2013. It is the largest Gross State Product in the United States, accounting for 13.35% of all economic output in this country. It is 40% larger than the economic output of the state in second place, Texas (Bureau of Economic Analysis 2014a). If California were a country, its GDP would rank as 7th largest in the world, behind only the United States, China, Japan, Germany, the United Kingdom, and France. (Wikipedia 2015a)

The industry sector group “Finance, Insurance, Real Estate, Rental, and Leasing” is the largest in California, with a 2014 output of $484 million, or 21% of the total. Next are “Professional and Business Services,” and “Government.” (Bureau of Economi Analysis 2014b) Agriculture is one of the smaller industry group, with a 2014 output of $34.8 billion, or 1.5% of total economic output. (I have been saying 2% in previous posts, due to the effect of rounding.) Agriculture, though a small part of the total economy, will be important for my economic analysis because of its outsize consumption of water.

Figure 35: California and United States GDP Growth, 1964-2014. Source: Bureau of Economic Analysis.

Figure 35: California and United States GDP Growth, 1964-2014. Source: Bureau of Economic Analysis.

Historically, California’s GDP has grown faster than that of the United States. Figure 35 compares growth in California’s GDP to that of the United States as a whole from 1964 to 2014. For California and the nation as a whole, GDP growth has fluctuated, but it has been positive except for the period of the Great Recession in 2008-2009. Sometimes California has grown faster than the USA as a whole, other times slower. However, over the whole time period, California has grown more rapidly 31 out of 51 years, and its average GDP growth outstrips that of the USA 7.09% to 6.70%. While a 0.39% difference doesn’t sound like much, in economic terms it is a significant advantage.

(Click on chart for larger view.)

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Figure 36: California and United States Decadal Population Growth, 1860-2010. Data sources: U.S. Census Bureau, 1996 and Undated.

Figure 36: California and United States Decadal Population Growth, 1860-2010. Data sources: U.S. Census Bureau, 1996 and Undated.

There are many reasons that California’s economy has grown robustly. One of the reasons is that California’s population has grown (Figure 36). For most of its history, California’s rate of population growth (blue bars) has significantly exceeded that of the USA (red line). California experienced an initial surge in population following the discovery of gold (the famous 49ers). It experienced a second surge during the 1930s, when the Dust Bowl caused huge numbers in the Midwest to seek a better life in the Golden State. Since then, however, California’s rate of population growth has been slowing, to the point that in 2000 it was approximately that of the USA as a whole, and in 2010, it was slightly less.

Now, the role of population growth in economic growth is controversial. The bottom line is that nobody has been collecting data long enough or reliably enough to settle the issue. Many factors other than population also affect economic growth, and without a lot of very reliable data over a long time, it simply is not possible to parse out the effects of each. Thus, people argue. Further, GDP is a measure of total economic output, not a measure of individual well-being. Companies want GDP to grow, because it tends to increase their revenues, and hence their profit. If they have significant debt, growing revenues can make it easier to pay it off. Governments tend to like GDP also, because growing GDP means increased tax revenues, making it easier for them to afford the services they are supposed to deliver. Growing GDP, even though it is not a measure of individual well-being, tends to be associated with well-being. Periods of shrinking GDP tend to be periods of depression, times of privation and hardship for many. However, it is at least conceptually possible for individual quality of life and well-being to be independent from GDP. (Coleman and Rowthorn 2011)

It is not possible to statistically relate California’s economic and population growth. However, it doesn’t take a rocket scientist to see that, when a state’s population grows by about half every 10 years, as California’s did for many decades, there will be a lot more people around. They will produce and consume goods and services in every increasing amounts, and the economy will grow. (So will the consumption of water, by the way, and that is part of the problem California now faces.)

There are no conclusions to be reached here, but the data suggests a question that is very important for our economic analysis of how the drought will affect California: how will the drought affect California’s population growth? Will the state continue to grow as before? Will growth slow, or even stall? In Part 11, I briefly recounted 3 stories; two involved cities where opposition to development had arisen because of the drought, and one involved a city devastated because the wells went dry. Add in the costs and inconveniences associated with water conservation and desalination, and put it all in the context of long term trends towards slower economic and population growth. Will the effects of the drought transition California to a long-term population decline, and how will that effect the economy?

Sources:

Bureau of Economic Analysis. 2014a. Regional Data. http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1. This is a data portal. For the data in this post, I selected GDP in current dollars, Total output for all industries, All states, and 2014.

Bureau of Economic Analysis. 2014a. Regional Data. http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1. This is a data portal. For the data in this post, I selected GDP in current dollars, All industries, California, and 2014.

Coleman, David and Robert Rowthorn. 2011. “Who’s Afraid of Population Decline? A Critical Examination of Its Consequences.” Population and Development Review. (37-Supplement), 217-248. Downloaded 9/12/2015 from http://onlinelibrary.wiley.com/doi/10.1111/j.1728-4457.2011.00385.x/epdf.

United States Census Bureau. 1996. Population of the States and Counties of the United States: 1790-1990. Downloaded from http://www.census.gov/population/www/censusdata/PopulationofStatesandCountiesoftheUnitedStates1790-1990.pdf

United States Census Bureau. Undated. Table 1. Intercensal Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2010. Downloaded from http://www.census.gov/popest/data/intercensal/national/nat2010.html.

Wikipedia. 2015a. Comparison Between U.S. States and Countries by GDP (nominal). Viewed online 9/12/2015 at https://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_%28nominal%29.

Drought in California Part 11: Studies of the Economic Damage

This is the 11th post in my series on Drought in California. In Part 10 I reviewed some effects that drought can have on a region. In this post I will begin to quantify what those effects might be for California. First, a few examples to illustrate the issues:

Conflict has arisen in Dublin CA, over a new water park the city is building. The park will require 480,000 gallons to fill, and will have features that spray or dump water through the air, increasing evaporation. City officials already admit that they may have to mothball parts of it until the drought is relieved. Local residents worry that the city is spending millions to build a boondoggle that will be unusable because of the drought. Can California afford to have water parks at a time when its reservoirs are at historic lows (Nir 2015)?

Folsom Lake in 2011 and 2014. Source: California Department of Water Resources via NASA.

Folsom Lake in 2011 and 2014. Source: California Department of Water Resources via NASA.

Conflict has arisen in Folsom, California over proposals to build new housing developments. Folsom Lake, the local reservoir, is one of the poster children for the California drought (photo at right). The city manager argues that the drought is temporary, and that Folsom’s water rights will easily support the additional housing. But is the drought temporary? When current residents have been required to reduce water consumption by up to 34% in some locations, can the state support increased population, more housing, and the consequent increase in water consumption? On the other hand, if California stops building new housing, what will happen to the economy (Nagourney 2015)?

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Emergency Water Distribution Tank, East Porterville, CA. Source: Community Water Center.

Emergency Water Distribution Tank, East Porterville, CA. Source: Community Water Center.

East Porterville is a town of about 7,500 in the Central Valley. There is no public water system, and the people rely on wells, which started going dry last year. About 3,000 are now without water in their homes. An economically disadvantaged community, residents don’t have the financial resources to drill deeper. They struggle to cook, clean, and wash, begging a few gallons from neighbors that do have water. Health problems are on the increase. (Castillo 2015, Glenza 2015)

These stories illustrate the types of problems with which California will increasingly have to wrestle.

Many economic forecasts for California don’t seriously consider the drought. I found only two studies that focused specifically on its effects. Both focused on the agricultural sector. The Giannini Foundation Study (Hanak and Mount 2015, Medellin-Azura et al 2015, Howitt, Medellin-Azuara, MacEwan, Lund, and Sumner et all 2015, Sumner 2015, and Howitt, MacEwan, Medellin-Azuara, Lund, and Sumner, 2015) focuses on the entire Central Valley. The Fresno State Study (Zelezny et al 2015) focuses on the San Joaquin Valley, the southern 2/3 of the Central Valley.

These studies conclude that in 2015 the economic effects of the drought on the agricultural sector are being mitigated by some factors that act like buffers. The most important is that farmers are substituting groundwater for their lost surface water. Although this results in increased costs, it mitigates the drought’s effects. In a sense, by building so many reservoirs, California has adopted a similar buffering strategy, allowing the state to draw down the reservoirs during times of drought. A second factor involves crop switching, though in exactly the opposite direction discussed in Part 7 of this series. The most profitable farm products, nuts and grapes, require more labor than do field crops like alfalfa and corn. Farms with secure water rights are switching to nuts and grapes, even though they are more water intensive. As a result, it is buffering the loss of farm jobs occurring because of fallowed land. The authors also noted that, as arcane as the current system of water rights is, it allows senior water rights holders with lower value crops to sell their water to farms with higher value crops. Thus, alfalfa growers, if they have senior water rights, can fallow their fields and sell their water to almond growers.

I should make an aside here that the same system allows farmers with senior water rights to sell their water to urban areas that have water shortfalls. In fact, some water systems in Southern California already purchase water from farms to supplement their supplies.

Overall, the studies estimate that the drought will result in $2.6 to $3.4 billion of lost economic output in 2015. California’s gross state product in 2013 was about $2.2 trillion, so the loss would represent less than 0.2% of California’s total economic output. The studies estimate that the drought would cause the loss of about 18,600 farm jobs and 564,000 idled farm hands. Regional unemployment is high, ranging from almost 10% to almost 14% in the San Joaquin Valley, but it is due to the continuing effects of the Great Recession, not the drought. Even though crop switching has reduced the loss in farm jobs, the number of farm workers decreased to 169,000 in 2014, from a high of 192,000 in 2010 (a decrease of 12%).

While locally the impact may be severe, as in East Porterville, the impact is small on the scale of the whole state. The effects of the drought are so small for two reasons. First, the two studies consider the drought as an isolated one-year event. They both emphasize that, if the water shortage continues, the economic effects will become much more dire, but neither study does the analysis. Second, the studies consider only one region of the state. The regions of highest economic activity lie outside the area studied, and are not included.

This series has emphasized, however, that drought affects the entire state, and it is likely to become the “new normal” in California. In the future California will face an annual deficit of 25.1 million acre-feet, or 39% of its annual dedicated water supply. Over time, the buffering strategies described above are likely to be exhausted: you can’t draw down aquifers and reservoirs forever, at some point they go dry; you can’t sell your water allocation if it has been cut off; you can’t switch to nuts and grapes if there is no water for them.

I found only one study that looked at the economic consequences if a region of California lost a significant portion of its water, and the loss was not buffered or replaced by other water sources. This study (the Seidman Foundation Study) asked what the economic consequences would be if water from the Colorado River was lost. It considered the 7 states that depend on water from the Colorado River, but in California it considered only the 7 Southern California counties that receive Colorado River water: Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura (which I will call the Colorado River Water Region, or CRWR) (James et al 2014). This region includes two of the largest producing agricultural counties in the state, Imperial and Ventura, but it also includes huge metropolitan areas: Greater Los Angeles and San Diego. The Colorado River accounts for about 92% of agricultural water supply, and 37% of municipal water supply in the CRWR.

The study found that if Colorado River water were cut off for a year, the CRWR would suffer $657 billion in economic loss. This loss would represent 55% of the regions total economy! The sectors with the largest losses would be real estate and rental, public administration, and healthcare-social services. The sector with the smallest losses would be agriculture-forestry-fishing-hunting – the percentage of loss would be high, but the raw amount would be small because the sector is such a small part of the overall economy. Job losses would total over 7 million. Since employment in the CRWR is 10 million (California Economic Development Department 2015), the loss of employment would be a staggering 70%!

I want to note two aspects of the study. First, it assumed that the lost Colorado River water would not, and could not, be replaced. Second, the study used a linear model, whereby the effects on the CRWR would be proportional to the amount of water lost. That is, if 10% of the Colorado River water were lost, the effects would be 10% of the total. If 50% were lost, the effects would be 50%. These characteristics will make this study useful as a basis to extrapolate to all of California.

Thus, the data suggests that the economic effects of the drought have not yet been particularly severe because buffering strategies have mitigated them. Without the buffering strategies, the effects may well have been severe. However, buffering strategies are unlikely to be useful under the scenario that I envision.

Since no published studies exist that directly address the question, in the next post I will begin the process of constructing an estimate of the economic losses the future water shortage will cause in California.

Sources:

California Department of Water Resources (photo). 2/25/14. Drought in Folsom Lake, California. Via NASA, https://www.nasa.gov/jpl/multimedia/california-drought-20140225/#.VdYLrHtpey0.

California Economic Development Department. 2015. Labor Force and Unemployment Interactive Map. Webpage accessed 2015-09-01 at http://www.labormarketinfo.edd.ca.gov/LMID/Geographic_Information_Systems_Maps.html.

Community Water Center (photo). Emergency Water Distribution Tank, East Porterville CA. Downloaded 9/2/2015 from http://www.communitywatercenter.org/drought.

Castillo, Andrea. 2015. “Drought Disaster in East Porterville Turns to Budding Health Crisis.” Fresno Bee. 6/20/15. Accessed online at http://www.fresnobee.com/news/state/california/water-and-drought/article25023559.html.

Glenza, Jessica. 2015. “The California Town With No Water: Even An ‘Angel’ Can’t Stop the Wells Going Dry.” The Guardian. 4/20/15. Accessed online at http://www.theguardian.com/us-news/2015/apr/20/east-porterville-california-drought-bottled-water-showers-toilets.

Hanak, Ellen and Jeffrey Mount. 2015. “Special Issue: The Economics of the Drought for California Food and Agriculture.” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

Howitt, Richard, Duncan MacEwan, Josue Medellin-Azuara, Jay Lund, and Daniel Sumner. 2015. Preliminary Analysis: 2015 Drought Economic Impact Study. Downloaded 8/26/2015 from https://watershed.ucdavis.edu/files/biblio/2015Drought_PrelimAnalysis.pdf.

Howitt, Richard, Josue Medellin-Azuara, Duncan MacEwan, Jay Lund, and Daniel Sumner. 2015. “Economic Impact of the 2015 Drought on Farm Revenue and Employment.” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

James, Tim, Evans, Anthony, Madly, Eva, and Kelly, Cary. 2014. The Economic Importance of the Colorado River to the Basin Region. Phoenix, AZ: Seidman Research Institute, Arizona State University. Downloaded 8/26/2015 from http://seidmaninstitute.com/protect-the-flows.

Medellin-Azuara, Josue, Duncan MacEwan, Jay Lund, Richard Howitt and Daniel Sumner. 2015. “Agricultural Irrigation in This Drought: Where is the Water and Where Is It Going?” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

Nagourney, Adam. 2015. “Losing Water, California Tries to Stay Atop Economic Wave.” New York Times, 8/19/2015. Retrieved online at http://www.nytimes.com/2015/08/20/us/losing-water-california-tries-to-stay-atop-economic-wave.html?ref=earth.

Nir, Sarah. 2015. “California Town, United by Drought, Is Split Over New Water Park.” New York Times, 8/15/2015. Retrieved online at http://www.nytimes.com/2015/08/16/us/california-town-united-by-drought-is-split-over-new-water-park.html.

Sumner, Daniel. 2015. “California’s Severe Drought Has Only Marginal Impacts on Food Prices.” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

Zelezny, Lynette, Xuanning Fu, Gillisann Harootunian, David Drexler, Antonio Avalos, Ndeil Chowdhury, Fayzul Pasha, Samendra Sherchan, Jes Therkelsen, Chih-Hao Wang, David Zoldoske, Sargeant Green, and Cary Edmondson. 2015. Impact of the Drought in the San Joaquin Valley of California. Downloaded on 8/26/2015 from http://www.fresnostate.edu/academics/drought.

Drought in California Part 10: How Drought May Affect California’s Economy

This is the 10th post in my series on Drought in California. The previous posts have all focused on the physical reality: how much water will it have in the future, what is the projected deficit, what are California’s options for obtaining additional new water, and what are California’s options for using its water more efficiently. This post will start to focus on what the economic and social consequences might be. In the introduction to the series, I noted that my motivation for writing the series came from a family member who was considering moving to California. I love California and the California lifestyle, but was this a smart move, I wondered, or was it like moving to Oklahoma at the opening of the Dust Bowl? So my analysis will be focused around that issue: what is likely to happen to the employment situation in California, what is likely to happen to property values, and what is going to happen to the vaunted California lifestyle? This post will provide some of the background that will be necessary to try to answer those questions.

I could find no studies that projected the economic consequences if drought became the “new normal” in California. Most economic forecasts I found didn’t mention the drought at all. Those that did tended to consider the drought as a temporary phenomenon – they forecast economic consequences of the drought for 2015. Thus, I will have to construct my own analysis. In this post, I will focus on some background that will be needed.

At the beginning of each post, I have noted some of the problems in conducting an analysis of the kind I am attempting. I wrote about them in the introduction to this series, and I recommend you read that discussion. The problems are even magnified in discussing how California might manage its water problem and what the consequences might be. One reason is that it introduces future economic conditions into the discussion. Another is that if studies of the physical situation were hard to find, studies analyzing the economic situation are even harder to find. A third is that it involves trying to track how changes will ripple out from the sector of their direct impact to affect other aspects of life in California. But most importantly, it involves trying to anticipate what people will or won’t do, and people are highly unpredictable.

Drought may affect California in many ways:

  •  Farms. Production may be reduced and expenses increased. Farm employment may be reduced. Reduced operating income may force farmers to sell or abandon assets. Farms may fail, with the accompanying social dislocation for the farm family living there. Farmers or farm workers may migrate away from the droughts.
  • Farming Communities. Many rural communities depend on farming for their economic base. Reduced farm income may result in reduced income and increased unemployment that ripples through the community via suppliers, retailers, service providers, and financial institutions. Community members may migrate to regions with better economies.
  • Other Rural Communities. Many rural communities derive their water supply from wells. Drought may cause a lowering of the water table, causing a decline in potable water quality plus a complete loss of water supply to some homes and communities. These problems with the water supply may cause a reduction in all kinds of economic activity, plus an increase in waterborne illness. There may also be an increase in illnesses related to dust.
  • Fire. Dry conditions may lead to an increase in fires. In forest land, this may lead to reduced economic activity in the timber industry, and to declines in the recreation industry. In populated areas, it may lead to loss of businesses or homes.
  • Electric Power. Utilities may see reduced hydroelectric generation due to low reservoir levels and/or curtailed water releases. Utilities may also be forced to curtail generation at thermal electric plants that use water for cooling (coal, nuclear), as water supplies decline or become too warm to keep the plant operating at full capacity. Power prices may increase.
  • Wildlife. Habitat for fish, plants, and animals may be destroyed, leading to loss of the fish, plants, and animals. Some of the fish, plants, and animals are themselves the basis of economic development, which would also be lost.
  • Water Bodies. Water levels in reservoirs, lakes, ponds, rivers, and streams may be lower. This would have direct effects for the area adjacent to the water body, but it would also have effects on species that depend on the water body, including humans that use it for water supply and recreation.
  • Soil. Drought may lead to increased erosion, leading to loss of soil quality. Many desert areas have become completely denuded of soil.
  • Construction. Drought may cause restrictions on new housing or commercial construction, which would ripple outward through reduced employment in the construction industry. It may make housing less attractive to potential buyers, or it may cause shifts in the attractiveness of regions depending on their access to water. Asset values may decline, and the effects would ripple outward through the financial services industry.
  • Increased Expenses. Prices may rise for food and other items, as production declines as a result of the drought. Costs may increase via attempts to supplement declining water supplies and via attempts to conserve water. These effects would be felt throughout all sectors of the economy.
  • Reduced economic activity and declining asset values may result in declining tax revenues for state and local governments, including schools. Yet government expenditures may need to increase due to effects of the drought. The result may be a reallocation of funding from current programs or higher taxes.
  • Life Style. Increased expenses for basics may leave less income surplus for amenities and recreation. Water conservation strategies may alter amenities and recreational opportunities, or cause their loss altogether. Water conservation strategies may make multiple aspects of life more complex or more difficult.
  • Mental Status. Drought may cause anxiety or depression about the future and about economic losses.
Is this what's in store for California? Dust Bowl, Dallas, South Dakota. Work found at https://en.wikipedia.org/wiki/File:Dust_Bowl_-_Dallas,_South_Dakota_1936.jpg .

Is this what’s in store for California? Dust Bowl, Dallas, South Dakota. Work found at https://en.wikipedia.org/wiki/File:Dust_Bowl_-_Dallas,_South_Dakota_1936.jpg .

The above list comes from a variety of sources, but the principle one is from the National Drought Mitigation Center (2015). A few of the items on the list are localized. Most of them, however, would be widespread effects that would affect entire regions, if not the entire state. While it may be argued that each individual effect is small, they add together and interact in ways that can make the cumulative effect devastating. Lest anyone doubt that truth, I repeat at right a photograph of the Dust Bowl that I ran in the Introduction to this series. During the Dust Bowl, 500,000 Americans were left homeless, 3.5 million people migrated out of the Plains states. In some regions 75% of the top soil was blown away, the value of farmland declined by up to 28%, and in heavily affected regions the economic losses were never recovered (Wikipedia 2015).

In the next post I will discuss how the effects might play out in California.

Sources:

National Drought Mitigation Center. 2015. Types of Drought Impacts. Downloaded 8/26/2015 from http://drought.unl.edu/DroughtforKids/HowDoesDroughtAffectOurLives/TypesofDroughtImpacts.aspx.

Wikipedia. 2015. Dust Bowl. Accessed online 8/27/2015 at https://en.wikipedia.org/wiki/Dust_Bowl#Human_displacement.

Drought in California Part 9: Summary of the Water Deficit and Strategies to Cover It

This is the ninth post in my series about drought in California. The previous posts have appeared once weekly over 8 weeks, so perhaps it is time for a recap and summary of what is known about California’s water deficit and the strategies that might be used to cover it.

California faces a serious water deficit, both right now and in the future. There are regions in California that receive a lot of precipitation, but much of the state is dry. Even in the wet areas, the bulk of the precipitation falls during the winter, while the spring, summer, and fall are dry. The vast majority of people live in the dry regions of the state. California has thrived by developing one of the most extensive water collection, storage, and transportation systems in the world. This system diverts surface water from Northern California, the Sierra Nevada Mountains, and from the Colorado River. In addition, California pumps groundwater out of its aquifers, the largest and most important of which is the Central Valley Aquifer. Seventy-six percent of the water is delivered to California’s agricultural areas, where it is used for irrigation, and 24% is delivered to its urban areas, where it supports the famous lifestyle for which California is famous.

Estimates of the size of the current California water deficit vary, but the best sources I could find suggest that it may be more than 6 million acre-feet per year. The deficit is covered by draining down both aquifers and surface reservoirs. Part of the shortfall in water has been caused by development. The population of California has skyrocketed, and so has agricultural consumption of water. Most projections expect California’s population to continue to grow, and thus, the water deficit will grow.

However, climate projections suggest that California’s water supply will decrease in the future. In California, much of the winter precipitation falls as snow in the mountains. The California snowpack is particularly important because it serves as the state’s largest “reservoir,” storing water during the winter and releasing it slowly during the rest of the year. This slow release is essential, because it allows the maximum amount of water to nourish vegetation, recharge aquifers, and be collected into reservoirs. Unfortunately, climate projections suggest that by mid-century California’s snowpack will decline by 40%. Such a decline would significantly reduce the water supply.

I found no studies that included climate change in their calculations of California’s future water deficit, so I constructed my own. I calculated that California’s future water deficit will be 25.1 million acre-feet, which is about 39% of California’s current water supply. The most important cause of the deficit will be the decline in the snowpack. The second most important cause will be the projected increase in population.

Theoretically, California could cover the projected deficit by obtaining additional water supplies or by reducing consumption. The possibilities for gaining additional water to cover the deficit include finding additional groundwater resources, diverting additional rivers either inside or outside of California, and desalination. The possibilities for reducing water consumption include reducing the population, reducing the amount of water used to sustain the environment, reducing agricultural consumption, and reducing urban consumption. Whether any of these hold any practical potential is hard to know. But even theoretically, only desalination, agricultural conservation, and urban conservation seemed to hold any potential; the other possibilities seemed unfeasible.

California’s groundwater system has been extensively mapped. The system is already being depleted, and it is unlikely that new aquifers will be discovered.

All but a few of California’s surface rivers have already been impounded and tapped. Looking at the few that have not been impounded revealed very significant problems that would make impounding them difficult, expensive, and highly objectionable.

The possibility of importing water from rivers out-of-state, like the Columbia River, would require a huge public works project to bring the water to California, and then re-engineering and rebuilding the existing California water distribution system to handle the increased capacity. It seemed impractical.

Desalinating enough water to cover the deficit would require the construction of many desalination plants, plus the infrastructure to distribute their water. In addition, it would require the construction of new electricity generation and storage facilities to power them. There would be a nightmare of problems that had to be overcome, and the cost would be high, but it did not seem impossible on the face of it. I wasn’t sure what context to put the cost in, but I calculated the annual cost to be roughly equal to 1/4 of the entire state budget, or 1% of the gross state product.

The notion of reducing population to reduce water consumption was felt to be unrealistic. It is typically abhorrent to governments and to the business community, as fewer people mean lower tax receipts and lower sales. I felt that California might eventually depopulate, but if it does, it would be because people migrated away on their own, not because of a policy choice by the state.

Diverting additional water away from the environment was felt to be impossible without causing severe damage. The environment in California has already suffered significant degradation due to water diversion. For instance, salt water is intruding into the San Francisco Bay Delta, and they are having to build an emergency barrier to try to prevent it.

Because agriculture consumes 76% of California’s water, it is the natural place to look for reduced consumption. I found some sources that suggested consumption could be significantly reduced using a few simple strategies, but other sources that suggested that the optimism was based on faulty analyses and fundamental misunderstandings. Estimates ranged from 0.5 – 3.4 million acre-feet. I felt the true potential lay somewhere between, but it was impossible to know precisely where. In any event, even at the full amount, it represents only a small fraction of the total deficit. I felt that ultimately water would be cut off from many California farms, causing many of them to fail, leading to significant unemployment and dislocation.

And finally, because California’s urban areas consume only 24% of California’s water, water conservation in urban areas can only make good a small percentage of the projected future deficit. Paired with strategies to recycle urban wastewater, it seemed that urban water consumption could make good up to 16% of the deficit. Each water saving strategy, however, saved only a small fraction of the amount that needs to be saved, required an up-front capital expenditure, required the acquisition of new knowledge and expertise, and contrary to claims, reduced the quality of service provided by the water. Thus, consumers would have to implement many strategies. Together, they would impose a noticeable, and possibly significant, burden that would meaningfully degrade the quality of life for which California has become famous.

Thus, California faces a very large projected future water deficit, and covering the deficit will not be easy. Only 3 of the potential solutions seem feasible: agricultural conservation, urban conservation, and desalination. Agricultural conservation and urban conservation are not sufficient to cover the deficit, either alone or in combination. Thus, it seems that California will have to implement some combination of all three.

The remaining posts in this series will attempt to look at how California might go about implementing such a combined program, and will discuss what the costs might be. I will finish with some discussion of how the drought and the attempts to make good the water deficit will affect California economically.

Drought in California Part 8: Conserving Water – Urban Water Conservation

This is the eighth post in my series Drought in California. In Part 1: California Climate and Drought, I found that drought is projected to be the “new normal” climate in California. In Part 2: The Status of California’s Current Water Resources, I found that California is already depleting both it’s groundwater and surface water resources. In Part 3: California’s Total Water Deficit, I constructed an overall estimate of California’s future water deficit, concluding that it will be about 25.1 million acre-feet per year, about 39% of California’s current dedicated water supply. In Part 4: The Potential to Procure Additional Ground and Surface Water, I found that a variety of obstacles and problems made it unlikely that California could cover the predicted future water deficit by tapping additional groundwater or surface water resources. In Part 5: The Potential of Desalination, I found that using desalination to cover the projected water deficit was within the realm of conceptual possibility, but it would be costly and would involve a massive infrastructure program. In Post 6: Conserving Water – Population and Environment, I concluded that conserving water by voluntarily limiting population growth or by stealing it from the environment would be objectionable due to severe negative effects. In Post 7: Conserving Water – Agricultural Water Efficiency, I concluded that some water conservation could be achieved in the agricultural sector, but only a fraction of the amount needed. The result would be the failure of many farms, causing unemployment and economic stress in California’s farming communities.

In this post I explore the potential for Urban Water Conservation.

Urban Water Consumption

Given how long water resources have been a concern and a bone of contention in California, you would think that the state would have an accurate estimate of urban water consumption, but it doesn’t. As late as mid-2014, the Los Angeles Times reported that public water districts across the state were refusing to cooperate fully with the state’s attempts to gather water consumption data. (Becerra, 2014)

Figure 22b. California Water WIthdrawals in 2005, Excluding Withdrawals for Thermoelectric Generation. Data source: USGS, 2005.

Figure 22b. California Water WIthdrawals in 2005, Excluding Withdrawals for Thermoelectric Generation. Data source: USGS, 2005.

The Pacific Institute notes that official estimates of urban water consumption range from 7 to almost 9 million acre-feet, a 28% difference. (Gleick et al. 2003). The California Department of Water Resources estimated that for the years 1998-2005, urban water use averaged 8.8 million acre-feet per year. (California Department of Water Resources, 2009) This matches relatively closely the USGS data for 2005, in which water supplied to homes by public water utilities, water self-supplied to homes (as in a well), water supplied to industry, and water supplied by public utilities to other uses (mostly commercial) were 8.83 million acre-feet. (See Figure 22b at right.) (USGS 2005)

(Click on chart for larger view.)

In Part 3 of this series, I calculated that California future water deficit would be 25.1 million acre-feet. Thus, the future water deficit will be more than 2.8 times as large as California’s current urban water consumption. Even if California were to deliver no water at all to its urban areas, it would leave 65% of the water deficit unaddressed. Thus, while it is useful and important to pursue, urban water conservation can only be a small part of any final solution.

One would similarly think that there would be many studies of urban water conservation in California, but there aren’t. The only study I could find that attempted a statewide assessment of the potential for urban water conservation was Waste Not, Want Not, published by the Pacific Institute (Gleick et al 2003). The Waste Not Study estimated total urban water consumption to be 7.0 million acre-feet, some 20% less than the estimate by the California Department of Water Resources. The Waste Not Study estimate appears to be an outlier, so in what follows I will use the fractions and percentages from the Waste Not Study, and adjust the amounts to reflect the 8.8 million acre-feet total from the California Department of Water Resources.

Table 4: Urban Water Conservation in 2009. Source: California Department of Water Resources, 2009.

Table 4: Urban Water Conservation in 2009. Source: California Department of Water Resources, 2009.

Residential use accounts for the largest fraction of urban water consumption, with residential indoor uses accounting for 33% of all urban consumption, and residential outdoor uses accounting for 21%. (See Table 4 at right.) Commercial consumption was next, accounting for about 27% of consumption. Industrial consumption and Unaccounted-for Water (leaks in the utility water delivery system) accounted for about 10% of consumption each. In both the Residential Indoor and the Commercial Sector, flush toilets accounted for the largest fraction of water consumption. In the Residential Outdoor sector, the largest consumer was water for landscaping (watering).

The Waste Not Study considered only conservation strategies that avoided a reduction in service to the end-user. For instance, using a low-flow showerhead was considered, taking fewer showers was not. Similarly, improving landscape watering systems was considered, modifying the landscape design (plant choices or layout) was not. Similarly, only cost-effective conservation strategies were considered, meaning strategies that cost less to save a given amount of water than would strategies to add that much additional water supply. The Waste Not Study concluded that California could achieve about a 35% reduction in urban water consumption, or 3.1 million acre-feet per year. (See Table 4.) That is about 12% of the projected water deficit of 25.1 million acre-feet per year.

Recycled Water

The Waste Not Study includes water reused by an end-user (capturing used water and using it again, either for the same purpose or for a different one), but it does not include replacing freshwater with recycled water. Recycled water, also called reclaimed water, is an umbrella term indicating various methods of capturing, treating, storing, and reusing wastewater, often at the scale of a public water system. Depending on what pollutants are in the wastewater and the degree of treatment, recycled water can be suitable for many uses, including use as potable drinking water. You have to get over the psychological “ick factor,” but recycled water can be very high quality drinking water.

Figure 29: Recycled Water in California, 2009. Sources: Gleick et al. 2003; State Water Resources Control Board 2015.

Figure 29: Recycled Water in California, 2009. Sources: Gleick et al. 2003; State Water Resources Control Board 2015.

As of 2009, the most recent data, California recycled about 669,000 acre-feet of water per year. Figure 29 at right shows how it was used. Among the uses, groundwater recharge might reduce urban water consumption if the aquifer being recharged is used as a water source for an urban water system. A number of the other uses do not: agricultural irrigation, seawater intrusion barrier, natural systems restoration, and geothermal energy production. Eliminating these uses from the total means that recycling water reduces urban consumption of new water by 315,000 acre-feet per year, which is about 4% of urban water consumption.

California may have the potential to roughly triple its use of recycled water, to 2.2 million acre-feet per year (Olivieri et al. 2014). If it was apportioned among users as recycled water is currently apportioned, then it would reduce urban consumption by about 1.1 million acre-feet.

The Current Status of Urban Water Conservation

In April, 2015, California Governor Edmund G. Brown issued an order mandating a 25% reduction in urban water consumption, together with a number of water conservation strategies to help achieve that goal. (Executive Order B-29-15) To meet that goal, the State Water Resources Control Board issued regulations instituting conservation standards ranging from 8% for water systems with an average per capita consumption of less than 65 gallons per capita per day, to 36% for systems with an average per capita consumption of more than 215 gallons per capita per day. (Office of Administrative Law 2015)

Figure 30: California Water Conservation 6/2014-6/2015. Source: State Water Resources Control Board 2015.

Figure 30: California Water Conservation 6/2014-6/2015. Source: State Water Resources Control Board 2015.

In both May and June of 2015, California met the goal statewide, and in every hydrologic region except the North Coast. Figure 30 at right shows the data. The program is too new to know at what level conservation will stabilize, but if conservation were to stabilize at the 27.3% level of June, it would represent a 2.4 million acre-feet per year reduction. That would represent slightly less than 10% of my projected future water deficit (State Water Resources Control Board 2015).

Urban Water Conservation Strategies

What does urban water conservation mean to the water user? Water conservation can include either behavioral or technological strategies. There are dozens, if not hundreds, of different strategies, ranging all the way from installing a low-flow showerhead, to installing grey water systems to capture used water and reuse it, to installing ground moisture sensors to control a sprinkler system, to very sophisticated analyses of industrial processes to minimize water consumption.

If, as the Waste Not Study suggests, millions of acre-feet per year can be saved at costs lower than getting additional water, then you would think that people would have flocked to adopt these conservation strategies. But they have not, the state has had to provide incentives for decades to achieve even partial adoption. Why?

I suspect that the answer lies in studies that McKinsey & Company did on reducing greenhouse gas emissions. They discovered that no single strategy could be applied throughout the economy to significantly reduce greenhouse gas emissions. Rather, like water conservation, there were dozens, if not hundreds, of smaller strategies, many of which had to be separately adopted by thousands, if not millions, of individuals. Though many of the strategies were cost-effective in the long run, they required up-front outlays of capital. They required significant investments of time and required the acquisition of special knowledge and expertise. Each saved only a small portion of the needed overall savings, requiring the adoption of many strategies. Sometimes there were market inefficiencies that prevented their adoption, including outdated regulatory requirements and split incentives (the person paying for the strategy was not the person who reaped the financial reward). (Creyts et al, 2007, Granade et al, 2009) Given these facts, it was not surprising that strategies to reduce greenhouse gas emissions had not been more widely adopted.

I know of no similar analysis regarding water conservation. But one doesn’t have to be a rocket scientist to look at the list of strategies from the Waste Not Report and see that a similar analysis might apply to them: there are many strategies that would have to be implemented, each requires an initial outlay of capital, and many of them require the acquisition of specialized knowledge or expertise. In some cases, market inefficiencies hinder adoption, and outdated regulations may prohibit them outright.

Figure 31: Central Los Angeles Seen from Space. Source: Google Earth.

Figure 31: Central Los Angeles Seen from Space. Source: Google Earth.

In addition, I would challenge the assertion that these strategies do not involve a reduction in service to the end-user. Low-flow showerheads, for instance, have significantly improved over the years. However, that does not mean that taking a shower with a low-flow showerhead is equivalent to the luxurious experience of showering with a quality high-flow showerhead. It can be done, and in California it seems that it must be done, but please don’t try to tell me it is the same, it isn’t. The same would be true for a gray water system: it introduces a level of complexity and complication that does not exist when using potable water for all purposes. In addition, The Waste Not Study did not consider conservation strategies that require behavioral change, such as showering less often, reduced washing of the car. or turning the beautiful landscaping of Southern California into a xeriscape. At right are two Google Earth renderings, Figure 31 shows traditionally landscaped central Los Angeles, and Figure 32 shows xeriscaped Paradise Valley, the wealthiest suburb of Phoenix (Wikipedia, Paradise Valley, Arizona). Even from space, the difference is plain to see.

Figure 32: Paradise Valley, Arizona Seen from Space. Source: Google Earth.

Figure 32: Paradise Valley, Arizona Seen from Space. Source: Google Earth.

The term “reduction in service” does not quite capture the changes that water conservation in California would require. To me, it seems to require a substantial change in the lifestyle for which California has been famous for decades. It seem to require a costlier, more complicated, somewhat dirtier, significantly less beautiful lifestyle. Not at all what California is famous for! In considering what the drought and what climate change mean for California, this change will be very important, I believe, and over the years will make California a less attractive place to live.

In summary, California’s urban areas consume about 8.8 million acre-feet of water per year. Because this amounts to significantly less than half of the projected future water deficit of 25.1 million acre-feet, urban water conservation can only be a small fraction of any final solution. Only one study exists of the state’s urban water conservation potential. It concludes that California can reduce its urban water consumption by about 35%. Compared to 8.8 million acre-feet of total consumption, that would be 3.1 million acre-feet. Another 1.1 million acre-feet can be conserved by recycling water at the public water utility level. The combined 4.1 million acre-feet represents about 16% of the projected future water deficit. Far from being easy or cost-free, however, urban water conservation would seem to involve significant capital outlay and a significant degradation in the lifestyle for which California is famous.

Sources:

Becerra, Hector. “California Officials Admit They Have Incomplete Water Usage Data.” Los Angeles Times. July 26, 2014. Accessed online 8/8/2015 at http://www.latimes.com/local/la-me-water-use-war-20140727-story.html.

California Department of Water Resources. 2009. Quoted in California Department of Water Resources. 2013. California’s Water Plan: Volume 3, Resource Management Strategies. Chapter 3: Urban Water Use Efficiency. Retrieved online 8/9/2015 at http://www.waterplan.water.ca.gov/docs/cwpu2013/Final/Vol3_Ch03_UrbanWUE.pdf.

Creyts, Joh, Anton Derkach, Scott Nyquist, Ken Ostrowski, and Jack Stephenson. 2007. Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost? New York: McKinsey & Company.

Executive Order B-29-15. 4/1/2015. Retrieved online 8/11/15 at http://gov.ca.gov/docs/4.1.15_Executive_Order.pdf.

Gleick, Peter, Dana Haasz, Christine Henges-Jeck, Veena Srinivasan, Gary Wolff, Katherine Cushing, and Amardip Mann. 2003. Waste Not, Want Not: The Potential for Urban Water Conservation in California. Berkeley, CA: Pacific Institute.

Granade, Hanna, Joh Creyts, Anton Derkach, Philip Farese, Scott Nyquist, and Ken Ostrowski. 2009. Unlocking Energy Efficiency in the U.S. Economy. New York: McKinsey % Company.

Office of Administrative Law. 2015. Notice of Approval of Emergency Regulatory Action. Retrieved online 8/11/2015 at http://www.waterboards.ca.gov/waterrights/water_issues/programs/drought/docs/emergency_regulations/oal_approved_regs2015.pdf.

Olivieri, Adam, Edmund Seto, Robert Cooper, Michael Cahn, John Colford, James Crook, Jean-Francois Debroux, Robert Mandrell, Trevor Suslow, George Tchobanoglous, Robert Hultquist, David Spath, and Jeffrey Mosher. 2014. “Risk-Based Review of California’s Water-Recycling Criteria for Agricultural Irrigation. Journal of Environmental Engineering. 2014.140. American Society of Civil Engineers. Accessed online at http://ucanr.edu/datastoreFiles/234-2791.pdf.

State Water Resources Control Board. 2015. June 2015 Statewide Conservation Data. Retrieved online at http://www.waterboards.ca.gov/waterrights/water_issues/programs/drought/docs/fs073015_june_by_the_numbers.pdf.

USGS. Estimated Use of Water in the United States. County Level Data for 2005. http://water.usgs.gov/watuse/data/2005.

Wikipedia. 2015. Paradise Valley, Arizona. Accessed online 8/5/2015 at https://en.wikipedia.org/wiki/Paradise_Valley,_Arizona.

Drought in California Part 7: Conserving Water – Agricultural Water Efficiency

This is the seventh post in my series Drought in California. In Part 1: California Climate and Drought, I found that drought is projected to be the “new normal” climate in California. In Part 2: The Status of California’s Current Water Resources, I found that California is already depleting both it’s groundwater and surface water resources. In Part 3: California’s Total Water Deficit, I constructed an overall estimate of California’s future water deficit, concluding that it will be about 25.1 million acre-feet per year, about 39% of California’s current dedicated water supply. In Part 4: The Potential to Procure Additional Ground and Surface Water, I found that a variety of obstacles and problems made it unlikely that California could cover the predicted future water deficit by tapping additional groundwater or surface water resources. In Part 5: The Potential of Desalination, I found that using desalination to cover the projected water deficit was within the realm of conceptual possibility, but it would be costly and would involve a massive infrastructure program. In Post 6: Conserving Water – Population and Environment, I discussed water consumption terminology and also concluded that conserving water by voluntarily limiting population growth or by stealing it from the environment would be objectionable due to severe negative effects.

In this post I will discuss the possibility for increasing agricultural water efficiency. At the beginning of each part of this series, I have noted that there are problems with the type of exercise I’m attempting, and with the data and analyses I’m having to use. If you want to read more about it, see the introduction to the series.

The Potential for Increased Agricultural Water Efficiency

Figure 26: Agriculture is an important industry in California. Photo by Wonderlane [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons.

Figure 26: Agriculture is an important industry in California. Photo by Wonderlane [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)%5D, via Wikimedia Commons.

Irrigation consumes 76% of California’s water, some 28.3 million acre-feet per year. Most of the irrigation is agricultural. (USGS, 2005) Because it is the largest consumer of water, agriculture is a prime target for water conservation. If the projected water deficit of 25.1 million acre-feet were prorated according to consumption, then 76% of the deficit would belong to agriculture, or about 19.0 million acre-feet per year. That represents about 69% of current agricultural consumption.

(Click on graphics for larger view.)

Some 77,900 California farms and ranches received $46.3 billion for their output in 2013, accounting for 12% of the national farm income total. California farms produced about 69% of the fruits and nuts produced in the USA, and 36% of the vegetables and melons. The top 10 agricultural commodities in California were (in order): milk, almonds, grapes, cattle, strawberries, walnuts, lettuce, hay, tomatoes, and nursery plants. (California Department of Agriculture, USDA) California is the sole U.S. producer (99% or more) of artichokes, dates, figs, raisin grapes, kiwifruit, olives, Clingstone Peaches, pistachios, dried plums, pomegranates, sweet rice, Ladino Clover seed, and walnuts. Thus, not only is California agriculture an essential industry within the state, but it is an essential contributor to the entire nation’s food supply. (USDA Pacific Regional Field Office, 2015)

In 2013, the average value of California farm real estate was $6,900 per acre, but irrigated land was valued at $11,800 per acre, an increase of 2.9% from 2012 (the drought is causing non-irrigated land to decline in value, but irrigated land to increase in value). The amount of land devoted to farming in California was 25.5 million acres. The total value of the farm land is about $176 billion. (USDA Pacific Regional Field Office, 2015). Direct farm employment in California in 2014 was 417,200, with an unknown number of other workers indirectly dependent on farming (anybody who sells equipment or services to farms or farmers). (Employment Development Department, 2015)

Figure 27: California's 10 most important agricultural counties.

Figure 27: California’s 10 most important agricultural counties.

In 2012, California’s top 10 counties by production were Fresno, Kern, Tulare, Monterey, Merced, Stanislaus, San Joaquin, Kings, Ventura, and Imperial. Seven of them are in the Central Valley. Monterey County is in the Central Coast Region (John Steinbeck’s The Grapes of Wrath was set in Monterey County). Ventura County is in the South Coast Region, just north of Los Angeles. Imperial County is in the Mojave Desert, along the border with Mexico. All of these counties are dry counties – the crops depend on irrigation for survival.

The potential for increased water efficiency in California agriculture is controversial, with estimates varying widely. Theoretical calculations of potential water conservation appear to be large, but the real-world potential appears to be much smaller. For instance, focusing on the San Francisco Bay Delta, a group at the Pacific Institute wrote that up to 3.4 million acre-feet could be conserved via 4 modest strategies: crop shifting, smart irrigation scheduling, advanced irrigation management, and efficient irrigation technology. A group at the Irrigation Training & Research Center attacked the Pacific Institute paper, however. In their opinion, smart irrigation scheduling, advanced irrigation management, and efficient irrigation technology were already widely adopted on California farms. As for crop shifting, they felt that it could not be accomplished because the land was not suitable for the proposed shift, and because it would create increased supply in certain crops without creating increased demand to receive it. In addition, they felt that the Pacific Institute group had completely ignored the economic implications of their recommendations, and had fundamentally misunderstood the way in which practices on individual farms translate into basin-wide water dynamics. (Cooley, Christian-Smith, and Gleik, 2008; Burt et al, 2008.)

Almond trees begin to flower in early spring. Source: USDA Agricultural Research Service.

Almond trees begin to flower in early spring. Source: USDA Agricultural Research Service.

An instructive example of economic implications might involve nuts. Acreage devoted to the production of nuts has exploded in California: pecan acreage increased by 52% in 2013, and almond acreage increased by 33%. They are very profitable: almonds were the second leading commodity in California, and walnuts were sixth. They are a long-term crop, however: nuts grow on trees, and it takes several years before a nut tree begins producing. Thus, farmers have a significant investment of capital and time in their nut groves.

The water needs of nuts are interesting, however. They require almost 1,200 gallons of water per pound to grow (almost 9 times as much as milk, almost 3 times as much as eggs). (Mekonnen and Hoekstra, 2012) They would appear to be a good candidate for the crop shifting strategy recommended by the Pacific Institute group. Shifting, however, would require farmers to abandon their significant capital investment, as well as one of the most profitable crops in all of California.

Complicating this scenario is the arcane system of water rights that exists in most western states, including California. Water rights were established in the 1800s and early 1900s. The basis was first come, first served. The first person on the scene made a claim to withdraw a certain quantity of water from a water source. The second person did likewise, and so on. Over time, the claims accumulated. In wet years, the water resource can supply all of the claims, but not in dry years, there just isn’t enough to go around. In those years, water is not prorated. Rather, the senior claim gets the full allotment. Then the second most senior claim, then the third, and so on until there is no more to distribute. It is a controversial system, but it has existed for a very long time, and it is well established in law. (Wikipedia, Water Right)

The effect of this system is that senior water rights holders get all the water they need during dry years, while junior holders go completely without. In those years, junior holders typically allow some of their fields to lie fallow. But you can’t do that with nut trees; they need water every year, or the trees will die. Thus, junior holders may choose to plant something other than nut trees. But if you are a senior water holder, why would you shift out of nuts? You are likely to get all the water you need, it is very profitable, and if you shift, you’re going to take an economic hit. The only problem for the senior rights holder is if water distributions are cut off entirely.

Easy, inexpensive solutions like those proposed by the Pacific Institute paper are often called “low hanging fruit.” I can’t evaluate whether low hanging fruit is a real opportunity in California, or whether it is largely illusory. I do feel constrained to observe, however, that agriculture has existed in California for many decades, water scarcity has been a problem for equally as long, and California has developed the most extensive water collection and diversion system in the country. The system has been very expensive and very controversial. Given these facts, it seems that claims for easy, inexpensive solutions should be evaluated with caution. Even where water conservation is possible, it seems likely to result in increased operating costs to the farmer, and shifting to less profitable crops. Thus, farm income will be reduced.

Those who advocate increased agricultural water efficiency sometimes point to the example of Israel, a model of desert farming efficiency. Israel’s agricultural accomplishment is, indeed, admirable. However, there are important differences that may make Israel a poor model for California. For one, in Israel they don’t farm all of the various crops that they do in California. For another, it is a very small country: more than 20 Israels could fit in California, almost 3 in the Central Valley alone. Further, it is more densely populated: 4.3 times as densely populated as all of California, and 3.6 times as densely populated as the Central Valley. These differences matter, for instance, because Israel strictly limits the amount of fresh water to farms, making up for it with reclaimed water from urban areas and brackish water. The larger size of California means that infrastructure to supply reclaimed water would have to be much more extensive in California than in Israel. In addition, Israel’s higher population density means that per acre of farmland, there is more urban water available for reclamation. (Israel Export & International Cooperation Institute, 2012)

The California Legislative Analyst’s Office concluded that agricultural water efficiency could conserve about 0.5 million acre-feet of water per year, at a cost of just under $6,000 per acre-foot. (Legislative Analyst’s Office, 2008) That is a tiny fraction of the projected water deficit.

Water deliveries out of the California State Water System were cut off to many farmers in 2014, and the State Water Resources Control Board just announced further cutbacks. Water rights dating as far back as 1903 will be restricted, and restrictions will grow as the summer goes on. (Medina, 2015) The result has been the drilling frenzy discussed in Part 2 of this series, as farmers seek to maintain production by substituting groundwater. How long they can continue to do so is unknown. In Post 2 I discussed the limits of that strategy: it threatens not only to drain the aquifer, but also to harm its ability to hold water when a wetter cycle returns. In addition, a group of farmers has threatened to challenge in court the state’s ability to make such cutbacks. It is hard to believe that California would ask so many of its citizens to endure great hardship so that senior water holders could continue to grow nuts. However, the existing system of water rights is deeply and firmly entrenched in law. Taking water away from senior holders would involve taking away a very important property right. It would be highly contentious, and it is not inconceivable that the Supreme Court would rule in favor of the water holders.

Certainly, California’s agricultural sector can reduce its consumption of water. All that is required is to abandon their fields and stop farming. If this were to be the direction California follows, then the economic consequences would be hard to predict. However, if one simply assumed that, since water consumption would have to be reduced by 67%, then 67% of California’s agricultural production would be lost, and 67% of the farmland would be lost, and it would amount to a loss of $31 billion in annual farm receipts, and $118 billion in farmland, not to mention all the equipment on those farms. About 280 thousand people would be thrown out of work. I don’t know how many of those whose lives are indirectly dependent on farming would become unemployed, but if one assumes that it would be 1/3 as many, then some 372 thousand people would be unemployed in total. That represents about 2% of California’s civilian employment, though the unemployment would be concentrated in the agricultural counties, not spread throughout the state. And finally, farmers usually operate on bank credit. The failure of 67% of the farms in California would create significant strains on the banking system, and the recent Great Recession has shown us how much havoc stress on the banking system can create.

The above paragraph makes it sound like the effects would all occur at once, in one year. If the drought and lack of snowpack continue as they have the last two years, the effects may, indeed, be concentrated into a single year, or two, or three. But if a wetter cycle returns, with the decline in the snowpack occurring gradually through mid-century, then the effects would be more gradual, spread over many years.

In summary, agriculture is the largest consumer of water in California. The sector’s prorated share of the water deficit would amount to slightly more than 2/3 of its current water consumption. While nobody is claiming that the sector can make that big a reduction in water consumption, there are a variety of sources claiming that large improvements in California’s agricultural water efficiency are easily and affordably achievable. However, there is reason for skepticism, and the conclusion of the Legislative Analyst’s Office is that only a very small improvement is achievable.

The alternative would be for a large portion of California’s agriculture to be lost, resulting in loss of income, loss of assets, stress on the banking system, and possibly a 2% increase in unemployment statewide. In addition, the entire United States would feel the effects, as more than 5% of our food supply would be lost, including 22% of our supply of vegetables and melons, and about 46% of our fruits and nuts.

My best guess, and it is mostly a guess, is that if cooperation occurs, then some water conservation will be achievable, more than the amount estimated by the Legislative Analysts Office. However, it will be nowhere the amount needed to cover the projected deficit. I have no idea how the issue of water rights will be resolved, but I expect that it will be highly contentious. I expect that a significant amount of California’s agricultural output will be lost, and a significant portion of its farms will fail and be abandoned. I expect that the effects will ripple through the communities which depend on and support California’s agriculture, causing significant hardship and economic dislocation. Over what period of time all this will occur depends on how the drought continues to unfold, as well as many human factors.

Sources:

Burt, Charles, Peter Canessa, Larry Schwankl, and David Zoldoske. 2008. Agricultural Water Conservation and Efficiency in California – A Commentary. Unpublished paper. Retrieved online 6/12/15 at http://www.itrc.org/papers/commentary.htm.

California Department of Food and Agriculture. California Agricultural Production Statistics. Web page accessed 6/12/15 at http://www.cdfa.ca.gov/statistics.

Cooley, Heather, Juliet Christian-Smith, and Peter Gleick. 2008. More With Less: Agricultural Water Conservation and Efficiency in California. Oakland, CA: Pacific Institute. Retrieved online 6/12/15 at http://www.pacinst.org/wp-content/uploads/sites/21/2013/02/more_with_less3.pdf.

Employment Development Department. 2015. Industry Employment & Labor Force – by Annual Average. An Excel spreadsheet created 5/22/15 by the Labor Market Information Division of the California Employment Development Department, and downloaded 6/14/15 at http://www.labormarketinfo.edd.ca.gov/LMID/Employment_by_Industry_Data.html.

Israel Export & International Cooperation Institute. 2012. Israel’s Agriculture. Retrieved online at http://www.moag.gov.il/agri/files/Israel%27s_Agriculture_Booklet.pdf.

Legislative Analyst’s Office. 2008. California’s Water: An LAO Primer. Retrieved online at http://www.lao.ca.gov.

Medina, Jennifer. 6/12/15. “California Cuts Farmers’ Share of Scant Water.” New York Times. Retrieved online 6/14/15 at http://www.nytimes.com/2015/06/13/us/california-announces-restrictions-on-water-use-by-farmers.html?ref=earth&_r=0.

Mekonnen and Hoekstra. 2012. “A Global Assessment of the Water Footprint of Farm Animal Products. Ecosystems. 15: 401-415. Downloaded from http://waterfootprint.org/media/downloads/Mekonnen-Hoekstra-2012-WaterFootprintFarmAnimalProducts.pdf.

USDA. “Cash Receipts by Commodity, 2010-2014F.” U.S. and State-Level Farm Income and Wealth Statistics. Economic Research Service. Web data portal accessed 6/12/15 at http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/annual-cash-receipts-by-commodity.aspx.

USDA Agricultural Research Service. “Blue Orchard Bee.” http://www.ars.usda.gov/Research/docs.htm?docid=18333.

USDA Pacific Regional Field Office, California. 2015. California Agricultural Statistics 2013 Annual Bulletin. Sacramento, CA: Pacific Regional Field Office, National Agricultural Statistics Service. Available online at http://www.nass.usda.gov/Statistics_by_State/California/Publications/California_Ag_Statistics/2013cas-all.pdf.

USGS. Estimated Use of Water in the United States. County Level Data for 2005. http://water.usgs.gov/watuse/data/2005.

Wikipedia. Water right. Viewed online 6/12/2015 at https://en.wikipedia.org/wiki/Water_right.

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