The Era of Water Reallocation

April 21, 2017

The demand for water for municipal, industrial and agricultural use is a bit like the game of Musical Chairs. There isn’t enough to go around without building costly and environmentally destructive dams, diminishing flows in rivers and streams or unsustainably pumping groundwater.

We can’t make nor can we destroy water – all the water there is, is all we’re ever going to have. We can only augment the supply in one way: by desalinating ocean water. This option will help only in circumstances where the need is acute and the financial resources substantial. The process of desalination is costly, energy intensive and environmentally challenging.

So, we need to live within our water means. Our water supply is really no different than a family’s budget. At the end of the month or year, either we balance the budget, draw down our savings or borrow from the bank.

We can conserve. The good news is that we can live within our “water” budget. To begin, we can conserve the water we use.

We can reuse. A second option is water reuse. Humans have been reusing water since the beginning of human history. And it’s fine quality for non-potable uses. So, let’s reuse it for watering golf courses, parks and cemeteries, and in industrial operations, such as power plants.

We can restructure. Our water management portfolio contains two other tools: price signals and market forces. We need sensible water rates, with increasing block rates and a lifeline rate for people of modest means.

We can reallocate responsibly. Our last tool signals the future: we’re entering an era of water reallocation. Let’s use market forces to encourage the reallocation of water from low to higher-value uses. The opportunity for trade is huge. Consider that an acre-foot of water (roughly 326,000 gallons) used to grow alfalfa generates at retail about $900. That same acre-foot used for lettuce yields about $4,600 and, if used to produce computer chips $13 million. This enormous disparity in value creates room to bargain.

The challenge for us is straightforward: how do we secure water for growing cities without harming our rural, agricultural-based communities?

We can help growers become even more efficient. My answer to this question is for cities and industry to pay farmers to modernize their irrigation infrastructure.

So let’s develop a financing program to modernize water infrastructure. Cities would provide the means for farmers to install high-efficiency systems and, in turn, the cities would gain rights to the water conserved. It’s a win-win. Farmers would continue to grow the same amount of crops but with slightly less water. Cities would obtain water for growth. It’s a solution that serves the interests of both farmers and cities. As important, it protects the future of rural communities by insuring that farmers stay in business.

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