Economic Impacts Of Transferring Water From Agriculture To Alternative Uses In Colorado PDF Download

Urban and rural economies throughout the southwestern United States and Mexico rely on surface water imported from the Colorado River. The Imperial Irrigation District (herein IID or District) has rights to use 3.1 million acre-feet (MAF) per year of Colorado River Water (Regional Water Management Group 2013 and Imperial Irrigation District 2009). Of this water entitlement, IID uses 97 percent for agricultural production. In addition, IID supplies water to San Diego and Los Angeles urban areas. The population reliant on Colorado River water is expected to rise from approximately 40 million people today, up to 76 million people over the next 50 years (Bureau of Reclamation 2012). Growth is anticipated both in urban areas including San Diego and Los Angeles, and within the area served directly by IID. Within IID, while demand for agricultural production is expected to remain constant, demand for water by municipal, commercial and industrial users is expected to increase (Regional Water Management Group 2013 and Imperial Irrigation District 2009). IID maintains senior water entitlements for roughly 20 percent of the Colorado River flows. The rights were established almost a century ago, before populations grew significantly throughout the southwestern United States, and during decades when flows on the river were higher than historic averages (Reisner 1986). Moreover, models based on paleo data, and climate change models have predicted a decline in water flows on the Colorado River. Many climate change scenarios predict long-term droughts with deficits of up to 60 MAF (US Bureau of Reclamation 2012). Over the past decades, court battles over water rights to the Colorado River have ensued. In addition, environmental policy has influenced controls of river flows to support ecosystems beneficially, in addition to providing water to support human populations. Given that IID utilizes a significant portion of its Colorado River entitlement for agricultural production, there is political and legal pressure for it to reduce its use in order to provide more water to support urban populations and ecosystems. As part of the Quantification Settlement Agreement (2003) for reducing reliance on Colorado River, the IID is required to transfer water to urban areas and for ecosystem restoration. The laws that allocate the Colorado River will be described in the Background of this report. As recent policies require more water to be allocated for urban and ecosystem uses, the amount of agricultural production within the IID is not expected to decrease. IID relies almost entirely on Colorado River imports to support agricultural production, and does not have alternative water supplies. In the face of a potential reduction in river supplies, and an increase in demand for water, IID is exploring options to improve reliability of its water supply. One of the options is storing Colorado River water for future use. The IID Integrative Water Management Plan (2012) has identified a goal to diversify its regional water supply portfolio by developing groundwater storage and banking of Colorado River water. Specifically, IID intends to develop the capability to store any surplus water to which it is entitled (within its 3.1 MAF) in groundwater storage banks for later use. For any given year in which IID diverts less water than it is allocated, the unused surplus water is called an "underrun". In this report, I evaluate the question: Is the Imperial Irrigation District's project to store "underruns" from their Colorado River entitlement economically and environmentally sustainable? How should their goals for water security be weighed against economic and environmental impacts? The development of groundwater banking projects in conjunction with increasing diversions of water from the Colorado River raises questions about economic and environmental sustainability. The definition and feasibility for groundwater banking projects in the IID are described in the Background section of this report. As described, groundwater banking within the IID region would require upfront costs for construction, and long-term costs associated with energy consumption, operation and maintenance. Furthermore the groundwater is typically salty and would require desalinization in order for it to be used beneficially. Impacts to ecosystems may also occur if more water is diverted from the Colorado River. The IID Integrative Water Management Plan also includes strategies for reducing overall water demands within the district. One of the key strategies is programs that pay farmers to not use water through field fallowing, or by improving efficient irrigation practices. There are economic and environmental sustainability issues associated with these programs, too. For instance, the Salton Sea relies almost entirely on agricultural runoff to sustain its water levels. As described in the Methodology section, this report compares groundwater banking projects that involve Colorado River inputs against alternative strategies that reduce demands. The methodology for evaluating impacts relies on the 'soft path' approach for water policy decisions. This approach encourages water managers to first consider demand reductions before increasing water supply infrastructure. The methodology highlights key factors for IID to consider for evaluating groundwater banking projects to meet water security objectives. The Results and Discussion section includes a description of how groundwater banking projects measure against alternatives in terms of economic and environmental sustainability factors. The analysis includes a cost comparison of groundwater banking projects for IID, in comparison to the strategies implemented if no groundwater banks are implemented. The environmental sustainability factors are discussed qualitatively, and from the perspective of identifying potential ecological resource impacts that IID should consider. The section also includes an analysis for how these strategies meet water security objectives. Based on the analysis of economic factors, environmental sustainability factors and the ability to meet future water security needs, the analysis provides results for IID's policy makers to consider when evaluating groundwater banking projects in the future.