Jay Lund: Water storage and drought in California agriculture

San Luis Reservoir May 2012 #7Dr. Jay Lund reviews water storage in California:  Changing patterns and reasons for hope

Earlier this year, the U.C. Davis Viticulture & Enology Department held a one-day seminar  on Changing Water Regulations and the Impact on Vineyard Management in California which touched on several topics of interest to small- and mid-sized growers. One of the speakers was Dr. Jay Lund from the UC Davis Center for Watershed Sciences who gave a talk on water storage and drought, as well as a glimpse into the future of water storage in California.

California water ag drought 2015 Viticulture Lund_Page_02First, Dr. Jay Lund began with the fundamentals of California water. “California is mostly a dry place and it has a lot of water demands,” he said. “I think we all understand this at some level, but it’s pretty much true all over the state. We have a situation where the state has water available in the wrong place at the wrong time for most of the uses which are in a different place at a different time. Our water demands tend to be in the summer and spring, and in the south and on the coasts and in the valleys where the water is available in the north up in the mountains in the wintertime.”

California is a great place to be a civil engineer, he said. “We get to build all this stuff and once it gets built, we get to figure out how to run it, and then you’re never finished figuring out how to run it,” he said.  “California has a very dynamic economy – just think about how much agriculture in California has changed in the last generation with the rise of tree and nut crops, vegetable crops, a whole change in marketing, and changes in irrigation technology. The same is true for the other 95% of California’s economy – it’s always changing, the population’s very dynamic and the demographics are changing, usually for the good.”

Another thing about California’s water is that we have a lot of variability from year to year, more variability from year to year in precipitation than any other state in the union,” said Dr. Lund. Pointing out the picture in the lower middle is of Sacramento in the 1960 flood, he noted, “It’s not just droughts, it’s also big floods. Nothing new here.”

California water ag drought 2015 Viticulture Lund_Page_03This water use has really changed California,” he said, presenting a map of the Central Valley in 1873 from the very first California Water Plan. “This was when they were just starting to figure out that maybe irrigation would be kind of useful here. Those very dark areas down in the southern part of the Central Valley were seasonally or permanently overflowed lands, and the Delta was permanently freshwater tidal marsh. There was no agriculture. The dark splotches go way up into the valley, well into the San Joaquin and Tulare Basins, and the giant Tulare Lake there in the middle, which I have been told it was the second largest freshwater lake in terms of area in the western U.S. It doesn’t exist today; it’s all farmland. So imagine all the fish and the birds that evolved into this huge amount of seasonal wetlands that are no longer there.”

He noted that the map on the left shows the relative water balances of how much and where in the state has the largest amount of water use and where the water is available. “You can see fairly large, very important parts of California where the water use bar is a lot taller than the water availability bar, so you might ask how do you use more water than what’s available,” he said. “It has to either be imported from another region, or you have to overdraft the groundwater or you have to do both. In the Tulare Basin, they’ve been doing quite a bit of a both, and in Southern California coastal areas and in the Colorado River region, they bring a lot of water in from outside.   The Sacramento Valley is in the position of being a water supply for some of these other businesses and people.”

California water ag drought 2015 Viticulture Lund_Page_04We’re now a rich enough part of the world that we care about the native ecosystems, and this is one of our major objectives in water management in California,” he said. “Not only the water management has changed the habitat for native species, but our land use changes, particularly the development of land in the Central Valley for agriculture, and the development of dams that cut off salmon migration have really restricted how well the native species are doing.”

There are about 130 native freshwater species of fish in California,” he said. “In 1989, after several, another decade or so of management for fish in a lot of ways, about 44 of these species were in pretty good shape, 50 were of special concern, 14 were listed as threatened or endangered, and seven had extinct. By the time we get to 2010, we’ve basically doubled the number listed, haven’t killed any more off, halved the number that were okay, and there are almost 70 of special concern.”

A lot of times when I’m talking with water managers of water agencies, they seem to spend a disproportionate amount of their time on the listed species – these are the species that are basically in intensive care,” Dr. Lund said. “But I tell them that they should really be worried about these other 70, as we really need to make sure no more of these come into the ICU because it’s really hard to get them delisted. Let’s try to keep them from getting on the list, so we need to think a little further ahead than the urgencies of the Endangered Species Act.”

California water ag drought 2015 Viticulture Lund_Page_05This is just a little bit of a history of California water, just to put where we are and where the future is going to be in terms of a historical context,” he said. “The history of water management in California has a lot of great stories in it, and I in the book we have on California water, called Managing California’s Water, the chapter on history is called Floods, Droughts, and Lawsuits, because that’s what it really takes to make big changes in California water. We see the latest drought is what led to the big change in groundwater.”

California’s economy, including its agricultural economy, is always changing, but we don’t like to change and we don’t like to change unless we have to,” he said. “This applies I think to us as individuals, and it certainly applies to the agencies and to the government, so we really need these punctuations to help move us along.”

Dr. Lund then briefly reviewed the history of California water management. “In the last 150 years or so, we began as a laissez-faire era. People came from the East Coast came to California and it’s all very different. Here you have a society that moved from rain-fed agriculture to a place that had wonderful long growing seasons, lots of nice flat fertile soils, but no solar desalinated seawater coming out of the sky. No rain. So what are you going to do? It took us some generations actually to develop irrigation systems, irrigation technology, irrigation friendly water rights, the appropriative doctrine, develop reclamation districts and irrigation districts, so we can start organizing locally. Then it took awhile for those local organizations to mature.”

They were so successful, we thought we needed more water, so we started to build the statewide and regional water projects,” he said. “In the hydraulic era, we basically had built dams in all of the major places that were cost effective to build dams. They had high water yields and low costs. Because people are pretty smart, they tend to build dams at the best places that are cheapest and give you the most yield. And then we worked our way down, for the most part.”

Now we’re sort of in an era of conflict because we have a lot more people, a lot more water uses, we’re a lot more prosperous, we have a lot more water demands, but about the same amount of water. In some ways, less water, so we’re hoping that we move from an era of conflict to an era of reconciliation where we’re still going to fight but at least we’ll get along, for the most part.”

California water ag drought 2015 Viticulture Lund_Page_06He then turned to agriculture. “We have more than 400 commercial crops in California, about $45 billion a year in sales,” he said. “Now that’s a lot of money, but that’s in the context of California’s economy which is $2 trillion a year, so while it’s a lot of money, you have to put it in context.”

This is the most agricultural value of any US state,” he said. “We have about 9 million acres of irrigated land, about 30 MAF of water use, it’s 80% of human use, and it’s little less than 4% of the labor force and state GDP. It’s important, but it’s not overwhelming. If you go back to the 1930s, agriculture in California was about 35 to 40% of state GDP and state employment; then it was really important.

California water ag drought 2015 Viticulture Lund_Page_07He then presented a table of crops grown in California. “The major crops are alfalfa, almonds, pistachios, and hugely valuable vines, vegetables – again notice how big these high value crops are, particularly permanent crops that you don’t want to short during a drought,” he said.

In terms of water management, we have a very mixed system,” he said. “Most water management is done locally; it’s done on farms, by households, by irrigation districts, and by urban water utilities. 85% of all money spent on managing water is raised and spent by these local agencies, so while we get all excited about water bonds, if you look at about $30 billion a year that we spend on managing water in California, less than 5% is going to come from water bonds. The main action in terms of managing California’s water is mostly local.”

California water ag drought 2015 Viticulture Lund_Page_08There all kinds of things done at the local level, he noted. “Water conservation, use, efficiency, wastewater reuse, crop prices, crop selection, and desalination, mostly for brackish, occasionally we’re thinking about for ocean, although it’s very expensive,” he said. “Groundwater use and recharge which is very important particularly during droughts, surface water reservoir operations because a very large share of our surface water reservoirs are owned and operated locally, and then water markets and exchanges.”

Water markets have been very useful in the last 20 years in helping to civilize changes in our water management,” Dr. Lund added. “Any time you can find a way that everyone can make money off of something, it often civilizes the conversation.”

Dr. Lund noted that there are a lot of statewide activities, such as interregional water conveyance, federal and state surface water reservoirs, plumbing codes, conservation incentives, groundwater banking and recharge, water market support and conveyance, water use subsidies, and many state regulations. “The bottom line on is that we have a big mix of things that we do to manage water,” he said. “Water is so important that we have to do a lot of things to manage it well, and we should really be looking at water management as a portfolio exercise. Just as if you had investments, you would want to have a portfolio of investments to minimize your risk and improve your overall performance. The same is going to be true in water.”

California water ag drought 2015 Viticulture Lund_Page_09He then presented a graph of storage capacity and uses. “In terms of groundwater storage capacity, by a conservative estimate, we have about 150 million AF of groundwater storage capacity,” he said. “That compares to the overall surface storage capacity in California of 42 MAF. Seasonally, we draw down and refill about 6 MAF or so of groundwater and about 8 to 12 MAF of surface water storage. In droughts we exercise the reservoirs a little more; we have a about 18 MAF in storage for droughts in surface water, and we tend to draw down 25 or 26 MAF or so in groundwater during droughts.”

If we have a long drought like what we’re getting into now, surface storage is mostly where we draw the storage from for the first few years,” he noted. “But after about the second year, we are moving almost entirely to groundwater withdrawals because that’s the big reservoir for droughts.”

Dr. Lund pointed out how small the storage expansions are compared to the current water storage capacity. “We are not going to solve California’s water problems entirely by building surface storage. There is absolutely no way. And on top of this, the most efficient reservoirs have already been built. We get less real water yield per acre-foot of new storage then we did out of the existing storage, so we have diminishing marginal returns. It’s like a farmer growing crops on land. You’re going to pay the most attention to the highest yielding acres, and the least attention to the lower yielding acres. Same is true for the acres of reservoir storage.”

California water ag drought 2015 Viticulture Lund_Page_10We have a lot of changing problems in California water,” he said. “Our problems are always changing and as a scholar, that makes things exciting. But there are some reasons for hope for how things are likely to move in the future. If you plot out agricultural and urban water use over the last 50 years, agriculture has sort of roughly peaked statewide overall. There are some regions where it’s increasing, there are also some regions where it’s decreasing. In some regions agriculture is decreasing because they are running out of water, in some places because the soils are becoming too saline and other areas because you have urbanization displacing agriculture.”

He pointed out that growth in urban use has been flat for a long time. “We still have more people coming and being born into California, but the per capita rate of water use in cities is going down, so it’s about even. Southern California, who we always like to complain about, they’ve been growing quite a lot for the last 20 or 30 years, but they import about the same amount of water. That’s pretty good. Could they do better? Of course they could. Could we do better up here? Of course we can, and we need to continue to do that, but it’s not like water demands are increasing exponentially for everybody. If there increasing for anything, it will be on the environmental side. But there’s no reason to think that things are really getting bad that way, in terms of growing use.”

Dr. Lund noted that the economy is much less dependent on abundant water supplies now. “Mostly this is a shift of California’s overall economy away from agriculture in the 1930s towards all the other things we do in California that don’t require nearly so much water per dollar of GDP,” he said. “So it leaves agriculture as the most vulnerable section. But the other good thing about that is 95% of the economy is now available to sort of help you through a drought, at least financially and that helps the state overall.”

Water markets help shift water use over time between lower value crops to higher value crops, give us flexibility in drought years and wet years to better operate the whole system, and help us civilize change, he said. “If any change requires lawyers, you can understand how smooth this is going to be. I’m not a believer in markets for everything and that markets will solve all our problems, but they do civilize the conversation.”

He noted that the lower chart shows the shift in employment in California’s economy. “Over this whole history, total employment is going up exponentially, but the share in mining started off huge and went down to almost nothing; agriculture has tailed off now at about 4%,3%; other goods manufacturing is down to 20%, 30%, and then all of the other services we have … it looks arguable that recreation is now a bigger employer in California than agriculture. But I think the fundamental thing that makes it easier to manage California’s water problems is that we pretty much all agree, at least in this drought year, that we have a problem.”

California water ag drought 2015 Viticulture Lund_Page_11Dr. Lund then presented a slide showing the impacts to agriculture from the drought in 2014. “This was mostly for the Central Valley,” he said. “We lost about 6.6 MAF availability during this drought, but we made up for that with about 5 MAF additional groundwater pumping; so 75% of the drought impact was made up for with additional groundwater pumping. What’s our major drought strategy in California? It’s groundwater. As we get more and more permanent crops, the cost of shorting those crops during drought years goes through the roof. So it becomes more and more important that we keep that groundwater available, particularly for our longer droughts.”

The net water shortage was about 1.6 MAF, and that’s what really hit us,” he said. “The resulting crop revenue losses were about a billion dollars. Additional pumping costs – that additional groundwater doesn’t come for free – that was another half billion dollars. Then we have livestock and dairy losses, because we lost a lot of unirrigated range land as well, so the total economic cost to agriculture, with the multipliers of everything, was about $2.2 billion and about 17,000 jobs.”

This is about $2.2 billion compared to the $45 billion of the statewide agricultural economy, so about a 5% hit,” Dr. Lund pointed out. “We took about a 25%, 30% hit to the water available to agriculture, we ended up taking about a 5% economically and in terms of land fallowing. It’s a tremendous loss but not a complete catastrophe, given how bad it could have been if we didn’t have groundwater available.”

California water ag drought 2015 Viticulture Lund_Page_12He presented a slide showing satellite images from 2011, a non drought year, and 2014, a drought year. “You can see bigger red blotches, particularly down in the Tulare Basin, where they were hit harder than we were up here.”

From a long-term perspective, droughts are pretty useful as they give us tests, he said. “Tests really force you to think and work hard, and make changes in the way you’re thinking and the way you’re doing things, and droughts do that for us,” he said. “They are painful, but they have their benefits. California’s society and its water use is always changing, water demands are always changing, droughts really bring attention to our need to make changes. This current drought is already helping us improve our water management, particularly in the groundwater area, but also in some of the water markets and a lot of the water conservation aspects.”

Dr. Lund said in a recent conversation with an engineer from the Netherlands, the engineer said he felt that in every generation, they have to have at least one threatening flood. “Not a catastrophe, not a little flood, but one big enough that everybody feels threatened so that you start paying attention to your business and you start making sure you’re doing your job,” he said. “I think this is also probably true for droughts and for floods. We want to manage these systems really well, but there’s a problem I think if we manage it too well that we will get complacent. We love the luxury of complacency in this drought, and in floods, but there is a price to be paid if we’re too successful.”

We’re in a dry place that has a lot of variability in water, so we’re going to see these threatening droughts and threatening floods naturally, I think, for more generations,” he said. “But in terms of management and policy, these droughts and floods become opportunities to focus our attention and make the changes that we see needed in the present and projecting out a little bit into the longer term so that the next drought or the next flood isn’t so painful.”

California water ag drought 2015 Viticulture Lund_Page_21People sometimes talk about ‘drought-proofing’ California. “I get a call from a newspaper reporter or someone, ‘what would it take to drought-proof California?’ I say OK, what would it take to earthquake-proof California? What would it take to fire-proof California? Would you want to pay for it? No,” he said. “It’s not going to happen. We’re a dry place and we’re going to have droughts, so the difference is what do we do to manage droughts so that the consequences of the droughts are reasonable. We’re not going to desalt seawater in every year so that we never have droughts because we’d be bankrupt, and we’d probably prefer to have droughts than to be bankrupt, so we’re going to have to do reasonable things, but we’re still going to feel impacts from droughts.”

Dr. Lund said that we’ll need a portfolio approach, a whole bunch of things that effectively go together, that help each other out and together don’t bankrupt us. “A large part of that is going to be groundwater because that’s our biggest storage,” he said. “A large part of it also is going to be water markets, so that we can move that water around flexibly as droughts hit the northern part or the southern part or the middle part of the state. As water becomes available, you might want to give market incentives to capture that water.”

State agencies need to work better together,” he said. “We’ve sort of grown our state regulatory apparatus like weeds maybe over time, this last drought, the first few months of last year, you could hear the agonizing in the state agencies as they were trying to learn how to cooperate and work better together. I think for this year’s drought, the agencies are going to be working better together, but we need to make sure that after this drought ends, the agencies continue working better together, and everyone will be doing a better job, including people that are being regulated because of it.”

We need better information, he said. “We have seen a lot of examples this year of how better water accounting, water use data, and better modeling would really help us,” he said. “I think we can do a lot better in terms of data management and modeling to help us improve our reliability and our water management, and I think it’s very important that as the drought ends, and hopefully it will soon, to go back and look at what can we learn from that, what can we do better, what did we do right, and try to forecast that out into the next drought.”

California water ag drought 2015 Viticulture Lund_Page_22We have a problem; we use too much water, particularly in some parts of the state, and the southern part of the Central Valley has a terrible problem with this,” he said. “We have about 1 or 2 MAF a year of groundwater draft down in those basins, we have a lot of environmental problems, and if you compare the outflows with the supplies including the overdraft and the Delta imports, you end up with a deficit in the long-term of 2 to 4 MAF a year. That’s a lot of water; that’s not lost to the decimal dust. That’s on the order of a million acres of irrigated land. Some of that’s going to be retired due to salinity, some of its going to be retired due to urban expansion, but not all of it. Some of its either going to retire due to water scarcity, or we’re going to have longer fallowing periods. Of course, maybe that will improve productivity, I don’t know. This is something we have to think about.”

California water ag drought 2015 Viticulture Lund_Page_23Dr. Lund noted that the picture on the slide is the Borg from Star Wars. “Their motto is ‘Resistance is futile,’ and what this slide basically says is you can’t resist physics, you can’t fight physics for very long,” he said. “This is the problem we’re going to have. This is not bad regulators, this is not bad people, this is not evil water wasters, this is just everybody trying to do their job but we don’t have enough water. So we’re going to see some changes in agriculture. We’re going to have more permanent high value crops, so I think in the long-term, we’re going to see more profitability in agriculture and more long-term revenues in agriculture. We’re going to see more environmental flows we’re going to have to contend with and try to benefit from that. We’re going to see tighter groundwater management.”

We’re going to have this problem with nitrate contamination in groundwater, it’s inevitable,” Dr. Lund pointed out. “We’re going to have to figure out how to deal with it and pay for it. It’s not a lot in terms of cost, that’s the nice thing. The Delta’s an expensive problem, but nitrate is an extensive problem but not a very expensive one if we’re organized about it.

We’re going to lose some land use to salination and Delta flooding, and we’re going to have to have less evapotranspriation off the landscape, either by land retirement, longer fallowing rotations, or more habitat,” he said.

We’re going to have some really interesting dilemmas on irrigation efficiency,” Dr. Lund said. “We would really like to see low irrigation efficiencies in some ways to encourage recharge in wet years, so we have that groundwater stock available for drought years, but we’d like to have very high irrigation efficiencies in all years, to minimize the infiltration of nitrate into groundwater and the accumulation of salts in the aquifer. We’re going to have to figure out what’s the balance there that we want, and how we change that balance in different parts of the state, because we have a very large state and it’s very different in different parts of the state.”

California water ag drought 2015 Viticulture Lund_Page_24So we’re facing challenges of limits of traditional water management,” he said. “We have a lot of interesting problems: native species, reconciling permanent scarcity, managing groundwater and essentially having very weak state and federal governments that aren’t always as effective as we’d like. We’re going to have to modernize our statewide system in several ways. And that’s going to have a lot of implications for our local water management because most of the water management is local, and we’re going to have to contend with in the statewide system. We benefit tremendously from having a statewide water conveyance system, water storage system, but most of our uses are local.”

California water ag drought 2015 Viticulture Lund_Page_25Dr. Lund then wrapped it up with his conclusions. “We have a statewide water system with a lot of local governments and very fragmented regulation; we have very limited state and federal abilities,” he said. “Local government is the most important financially in terms of water management and in terms of benefits, the complexity of this immense highly inter-tied water system are huge. Because we have such complexity, we have a lot of options. If we had a very simple water system, we wouldn’t have many options. In a drought, we really see the benefits of this hugely inter-tied system if we allow ourselves to take advantage of it.”

Integrated portfolios are the future, and my favorites here, nature and economics eventually prevail over indecision and existing law. You can’t fight physics. And then droughts remind us to change, and to prepare,” he concluded.

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