by Robert M. Gailey and Jay R. Lund

The historic drought in California from 2012 through 2016 brought unprecedented groundwater level declines and reports of dry domestic supply wells.  This was particularly true in the Central Valley.

New research on conditions in Tulare County during the drought provides insight regarding tradeoffs in interests between domestic well owners and agricultural pumpers, as well as suggests an approach for addressing the needs of both stakeholder groups.  These results can be useful for groundwater management policy and implementing the Sustainable Groundwater Management Act (SGMA).

Groundwater often buffers water supplies against drought.  The benefits from increased well pumping are greatest during long droughts when statewide groundwater use can rise from about 30 to 60 percent of human water demand.  Up to 80 percent of this use is for crop irrigation.

Agriculture is willing to incur higher costs from additional groundwater pumping during drought because it is profitable to do so.  Moreover, investments in trees and vines hardens agricultural water demands and creates need for the constant water supply provided by pumping groundwater.  (Domestic water demands also are hardening with water conservation, but are much smaller – particularly in rural areas.)

Other costs often result from groundwater use and affect neighbors who might not benefit from sustaining economic production by pumping more during drought.  Increased pumping decreases the volume of water stored in groundwater systems and water levels fall.  This groundwater drawdown can spread from deep, high-capacity wells – sometimes for thousands of feet.

In regions where there are many production wells, areas of water-level depression from individual wells can merge into broader regions of impact.  The decreased water levels can cause problems for shallower wells.  Pumps are no longer properly submerged, cavitation occurs and pumps stop working unless they are moved lower in the wells.  Some wells are too shallow to allow further pump lowering and must be shut down or replaced with deeper wells.

These are expensive actions and service providers are in high demand during drought.  Domestic wells are generally more susceptible to going dry and incurring additional costs because they are mostly shallower than the larger and deeper agricultural wells that draw down water levels the most.  These domestic well impacts are a classic case of economic externality – when one party is affected by another’s actions.

Domestic wells are common in rural areas that lack municipal and community water supplies.  Rural wells often supply economically disadvantaged households and communities already struggling with water quality problems from nitrate and arsenic.  Domestic well owners usually cannot compete financially with larger pumpers to employ the skilled labor needed to fix wells.

Figures 1 a and b show the distribution and density of domestic and agricultural supply wells in California (approximately 235,000 domestic and 34,000 agricultural wells statewide).  Although drought problems for domestic wells are more likely in sub-basins designated as Critically Overdrafted and High Priority by the California Department of Water Resources under SGMA, differences in stakeholder interests likely also occur in other areas. Potential impacts of agricultural groundwater pumping on shallow domestic wells should be considered when groundwater management plans are developed.

Figure 1. Numbers of wells in California: a domestic wells (Dom) and b irrigation wells (Ag). Gray shaded area is the portion of Tulare County located on floor of the Central Valley (study area). Data source: CADWR Well completion report map application

Available data do not provide a precise count of domestic supply well impacts in Tulare County during the 2012-2016 drought; however, our analysis suggests that the part of the county on the valley floor experienced approximately 1,100 well outages.  The cost to maintain uninterrupted supply from these wells is estimated at $10.3 million.  Because agricultural revenue during this same period was significantly higher (approximately $35 billion), reducing groundwater pumping for agricultural supplies would likely have cost far more than the estimated additional costs to maintain domestic wells.

Institutions in the southern Central Valley and elsewhere in California are beginning to plan for compliance with SGMA.  The new regulations require including a range of stakeholder concerns in planning.  Balancing agricultural pumping with domestic supply reliability will likely be an important consideration.  A funding mechanism to prepare shallow domestic and community wells for decreased groundwater levels (lowering pumps and replacing wells) might allow agriculture to maintain operational flexibility to meet their water demand during drought.

Figures 2 a and b show how information on agricultural profits and domestic well impacts could be used to develop a management policy that considers both stakeholders’ interests.  Using the historic groundwater level record (Figure 2a), three policies regarding maximum allowable depth to groundwater are considered for the recent drought.  Policy 1 limits the decrease in groundwater level to the previous lowest point (which occurred in 2010).  Policy 2 specifies a limit halfway between the previous low and the lowest point during the recent drought.  The Unregulated policy entails no regulation and allows groundwater levels to drop as low as needed to meet all pumping demands (as happened in 2017).  For policies 1 and 2, groundwater levels reaching the regulatory limit would trigger significant curtailment of pumping so that no additional decline occurred and groundwater levels would rebound more quickly after the drought when pumping lessened.

Figure 2: Example groundwater management policy analysis: a potential policies and resulting groundwater hydrographs and b depth and compensation trade off curves. Groundwater depth data source: Well 362539N1193051W001 CADWR Water Data Library. Ag is agricultural. Opp is opportunity. Dom is domestic well. Ops is operations. Prof is profit. Black and colored dots on Fig. 2b correspond to groundwater depths at 1 m intervals. Red dot is 36 m and blue dot is 50 m.

The hypothetical policies can be evaluated based on principles of economics using the estimated costs for domestic wells and agricultural financial data.  The end result is a plot of agricultural opportunity costs (lost profit resulting from limited water supply) against domestic well costs (Figure 2b), which demonstrates the trade-off in costs between stakeholders for the different policies discussed above (indicated as colored dots).  This curve presents the spectrum of potential policies from a perspective of neutral economic efficiency.  Moving from one potential policy to another results in gains for one party and losses for the other.

Maximizing economic benefits to all stakeholders results in a specific maximum groundwater depth policy (dashed green line on Figure 2a and green diamond on policy trade off curve on Figure 2b).  The water depth for this policy is near the historic low during the recent drought because the agricultural opportunity cost is so much greater than the domestic well cost.  This disparity in costs affects the economic calculations that drive policy selection.  Although maximizing the overall economic benefits would do little to ease impacts to domestic wells, future water level declines would be limited (blue dotted line on Figure 2a could not dip below green dashed line).

This total economic welfare approach does not address 1) the distribution of cost among stakeholders relative to benefits received, 2) ability of each stakeholder to absorb costs and 3) impacts on human subsistence (need for drinking water versus need for additional production).  These considerations may lead to more stringent policies that lessen the burden on domestic wells (left shift along depth policy tradeoff curve from green diamond).

An alternative approach might be for agriculture to provide some compensation for well costs.  The green dotted line on Figure 2b indicates a constant level of maximum economic welfare (and a single maximum water depth policy) but varies from no compensation (green diamond) to full compensation (red diamond).  It is a compensation trade-off curve that represents a negotiated, or regulated, shifting of the externality from well owners back to agricultural producers.

The amount of compensation (location along green dotted line on Figure 2b) might depend on considerations such as whether some of the groundwater level decline occurs from pumping farther away rather than from nearby agricultural pumpers.  The compensation approach is obviously preferable for domestic well owners and would also be preferable for agricultural producers if it reduced costs relative to a more stringent policy.

This analysis assumes the maximum groundwater depth policy only addresses costs to domestic wells from agricultural pumping that are related to supply quantity.  Other considerations, such as maximum depth limits related to land subsidence, also could be incorporated.  The approach presented here would supplement balancing the groundwater budget as required by SGMA.  Groundwater systems should be managed to an agreed upon set of metrics that includes water depth thresholds.  Achieving agreement on the specific metrics could be made easier using some economic analysis.

More details on the research summarized here will be presented at noon on May 22, 2018 at the Center for Watershed Sciences, UC Davis.

Rob Gailey recently earned a PhD in Civil and Environmental Engineering at the University of California, Davis and is a practicing hydrogeologist in California.  Jay Lund is a Professor of Civil and Environmental Engineering at the University of California, Davis, where he is also Director for its Center for Watershed Sciences.

Further Reading

Gailey R.M. (2018) Approaches for Groundwater Management in Times of Depletion and Regulatory Change.  PhD Dissertation, University of California – Davis.

CADWR (2014) California water plan update 2013. California Department of Water Resources. California Department of Water Resources.

CADWR (2015) California’s most significant droughts: comparing historical and recent conditions. California Department of Water Resources.

County of Tulare (2017) Drought effects status updates.

Feinstein L, Phurisamban R, Ford A, Tyler C and Crawford A (2017) Drought and Equity in California, Pacific Institute, Oakland, CA Last accessed 28 September 2017

Hanak E, Lund J, Arnold B, Escriva-Bou A, Gray B, Green S, Harter H, Howitt R, MacEwan D, Medellín-Azuara, Moyle P and Seavey N (2017) Water stress and a changing San Joaquin Valley, Public Policy Institute of California, March 2017.

State of California (2017) Household water supply shortage reporting system.

Tulare County Agricultural Commissioner (2017) Tulare County crop and livestock report, 2016.