CALIFORNIA WATER LAW SYMPOSIUM: Utilization of Water Transfers to Recharge Groundwater Basins

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Water transfers can be an effective water management tool for providing much-needed flexibility in the allocation and use of water in California.  Water transfers occur for a variety of purposes, including agricultural, municipal and industrial uses; water may also be transferred for environmental purposes such as in-stream flow augmentation and wildlife refuges.  Transfers are particularly useful for meeting critical needs during drought periods. However, transfers must be carried out in a responsible manner in order to assure that they do not result in adverse impacts to other water users or unreasonable effects to the environment.

In 2014, the legislature passed a package of bills known as the Sustainable Groundwater Management Act (SGMA), which set a course for sustainable management of the state’s groundwater resources.  With twenty-one of the state’s groundwater basins considered critically overdrafted, many groundwater agencies will be looking for outside sources of water to augment their supplies, considering water transfers as one of the possible options.

At the California Water Law Symposium held in January at UC Berkeley, a panel discussed how to address the challenges posed by California’s aging water infrastructure and complex water rights systems by utilizing water transfers to recharge groundwater basins and achieve a sustainable yield.

Seated on the panel:

  • Eric Robinson, shareholder with the Kronick Moskovitz Tiedemann & Girard in Sacramento and manager of Kronick’s water resources practice, representing public agency and private sector clients in the field of natural resources and environmental law. Robinson assists a number of clients in SGMA compliance.
  • Eric Averett, General Manager of the Rosedale-Rio Bravo Water Storage District. Since 1991, Mr. Averett has been involved in evaluating and resolving water supply and quality challenges facing Kern County.  He also is the chair of the Kern River Watershed Coalition Authority.
  • Maurice Hall, Associate Vice President of Water for the Ecosystems Program at the Environmental Defense Fund. He oversees EDF’s work to revitalize working rivers and their ability to provide a resilient water supply.

The panel was moderated by Andrea Clark, a partner with Downey Brand in Sacramento; Ms. Clark works on water rights, flood control, and water transfers.  The panel was organized by McGeorge students Kaitlin Harr and Sebastian Silveira, Water Law Society, at University of the Pacific, McGeorge School of Law.

Ms. Clark began with a short overview of water transfers in California, noting that especially in dry years, there often is not sufficient water supply to go around for all of the needs in the state.  Year to year, conditions in water supplies can vary tremendously.

Using Shasta Reservoir as an illustration of this variability, Ms. Clark noted that in January of this year, Shasta was at 72% of its capacity and 110% of its historical average, largely a result of the record precipitation in 2017.  A year earlier, Lake Shasta sat at 80% of its capacity, and 122% of its historical average.  But on January 18, 2016, two years ago, it sat at 38% of capacity and only 58% of its historical average.  “We’d like to have sufficiently consistent water supplies, or just consistency in our water supplies, but Mother Nature doesn’t work that way,” she pointed out.

Water transfers are one of the tools for managing water in this state.  Different regions have different water needs, and the impacts of low supplies hit differently in different places so water transfers are an important tool for moving water to places of critical need, particularly in drier years.  With water transfers comes a water market that provides incentives for water right holders with more than sufficient supplies to transfer water to parties who have insufficient supplies that might have higher value uses, Ms. Clark said.  She also pointed out that state law does favor the efficient movement and transfers of water for purposes of fulfilling the needs for water throughout the state.

In order to transfer water, you first have to have a right that you can then make available for transfer.  There are several types of water rights in California:

  • Riparian rights are the right to divert water where property abuts to a stream or river. The right to use riparian water is limited to the land that is riparian, so riparian water rights are of somewhat limited use in the water transfer context, because they cannot be used by law on non-riparian land.
  • Appropriative water rights are the most common type of rights that are relied upon to transfer water. They are rights that are either licensed or permitted by the State Water Resources Control Board, or they were held prior to 1914.  An appropriative right can be used for beneficial uses on distant lands; it is not restricted such as a riparian water right.
  • Contract rights are associated with government projects in California, primarily the federal Central Valley Project or the state’s State Water Project. It’s essentially a contract that gives you a right to a certain amount of water under certain circumstances at certain times.  Water transfers based on contract rights are quite common, Ms. Clark said.
  • Groundwater rights, essentially the right of a landowner to draw on water where property overlays percolating groundwater. Overlying rights are limited to use of the water in the basin, so groundwater rights aren’t as common of a basis of water right to use for water transfers, she said.

The water right is important, because you have to have the water right and then you have to make that water available for transfer, and that means something specific, said Ms. Clark.

There are three primary methods for transferring water:

  • Land fallowing or idling: The transferor declines to divert water from the stream and lets agricultural lands go fallow. The water is picked up by a downstream user or buyer, or in some cases upstream, depending on the facilities you have, she said.
  • Groundwater substitution transfers: The transferor lets the water go past in the stream, does not divert it, but doesn’t let the land lie fallow; instead, pumps groundwater to use for irrigation, essentially substituting the groundwater for the diverted surface water that he or she would have used.
  • Reservoir reoperation: Essentially a reservoir modifies its operations to make certain water available for transfer.

In each case, the buyer or the transferee typically picks up the water downstream, which requires that the facilities exist to move water around, Ms. Clark said.

Each of these methods of water transfers requires that water be made available, and that means something specific, she said.  “You actually have to not use water that you otherwise would have used in order to make it available.  If part of your ten year planting plan involves leaving certain lands fallow for years two and four, that doesn’t mean that you get a windfall by transferring water those years if you weren’t going to use it anyway.  This is a really critical part of transfers … Regulatory agencies pay a lot of attention to that.  They want the water to be ‘new to the system’, water that otherwise wouldn’t be there in order for it to be transferred.”

Ms. Clark then reviewed the statutory provisions in California law that facilitate, encourage, and incentivize water transfers:

  • Water code section 109: ‘It is hereby declared to be the established policy of this state to facilitate the voluntary transfer of water and water rights where consistent with the public welfare of the place of export and the place of import.’
  • Water code section 1014: This section provides that transferring water does not equal forfeiting or abandoning your right. “That’s really critical to incentivize folks to transfer water,” Ms. Clark said.  “If you weren’t protecting their water right, then people probably wouldn’t do it.  So the water code is very clear that transferring water is not basis for forfeiture, abandonment, or modification of any water right.”
  • Water code section 1729: This section exempts short-term water transfers from CEQA. “This is pretty important, and probably one of the reasons that there are a lot more short-term water transfers than long-term water transfers, at least when it comes to rights for which you have to go to the State Water Board to change,” she said.

The key rules for transfers involve avoiding third-party impacts:

  • No injury to legal users of water: This essentially means that no other legal water users, whether they are groundwater or surface water users, are injured by the transfer, Ms. Clark said. “If water is truly made available for transfer and is new to the system, and is there in a way that isn’t typically there, then other legal users of water should not be injured by it.  That’s at least the theory.  The state and federal entities that look at and approve water transfers are very interested in this because they have to demonstrate that there is no injury to other legal users of water.”
  • No unreasonable effects on fish and wildlife: Transfers won’t be approved unless you can demonstrate no unreasonable effects.  “What does this mean in practicality? Well, if you’re fallowing land, you need to demonstrate that you’re not going to have any impacts on endangered species.  In the Sacramento Valley, that’s often species like the giant garter snake, when you suddenly have an area that is typically wet and you’re leaving it dry.”  Ms. Clark said another example are the basic limitations on the timing of when transfer water can go through the Delta, which is a limited window due to endangered species act protections for aquatic species in the Delta.
  • No unreasonable economic effects on the county from which the water is coming: This is a factor to be considered if state facilities are used for the transfer.  There are a number of local jurisdictions that have essentially promulgated ordinances restricting transfers of water out of their areas in part because they view them as harming the local economy.  If you transfer water out and you let land lie fallow, then that land is not productive and is not creating input for the local economy, she noted.

Ms. Clark noted there are a number of local, state, and federal entities that may be involved in water transfers.  The State Water Resources Control Board is involved when a licensed or permitted water right needs to be modified to make a transfer.  The Department of Water Resources is active in water transfers in part because DWR facilities are used to transfer water through the Delta.  The Bureau of Reclamation is involved with Central Valley Project transfers and they have to approve such transfers.  The US Fish and Wildlife Service and the National Marine Fisheries Services weigh in on ensuring no unreasonable effects on fish and wildlife.

“There are also counties that have ordinances restricting or prohibiting the export of water through transfers,” she said.  “There are also counties where politics can play a role in the transfers, where the optics of moving water out of a north of Delta county to benefit a south of Delta area, north-south, is frowned upon, and so sometimes local politics can come in and impact the ability of water to be transferred.”

Ms. Clark concluded by noting that transfers are generally more difficult to carry out than one might expect.  “The rules that I mentioned, each of them has a lot to it and it’s often quite expensive and takes a lot of time to get through a water transfer.  Some would say that is actually not consistent with the state’s policy to favor them, and some would say it should be incredibly difficult because there could be impacts on wildlife or impacts on other users.”

ERIC ROBINSON

Eric Robinson began by displaying a map from the Department of Water Resources showing the groundwater basins across the state, with those that have been designated as critically overdraft depicted in pink.

“The reason I have this slide here is because that neighborhood shown in pink is a part of California where SGMA is going to be implemented in a way that many people expect to result in reductions in groundwater pumping in order to help solve the overdraft problem,” he said.  “And you have a highly developed agricultural economy in this area.  This is the San Joaquin Valley.  This is one of the most productive agricultural regions on the globe, and many people expect a significant reduction in groundwater pumping which is going to take water away from existing developed economy that’s providing public services and jobs and amenities.”

“Implementing SGMA in an extreme situation where you’re probably going to have significant groundwater pumping cuts is going to create a new source of demand for water transfers, and that’s the linkage between SGMA and water transfers,” he continued.  “Implementing SGMA, cutting groundwater pumping, means you’re going to be looking for replacement water and water transfers are going to be a significant source of that.”

The map on the right shows the infrastructure for delivering water throughout the state which he likened to a highway system used to move water.  The Central Valley Project and the State Water Project are like interstate highways; connected to that, there are the smaller distribution systems which are more like the state highways; connected to that are the county roads and eventually your driveway, which are the ditches and smaller water delivery facilities.  “It’s like a great grid that is spreading across the Central Valley and much of the rest of California; this is the system that we use to move transfer water,” he said.

Where is the transfer water going to come from?  The Department of Water Resources recently issued a report which sought to quantify replenishment water, looking for additional water supplies that maybe haven’t been fully developed and committed to either an environmental use or a human use and might be available to deliver for use in lieu of groundwater pumping that has to be cut under SGMA.  Mr. Robinson presented the pie chart of the results, noting that the largest slice of the pie is the Sacramento Valley, an area which has been engaging in transfers for many years.  He also pointed out that the chart doesn’t only consider surface water, but includes stormwater, recycled water, and other possible sources.

Mr. Robinson then presented a map showing all 127 groundwater basins or subbasins that have been designated by DWR as being high or medium priority under SGMA, and who must prepare and adopt Groundwater Sustainability Plans.  These include the overdrafted basins, but also many other basins that aren’t in overdraft, but where groundwater plays a critical role sustaining important economies as well environmental values.  He pointed out that this includes the Sacramento Valley where the pie chart indicated that water available for replenishment might exist there.

“Remember SGMA is going to be regulating all of this, not just the overdrafted basins,” he said.  “What’s important about that is that when you implement SGMA in all of those orange or yellow shaded basins, you’re not just correcting overdraft in the San Joaquin Valley, you’re ensuring long term groundwater sustainability to support the existing overlying and future economy as well as environmental resources in areas of the state where there seems to be quite a bit of water and are a potential sources of transfer water to be moved out of that area for replenishment elsewhere.  So SGMA is going to get involved at both ends of this – not just creating demands for transfer water, but if you’re in area where water might be transferred from such as the Sacramento Valley, SGMA will be looking at that activity as well with an eye towards how it affects local sustainability in that basin.”

He next presented a bar graph from a 2016 report by the Public Policy Institute of California depicting the volume of water transferred from 1982 to 2014.   The dark blue portion on the bottom of each bar indicates short-term transfers, which are those that start and finish within a year; short-term transfers are not subject to CEQA.  Short-term transfers must be approved by the State Water Resources Control Board (depending on the water right), but the State Board will not approve that transfer if it’s not determined to be in the public interest; it includes an environmental effects component, so Mr. Robinson noted that just because it is exempt from CEQA review, it doesn’t mean there isn’t an environmental review or a public interest review.  “Short-term transfers have been a feature of California’s water landscape for many years and they continue to be important,” he said.  “We both work on many of them.”

The lighter blue portion of the bar indicates long-term transfers, and the orange on top are permanent transfers where someone with a water right gives it up permanently in return for whatever consideration they are going to get, and then they assign or transfer that water right permanently to the new use.  He pointed out that the chart shows that transfers now average about 1-1.5 MAF per year, and noted that amount is for not just transfers through the Delta, but what is transferred throughout California.

One of the questions they were asked to address as panelists is how does SGMA contemplate transfers, if at all?  Mr. Robinson said that he didn’t remember reading the word ‘transfer’ during the legislative process or in DWR’s Groundwater Sustainability Plan regulations process, so he went back looked at that all again with that filter on to see what he could find.  “Sure enough, transfers are in there, but it’s indirect because the point of SGMA was not to change water transfer law, the point of SGMA was to manage groundwater, and then it has incidental effects like transfers in order to help provide replacement water,” he said.

He presented a slide that provides DWR’s guidance on the role that transfers can play in SGMA implementation, noting that it’s a quote from the DWR report on Water Available for Replenishment.  The report identifies two kinds of transfers: inter-basin and intra-basin.  “Inter-basin transfers are transfers where the water is coming from one location and is being delivered far away for use in a new location and they are in different watersheds, maybe different groundwater basins; that would be an inter-basin transfer,” he said.  “Then there’s also an intra-basin transfer, where within the groundwater basin, there are two different uses of groundwater occurring, one is agricultural and another might be an urban use such as providing municipal water service to a city, and an intra-basin transfer might be the city paying the farmer some money to reduce their production, so they change their water use in some way that reduces their net consumption of water out of that hydrologic system, and then that reduced amount can be transferred, in this case to the city in this example.  That would be an intra-basin transfer.”

Mr. Robinson noted that the SGMA statute also contemplates transfers, but more indirectly.  He first pointed out that the SGMA statute does not change water rights law, and that includes water transfer law.  Otherwise, the SGMA statute gets into transfers in the detail and content of the groundwater sustainability plans that have to adopted by 2020 in critically overdrafted basins and 2022 for other medium and high priority basins.

“For example, one of the things your groundwater sustainability plan has to do is describe the surface water available for recharge, either to prevent overdraft, or if you have overdraft and you are reducing your groundwater pumping, you’re providing replacement water, those kinds of activities,” he said.  “DWR’s regulations for groundwater sustainability plans talk about the water budget and the things you have to consider, and that includes the total surface water entering and leaving a basin.  That could be transfer water entering the basin, or leaving it.  Either way, or if you have both going on at the same time, your groundwater sustainability plan is going to have to address that to help make sure that everything lines up and you’re going to be sustainable.”

ERIC AVERETT

Eric Averett began by noting that he represents one of the critically overdrafted basins in the San Joaquin Valley, which means they have a significant deficit or shortage and rely heavily on the ability to transfer water from areas of surplus to areas of deficiency.  “I think it’s safe to say that most of us within the state of California depend upon the ability to transfer water, so whether you’re in Southern California or Northern California, we rely heavily on the ability to move water from one region of the state to another,” he said.  “In fact, that’s what makes our state’s economy so much more robust.”

The state has a long history of surface water transfers, but SGMA has introduced the idea that we may need to transfer groundwater from one region or one area to another, and that’s new and novel, said Mr. Averett.  “Some of the challenges associated with that is making sure that we evaluate the impacts.  If I’m moving groundwater pumping from one field maybe three miles away, am I creating a pumping depression and water quality impacts, so those are some of the things we’ll be looking at.  And then optimizing and providing market access to water supplies.”

Historically, most of the surface water transfers have occurred within the State Water Project and the Central Valley Project.  While intra-basin transfers (or moving within a basin) do occur, inter-basin transfer are much more common, he said.

Mr. Averett said the one thing we need to emphasize and focus on is allowing recharge on prime ground and transferring the pumping right to perhaps non-prime or less than ideal grounds.  “As an example, on the right hand side of the slide you see a water level change map within Kern County.  The vast majority of the suitable ground for groundwater recharge is on the east side of the valley floor, but we have pumping throughout the entire valley area.  We have partnerships with other water districts that the district that I manage has access to three surface water supplies and we can replenish.  In fact, this year, we recharged within about 4000 acres over 400,000 acre-feet of water.  A cost effective transfer of groundwater to another region would allow us to bring in their water supplies, and within the groundwater basin, transfer the pumping rights to them and perhaps leverage some of the water supplies that they would have otherwise lost.”

One of the challenges with the transfer of a pumping right from one region to another is having an adequate groundwater model that can evaluate the impacts, such as if the change in the hydraulic gradient within the groundwater basin move a contaminant plume from one region to another or create localized pumping impacts and what are the costs associated with decreasing or lowering the groundwater level in one area to leverage economic advantage to another.

Mr. Averett said that transfers will be something that the vast majority water districts and interests within these overdrafted groundwater basins will be looking at to insure survivability of overlying uses, so he would be talking about how they have worked, some of the challenges associated with them, and what can be done to overcome those challenges.

He couched it in terms of ‘the good, the bad, and the ugly.’  “The good of water transfers is that they provide opportunities for water management; the vast majority of what my time and energy is spent on is trying to figure out how I can move water from one region of surplus into my region which is in deficit,” he said.  “The bad are some of the regulatory limitations.  It’s not to say that there shouldn’t be regulatory oversight, but it should be reasonable.  The last is the ugly – lost water.  The inability to transfer and move water results in lost water or lost opportunities.”

He then discussed a transfer that occurred in 2017 to illustrate how in some ways it was successful but in some ways it was challenged.

The Exchange Contractors had a surface water supply of 30,000 acre-feet that was in excess of their needs.  It was a use it or lose it situation for them.  Within a short two-week window, they were able to negotiate an agreement that created a lot of flexibility for both Mr. Averett’s district as well as theirs.  “We offered to take their water, up to 30,000 acre-feet, and allow them to designate how much of it they wanted to transfer to us as a sale and how much they wanted to designate as a banked supply for future return to mitigate impacts of reduced water supplies in future years.  So we negotiated the agreement in about two weeks.  It took almost 3 months to get the necessary approvals in place, and as a result if that, we lost some water.”

He then turned to the regulatory limitations, noting that it takes time to process and get approvals through the regulatory agencies.  They have many types of activities they are dealing with, and transfers have to be reviewed to be sure there are no unintended consequences before they can get approved, so he will argue as to why perhaps a standardized template may be appropriate.

There are place of use issues.  “Some water molecules seem to only want to go in some areas because of regulatory limitations, and that creates certain challenges,” he said.  “So even though we negotiated and got the agreement and the approvals in place, because of the time frame that it took, our window of opportunity to take delivery of the water only allowed us to take approximately 14,000 acre-feet of the supply.  Unfortunately they were unable to move it and it was lost to the system.”

In terms of economics, this is a very, very small transfer, but the numbers get significantly higher when you talk about statewide opportunities, he said.  “This little block of water that was lost, in a dry year market within Kern County in 2015, was about $35 million.  If you translated that to a crop that didn’t have access to that water supply and had to be fallowed or pulled out for one year, that’s about 4000 acres of lost economic productivity.”

“Because of certain regulatory limitations, the federal water should not go into certain areas, and state water should not mix,” Mr. Averett said.   “I took this picture on the drive up here; this is my water district.  On the left hand side is the Cross Valley Canal, and you see that water dumping into the canal?  There’s a well just off the picture, maybe 30 feet away.  That well is a recovering banked groundwater.  In the same canal, 100 yards downstream, there’s a pump pumping water out of the canal and putting it into my recharge basin.  I am recharging and recovering at the same time in the same facility.  That does not make sense.  Why am I doing this?  Because of rules and regulations.”

“There do need to be protections, I’m not arguing that we shouldn’t fully evaluate things, but this should not happen as this is a waste of energy,” he continued.  “There’s $80 per acre-foot being spent for no reason whatsoever at this moment, so when we talk about transfers, it is good water management and we need to expand and evaluate to make sure that what we’re doing, we’re doing it in the right way.”

Mr. Averett then gave his conclusions.  “Number 1, the state really does need to engage with us,” he said.  “This will determine whether we are successful in implementing sustainable groundwater management.  No ifs, ands, or buts, and I’m going to focus that statement on the groundwater side.  The ability to leverage the value of an asset or strand it, that’s the difference.  And transfers will be fundamental or key to that.”

“Encourage and incentivize transfers that replenish the overdrafted groundwater basins,” he continued.  “Eliminate regulatory limitations that prevent efficient water management, and then make sure that we do protect the stakeholders interests.  I’m not one for creating an open and free market; I want to make sure that we are considerate of all the issues that transfers create, but that we prevent or preclude the type of picture that I just showed you where you’re pumping and recharging all at the same time.”

MAURICE HALL

Maurice Hall began by saying that we are at a point where things are changing with SGMA, and as a result, many different things are going to have to change.  “We were trying to change things already, but the force of SGMA is going to cause us to do a lot of things, so we need new approaches,” he said.  “We at the Environmental Defense Fund think that water transfers are probably part of the future.  Transfers are one of the tools we need to use to make the transition that we’re going to have to make.”

Groundwater basins can be thought of as giant natural storage basins that are maybe 70% full of sand, but because it’s so large, there is a lot of room for water storage, he said.  They are different than surface storage reservoirs because they don’t have impermeable boundaries or impermeable sides or an impermeable dam.  The inflows to these groundwater basins come from a lot of different sources over large areas, and the outflows don’t tend to occur in one specific place; rather than letting water out of the dam in canals or putting it in the river where it’s diverted downstream, there may be tens of thousands of wells in a groundwater basin, he said.

Not only are these basins natural storage basins, but they are also conveyance facilities, because they collect that water from a lot of different sources, such as rainfall infiltration, leakage from irrigated agriculture, or from streams and rivers; the basin holds it and then distributes it to those thousands or tens of thousands of wells, Mr. Hall said.

“So change your thinking to think of the basins as this natural infrastructure,” he said.  “If you have the infrastructure and the capacity to store water, all you need in order to dramatically increase your management tools is that you need good accounting and good information about the status of that resource, and so that’s what SGMA actually does for us.”

Previously, many of the groundwater basins weren’t really being watched very closely, but with SGMA, there are new management requirements; there has to be this oversight and that oversight is going to happen over a huge part of the state, he said.  “You might have had in the past some isolated islands or places where they were doing pretty rigorous management, but now that management is going to be stretched over large areas, and putting in those accounting systems in place, it’s going to be natural for us to start using more and more sophisticated water management tools.  It’s going to be a natural process for water trading or transfers.”

It’s natural that more water transfers are going to emerge, and so our challenge is to make sure it is done correctly to maximize the values and avoid the undesirable sides of transfers that we’ve seen in the past and have given transfers a bad name, Mr. Hall said.  “I think we also need to work on doing it quickly.  As those deadlines put pressure on us to get some things done, when the precedent is set well so that we don’t do a lot of things that we didn’t have to worry about undoing, we have impacts that we’re going to have to live with, and so we want to set precedents early so that these tools can be used appropriately and more reliably, more quickly.”

The Environmental Defense Fund is involved in water transfers because we want to see resilience in our water systems, and with that resilience, adequate protections of ecosystems that depend on water, and the at-risk communities that depend on water supplies, and to get to that resilience, we need to use the best tools; EDF thinks that water transfers or water trading offers a lot of strength, provided that we do it right, he said.

There are two main angles on this issue of water transfers for the Environmental Defense Fund.  “One is we want to see SGMA successful and there are some real challenges that we’re going to have to overcome to make it successful, and so we think these tools of water transfers can dramatically ease the transition to balance and build a more resilient future and comply with the sustainability requirements of SGMA,” he said.  “That success of SGMA and of good groundwater management is fundamental to our overall integrity in our water system, so we have to make this successful.”

“Secondly, there are direct and indirect benefits for the environment and for these at-risk communities, and by using transfers right and developing the right rules, we can have these transfers actually come up with explicit environmental benefits,” he continued.  “I could envision us storing water in the groundwater to provide water for refuges or having groundwater storage to provide cool water when fish really need it in drought periods.  So in addition to having the integrity of the water system and the indirect benefits that a well-functioning water system can provide, we also can provide direct benefits for the environment through water transfers and the other actions that water transfers facilitate.”

With respect to indirect or in lieu recharge, Mr. Hall considers it as any way that you have the end result of having more water in the ground, so all of the different methods that you might use to reduce pumping, as long as you do the right accounting for it, can be considered recharge methods.  For example, switching crops to lower water use crops that save water compared to what you would have used otherwise, that can function as a recharge method.

“If you open up the possibilities of different types of recharges, along with the right accounting methods and doing the right crediting, it really opens up a broad range of different types of transfers that don’t necessarily look like the things that we’ve seen in the past, and those offer huge opportunities going forward,” he said.  “If you combine those different types of recharges with the direct methods such as recharge ponds, leakage from irrigation ditches, flooding agricultural lands, or in lieu methods, there’s a wide variety of transfers that make sense and can provide a lot of value.”

Mr. Hall gave an example.  There are surface water districts in some areas, including the east side of the San Joaquin Valley, where in wet years, they have a lot of water which they tend to use because the state’s water law and policies tend to encourage the use of water; there are also years when they don’t have as much water as they’d like, he said.  “By looking at the groundwater basins that underlie most of these water uses already as a potential storage mechanism, provided they have the accounting in place and there’s crediting methods for them to do this, you can envision them having a different crop during those wetter periods.  So instead of saying instead of using water to the maximum this year, perhaps they reduce water use this year and put that water in the ground and store it for later.  Part of it might be credited to the groundwater users who are needing to address their imbalance in the basin; part of it could be credited to surface water users to improve their ability to access water in those really dry years.”

“Provided that you have confidence that you’re going to be able to draw on that water later, the ability to store some of that water can provide a lot of benefits to both to the surface water districts and the groundwater districts,” he continued.  “So the transfer program then becomes how do you do the crediting for that, the accounting for it, and of course have the understanding of the way the basin operates to make sure that you’re doing the right thing.”

Mr. Hall said there are many more examples of how water transfers or water trading can be beneficial to all parties.  “It’s important for us to think about not just these areas where we have severe overdraft,” he said.  “I think water trading programs or water transfer programs in groundwater basins that are reasonably healthy but where you need to deal with things like salt water intrusion and surface water depletion and you need to spatially manage the way water is withdrawn from your basin, groundwater transfers in those areas are going to become more and more valuable.”

DISCUSSION HIGHLIGHTS

Moderator Andrea Clark asked Maurice Hall what role the environmental community is playing in trying to have water transfers be facilitated to make positive change for SGMA.  “What approaches that your organization and perhaps others in the environmental community are discussing or have already engaged in?”

“From the environmental perspective, there are a wide range of perspectives on water transfers and water trading,” responded Mr. Hall.  “Frankly there have been some really bad examples of water transfers in the past, both in their impacts on local economies and on the environment.  Unfortunately, we don’t really even understand many of the impacts on the environment until long after they have happened.  So we look at this situation as a tool that if designed and used properly, can be really helpful in stabilizing our overall water system.  That’s a really important thing because if we don’t have a good functioning water system, then we’re not accounting for things well and the water for the environment tends not to show up when it needs to, so you can do other things, such as habitat restoration and instream flow, but it doesn’t have the long-term resilience that you want it to have, so let’s get our water system functioning properly.”

“With respect to water transfers, what we want to help do is to help do them right, and where possible and reasonable, let’s streamline the regulatory process and make sure that the background work is done so that when you do a transfer, you know what the impacts are and those have already been accounted for,” Mr. Hall continued.  “I took special note to Eric’s last comment that our success will depend on a statewide comprehensive transfer policy, and I think it’s likely to be a number of different transfer programs, that are built right and streamlined so that as long as you obey the rules, you have confidence that it’s not going to have indirect impacts that you don’t want to occur.”

Mr. Hall said that the Environmental Defense Fund is taking action on many different levels, noting that the they released a report which is an example of early guidance on how these water trading and groundwater can work. (see: Groundwater Trading as a Tool for Implementing California’s Sustainable Groundwater Management Act)  “We are working with districts and GSAs in different places to test different concepts for addressing groundwater and surface water interaction and we’ll be looking to working with people to shape and test actual trading programs, and then taking that knowledge and those insights gained back to Sacramento to try to help shape DWR guidance,” he said.  “If there are policies that need changes to facilitate healthy transfers, then those are the things that we want to help make happen for the benefit of the environment but also for the benefit of all the other users of our water system.”

Eric Robinson noted that one of the issues pointed out in the presentations was the regulatory complexity of getting a transfer approved, such as the no injury rule, the adverse environmental impacts, and all the different regulatory jurisdictions whose approval is needed in order to physically perform one water transfer.  “Even if it’s a one year temporary transfer exempt from CEQA, there is a regulatory gauntlet, and one of the solution approaches that water agencies who have transfer needs have devised is doing programmatic federal and state environmental review of an environmental program so that you flush out all of the environmental impact issues in a long public process with science underlying it, get public input, and provide the regulatory agencies with a fully baked cake for your water transfer program so that you have no instability in what the program looks like and what you ought to be able to expect to get out of it in terms of water in certain kinds of years.”

“One of the things you get when you do this is this: that’s a complaint filed by AquAlliance and other environmental groups to kill a transfer program that went through a multi-year NEPA/CEQA process in order to organize, publicly disclose, and develop certainty in the ability to rely on this program to provide transfer water,” Mr. Robinson continued, noting that the matter has been tied up in litigation since 2015; subsequent to the symposium, a ruling was issued on the lawsuit.    “The list of claims against this program is that there are 20 NEPA violation theories, 12 ½ CEQA violation theories, endangered species act theories, and the lesson of this kind of litigation to water industry whose trying to do things in a transparent science-based way is that no good deed goes unpunished because of the bomb throwers.  Frankly it’s been a joy to participate on a speaking panel on water transfers that has an intellectually robust and positive contributing environmental organization like the Environmental Defense Fund, that takes a more science-based technically based approach to thinking about what their posture is on something like water transfers, and if they are done correctly, there is support.  These things can provide a net environmental benefit, but it takes thoughtfulness in thinking about these things in order to get that to happen, so if you want to see SGMA implementation happen in a real way, we’re going to need water transfers.”

Moderator Andrea Clark asked Eric Averett to elaborate on his ideas for some sort of model agreement, and to the extent that addresses environmental impacts that may or may not be in the control of a GSA.

“For too long, we’ve not recognized that water transfers are a three-legged stool and there are maybe more legs,” responded Mr. Averett.  “Typically there are interest groups at the table – there’s ag, there’s urban, and too often, we’ve forgotten the environment, so they’ve come in and taken their leg out and the stool falls over, so we certainly need to be cognizant of the effects on the environment when we look at water transfers.”

“It does represent a challenge, and so as we look at moving forward and developing what I would characterize as a standardized template,” Mr. Averett continued.  “What I’m hoping for is that we develop a set of criteria that should be looked at, and perhaps thresholds that if you’re within or under those thresholds, a transfer can move to the next phase.  The lack of certainty will kill the ability to management of water.  Whether you’re ag, urban, or environment, you need that certainty, and the lack of it really stifles economic growth and opportunity, and so developing a standardized template so when I go into propose a transfer and there’s a standard checklist that I could go through and say I’ve met these conditions and criteria and they represent the major hurdle, then I can go in with some level of certainty to say there’s a high probability that this will go forward, or I have met the requirements and I know I’m going to be able to proceed.”

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