ELLEN HANAK: Water and the Future of the San Joaquin Valley

Ellen Hanak delivers four priorities for managing the implementation of SGMA in the San Joaquin Valley

The San Joaquin Valley is California’s largest agricultural region and an important contributor to the nation’s food supply, producing more than half of the state’s agricultural output.  Irrigated agriculture is the region’s main economic driver and predominant water user.

However, the San Joaquin Valley is at a pivotal point. It is ground zero for many of California’s most difficult water management problems, including groundwater overdraft, contaminated drinking water, and declines in habitat and native species.  The Valley has high rates of unemployment and pockets of extreme poverty, challenges that increase when the farm economy suffers.

The Sustainable Groundwater Management Act requires local water users to bring their overdrafted groundwater basins into balance by the early 2040s.  With the largest groundwater overdraft in the State, the implementation of SGMA will have a broad impact on Valley agriculture in coming years, and will likely entail fallowing of significant amounts of farmland.

“Water and the Future of the San Joaquin Valley” is the third installment of a research project by the Public Policy Institute of California (PPIC) Water Policy Center on solutions to the San Joaquin Valley’s water challenges. Ellen Hanak is director of the PPIC Water Policy Center and a senior fellow at PPIC. At the May meeting of the California Water Commission, she discussed the findings of their research and recommendations regarding the challenges facing the San Joaquin Valley.

Ms. Hanak began by noting that the San Joaquin Valley is really at a pivotal moment.  More than half of the agricultural output of the state comes from the San Joaquin Valley.  “From a farming perspective, that carries through to the economy in a lot of respects,” she said.  “In 2015, we estimated that if you add together the Valley’s crop, livestock, and processing revenues and value added, it was almost 25% of the regional economy.”

The implementation of the Sustainable Groundwater Management Act (SGMA) and bringing water supply and demand into balance has to be done in conjunction with addressing water quality challenges, among other related things.  “A lot is at stake for the economy, for public health, for the environment, she said.  “The bottom line is that we found that there are a lot of promising approaches that allow folks to manage the scarce water resources most effectively and to manage and steward water on lands more flexibly.  It’s not a command a control approach as much as providing incentives for landowners and farmers in particular who are going to be on the frontline of this to make decisions that are beneficial to their bottom line but also more broadly.”

It also means looking for approaches that leverage multiple benefits such as a recharge area that’s also a wildlife area or a project that can manage water quality and water supply together.

Cooperation and coordination among stakeholders in the Valley will be key; there isn’t a farm-by-farm solution that will really make this work, she said.  “What we emphasize is that the solutions really need to come from leadership in the Valley, but the state and federal governments can be very important in providing vital assistance.  It’s not just funding but also a regulatory framework to help encourage folks to do things that are most beneficial.”

SGMA IMPLEMENTATION IN THE SAN JOAQUIN VALLEY

Implementation of the Sustainable Groundwater Management Act is a major focus of the water user and water management community, she said.  All groundwater basins considered high or medium priority (shown in orange and yellow on the map) need to comply with SGMA.

“The San Joaquin Valley is really ground zero in terms of getting first of the gate with getting the plans done,” Ms. Hanak said.  “Public review drafts of these plans are starting to make their way out into the public and they have to be delivered to DWR by the end of January of 2020 and implementation needs to start at that point.  Folks are going to have about 20 years to achieve sustainability but they’ve got to meet milestones along the way and they have to make sure they are not causing significant undesirable impacts in the meantime.”

In order to achieve this balance, the GSAs must either add to supplies or reduce demand (meaning use less water), and for most basins, it’s probably going to be a combination of those two things, she said.

Groundwater withdrawals exceed recharge in all but the wettest years.  On the chart, the years where pumping exceeds recharge are shown in brown and below the line; the years in blue are the years when recharge exceeded pumping.

“The objective is not to make groundwater use the exact same in every year; it’s to move that line down so that there are more blue years and that way it balances out, so it is available to use more intensively in dry years,” she said.  “That’s a very important drought reserve for the Valley.”

Also happening concurrently is the implementation of water quality laws and regulations relating to groundwater.  “In this regard, California is in some respects ahead of the nation as a whole because the federal laws on water quality don’t address groundwater quality to the same extent that our Porter Cologne does,” Ms. Hanak said.  “There has been over the last maybe 12 years or so, various regulations that are especially related to agriculture and groundwater management; there’s been a dairy order that relates to groundwater quality, also the Irrigated Lands Regulatory Program and the CV-SALTS program.”

She noted that the CV-SALTS group initially got together to deal with long-term salinity issues and then took on the issue of nitrate, a long-term contaminant that’s very important from a drinking water perspective.  That group proposed a regulatory framework to address providing safe drinking water and the need to manage long-term pollution, both nitrogen loading and the salt balance; that ended with a Salt and Nitrate Control Plan that the regional board adopted last year about this time, which is going to for a yea/nay vote at the State Water Board soon.

“The idea of this approach is to look at it comprehensively, and in the very near term, provide safe drinking water solutions while managing the longer term challenges,” she said.  “I highlight this because there are some potential synergies with bringing water supplies and demands into balance but also some potential trade-offs.”

Changes to water and land present new challenges and new opportunities for stewardship. Water will be more scarce as groundwater basins are brought into balance, and there’s likely going to be irrigated cropland that will come out of production as part of the demand management equation that will need to be managed in some way.

“There’s obviously a lot of interest in reducing the need to manage demand, but then also that there’s likely going to be some land that comes out of production,” she said.  “It will be important to manage that so it’s not causing public health problems from dust, it’s not causing problems for neighboring farmland from pests and weeds, and also, it will be important to find ways that it can generate some value for the economy.  That’s where thinking about these multi-benefit approaches really comes in, how to steward the soils so that can generate value, potentially even with carbon credits as well as for healthy farmland.  Habitat, solar, recharge, flood protection, recreation – there are a lot of different potential opportunities that need to be thought through.”

FOUR PRIORITIES FOR ACTION

PRIORITY 1: Balancing water supplies and demands

The PPIC study looked at overall water balance and what was the gap that needed to be met and considered a range of options.

“That donut shows you what the gap is,” said Ms. Hanak.  “The groundwater overdraft we estimated over those 30 years is about 11% of total net water use, so the task is either making some of that red blue with some new supplies, or shrinking the size of the donut to get rid of that overdraft.”

For the urban communities, the researchers determined that even in this fast growing region, urban demand could potentially be managed through conservation.  “We’ve already seen some significant net water savings since the outset of the drought and with the state’s new requirements on water conservation, it just shows that in the scheme of things, that’s a potential way to go,” she said.  “We expect that urban communities will probably want to be co-investing in supply projects as well.”

Their research focused on what’s affordable for agriculture; everything listed in red on the slide above are things they examined in some detail.

On the supply side, they looked at studies that had quantified how much water could be made available potentially and at what the cost range.  The chart shows the results, with the blue bar representing the best maximum physical potential for getting new water out of these different sources, based on the studies; the yellow is the likely amount that farmers would be willing to pay, based on what would be profitable for farmers in their business, because water in agriculture is a business input.

“We took into account the uncertainties, and what we found is that there are some options, but a lot of them are pretty expensive,” she said.  “There are limits to how much you’ll pay before you’re not making money off of the water, and that sweet spot is about $300-500 an acre-foot.  Beyond that, it gets pretty expensive for long-term investments for farmers.”

The researchers found that the most potentially available water at the most reasonable cost is capturing and storing more local runoff.  “That is water within the greater watershed that is not currently captured during high flow events and that’s not currently needed by somebody else downstream or the environment,” Ms. Hanak said.

They considered the different ways water could be acquired for recharge, including surface storage projects such as Temperance Flat and reoperation of the existing system to optimize how groundwater and surface water work together.  She noted that Temperance Flat comes out kind of expensive, not so far out of the realm of possibility that folks would never want to invest in it, she said, but it’s on the high side compared to what recharge investments seem to cost.

Increasing local runoff by managing the headwaters and the forests differently could potentially yield a significant amount of water, but it’s only for water supply, it’s very expensive, she said.  “The average price estimated was about $4500 an acre-foot,” she said.  “That does not mean it’s a bad idea to do it; it’s just that water cannot be the main investor in this.  It could be a co-benefit.  You really need the other beneficiaries to help pay for that to make it happen.”

They also considered ways to increase water imported from the Delta, looking at Water Fix, Shasta, and Sites as well as system reoperation.  “What we found are the big projects are expensive for Valley ag, and that’s why you don’t see too many folks lining up with their checkbooks for those projects at this point,” she said.  “That is taking into account the money that the state and federal governments have committed to these projects which includes Prop 1 cofunding, but those projects still require beneficiaries to pay.  What we find is that a bit of Delta imports could be increased through reoperation, or managing the entire Central Valley system together.”

A lot of folks are interested in water reuse and recycling, but Ms. Hanak said there’s not much potential for expanding that as most recycled wastewater is already spread on the ground in this region and the water that goes into rivers is pretty much spoken for, so while there may be some potential for optimizing where its used, but it’s not a net big increase in supply.

“Overall, about a quarter of the supply gap can be met through new supplies, so that means about 75% in our estimate will need to be met through managing demand on the ag side,” she said.  “That can be done somewhat through crop shifting but mainly by taking land out of production.  This is not a solution where irrigation efficiency can get you much bang for the buck because it doesn’t really reduce the net water use of crops and actually sometimes increases it.”

Flexibility will be key to managing farm water demand to minimize economic impacts.  “What we looked at is inflexible water management versus flexible water management,” she said.  “This means trading and allowing water to be used on the most productive fields and crops.”

The top chart on the slide shows crop revenue losses, with the brown bar on the left showing crop revenue losses with completely inflexible water use, meaning a proportional reduction across the board; that would generate losses of $3.5 billion dollars a year in crop revenues relative to today’s conditions, she said.    The rust colored bar shows the crop losses with water trading within the basin, both surface water trading and groundwater trading.  The yellow bar shows crop losses with valley-wide trading.  The green bar shows crop losses with valley-wide trading and new water; she noted that this reduces the cost to about 1/3 of the costs than with inflexible water use, all for the same amount of water.

“That’s what we consider the sweet spot from the point of view from the ag economy and the regional economy and that gets you down to 25% of the costs,” said Ms. Hanak.  “That’s the one that makes a big difference on that bottom graph which is land fallowing; that can reduce the amount of land fallowing from about 750,000 acres to a little bit over 500,000.”

A portfolio approach can minimize the economic losses.  She presented a slide showing revenue losses, GDP losses, and job losses by ag sector.  The green color on each bar represents crops; the red are dairy and beef impacts, and the yellow is processing; the things on the revenue side carry through to GDP, which is the real value generated in the Valley, and also job losses.

“The higher value crops also tend to have more jobs, so it’s important, not just for farmers bottom line, but for thinking about the regional economy and employment more generally,” she said.

A glide path or gradual ending of overdraft can be important from the standpoint of economic adjustments as long as people do it in a way that takes care of mitigation of some of the key issues, such as subsidence and drinking water wells.

Recommendations

Ms. Hanak acknowledged that more analysis needs to be done on where the smart infrastructure investments are, and more analysis needs to be done on how much water is available for groundwater recharge.  “There are ways that state and federal agencies can improve the process for approving trading and banking to make that more streamlined, and a fair number of things that folks have to do at the local level to incentivize recharge on farmland,” she said.  “Fair and equitable and transparent local water trading rules need to be developed, and then figuring out how folks are going to coordinate, and not just at the GSA level – it has to go up to the basin level and across basins to really maximize benefits.”

PRIORITY #2:  Ensuring safe and reliable drinking water.

The Valley’s really a hot spot for California’s overall safe drinking water crisis, Ms. Hanak said.  She presented a slide with two maps on it.  The map on the let shows all the water systems that were out of compliance with water quality standards; over half are in the Valley.  There are a range of contaminants with nitrate and arsenic being the most common ones; about a quarter of these systems have multiple contaminants that they need to address.  She acknowledged that 123 TCP is not shown, which is a new regulation, and a lot of systems are out of compliance for that.

“This is a big issue,” she said.  “Most of the systems are quite small.  Most have been out of compliance for over 3 years, so it’s chronic ongoing and without a fix.”

The map on the right of the slide shows the systems and wells that were affected during the drought; the orange dots are water systems that applied to the state for emergency funding, about half of them in the San Joaquin Valley.  The blue dots are the domestic wells and very small systems that ran out of water; almost 80% of those were in the valley, which is likely underreported because it was self-reported.

“These supply vulnerabilities need to be considered in conjunction with the water quality issues, because some of the places that have quality issues are also vulnerable from a supply perspective,” she said.

Recommendations

Ms. Hanak said that even though locals have to be really driving a lot of this change and providing the support for on the ground solutions, the state has to take a lot of leadership.  The solutions include not just funding, but also technical and managerial solutions on the ground.  She also noted that if groundwater sustainability plans don’t have some guidance on how they are going to mitigate for dry wells, they probably should be sent back to get fixed.

PRIORITY #3: Managing groundwater quality for the long-term

There are long-term nitrogen and salt issues which need to be addressed.  “Any time you are applying fertilizer in basins that already have very high nitrogen levels, you’re going load nitrogen,” Ms. Hanak said.  “One of the regulatory challenges is figuring out how to allow agriculture to still continue, encourage reduction in loading, and figure out ways to improve that over the long-term.  This is true across the board with inorganic fertilizers and chemical fertilizers.”

Dairies face special challenges, because it’s easier to become more efficient in the application of fertilizers than it is manure, which is largely used by dairies, she said.  The map highlights special challenges dairies face, both because the manure is harder to manage effectively on the farm and because there is too much manure relative to dairy cropland.  The map on the left shows the dairy cropland which is about 6% of all the land in the valley and the map on the right shows the nitrogen loading hotspots; anything in yellow is higher than it should be from a health perspective.

“The real hotspots that are off the charts in terms of the numbers align really closely with the dairy lands and that’s because there’s a lot of manure to manage so folks are looking for solutions and one big part of the solution is getting the manure off of the dairy lands and finding ways to monetize that and make it useful as a resource elsewhere,” she said.

Salt build-up is reducing crop productivity, especially on the west side of the valley.  The salt accumulates because when there’s salt in the water, crops don’t use the salt, they use the water and leave the salt behind.  Whereas nitrogen is a drinking water issue, salt is really an ag productivity issue.  Many of the more profitable crops are more salt-sensitive, so farmers have been adjusting their agronomic practices and by crop shifting, but already about 250,000 acres of land has been taken out of production because of salt buildup and another estimate 1.5 million acres that are salinity impacted.

“It’s likely some of these lands are going to come out of production over time because the solutions are very expensive to make the salt go away by exporting it, desalting it, and so on,” Ms. Hanak said.  “We highlight this as an opportunity for really thinking together about water quality and water supply and encouraging that if lands are going to come out of production, that that water can go to more productive land, so that it’s not disjointed decisions between water supply demand balance and managing salt.”

With respect to groundwater recharge in relation to water quality issues, Ms. Hanak pointed out that while it is one of the most cost-effective ways of adding to supplies, you need to be mindful of the water quality implications.  The valley has a lot of very suitable land for recharge; they estimated based on the UC Davis soil maps that in 2014, about 2.8 million acres of the irrigated cropland in 2014 was suitable or at least moderately good for recharge in the valley.  However, only about a quarter of that land is in alfalfa or vines which don’t have a lot of nitrogen fertilization applied; some of that land isn’t suitable because the crops are not suitable (such as citrus) or because the land has had dairy manure applied.

“The key issue is figuring out how to manage recharge on the lands that are shown in green,” Ms. Hanak said.  “Those are crops that can handle recharge from an agronomic perspective, but where they do use nitrogen fertilizers, so thinking about how to manage that in ways that are compatible.  For example, maybe not applying fertilization in the fall to make it possible to recharge in the winter, those are calls farmers will have to make, but also thinking about the regulatory framework to in some cases maybe allow things to get worse in terms the water pushing nitrogen down into the water table with the plan that it will get better overtime as more water is applied to that.”

Recommendations

“On the ground folks are going to have to manage water quality and quantity together,” she said.  “There are some synergies there but also some trade-offs to consider.  New technologies are going to be important, and then providing the regulatory flexibility to manage these long-term pollutants flexibly so we get the best overall outcomes is going to be an important piece.  We think that the Salt and Nitrate Control Plan could accommodate this flexibility, even though it hasn’t been an active part of the discussion yet.”

PRIORITY #4: Fostering beneficial water and land use transitions

A significant issue is what to do with land that’s likely to come out of production.  The donut diagram shows the lower bound estimate for how much land might come out of production of about 500,000 acres.

The different colors show the kinds of uses that are already being considered: The San Joaquin desert ecosystem recovery plan envisions 80,000 acres or 15%; about 9% could potentially go to solar as part of the broader efforts to expand solar energy; and the smaller blue-green slices are expansion of riparian corridors and intermittent wetlands, which are essentially recharge basins managed for wildlife as well.

The big yellow piece, about two-thirds of the total is what would be leftover if only what was planned moved forward.  “This just shows you that the total amount that we’re looking at is bigger than what’s already been imagined for these other pieces,” she said.  “It’s not to say nothing can happen there.  There’s potential for stewarding of all of these lands, some of it as permanent retirement but some of it as rotationally fallowed lands where one is managing for soil health and doing carbon capture during those periods that can be good from a water retention standpoint.  We think that those different approaches thoughtfully done can bring in revenues, including USDA, CDFA funding, greenhouse gas emissions, and other programs that bring in revenues for that.”

Recommendations

There needs to be broad-based inclusive planning beyond the level of the GSA and at a regional level.  The state and feds can play key roles by providing more flexible regulatory approaches for doing restoration at the bigger scale such as habitat restoration plans to make it easier for landowners, and to incentivize landowners to do things in the right places and the right ways.  Boosting technical support and R&D will also be key.

HOW CAN THE STATE BE MOST HELPFUL NOW?

“Number one is ensuring a robust comprehensive framework for safe drinking water solutions, and this not just financial, it’s also the technical and managerial,” she said.  “The second is that now we’re entering the next phase of SGMA where we’re going to be in the first five years of plan implementation.  A lot of the work that has been done so far is just getting some basic numbers together and some really basic concepts about how folks are going to manage.  Now the proof is going to be in the pudding in terms of what kinds of projects and actions are going to be possible.  The state can really play a major role in getting the regulatory program, clarity, consistency among regulations, flexibility, and then supporting locals in some of these other areas, such as assessment of smart infrastructure investments, supporting pilot efforts for folks that are willing to take some risks and try these on the ground, technical support and R&D, and supporting broad based planning that’s led by folks in the region.”

DISCUSSION PERIOD

“When we talk about improving watershed health which has the potential outcome for improving water capture and water quality improvement, it also improves fire reduction and also has an impact on soil health and carbon sequestration so there are multiple benefits there,” said Chair Armando Quintero.  “One of the things that I think about is who is going to pay for this.  I really think we have got to get all Californians realizing that we all have to invest in all of California.  All of our urban centers are dependent on the Sierra watersheds, and there’s a disconnect between the folks at their faucet and these incredible water basins, and so I’m really interested in seeing us as a water focused community making the case that this requires everybody’s investment.  And it has to be significant.”

“When you talk about technical support and R&D, one of the things that the state can do on a statewide basis that facilitates local decision making is real-time and accurate information systems, in terms of where is water in the system and what are we actually going to see come down the hill,” continued Chair Quintero.  “For all of the water users in the state, to have the best information possible to make decisions that can be implemented a few months away, knowing what’s coming down the hill, which involves so many things, what’s the soil moisture look like, what was the precipitation that year, what’s the vegetation look like – all of those things.  So it seems to me that one thing we need to do as a state is put in robust information systems that are accurate and allow for early decision making.”

Chair Quintero said capturing water is important as well.  “One of the big questions to me is where do we capture water and it seems like one of the things that we have to do as a state is provide really good land and recharge maps for each of these big basins … I don’t really know if we have that now.”

“The initial work led by UC Davis soil lab has been important for people as a first start,” said Ms. Hanak.  “Now there’s work being done both from a team at Stanford and also at Davis on trying to hone that and find the very high potential areas, such as the connectivity underground or former riverbeds to really maximize that.  You’re also starting to see this on the ground with growers who are experimenting with this too.  They have the general maps too but they are looking at where does water really percolate well, but yes, I think we have a basis for making some decisions now but we can improve that information.”

“One of my concerns with SGMA is that it seems that we have to develop the technology to also be able to in real time and accurately understand what’s happening with the water quality underground,” said Chair Quintero.  “As we recharge aquifers that have been drawn down, it’s sort of a different environment in there than the water that was there before.  My understanding is that when you dry out soils in an aquifer and then you recharge of it, the combination of the ingredients that are in the water, whether it’s fertilizers or other contaminants or other chemicals and things that are in the water, it seems that we have to really keep an eye on making sure that those water basins are kept healthy.”

“I’ll just start by saying a lot of them are not,” said Ms. Hanak.  “Sometimes recharge, if there’s stuff sort of in the vadose zone and root zone, the recharge initially might push some of that through faster than it would happen under normal conditions, but colleagues on my team including Thomas Harter are optimistic that actually the floodwaters coming in from the Sierra is a pretty clean source of water so that has the potential overtime to improve water quality.  The issue is more, if you’re impatient and you want it improved by next year, that might not be a realistic expectation.  Their thinking is that that can be helpful also with the salinity issues, too, depending how you’re going to get that to the land and manage that.”

Commissioner Carol Baker asked if the study looked at existing laws and regulations and whether or not there are areas where the law can either be improved to help move these issues forward and where maybe we have to start from ground zero?

“We go into some detail in the main report on some of the legal and regulatory issues relating to especially groundwater recharge issues and some water trading issues,” said Ms. Hanak.  “Our philosophy is we first look at what can you do within existing law, and the answer is usually much more than we’re doing.  And so then that speaks to, are there ways in which regulations could be applied differently or we’re not taking advantage of opportunities we already have.”

“On the recharge issue, there’s been some debate over whether there is a need for statutory change on whether recharge is a beneficial use,” continued Ms. Hanak.  “Brian Gray who is the legal expert on our team has been coming down on the side of that it probably isn’t needed; it may be helpful for certain things.  But what’s really key is getting to a place where the decision could be made quickly on how much water folks can divert for recharge when its available because it comes fast and furious when it does, and that there’s a lot of potential already within the law and the State Board’s purview for that.  Which is not to say, sometimes legal changes can help to give the agencies a nudge or affirm that yes this is something that is important to us and assisting in interpretation.”

“Another example is on the water quality side where what we think is actually the new salt and nitrate control program provides some important flexibility that the region is going to need to manage these issues,” Ms. Hanak said.  “It’s a matter of just using that flexibility in a responsible way.  On the question of habitat management, we point out there are a lot of things right now that are available that aren’t used that much.  That includes habitat conservation plans, NCCPs which is the state equivalent, Safe Harbor, and those kinds of things, so there’s potential for us to try to find ways to do more.  That doesn’t mean that the legislature should never have anything to do, but they are not the ones holding us up.”

“One area where I’ll flag and I know this is an area that Commissioner Herrera has been very active on is on the safe drinking water side.  We need legislation to figure out how we’re going to fund safe drinking water.”

FOR MORE INFORMATION …

• For the agenda, meeting materials, and webcast link for the May meeting of the California Water Commission, click here.
• For the PPIC report, Water and the Future of the San Joaquin Valley, click here.

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