SGMA’s impact on California water planning will become clear in summer – HNRG

Hancock vice-president Carl Evers says surface water trading may increase amid this year’s drought, providing a first step toward building mechanisms to facilitate future groundwater regulation.

The impact of California’s Sustainable Ground Water Management Act on producer response to this year’s dry conditions will reveal itself during the summer peak in irrigation, said a Hancock Natural Resources Group vice-president for water resources.

According to an updated map released on April 29 by the National Oceanic and Atmospheric Administration’s California Drought Monitor, 88 percent of the state is currently experiencing “severe” to “exceptional” drought. The conditions have led to California Governor Gavin Newsom declaring a state of emergency in two counties while others could be added as necessary.

Carl Evers, whose position as Hancock’s vice-president for water resources includes management of water policy for its domestic ag investments, told Agri Investor it is important not to overstate the impact of any one year’s weather conditions.

Evers – who contributed to a March report from the nonprofit Environmental Defense Fund examining SGMA implementation – said it is too soon to know whether early steps toward regulating groundwater use under a law passed in 2014 are influencing water decisions by California farmers this year.

While plans submitted by Groundwater Sustainability Agencies for managing over-drafted sub-basins through 2040 under SGMA are still being reviewed and not yet in effect, he added, heightened concerns about the future could impact producers’ near-term water strategies.

“People are going to be focusing a little bit more on their ability to access and acquire water that replaces groundwater they may have pumped in the past,” said Evers. “Right now, we know what the snowpack is and we know what reservoir levels are, but when we get into summer demands and we see who’s planted what; that’s when we’ll better understand how other people are reacting.”

Most agricultural producers in California, Evers explained, will have received finalized surface water allotments for the year by the end of April. Although the local water district authorities making those decisions are often the same entities that have established themselves as GSAs for SGMA purposes, surface water is distributed through a separate process that varies among basins.

Trading within water districts has long been among strategies producers have used to manage water risks in California, Evers said, adding he expects this year will be no different.

“You will see activity on surface-water markets now as people sure up their supplies and [you will] continue to see it throughout the summer season,” he said. “Surface water purchasing and exchanges have been going on for a long time and while activity may increase there, it’s nothing new.”

The EDF report highlights water trading and conservation programs as potential strategies to help fund land repurposing designed to keep within compliance with SGMA. It also addresses the need for inclusive governance of such markets, including protections for local communities and ecosystems.

Stacie Ann Silva, a senior associate at California-headquartered water consultants (and EDF study sponsor) New Current Water & Land, told Agri Investor the amount of water currently traded within GSAs varies widely. Silva said some have active internal markets where only the GSAs and parties directly involved with water rights transfers are aware of volumes or prices.

“The agencies say: ‘You two landowners just cut your deal and tell us how much water you want me to move from Account A to Account B,’” she explained. “A lot of the groundwater and surface water cost information we get is somewhat anecdotal and transaction specific.”

Evers said SGMA has guidelines for monitoring all groundwater activities and identifies specific adverse effects that need to be avoided. All participants in California’s ag markets, he added, will benefit from the establishment of markets that are as “flexible and far-reaching” as possible.

“Water trading markets inside of GSAs are a good first step,” said Evers. “Once we get that part underway, there will be places where it will be appropriate to trade across GSA boundaries and there will be areas where it won’t.”

Evers stressed water supply variability has always been a part of agriculture and regardless of challenges presented in any single year, sustainability planning is designed for the long-term.

“It is important not to waivered by a dry versus a wet year,” he said. “That’s just California hydrology.”