It’s been a boom year for California’s water drillers. As a third of America’s most populous state, bakes in what the US Geological Survey calls an “exceptional drought” – the most severe rating – drillers are being kept busy as farmers and small communities tap deeper into groundwater. 

But as water shortages bite, wells run dry and domestic users face a US$500 ($604) fine for hosing the drive or watering the lawn, old profligate certainties – in a state that has long taken abundant, cheap water for granted – are unravelling as California begins a transition from an era of plenty to one of water scarcity.

The state sits atop about 81 trillion gallons (306.6 billion cubic metres) of groundwater, although much of it is far too deep to be commercially exploited. 

Traditionally, landowners took whatever they wanted, confident that annual snowmelt would replenish aquifers. 

But with this year’s snowmelt in the Sierra Nevada down by two-thirds as climate change disrupts weather patterns, a drastic rethink is taking place in a state that, uniquely in the West, has never bothered to manage groundwater.

This laissez faire outlook has worked in average years. But this drought is anything but average. Groundwater use has soared from 31 per cent to an expected 53 per cent, a 62 per cent increase that will cost producers around US$454 million. 

It is an unsustainable exploitation that is ripe for water disputes.

Once settled by gunfire, today’s water wars are resolved in tortuous court battles. In 2010 the Pacific Coast Federation of Fisherman’s Associations, the Institute for Fisheries Resources and the Environmental Law Foundation filed suit in Northern California’s Siskiyou County to stop permits to drill for groundwater near the Scott River. The result, handed down by California’s Superior Court in July, is a game-changer in how the state uses groundwater.

“For decades California has been the Wild West of groundwater, where the state does not regulate how much water is pumped from underground, even though that can dramatically affect stream flows and other water users,” said Natural Resources Defence Council staff lawyer Doug Obegi.

The court decision, he said set a wider precedent. Anyone who wants to use groundwater connected hydrologically to navigable water – owned by the state and designed to benefit all the populace – must satisfy the public interest doctrine.

Historically, California allocated water rights on a first-come, first-served basis. Those who captured water owned the rights to exploit it. 

“Most developed countries and US states have systems for allocating groundwater,” said Richard Howitt, professor emeritus of agriculture and resource economics at the University of California, Davis.

“We haven’t had to in the past because we had so much water. Now we’re rich no longer.” 

The drought has shown that water is finite. Last week, Californian lawmakers recognised this by inaugurating a new water era. For the first time, water districts must sustainably manage groundwater pumping. Local control comes with a caveat: if managers in the most-at-risk districts – 126 out of 500 – don’t act by 2020 the state can intervene.

Exploiting groundwater has helped the state’s huge agricultural sector largely weather the drought with little effect on domestic food prices, says a recent Watershed Sciences report from UC Davis.

The study found the drought’s direct cost to farming was US$1.5 billion, about 3 per cent of total value, with the loss of 17,100 seasonal and part-time jobs, or 3.8 per cent of farm employment. About 173,205ha, 5 per cent of farm land, was laid fallow. 

The wider economic cost was US$2.2 billion.

Most worrisome is a 40 per cent chance the drought will continue into next year.

“People are pumping underground water and making do,” said Howitt, who co-authored the study. “But if the drought continues, all bets are off. A lot of water districts put aside water that is being used. But it won’t be there next year.

“The cautionary tale is two-fold; we’re running down our reserves and we’re hoping for good rain this winter. If we don’t get rain, our reserves will be a lot less and we’ll need significant water transfers [between districts].” 

According to the United Nations, farmers are the world’s top water users, accounting for 70 per cent of the total. Industry consumes 22 per cent and domestic use is 8 per cent. 

In California, farmers account for 80 per cent of water use, even though agriculture amounts to about 3 per cent of the state’s US$2 trillion GDP.

And while cities cut water use by about 10 per cent between 2000 and 1010, despite gaining 3 million more residents, farmers dragged their feet and most agricultural districts opposed last month’s new law.

Traditionally, farmers let some land lie fallow land during droughts. But Wall Street and investment banks have pumped dollars into agriculture, driving up land values and water transfer prices while chasing profits from crops like almonds – California supplies 85 per cent of world production of this commodity – that require fulltime irrigation. 

One likely result will be increased water transfers, as farmers who grow seasonal crops fallow land and sell surplus water to orchardists. 

“It’s a real trade-off,” said Obegi. “You earn more per acre, but when water is scarce you have to spend more on the market. So the economics push one way while water supply and climate change push back the opposite way.”

The California Water Foundation warns that if current water use trends continue, the statewide gap between supply and demand by 2050 will be “equivalent to the annual water use of eight cities the size of Los Angeles”.

“Our weather patterns are becoming much more volatile,” said foundation director Lester Snow.

“Our extremes are getting more extreme. We have higher flood peaks, then a greater occurrence of drought. We need to much more effectively diversify our supplies. We can’t any longer depend on a string of reservoirs. Our approach is integrated water management.”

This means investing in water recycling, conservation, recharging urban run-off capture, better storage of flood flows and other measures included in a state water bond to be put before voters in November.

It’s time for an upgrade. Climate volatility has exposed the Achilles heel of the 20th century network of dams, aqueducts and canals – the ageing backbone of the state water supply – largely dependent on unreliable supplies from melting snow.

California’s problems are a microcosm of world concerns as the cost of water rises, with cascade effects for consumers, farmers and industry, from mining to hi-tech. The state’s move towards regulation reflects a growing emphasis worldwide on compliance.

Global Water Intelligence, which provides data to the water industry, says companies have spent US$84 billion since 2011 managing water use to cut costs and be sustainable.

Will California’s culture of taking water for granted change? “I think so,” said Obegi. “Historically, one of the biggest users was hydraulic mining, using water to blast gold from mountains. Then agriculture became king. We’ve also been good at providing fairly cheap water for consumers.

“Asked where water comes from many folks don’t know anything more than it comes from the tap.

“But that’s changing. We’re seeing a growing willingness to invest in water supplies. And that’s good news for California.”

– NZ Herald