California’s Drought: Cheap Water, But No Free Lunch

Written by Sharlene Leurig:

Today, President Obama visited California’s Central Valley, which may be in the midst of the driest winter in centuries. The President’s visit brings along with it federal disaster relief for farmers and communities on the verge of running dry. While the near term aid will be welcome relief to many, it won’t be nearly enough to protect California’s economy—or America’s food supply—from the water shortages that are coming.
The reason why? California’s water supply is overly dependent on two highly at-risk sources: runoff from mountain snowpack and groundwater.

California relies on snowpack to store much of its water. As a result, reservoirs weren’t designed to hold as much surface water as the state uses. Yet by 2050, it’s predicted that a typical California snow season will produce 25-80% less than average historic snowfall. The problem is not only reduced precipitation, but also higher temperatures that will mean less snow and more rain. Without reservoirs, rain can’t be captured and stored for when water is needed most. The trouble is, reservoirs are nearly impossible to permit in today’s regulatory environment (often for good reason). So some other form of storage will have to replace what will be lost as snowy winters become more rare.

Which brings us to groundwater. It’s the cheapest source around, and a reliable alternative in dry years when water deliveries from the state’s rivers are curtailed. It’s also virtually unregulated in the state, meaning there are plenty of places where anyone can drill a well and pump without limit. As a result, California’s groundwater resources are gravely imperiled. Satellite data has recently shown that between 2012-2013, as surface water allocations became increasingly constrained, the state’s primary agricultural basins pumped a volume of groundwater equivalent to the rest of the state’s total water use.

Groundwater storage changes in California from 2003-2010. From the GRL paper by Famiglietti et al, 2011. Blue line shows overall decreasing trend, about 3 cubic kilometers per year. Red line shows piecewise trends, and that most of the depletion occurred during the drought of 2006-2010. Link:
Groundwater storage changes in California from 2003-2010. From the GRL paper by Famiglietti et al, 2011. Blue line shows overall decreasing trend, about 3 cubic kilometers per year. Red line shows piecewise trends, and that most of the depletion occurred during the drought of 2006-2010. Link:

As long as mountain runoff is the state’s primary water source and groundwater is unregulated, California’s water security will be in jeopardy.

So, after the federal emergency funds are spent, what should we do to start investing in California’s long-term water security?

Diversify: California water providers must develop more resilient local supplies. This means investments in technologies like efficiency and water reuse that make existing supplies go farther. It also means developing new storage systems like aquifer storage and recovery (ASR), which makes use of groundwater aquifers as underground reservoirs to store water until it’s needed. For ASR to work, groundwater must be regulated—otherwise there is no assurance that someone else won’t pump the water before you can reclaim your investment.

Price: Water is notoriously underpriced (and groundwater not at all). Most of the attention on water rates usually gets paid to agriculture, where water users are paying as little as $6 for every acre-foot of water (equal to around 325,000 gallons). But even though urban areas account for only 10% of all water used in California, there are still huge gains to be made in using pricing to reduce wasteful water use. Public water providers are too often constrained in their ability to convey pricing signals, thanks to Proposition 218, which has been used to overturn conservation-incentivizing water rate structures. To overcome this obstacle, water providers need to be more transparent about the avoided capital costs of new supply that are being “priced-in” to rate structures. This should be a top priority of the California Urban Water Conservation Council, which is now revisiting its Best Management Practices for urban water pricing.

Share: Farming accounts for some 75% of the state’s water use. There’s no way of getting around the reality that California’s water security depends on moving some water from farming to other users, including cities and the environment. But the vitality of California’s farming industry also has to be protected. Half of America’s fruits and vegetables are raised in California. And some of America’s most well-known food brands depend on California’s agriculture: 30 percent of the world’s processing tomatoes, used by companies like Campbell Soup, for example, come from California.

These are steps that must be taken by Californians, and supported by companies and investors with an economic interest in California. At stake is the food security of a nation, and the financial vitality of corporations all over the world.

Sharlene Leurig is director of the sustainable water infrastructure program at Ceres. Ceres is a nonprofit organization mobilizing business and investor leadership on global sustainability challenges. Follow her on Twitter @sleurig and learn more about Ceres at

Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy. Through powerful networks and advocacy, Ceres tackles the world’s biggest sustainability challenges, including climate change, water scarcity and pollution, and human rights abuses.

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