WATER SUPPLY

23 June 2000
Lady Bird Johnson Wildflower Center
Austin, Texas

Background: Susan Rieff of the National Wildlife Federation (NWF) explained that the sheer scale of the water problem in Texas would ultimately demand attention and require new water resources, but it was unclear still what would be saved and what would be sacrificed in finding these new resources. She admitted to a fear that without a change in the current paradigm, rivers would go dry, fisheries would decline, and estuaries would be impaired.

Supply, Demand and Impacts: Myron Hess, counsel for NWF, catalogued the impacts of human water use in Texas:

Habitat loss: Reservoirs have harmed bottomland hardwoods, a key habitat for migration of terrestrial and avian creatures, contributing to the decline from 16 million acres originally to only 6 million acres in 1980. Some of the decline is due to direct inundation (600,000 acres of wetlands have been drowned), while other sensitive acreage has been lost to reduction in silt and freshwater flows downstream.

Evaporation: Reservoirs are also responsible for major water losses due to evaporation, ranging from 16" in east Texas to as much as 6 feet per year in west Texas. As an example Choke Canyon reservoir has a yield of 178,000 acre-feet per year, yet suffers evaporation of 150,000 acre-feet per year. This is a major problem statewide: 3.5 million acre-feet of water stored in reservoirs is lost to evaporation each year.

Estuarine effects: Reservoirs have also intercepted major amounts of flow that once reached the state’s estuaries. For instance, Lake Corpus Christi and Choke Canyon reservoir have not been full since 1992, indicating that little has been allowed to bypass the dams and reach the estuaries downstream. Another example is provided by the Rio Grande, which was considered navigable 500 miles upstream of the coast for 7 months of the year, while now, after construction of four major dams, one can stand knee-deep at its mouth.

Disappearance of springs: Surface water resources are not the only ones to have suffered due to overuse. Groundwater withdrawals have resulted in the permanent loss of 80 of the 280 major springs in Texas, and cut into baseflows in the state’s rivers. Commanche Springs provides a dramatic example – in 1684 travelers noted 6 springs there; by 1859 the springs were supplying Fort Stockton; by 1875 they irrigated 6200 acres; by 1961 they were dry.

Subsidence: Another problem related to groundwater withdrawal is subsidence. Coastal areas such as the Houston-Galveston region have seen subsidence of as much as 9 feet, exposing homes, industrial areas and roads to flooding, and contributing to the loss of coastal marshes as they are submerged.

Fishery impacts: Taken together, the erosion of surface water and groundwater supplies has had an alarming effect already on Texas fisheries. For example, 5 fish once native only to Texas, are now extinct. 3 fish once found in Texas are now extirpated from the state. Despite Texas’ great diversity of fish (6th in the nation), fully 20% of the fish species found in the state are considered threatened or endangered. Shellfish are also feeling the impact of excessive human water use: 18 of 53 mollusk species in Texas are rated as threatened or endangered, while the coastal shrimp industry in on the verge of collapse. Mr. Hess noted that some of the fishery impacts were not exclusively due to low water flows, but were also due to water quality problems, as dilution of contaminants declined.

Population and water demand trends: The current situation is expected to worsen due to population trends in the state. Texas’ population is expected to double to 40 million by 2050, and water demand to rise to 20 million acre-feet per year. This scale of demand is high in relation to dependable surface water supplies of only 23.6 million acre-feet per year (the amount available during the 1996 drought). Groundwater pumpage is already in deficit: in 1996 withdrawals were at 9.9 million acre-feet per year, almost twice recharge of 5.3 million acre-feet per year.

Surface water regulation: Part of the water problem in Texas is due to its regulatory structure. While surface water is actually owned by the public, rights to use that water have been issued to a variety of private and institutional users, often with little concern for dependable flows or habitat needs. For example, there are major segments of the Canadian, Red, Cypress, Sabine, Neches, Trinity, Brazos, Colorado, Guadalupe, San Antonio, and Nueces River which are fully appropriated. The extent of appropriations is not immediately apparent now because many of these rights are banked and have not yet been exercised.

Groundwater regulation: Texas’ groundwater resource also suffers from regulatory gaps. Texas is one of the very few western states to apply the absolute rule of capture to groundwater use. In other words, a surface landowner enjoys the right to pump as much water from the aquifers underlying his tract, despite effects on adjoining landowners’ wells or surface water supplies.

Energy analogy: Mark MacLeod of Environmental Defense followed with a talk on the analogy between energy and water in Texas, and a possible model for reform of water resource management.

Similar water/energy problems: Like water authorities, energy utilities have traditionally planned on supply-side solutions to shortages of electricity, rather than on efficiency or demand-side solutions. The supply orientation for both water and electricity utilities is based on the training of their engineers (the shortage question typically becomes a power plant design problem), the incentives (cost-plus guarantees reward a dollar of plant investment with 10 cents of revenue), the ignorance of options (such as pricing, markets, etc.), the regulators’ deference to the industry, and the public’s unawareness of where their energy or water comes from (energy comes largely from coal, not solar or wind).

Energy solution model: Over the last 7 years, Texas has undergone a dramatic restructuring of energy regulation, with good environmental features, including increased efficiency and renewable energy investment requirements. Mr. MacLeod found that an educated public (particularly through a deliberative poll) can influence agency officials to adopt major institutional changes and do the right thing for the environment and consumers, if cost-effective options are offered.

A donor asked what the energy reform initiative cost. Molly Stevens estimated $400,000 per year over 7-8 years, about half funded from the Energy Foundation (Pew, MacArthur, Rockefeller, etc.).

One funder asked whether customers would be willing to pay attention to water issues, where there was not such a pocketbook problem at stake as with electricity bills. Mark MacLeod was not sure, but said that Texans appeared to look beyond cost issues: deliberative polls indicated that electricity customers were willing to pay more to get a public benefit. Melinda Taylor said that water is under-priced in Texas, and repricing water to its real marginal cost could help get citizen attention and support.

Susan Kaderka said that a TPWD needs assessment poll of focus groups found that the environment is not a top-of-the-mind issue in Texas, but that water, both supply and quality, was consistently rated as a critical issue by those polled. Ms. Kaderka told the group that the poll had not yet been publicly released.

Historical context: Ken Kramer of the Sierra Club's Lone Star Chapter explained that he believed that "past is prologue" and proceeded to give a sketch of water planning in the state. The original Texas Water Plan grew out of the 1950s "drought of record", resulting in a 1957 bond issue and the creation of the Texas Water Development Board (TWDB) to steer those bond moneys to water projects. During the 1960s, a great deal of attention was paid to a $3 billion proposal to pump water from the Mississippi to the High Plains and south Texas for agricultural use. Throughout the 1950s and 1960s, the standard water approach in Texas was marked by grandiose plans, little attention to water use and plans outside the state, and reliance on structural solutions (dams, canals, and pipelines).

In 1969, the tide began to turn, when voters, led by fiscal conservatives and environmentalists, turned down the bond package as too costly and damaging. The bond package was again defeated in 1976. Billy Clayton’s "rainy day fund" was defeated a third time in 1981. Following this Lt. Governor Bill Hobby opened water planning to environmentalists, though their views remained in the minority. However, environmental views were supported by the withdrawal of most federal cost-share dollars by President Carter. Also, in 1985, the state Legislature passed a law requiring freshwater releases from dams constructed within 200 miles of the coast.

As a result, most Texas water plans of the 1980s and early 1990s have shown more sensitivity to environmental concerns. For example, the plans of the late 1980s indicated proposals for about 50 new reservoirs, while by 1992, the TWDB plan included only 14 dam proposals.

This encouraging trend reversed itself in 1997, when Lt. Governor Bob Bullock responded to the severe drought of 1996 with Senate Bill 1 (SB 1), a bottom-up planning process for assuring a reliable 50-year supply in each of 16 state regions. While this approach had the appearance of a grassroots idea, with the kind of citizen participation that environmentalists favored, it actually allowed river authorities, local municipalities and industry consultants and construction firms to control much of the process. As an example, each 11-12 member regional group had only 1 environmental slot.

This SB 1 process is coming to an end relatively soon (regional plans must be submitted to the TWDB by January 5, 2000, with the TWDB completing its review by January 5, 2002). There is concern that the outcome will be fraught with problems:

• Inadequate environmental public representation

• Excessive representation of pro-development interests (municipal water districts, agricultural and industrial users, etc.)

• Conflict of interest by the consultants coordinating the planning process, many of which are tied to firms with construction arms

• Heavy emphasis on structural solutions

• Lack of environmental attention

• Little public awareness

Senate Bill 1 Outcomes: Mary Kelly of the Texas Center for Policy Studies gave two extreme examples of results from the SB 1 process. On the good side, the Lower Rio Grande planners have come up with a scheme for shifting major amounts of water use from agriculture to municipalities, to answer population growth in the region. However, this shift is not at the expense of agricultural production, and instead is based on efficiency improvements on farms, such as canal improvements to reduce evaporation and infiltration losses.

A less favorable outcome is exemplified by early signs of the East Texas plan. The East Texas group has marked 13 locations as "unique reservoir sites", with none listed as "unique ecological sites". Also, the Sabine River Authority is seeking to have Congress overturn a conservation easement which has thus far blocked construction of the Waters Bluff reservoir. Finally, there seems to have been very little public participation and awareness of the East Texas process and plan.

A donor asked whether there was a potential political problem in using public funds to make investments in private agricultural infrastructure. Mary Kelly and Melinda Taylor noted that public funds had long subsidized agriculture, and that removal of the subsidies might help the water problem a great deal (Valley farmers pay 17 cents per acre-foot for administration, and about $1 per acre-foot for conveyance, but nothing for the water itself). Mark MacLeod agreed, saying that farmers should be paying something closer to the marginal cost of water. Mary Kelly added that there would be a quid pro quo involved too – municipalities would get water in return for their investment in agriculture. Ken Kramer offered that agricultural water use might also be improved by changing the cost-share and low-interest loans formulas used by the Texas Water Development Board and the US Department of Agriculture to help farmers. Terry Hershey noted that we need to recognize worthwhile government programs, even if there is no public access to private locations. She mentioned the Natural Resources Conservation Service 50-year program to build small dams in upstream locations, which reduce flooding and siltation, while creating new wetlands, as an example of a good public/private partnership.

General solution overview: Susan Kaderka noted the need to make major inroads into public opinion to try to raise the low public awareness about the effects of human water use on the enviroment. and to help the public see the reality of limits – that most of the water in Texas is already spoken for, well before the expected increases in population.

She sees two major challenges facing environmentalists concerned about water in the state:

• Redistribute water supply to accommodate the environment

• Reduce per capita demand to accommodate a growing population

She is worried that this will be a difficult task due to recent backsliding: in 1997 the Texas Water Development Board was proposing only 6 new dam projects, while by 2000, SB 1 planners were proposing 38 new dam projects in the state. Also, there is a deep-rooted legacy of negligence for the environment: out of ten beneficial uses recognized by the Legislature for water, none were explicitly for the environment.

She suggested three major goals to focus on:

• Define and protect adequate instream flows

• Define and protect adequate freshwater inflows to bays and estuaries

• Get explicit protection for water supply to critical habitat

She favored the following tools for achieving those goals:

• Incentives

• Market mechanisms

• Subsidies

• Regulations

Importance of market remedies: Melinda Taylor elaborated on a number of the promising solutions that Ms. Kaderka outlined, with some examples already underway:

She described the cap on Edwards Aquifer groundwater withdrawals that ED and Sierra had fought for, and the subsequent, if slow development in market trading of withdrawal rights. Eventually, she hopes for a dynamic market allowing farmers to sell water to San Antonio, similar to what has developed in Oregon (where municipalities have paid farmers to let land lie fallow), and in California (where the Los Angeles water utility paid the Imperial Irrigation district $100 million for 100,000 acre-feet of agricultural water).

She felt that pricing and water markets options were much more cost-effective and environmentally benign than current popular supply options, such as dams, channels, pipelines, cloud-seeding, inter-basin transfers, etc. She did admit some interest in rainwater capture. She offered one demand-reduction example that has worked well in Tucson, where the city sets prices according to drought conditions, and has managed to foster a lot of conservation. In general, she felt that this was the direction of the future – towards demand reduction, rather than supply additions (she noted that the Federal Energy Regulatory Commission estimated that 100s of dams are now actually being taken off-line, including 12 major dams, due to siltation, aging concrete, etc.).

Ms. Taylor offered three measures to discourage new reservoirs

Conservation: A low-income housing project in Houston was able to reduce its water use by 72% with off-the-shelf technology: these steps could spread, but first she felt that three issues needed to be addressed:

• Quantification of potential municipal and agricultural conservation yields

• Ideas on how to pay for conservation measures

Pricing: Ms. Taylor argues that water is much too cheap in Texas, offering the example of Valley farmers who pay mostly only for the overhead and electricity of moving water to their fields, and nothing for the water itself. Cities such as Dallas have water prices well below average and could afford higher prices as well. Further, prices should fluctuate with drought conditions.

Markets: Ms. Taylor urges that Texas create and encourage markets in traded water use rights. To do that, an enforceable cap on supply needs to be set first, then water diversions need to be metered, rights need to be assigned, and penalties imposed for cheating. If there were such a market, the state might want to acquire water rights outright for wildlife, or purchase stored waters to influence timely dam releases. Municipalities could invest in more efficient ways for farmers to use water, or pay for farmers to fallow their fields, and release the unused water, periodically.

Water Supply Discussion (2)

15 September 2000
Headliners’ Club * Austin, TX

Water: Myron Hess, counsel with the National Wildlife Federation’s Austin office, reported on the progress of the Senate Bill 1 water planning process, which seeks to have 16 Texas regional committees develop plans for meeting the water needs over the next 50 years. Mr. Hess finds that many of the plans are focused on meeting speculative economic demands, and neglect basic environmental needs. His work began by distributing NWF’s criteria for an environmentally sound plan to over 300 voting members of the 16 planning committees. Currently, he is attempting to file comments on these plans by the end of September, when 11 of the 16 plans’ comment periods end. At this point, he finds that most plans have done no affirmative review of the environmental effect of their envisioned water projects, nor any review of existing baseline environmental conditions. Environmental review appears to be restricted to per forma "low to moderate impact" assessment, without any specific review of impacts. Mr. Hess fears that many of these plans, if built, would cause dramatic disruptions of instream, spring, and estuarine flows, with significant groundwater drawdown, and frequent spring dry-ups. He hopes that NWF and other non-profits can ensure that SB 1 is an informed decision-making process, since he believes that Texans will not accept water plans that destroy the environment.

Susan Kaderka, director of the NWF Austin office, reported that in addition to NWF, 3 other groups, Sierra Club, Texas Center for Policy Studies, and Environmental Defense, were also working on the SB 1 project. At Ann Hamilton’s invitation, these four groups had just finished a joint proposal for a 3-year Texas water research, education, and advocacy program for submittal to the Houston Endowment and other interested donors. The multi-year project will focus on requiring environmental water reserves, and using water pricing and use incentives to encourage efficient use of the water available to municipalities, industry, and agriculture. She also said that the initiative would include general public education and specific alerts, since the today’s largely urban population can often grow ignorant of water sources and limits.

Questions and Answers

Q: What would the scope of the project be, and would it include out-of-state problems related to the Rio Grande’s tributaries in New Mexico and Mexico? Or, would the work include groundwater issues in addition to the traditional surface water concerns? Myron Hess said that there was a need to enforce existing intrastate international treaties and to improve water use efficiency in Mexico, yet he was pessimistic, given the dissension. For instance, El Paso is at odds with both rural landowners (planning on pumping many of them dry) and Mexico (diverting water to in-state canals, away from the international rivercourse) over water.

It was noted that the Clean River program had promise in possibly increasing cooperation in east Texas over resisting involuntary water exports.

Q: What is the role of water marketing in the midst of the public SB 1 process? Myron Hess said that there indeed had been some big transactions, particularly in the Colorado River basin, where the City of Corpus Christi and the Lower Colorado River Authority had bought senior agricultural water rights from lower basin holders. Susan Kaderka felt that these purchases have already created alarm in rural communities, and would lead to more urban/rural conflicts in the future. Myron Hess sees it as a financial contest, particularly in the groundwater area, where the law of capture allows the biggest pump to prevail.

Q: Who was the client for public interest groups working on water issues – cities, rural communities, or the environment? Myron Hess did not feel that there is a single client, but that their goal is to insure an informed decisionmaking process, improved water use efficiency, and a vital ecosystem, which would benefit all.

Q: How are river authorities governed, and what role would they play in water in Texas? Myron Hess felt that the authorities would likely continue to be the main manager of most river systems.