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California Is Running Out Of Cheap Water

The ongoing water crisis in California has generated some dire predictions about the state’s future. But California isn’t running out of water. It’s running out of cheap water. The drought damage is estimated as $2.2 billion, which is significant, but hardly the “end of growth” for California’s $2.2 trillion economy. The problem for businesses, however, is that cheap water jeopardizes their water security. Executives need visibility into the issue and strategies to manage it, but unfortunately, the slow policy response and inconsistent price signals slow adaptation and innovation.

It starts with a very basic problem of ‘metrics’. How do we measure water? Since agriculture accounts for the majority of the water usage, around 80%, the attention naturally focuses on this sector. In the absence of good metrics, the conversation drifted to esoteric metrics such as “gallon per nut” (for almonds) to compare almonds and alfalfa. These two are the most frequently discussed crops; they occupy similar land acreage in the state. An acre of almonds consumes about 1,140 kgal of water per year while an acre of alfalfa consumes about 30% more. But there are real economic differences: Almonds generate about $6,000 of revenue per acre per year, compared to alfalfa’s $1,000. Therefore, the economic value of almonds is about $5.3 per kgal of water and alfalfa is only about $0.7 per kgal – almonds are eight times more valuable than alfalfa per unit of water.

There is even a more basic issue. Water is measured (and charged for) by volume. But the value of a gallon of water is highly dependent on location. In California, the difference is extreme. The typical difference in annual total rainfall between northern and southern California is fifty-fold – 100 and 2 inches, respectively. Clearly a gallon of water in the north has different value than the same gallon of water in the south, but how can this be quantified?

The most logical proxy to use to sort out the geographic and economic differences in the value of water is energy. There is no shortage in water for those who are willing to pay for the energy to treat, convey, distribute and collect it after use. This is why California is not running out of water. It already ran out of cheap water. But water needs to be regulated to make sure that withdrawal does not lead to depletion, and is priced in a way that captures the value of the energy and environmental externalities.

When we price water as energy, we gain visibility. The energy intensity of water in California can be as low as 2 kWh per kgal or as high as 37 kWh/kgal (including desalination and conveyance). Assuming an electricity price of $0.15/kWh (to create a “value of water” benchmark), the energy price of water will range between about $0.3 per kgal and $6 per kgal. Almond farmers can easily pay for the low-end (which is less than 10% of resulting crop value), which is what they have been doing until recently. They cannot pay for the high end. Alfalfa farmers can pay for neither, and the popularity of the crop in the state depends on the fact that the state’s byzantine system of water rights means that water can be virtually free for some agricultural users. In some locations, however, today’s drought prices are as much as $3 per kgal and driving an outcry among farmers. In the absence of clear and consistent water pricing, econometrics that use energy as a proxy can provide decision makers with visibility into the value of water.

This analysis highlights the challenges California faces in deploying what should be its greatest asset in addressing water issues: innovation. The lack of clear pricing has led to a lack of interest by Silicon Valley entrepreneurs and investors. New pricing mechanisms and regulations may change this situation, but the track record of government is not encouraging. Last year, finally, the governor signed a bill to regulate groundwater extraction – but the regulation is set to be fully implemented only in 2040, and until then, farmers that have the money to drill deeper for water can suck aquifers dry, while regulators that focus on the residential sector, may move some guilt, but California residents cannot conserve their way out of the crisis.

The Israeli experience may be relevant. From the water perspective, Israel is like a “miniature California”: It is 60% desert, had a seven-year drought between 2004 and 2010 and the driest winter on record in 2013-2014. It has one big surface water reservoir (the Sea of Galilee) and ground water aquifers that need to be protected, and relies on desalination plants for additional water. Fresh water is expensive, so farmers minimize use and when possible use brackish water. Even so, agriculture is 2.4% of GDP (compared to 2% in California) – Israel even exports carrots to Russia. Like California, it’s an entrepreneurial hub, and there the price of water helps drive thriving water innovation: Promising start-ups include Desalitech, which builds improved reverse osmosis systems that farmers can use.

How should business executives respond to the water crisis? They cannot wait for policy makers. They have to acquire the right data and determine the internal value of water to decide what technology can be effective where. For example, Nestlé uses an internal ‘shadow price’ of water to assess innovations and proposals for new equipment.

As California runs out of cheap water, and as the regulators are moving too slowly, companies have to distill complex information into crisp decisions. They should use data and analytics to determine the value of water, using the energetic price as a starting point. This will boost innovation and select the innovations that can provide value.

http://www.wateronline.com

9 states running out of water

For many states, the rainy season is over, and most of the Western United States is now locked into a fourth consecutive year of drought. The imminent dry summer is particularly foreboding for California, where more than 44% of land area is engulfed in an exceptional level of drought. This was the highest such share nationwide and the kind of water shortage seen only once a century.

According to a study by the National Aeronautics and Space Administration (NASA), “Droughts in the U.S. Southwest and Central Plains during the last half of this century could be drier and longer than drought conditions seen in those regions in the last 1,000 years.” The likelihood of such a drought is 12%, NASA scientists estimated.

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Based on the most recent drought levels estimated as of the week ended April 14 from the U.S. Drought Monitor, 24/7 Wall St. identified the nine states with the most widespread severe to exceptional drought conditions. During periods of severe drought, crop or pasture losses are likely, and water shortages and restrictions are common. Relative to historical trends, severe drought is expected once every 50 years. During times of exceptional drought, these conditions are intensified and water shortages are considered water emergencies. These are the 9 states running out of water.

In an interview with 24/7 Wall St., Brad Rippey, agricultural meteorologist with the U.S. Department of Agriculture (USDA), said, “Where people live and where the precipitation falls are two completely different areas.” As a result, water needs to be transported to meet water demands in each state. States rely on a range of water sources.

While Great Plains states rely heavily on groundwater, the western part of the country relies more heavily on surface water, which is replenished each year primarily by the spring thaw. Snowpack levels, therefore, are very important for water supplies.

The U.S. climate is also highly variable, which means wet seasons in different parts of the country occur at different times during the year. For large swathes of the nation, the wet season is primarily in the early spring. Across the Great Plains and southward, on the other hand, the wet season typically peaks during May, June, and July. As Rippey explained, current drought levels as of mid-April may still have a chance to improve in states such as Kansas, Oklahoma, and Texas.

In Western U.S. states, however, peak precipitation was expected from October through March, which means in states such as California, Oregon, and Nevada, the drought levels will most likely not improve much from their mid-April conditions.

The ramifications of such severe drought conditions for these states and for the nation are manifold. California and the Great Basin are major sources of the nation’s food. The production of several water-intensive crops such as cotton, corn, soy, wheat, and rice are already down substantially from when the drought began. Cattle and other livestock also require large quantities of water and nutritious pastures and drinking water.

Beyond the economic impacts, municipal cutbacks and water restrictions have a tangible impact on individuals living in these areas. In addition, Rippey said the likelihood of wildfires is much higher than normal as a result of the dry weather.

On the bright side, Rippey noted the current drought in California is approaching the level of drought experienced in the late 1970s — the last time such drought levels affected the state. This time, reservoirs are at higher levels than they were in the 70s, and water consumption is lower. It appears people are more conscious of the situation, and there may be ways for state officials to adjust to the problem.

Based on the most recent drought levels estimated as of the week ended April 14 from the U.S. Drought Monitor, 24/7 Wall St. identified the nine states with the most widespread severe to exceptional drought conditions. During periods of severe drought, crop or pasture losses are likely, and water shortages and restrictions are common. Relative to historical trends, severe drought is expected once every 50 years. During times of exceptional drought, these conditions are intensified and water shortages are considered water emergencies. These are the 9 states running out of water.

In an interview with 24/7 Wall St., Brad Rippey, agricultural meteorologist with the U.S. Department of Agriculture (USDA), said, “Where people live and where the precipitation falls are two completely different areas.” As a result, water needs to be transported to meet water demands in each state. States rely on a range of water sources.

While Great Plains states rely heavily on groundwater, the western part of the country relies more heavily on surface water, which is replenished each year primarily by the spring thaw. Snowpack levels, therefore, are very important for water supplies.

The U.S. climate is also highly variable, which means wet seasons in different parts of the country occur at different times during the year. For large swathes of the nation, the wet season is primarily in the early spring. Across the Great Plains and southward, on the other hand, the wet season typically peaks during May, June, and July. As Rippey explained, current drought levels as of mid-April may still have a chance to improve in states such as Kansas, Oklahoma, and Texas.

In Western U.S. states, however, peak precipitation was expected from October through March, which means in states such as California, Oregon, and Nevada, the drought levels will most likely not improve much from their mid-April conditions.

The ramifications of such severe drought conditions for these states and for the nation are manifold. California and the Great Basin are major sources of the nation’s food. The production of several water-intensive crops such as cotton, corn, soy, wheat, and rice are already down substantially from when the drought began. Cattle and other livestock also require large quantities of water and nutritious pastures and drinking water.

Beyond the economic impacts, municipal cutbacks and water restrictions have a tangible impact on individuals living in these areas. In addition, Rippey said the likelihood of wildfires is much higher than normal as a result of the dry weather.

On the bright side, Rippey noted the current drought in California is approaching the level of drought experienced in the late 1970s — the last time such drought levels affected the state. This time, reservoirs are at higher levels than they were in the 70s, and water consumption is lower. It appears people are more conscious of the situation, and there may be ways for state officials to adjust to the problem.

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To identify the states running out of water, 24/7 Wall St. reviewed the percentage of land area in severe to exceptional drought from the U.S. Drought Monitor as of the week ended April 14, 2015. To be considered, a state needed to have at least 20% of its land area affected by severe to exceptional drought. While New Mexico did not meet this criteria after a welcome late winter monsoon, the state still suffered among the worst long-term drought conditions, according to Rippey. We also reviewed drought levels during the same week in 2014. Peak drought levels for 2014 in each state, as well as the number of people affected by each level of drought are also from the Drought Monitor.

These are the states running out of water.

9. Texas
> Pct. severe drought: 24.7%
> Pct. extreme drought: 14.9% (5th highest)
> Pct. exceptional drought: 3.3% (4th highest)

For the first time since 2006, the current drought, which according the National Weather Service began almost five years ago, engulfed almost all of Dallas. The drought is widespread across Texas, and while still crippling, was not as severe as 2014. For the week ended April 15, 2014, about 44.1% of Texas was in severe to exceptional drought conditions. For the week ended April 14 this year however, those conditions applied to about 24.7% of the state’s land, the ninth highest nationwide. Precipitation levels have been below normal throughout much of the state each year since the drought began in October 2010. Based on land usage, the most severe impact of the drought conditions in Texas could be on cattle production. While about three-quarters of Texas land area is used for agriculture, most of that land provides pasture for raising cattle, the state’s leading commodity. With pastureland unavailable, cattle ranchers use more costly grain to feed the cattle. They also rush the lower weight livestock to market, which increases supply and can lead to lower prices and income. The severe drought is affecting about 28% of Texans.

8. Kansas
> Pct. severe drought: 27.7%
> Pct. extreme drought: 4.9% (7th highest)
> Pct. exceptional drought: 0.0% (tied—the lowest)

Severe to exceptional drought conditions, while affecting almost 28% of Kansas in the week ended April 14, are significantly improved from one year ago when such conditions affected over 70% of the state. The most intense drought conditions apply to the western and southern portions of the state. The USDA designated 27 counties in that part of Kansas “primary disaster areas” this year, making farmers in those areas eligible for low interest loans. Governor Sam Brownback 2014 declaration of drought emergencies in 56 counties making up more than half of Kansas remains in effect. Statewide, precipitation was 19% of normal in March, according to the Kansas Water Office. Precipitation in April in Kansas also is expected to be below normal. MDA Weather Services, a Maryland-based commodity firm, is forecasting that the Kansas 2015 winter wheat crop will yield 292 million bushels, down from the state average of 329 million bushels for the past decade. About 22% of Kansas residents are affected by the current severe to exceptional drought.

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7. Arizona
> Pct. severe drought: 29.5%
> Pct. extreme drought: 1.0% (9th highest)
> Pct. exceptional drought: 0.0% (tied—the lowest)

An estimated 325,700 Arizonans, or 5.1% of the state’s population, are affected by the continuing severe to exceptional drought, the smallest share of any of the nine states with the most serious drought conditions. About 29.5% of the land in the state is affected by the severe to exceptional drought, slightly more than half of the 57.1% that was affected in 2014. Drought conditions worsened in the eastern part of the state in March, with the drought levels in parts of four counties reclassified as severe or extreme. The state may experience even more serious conditions in the future. According to the Colorado Basin River Forecast Center (CBRFC) snowmelt into the Lower Colorado River Basin reservoir, which supplies water to Arizona, has been very low and largely depleted. Rippey also noted critically low reservoir levels in Arizona, a long-running problem for the state.

6. Colorado
> Pct. severe drought: 39.8%
> Pct. extreme drought: 0.0% (tied—the lowest)
> Pct. exceptional drought: 0.0% (tied—the lowest)

Drought levels are typically lowest during the winter months when precipitation is at its highest. Melted snow and ice are the major water source of the Western states. Colorado reported relatively low precipitation levels this past winter, however, which partly explains the high drought level. As of the week ended April 14, severe to exceptional drought conditions afflicted nearly 40% of Colorado, the sixth highest such proportion and far higher than the state’s peak level of about 19% between May and June last year. The Colorado Water Conservation Board reported a relatively warm and dry spring as of April. However, reservoir storage was above average levels, and the Board anticipates conditions to stabilize during the spring storm season.

5. Oregon
> Pct. severe drought: 49.9%
> Pct. extreme drought: 33.7% (4th highest)
> Pct. exceptional drought: 0.1% (5th highest)

As is the case with much of Western U.S., snowmelt is the backbone of Oregon’s water supply. The region’s water consumption relies on high precipitation during the winter months. Winter snowpack slowly melts in the spring, resupplying reservoirs and other water levels. However, this past February was among the warmest on record in Oregon, and severe to exceptional drought levels unexpectedly peaked that month for the year, afflicting 77% of the state’s land area. As a result, the annual snowmelt contribution to the state’s water reservoirs was below average. While the melt did bring down the drought level since February, the snow-drought will still likely exacerbate the effects water shortage. Nearly all of Oregon was affected by abnormally dry drought, and more than 49% of the state’s land area was in a state of severe to exceptional drought, trailing only four other states.

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4. Oklahoma
> Pct. severe drought: 51.7%
> Pct. extreme drought: 39.7% (3rd highest)
> Pct. exceptional drought: 10.7% (3rd highest)

While the periods of peak precipitation have passed in the Western U.S., the wet season in Oklahoma has not quite arrived and therefore there may be hope to restore water supplies there. With severe to exceptional drought conditions affecting more than half of Oklahoma as of the week ended April 14, however, the state’s current water shortage is quite dire. Almost 11% of the state’s land area was experiencing exceptional drought, nearly the highest such share in the nation. Oklahoma is also one of a handful of Great Plains states relying heavily on the Ogallala Aquifer, which supplies water for about one-fifth of all U.S. wheat, corn, cotton, and cattle production. The Aquifer, which contains water thousands of years old, is currently being depleted faster than it is being replenished.

3. Utah
> Pct. severe drought: 53.2%
> Pct. extreme drought: 9.3% (6th highest)
> Pct. exceptional drought: 0.0% (tied—the lowest)

Compared to last year, the amount of Utah land affected by severe to exceptional drought conditions as of the week ended April 14 has grown threefold. The drought is parching an estimated 53.2% of Utah compared with 17.9% of land last year. An estimated 2.1 million people live in the area currently experiencing the severe drought. Utah’s water supply managers could be facing one of the worst water supply years on record for the state. As of April 1, when snowpacks in Utah usually peak, snowpacks across the state were exceptionally poor, and all low elevation sites are completely melted. Around the same time, precipitation in the state was 47% of average. Earlier this month, the USDA designated two Utah counties natural disaster areas as a result of drought conditions. The declaration means farmers, ranchers, and businesses in the affected areas are eligible for emergency low-interest loans.

2. Nevada
> Pct. severe drought: 85.7%
> Pct. extreme drought: 48.0% (2nd highest)
> Pct. exceptional drought: 18.4% (2nd highest)

Severe to exceptional drought conditions were afflicting nearly 86% of Nevada as of the week ended April 14, approaching the 2014 peak level of 87% of land affected by severe to exceptional drought. Drought did not peak last year until mid May into June, however, which means Nevada may see conditions worsen by the end of this summer. Already, 354,725 Nevada residents are affected by exceptional drought levels, the second-highest number after only California. The Sierra Nevada mountains and the Lake Mead reservoir supply Nevada and much of the region with water. Both supplies are weak compared to historical levels, however. Snowmelt on the Sierra Nevada range is low on account of a warm winter, and Lake Mead’s water level has dropped steadily since the regional drought began.

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1. California
> Pct. severe drought: 93.4%
> Pct. extreme drought: 66.6% (the highest)
> Pct. exceptional drought: 44.3% (the highest)

More than 93% of California was engulfed in severe to exceptional drought as of the week ended April 14, the highest such share nationwide. More than 44% of the state experienced exceptional drought conditions, the highest such drought level and by far the worst such share nationwide. By contrast, less than 3% of the nation was in a state of exceptional drought, and only 18.4% of second-place Nevada was as afflicted. Peak precipitation levels in California normally occur between October and March, which means the time to replenish the dwindling supplies is largely over. California and much of the Western United States saw little to no precipitation that week.

California’s current water shortage crisis is entering its fourth straight year. Severe to exceptional drought conditions affected 100% of the state for two straight months last summer. Nearly 20 million Californians live in the areas affected by exceptional drought, the highest raw number and an understatement of the real impact. Most of California’s water usage is for agriculture, and the state generates a huge portion of the nation’s food, including more than two-thirds of the country’s fruits and nuts. In addition, as Rippey noted, drought conditions raise the likelihood of wildfires in the coming dry season.

http://finance.yahoo.com/news/9-states-running-water-102631632.html

The Innovative Stormwater Infrastructure Act

The Innovative Stormwater Infrastructure Act made some progress in Congress last week; it was assigned to a congressional committee for consideration, possibly to be sent on to the House or Senate as a whole. Sponsored by Rep. Donna Edwards (D-MD) and Senator Tom Udall (D-NM), the act has two major goals: one is to improve water quality and the other is to provide jobs.
The act emphasizes “innovative” stormwater measures, particularly green infrastructure. It specifically mentions permeable pavement, natural drainage swales, and green roofs as alternatives to conventional stormwater infrastructure. A version of the bill was first introduced in 2013 by Rep. Edwards. You can read the full text of the act here.
According to a statement released by Rep. Edwards, the act will do several things to address water management:

  • Promote the use of innovative stormwater solutions within the Environmental Protection Agency’s Office of Water and related programs and provide technical assistance to states, local governments, and the private sector;
  • Invest in planning, development, and implementation grants for community-based stormwater control projects;
  • Establish up to five Centers of Excellence in various regions of the US that would conduct research, develop recommendations, and provide training and technical assistance for implementing management practices for stormwater control and management; and
  • Promote public-private partnerships to create jobs in the design and construction of innovative stormwater control infrastructure.
    It lists further goals:
  • Improve our nation’s ability to manage clean water resources, including drinking water;
  • Increase research and development of innovative green infrastructure techniques;
  • Create jobs across diverse sectors, such as plumbing, landscaping and engineering;
  • Save taxpayer money by reducing the amount of water entering treatment plants, keeping energy costs low and prolonging the life of existing conventional water infrastructure; and
  • Provide environmental and economic benefits to communities, including reduced flooding and energy use, as well as increased community greenspace and property values.
    As it addresses polluted runoff, flooding, and combined sewer overflows, the act seems similar in intent to the thousands of municipal stormwater permits that are already in place. The Centers of Excellence and the technical assistance it promises, however, as well as more research and development on specific green infrastructure techniques, could benefit communities across the board.
    What’s your take on the Innovative Stormwater Infrastructure Act—will it help further clean water interests, or is it redundant with existing legislation?

By: Kaspersen, Janice: Stormwater Editor

Usgbc Cces
Triton Stormwater Solutions, LLC
7600 Grand River Rd, Suite 195
Brighton, Michigan 48114
Phone: (810) 222-7652 - Fax: (810) 222-1769
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