Dry Year Option for Water Solutions in Urban and Agricultural Settings, Dr. Luis Ribera and Nishita Sinha

Dry Year Option for Water Solutions in Urban and Agricultural Settings

Luis RiberaNishita Sinha(Texas A&M University)

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Increasing UsagePollutionDeforestationFall in Groundwater levelClimate Change

Water Scarcity

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Requires more than traditional practices of water conservation

Cost-effective ways to reduce non-beneficial water consumption in irrigated agriculture without compromising economic returns

Lowering existing levels of consumptive water use, while at the same time increasing water’s productivity

A well-functioning water market can provide financial incentives for improving water’s productivity

Solutions

4Source: https://www.tceq.texas.gov/gis/metadata/edw_tsms_met.html

Edwards Aquifer

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Voluntary Irrigation Suspension Program Option

Participation open to irrigation water right holders including municipal and industrial

Water level below 635 feet in J-17 index well triggers the program

Goal- Enrollment of 40,000 ac-ft of waterTrigger Date- October 1stFlexibility- Farmers can walk out post

enrollment if water level increase

The VISPO

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Participants must suspend withdrawals in the following calendar year

Standby fee is paid to all participants irrespective of a suspension call

Implementation fee paid when program requires suspension of withdrawals

Initially pursue enrollment from counties with high impact factor- Atascosa, Bexar, Comal and Hays

Option Structure

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Two term contracts- 5yr and 10yrPayment Schedule

Contract Terms

5-year ProgramStandby fee $50/acre-foot, 1.5% increase per year

Implementation fee $150/acre-foot, 1.5% increase per year

10-year ProgramStandby fee $57.5/acre-foot for years 1-5 and step-

up to $70.20/acre-foot for years 6-10Implementation fee $172.5/acre-foot for years 1-5 and

step-up to $210.60/acre-foot for years 6-10

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Enrollment for the first program began in 2012Implementation once in 2015Fully enrolled program- some applications were

denied since enrollment was fullGuaranteed payment for farmers- stand-by

paymentFarmers cut back on vegetables. Cotton and

Sorghum worked well under dry-land cropping

Program Evaluation

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In 2015, Critical Period Management (CPM) reduction applied to permit holders

VISPO provides the financial incentive to cut further

Aided increase in spring flows and municipal water supply

Lower incidence on farmers of the reduced irrigation water supply

Program Evaluation

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VISPO is funded from aquifer management fees (AMFs) that are specified for the Habitat Conservation Plan- the municipal and industrial permit holders pay $44/acre foot of water as AMFs

Total cost of the program can be ascertained only after the expiry of contract terms due to myriad uncertainties

Edwards Aquifer Authority estimates cost of about USD 4 million for an average implementation rate of 33% over a period of 10 years under a fully enrolled program

Program Management

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Depends on Rio Grande for domestic and agricultural uses

Both agricultural and municipal water demand is expected to grow in the coming years

Oil and gas production has put significant pressure on water demand

Majority of municipal water demand is currently met by Rio Grande

Amistad-Falcon Reservoir system- the shared resource with Mexico

The Valley

To fix and delimit the rights is US and Mexico with respect to the water of:Colorado and Tijuana Rivers andRio Grande from Fort Quitman to the Gulf of

MexicoOne-third of the flow to Rio Grande from the Conchos,

San Diego, San Rodrigo, Escondido and Salado Rivers and the Las Vacas Arroyo…this one-third shall not be less, as an average amount in cycles of five consecutive years, than 350,000 acre-feet

In case of “extraordinary drought” or serious accident to the hydraulic systems on Mexican tributaries…the treaty allows for the deficiencies to be repaid in the following five-year cycle

If reservoir levels exceed 85 percent full then deficit if forgiven and a new five-year cycle starts

Water Treaty of 1944

Water Treaty of 1944

Between 1953 and 1992 Mexico failed to deliver water to US only once

Since then, almost in every five-year cycle there has been a failure to deliver minimum water amount

Agricultural production in the LRGV depends heavily on irrigation water

Water Treaty of 1944

Value of Irrigation Water for LRGV

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Allocation from Amistad and Falcon reserves coordinated by Rio Grande water master

The DMI (Domestic, Municipal and Industrial) gets the priority followed by mining and irrigation

The DMI storage account is renewed at the beginning of each month

DMI and operational reserves are recharged before mining and irrigation water allocation

Rights Structure

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Surface water vs. Ground waterUrban has superior right to agricultureRisk and uncertainty exist with dependence on

MexicoThere are 27 ID’s and each operates

independentlyWater is stored in the reservoirs so takes a few

days to reach a farmer when calledAdministrative Differences- Role of ID’s and

water master!

Differences from Edwards Aquifer

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Municipal use is limited by municipal water rights- ag conservation may not help!

Sometimes, DMI usage exceeds their individual water right

IDs continue to “oversupply” DMI water to DMI users if they have availability

In absence of DMI water with the ID, cities can acquire water from a third party

These one time “contract water” deliveries are governed by the watermaster

Current Practice under Shortage

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Increase in water demand, climate change, uncertainty on deliveries from Mexico

Irrigation water used to charge the networks of canalThe reliability of municipal water availability may be

disrupted in cases of severe drought and absence of “push water”

Urban must also pay for water losses from seepage, evaporation and other operational losses

Municipalities may need to purchase water to provide for “push water”

Motivation for a DYOP

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Establishing a market where DMI can purchase push water from farmers

Similar to the VISPO, an option be given to farmers where they can slow down irrigation water usage to recharge the canals under water shortage

DMI water availability with the ID’s can be used as a trigger for withdrawal suspensions by farmers

When district has the required amount of water in the DMI account no suspensions will be required

Our Vision

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Like VISPO, payments will be made for both enrollment in the program and suspension when triggered

Volume of push water varies – canal status and length of the system are key determinants of push water requirement

Prices may be negotiated between the parties- cities/districts and farmers

Efficient pricing mechanism would imply paying the farmers the break-even price or the water use value

Payment Proposition

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The present value cost of the contract is the sum of payments to exercise the option and holding it discounted to the present time

We plan to develop a risk based simulation model to assess the probability of exercising the option under different scenarios

Simulation results will provide insight into the potential payments necessary to offset farmer and ID losses under different production and drought scenarios.

Value of the Option

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Cost of water procurement via a DYOP must be less than that of any other alternative

Can have shorter term unlike the Edwards Aquifer program- does not concern endangered species

A small-scale program involving a few districts that are more likely to benefit from DYOP may be put in place

A pilot program can help us understand large-scale challenges and feasibility issues

Other Elements

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Questions/Comments?

Value of Irrigation Water for LRGV

Value of Irrigation Water for LRGV