This is such an old story, but the new garb makes an interesting side-by-side comparison: a community faces tension as a new water user comes to town.
In Barnhart, in West Texas, it’s fracking for oil:
The Barnhart area has been hard-hit by drought, he said, just as surging oil and gas drilling activities have increased local water demands.
In Paso Robles, CA, it’s wine:
Where did the water go? Smith and other residents say it’s flowing freely into the area’s signature industry — wine.
Let us set aside, for a moment, the value judgments one might have about the newly produced products involved, and the fact that we love one while find the other abhorrent (I’ll let you decide which is which.).
What policies could be implemented in these communities to sort out the competing demands for scarce water?
Full disclosure–I make wine for a living and irrigation, either from groundwater or surface water is part of our toolkit. We are actively involved in building recycled water infrastructure–and yes, the recycled water would otherwise be discharged into SF Bay. The Paso Robles problem is hard to resolve–the nearest external source of water is a pipeline from Lake Nacimiento, on the upper end of the Salinas River watershed. Who would pay for that infrastructure and the pumping? How reliable is the source? In any case, the present situation is untenable. In West Texas—where would additional water come from? Praying for rain may be one idea, but should I live there, I would be demanding that the oil drillers be part of the solution.
Since all uses are economic, it makes sense to use a market (an auction) to ration the water. Where does the money go? To traditional users (my all in auction) or the community (a pooled auction).
Here’s the post with details: http://www.aguanomics.com/2012/12/all-in-auctions-is-published.html
ps/wine and oil are BOTH valuable, although perhaps not at the same margins.
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