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Water Supply – Unsustainable California: The Top 10 Issues Facing the Golden State

California's Water Problem Jon Jablonsky / Flickr

In Brief

California’s record-level drought has drawn attention to the state’s neglected water management challenge. However, the state’s obsolete, inefficient water infrastructure system threatens effective statewide water delivery even during non-drought conditions.


2013 marked the driest year on record for many regions in the state, and the same conditions are likely to persist in 2014. The state’s major reservoirs – Lake Shasta, Lake Oroville, and San Luis reservoir – were at 36%, 36%, and 47% capacity, respectively, at the end of January 2014 (Figure 1a). While many attribute the state’s unpredictable water supply to the drought and rising temperatures, California’s current drought conditions actually reveal weakness in the state’s water supply management policies.

Figure 1a. Water Conditions for Major Reservoirs Figure 1a. Water Conditions for Major Reservoirs

Even under normal conditions, without the necessary policy reforms and different funding sources, California’s water supply would still be unreliable. The state’s old and insufficient water infrastructure, largely unmanaged groundwater supplies, inefficient water use, and environmental issues are just some of the threats to the state’s future water supply in the short- and long-term. As the population continues to grow and temperatures continue to rise, these challenges will intensify.

Figure 1b. California Daily Water Use (in gal, per capita) Figure 1b. California Daily Water Use (in gal, per capita)

California’s water availability varies within the state, particularly between the northern and southern regions. More than 75% of the state’s precipitation occurs in Northern California, but Southern California demands 75% of the state’s water. Furthermore, while water usage per capita has declined over time, California’s growing population is likely to drive greater water demand overall in the future (Figure 1b).

Water Supply & California’s Economy

In much of California, access to water has been unreliable in the face of numerous demands for various uses. Based on water consumed only by municipal, industrial, and agricultural users, agriculture uses approximately 80% of the total “developed water supply.” Although agriculture remains an important source of income for the state, California’s economy has become less reliant on water-intensive industries. For example, agriculture and other water-related industries now account for only 2% of the state’s Gross Domestic Product.

California receives the greatest portion of agricultural revenue in the U.S. (11.3%). In some cases, crops that generate large portions of the state’s agricultural revenue require less acreage and less water compared to cheaper crops. During drought conditions, the state could increase its water use efficiency as well as its agricultural revenue by focusing production on valuable crops that require less water and acreage.

California Surface Water Storage

California has done little to expand its surface water storage facilities in recent decades. The backbone of the state’s water system, the federal Central Valley Project (CVP) and State Water Project (SWP), have made no significant infrastructure investments since the 1970s. These projects designed their reservoirs to satisfy the water demands of the state’s population when it was only about 19 million, half the size of the current population. California’s fast-growing population is likely to increase water demand. Thus the aging water infrastructure is insufficient to satisfy the demands of California’s 38 million current residents.

There have been significant developments in local surface storage construction such as the Diamond Valley Reservoir, which serves the Metropolitan Water District of Southern California in Riverside County. However, the federal government owns most of California’s major reservoirs that require maintenance. Additionally, considering warmer temperatures, there is likely to be more winter precipitation falling as rain instead of snow. Therefore, California’s water supply system should have a sufficient number of efficiently operating reservoirs to satisfy the needs of the growing population and maintain sufficient reservoir space for winter flood control.

Building (about $2.3 to 3.2 billion) and maintaining (about $10 to $21 million annually) reservoirs and dams is costly, but it provides the state with operational flexibility. For example, they provide drought protection by compensating for the snowpack loss due to higher temperatures, environmental protection by releasing water when needed, and manage floodwaters. Thus while maintaining and building new surface water infrastructure is costly in the short-term, it secures the state’s essential water supply system and offers the opportunity to respond to emergencies.

Unregulated Groundwater

California’s surface and underground water is all part of the same system, yet, surface water is generally considered a public good, while ground water is considered a private good. As such, two different legal systems regulate surface and groundwater in California. This decentralized management could lead to an irreparable “groundwater overdraft,” which occurs when water is released faster than it is replaced through absorption. Groundwater overdraft can especially happen during drought conditions because there is insufficient surface water available. They can cause land to sink, or in case of coastal aquifers, lead to seawater intrusion. Some areas of the San Joaquin Valley have already started sinking at an alarming rate.

Groundwater storage is widespread, but these underground storages refill and empty much slower than the surface reservoirs, which makes them a more suitable water source during droughts. Between 1998 and 2005, groundwater resources supplied about 35% of California’s average annual water demand in urban, agricultural, and managed wetland areas. During drier years, this portion increased to 40% or higher statewide and as more than 60% in some regions.

The state has previously implemented various strategies to address groundwater management challenges and make it a more reliable water supply source. However, California still lacks a formal state-administered system that regulates and permits groundwater use.

Environmental Measures Affecting Water Supply

The Sacramento-San Joaquin River Delta (“The Delta”) is the hub of California’s two main water delivery systems – the SWP and the federal CVP. It is an important ecosystem and also a critical link in California’s water supply system. Therefore, it has been the center of a power struggle among urban water use, agricultural water use, and environmental objectives.

As a result of recent drought conditions, a state court has ordered restrictions on Delta water pumping to protect certain fish species from extinction because water pulled directly through Delta channels increases the risk of fish getting trapped in the pumps. Additionally, the existing operations of the SWP and CVP pumps can reverse river flows, which can potentially alter salmon migratory patterns and contribute to the decline of sensitive fish species such as the Delta smelt. The court-ordered restrictions further reduces the surface water supply. Consequently, water users may turn to local underground resources, which can lead to a groundwater overdraft.

To resolve the dispute and increase water supplies, water agencies proposed the Bay Delta Conservation Plan. This plan includes the construction of two tunnels that would carry water beneath the Delta to the SWP and CVP pumping plants, and from there, the water would travel into the existing water channels that currently supply much of the state’s water. However, this solution requires strict governance and financial policies, as well as a systematic science program and ecosystem restoration under new conditions. This proposal, if successful, could solve the Delta’s environmental problem while stabilizing the water supply.

Water Efficiency and Conservation

As Professor Barton Thompson, Co-Director of Stanford University’s Woods Institute for the Environment, said, we “cannot run out of water…all we can do is run out of cheap water.” Water is a scarce resource in California, and policymakers have primarily focused on increasing the supply of water to meet increased demand. Policymakers should also consider incentivizing reduced demand for water, particularly when it is extremely scarce.

“In theory, cities cannot run out of water. All we can do is run out of cheap water, or not have as much water as we need when we really want it.”
– Barton Thompson, Co-Director of Stanford University’s Woods Institute for the Environment

Public institutions regulate most of California’s water so that it is priced far below true market value in urban and agricultural areas. Further, water prices do not adjust automatically to periods of shortage and excess.

However, research studies have shown that even higher water prices affect the public’s demand for water very little in California. Thus increasing the cost of water may be ineffective in reducing municipal water use. Yet, studies have found that increasing water prices may reduce agricultural water demand. Given the state’s dependence on the agricultural sector for food and resources, raising water prices could have additional negative effects, such as a significant increase in food prices.

Funding Challenges

California’s local agencies are more responsible for delivering water services and maintaining infrastructure than the state and federal governments. They mainly fund their operations through monthly water and wastewater bills. State and federal spending is low relative to the local agencies’ water expenditures. In the late 2000s, local agencies spent about $30.3 billion annually, while state and federal agencies spent about $3.1 billion and $510 million, respectively (Figure 1c).

Figure 1c. California’s Annual Water Expenditures in late 2000s (% of Total Expenditure) Figure 1c. California’s Annual Water Expenditures in late 2000s (% of Total Expenditure)

General obligation bonds, funded by tax revenues, have become a more reliable source of funding for the local agencies’ water projects. But water expenses have exhausted the existing water bond funds, and due to concerns regarding weak voter support, the state Legislature has postponed a ballot measure for the new bond until November 2014.

Due to recent drought conditions, Governor Brown announced a $687.4 million emergency drought-relief plan, which includes funds for housing and food for workers directly impacted by the drought, as well as secures emergency drinking water supplies. Critics such as the Minority Assembly leader Connie Conway and Vice Chair of the Assembly Water, Parks and Wildlife Committee Frank Bigelow have called the Governor’s plan an ineffective “drop in the bucket.” The Governor further proposed an additional $142 million in the May Revised budget to continue the immediate drought-related efforts. The state must develop a range of funding options to successfully face the challenges of sustainable water supply management.


In recent years, water agencies have made significant progress towards creating a reliable water supply system. However, California’s water system still faces a number of challenges such as old and insufficient water infrastructure, largely unmanaged groundwater supplies, inefficient water use, and environmental issues. These challenges have become even more difficult to tackle with population growth and higher temperatures. Thus improving water supply management policies and finding sustainable funding sources are essential means for the state to develop an effective and reliable water supply system.

Works Cited [+ Expand]

California Department of Water Resources. “Driest Year on Record?”
Gillis, Justin. “Science Linking Drought to Global Warming Remains Matter of Dispute.” The New York Times. February 16, 2014.
Legislative Analyst’s Office. “2013 Cal Facts.” January 2, 2013.
Canessa, Pete, Sarge Green and David Zoldoske. “Agricultural Water Use in California: A 2011 Update.” The Center for Irrigation Technology California State University Fresno. November 2011.
California Department of Food And Agriculture. “California Agricultural Production Statistics.”
California Department of Finance State Data Center. “Historical Census Population 1850-2010.”
Association of California Water Agencies. “Sustainability From The Ground Up: A Framework for Groundwater Management in California.”
Legislative Analyst’s Office. “California’s Water: An LAO Primer” October 2008.
United States Census Bureau State & County QuickFacts. “California.”
Legislative Analyst’s Office. “California’s Water: An LAO Primer.” October 2008.
Union of Concerned Scientists. “Global Warming and California’s Water Supply.”
California Department of Water Resources. “Sites Reservoirs: Frequently Asked Questions.” September 2007.
San Francisco Gate. “Drought should make state rethink water policy.” February 7, 2014.
Association of California Water Agencies. “Sustainability From The Ground Up: A Framework for Groundwater Management in California.” April 2011.
Hesterman, Donna. “California groundwater management trickles up from local sources, Stanford report finds.” Stanford News. July 7, 2011.
Schmit, Julie. “In California, Demand for Groundwater Causing Huge Swaths of Land to Sink.” National Geographic Daily News. March 25, 2014.
California Department of Water Resources California Water Plan Update 2009 Volume 2 Chapter 8. “Conjunctive Management and Groundwater Storage.”
Association of California Water Agencies. “Sustainability From The Ground Up: A Framework for Groundwater Management in California.” April 2011.
Bay Delta Conservation Plan. “Bay Delta Conservation Plan Highlights.” December 2013.
Public Policy Institute of California. “California’s Future: Water.” January 2014.
Rogers, Paul. “California drought: Past dry periods have lasted more than 200 years, scientists say.” San Jose Mercury News. January 25, 2014.
Olmstead, Sheila M. and Robert N. Stavins. “Managing Water Demand, Price vs. Non-Price Conservation Programs.” Pioneer Institute. July 2007.
Hesterman, Donna. “California groundwater management trickles up from local sources, Stanford report finds.” Stanford News. July 7, 2011.
Olmstead, Sheila M. and Robert N. Stavins. “Managing Water Demand, Price vs. Non-Price Conservation Programs.” Pioneer Institute. July 2007.
California Climate Change Center. “Price Impact on the Demand For Water and Energy in California Residences.” August 2009.
Schoengold, Karina, David L. Sunding and Georgina Moreno. “Price elasticity reconsidered: Panel estimation of an agricultural water demand function.” University of Nebraska Papers in Natural Resources. September 19, 2006.
Hanak et al. Managing California’s Water. Public Policy Institute of California, 2011.
Hanak et al. “Water and the California Economy: Technical Appendix.” Public Policy Institute of California. 2012.
Hanak, Ellen., “Addressing Funding Gaps in California Water.” Public Policy Institute of California Testimony. February 26, 2013.
Association of California Water Agencies. “2014 Water Bond.”
Office of Governor Edmund G. Brown Jr. “Governor Brown Signs Drought Legislation.” March 1, 2014.
York, Anthony. L.A. Times, “$687-million California drought relief plan met with mixed reactions.” Los Angeles Times. February 20, 2014.,0,2465716.story#axzz2tszAoXts.
Governor’s Budget 2014-15. “Emergency Drought Response.” May Revision 2014-15.

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