Larry D. Sanders ODAFF Advisory Group Animal Science Department Faculty Seminar Oklahoma State...

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Larry D. Sanders

ODAFF Advisory Group

Animal Science Department Faculty Seminar

Oklahoma State University9 December 2011

Implications of Water Planning/Policies in Oklahoma

Larry D. SandersJanuary 2013

Larry D. SandersJuly 2013

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AGRICULTURE’S ROLEIN THE STATE’S ECONOMY

Sustainable agricultural industry essential to Rural & state economyProvision of ecosystem services

Water access essential to the success of agriculturethe future of the state’s economyProvision of ecosystem services

The current state of knowledge limits scientific ability to evaluate future access to water and water supply

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Water’s Role in OK Agriculture• Water is critical to 100% of the agricultural economy• Direct impact for OK ag sector-- $20.3 billion (total over $28

billion)

• Average streamflow & groundwater recharge likely lower if no crop production agriculture & stewardship of ag land managers

• Farms cover 35 of Oklahoma's 44 million acres– First recipients, first users, and first managers of 75-80%

of Oklahoma's precipitation

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Water Supply Issues in OK

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Plenty of water in a typical year…

OklahomaWatersupply

1120 square milesof water area inlakes & ponds & over 78,000 miles

of rivers & streams

23 major ground-water basins w/320 mil. acre-feet

Allocated streamwater use is

2.6 mil. ac-ft/yr

34 mil. ac-ft/yrflows out of

state viaArk. & Red River

basins

Problem is Allocation– getting it where, when, how much and at a price we want

541%

33.1%14.3%

5.2%

(13 Regions)

OWRB, 2011

Oklahoma water resources under pressure

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Growingpopulation

Economicdevelopment Ethanol

production

Thirstyneighbors

Hydraulicfracturing

Tribalrights

Moreweathervolatility

OK WaterResources

Invasivespecies Wateruptake

Water quality diminishesEffective water supply

Lack of Investment

Changes inwater law/rights

Unknown/Unexplained events

20 years ago, how many of these were unexpected events?

Oklahoma water under pressure, but… changes in demand and supply

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Conservation

OK Water Resources

Investmentin waterinfrastructure

Developmentof newstructures

Drought/floodmanagement

Increasethe priceof water

Droughttolerantplants

More efficientIrrigationsystems

Re-usewater

Desalinatewater

Re-use petropumpingwater

Red cedareradication

Wetland use

AssigningProperty rights

Unknown/UnexpectedEvents?

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Water Planning Regions, Oklahoma Comprehensive State Water Plan 2012 & potential major deficits thru 2060

Ground & Surface; Mun/Ind

Surface; Mun/Ind

Surface; Irrigation

Ground & Surface; Irrigation

Note: Groundwater provides 75-87% of irrigation water supply OWRB, 2011

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Complicating “Political” Factors…

• Interstate transfers• Intrastate transfers• Conjunctive use• Potential “takings” of

existing rights & compensation

• Redistribution of access• Conservation v. Investment

in new supply• Tribal issues• Instream flow• State budget priorities

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Concerns w/Ag Water Projections in OCWP

• 2060 demand/results may be subject to misinterpretation • If the 1960 water plan would have forecast 2010

agricultural demand using similar technical rules, would likely miss:

• Build up in the hog and poultry industries • Expanded use of irrigation in such crops as cotton,

corn and alfalfa• Efficiency gains in improved technology• Aberration of a relatively wet two decades at the end

of the 20th century• Trend analysis/alternative scenarios based on industry

activity would likely be an improvement by providing a relevant range of projected needs over the 50 year horizon

http://climate.ok.gov/index.php/climate/climate_trends/precipitation_history_annual_statewide/CD00/prcp/Annual/oklahoma_south-central_u.s

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Weather Projections

• Short-intermediate term:– Climatologists predicting 3-

15 years of ongoing drought pattern in OK- TX region 2011+

• Longer term:– Continued debate about

global climate change• Risk & uncertainty require

adaptation and mitigation options & consideration of public & private investment

• If govt. isn’t funding, what will the private sector be likely to do?

OK Water for 2060 Act (2012)

• “The Legislature hereby declares that, in order to protect Oklahoma citizens from increased water supply shortages and groundwater depletions by the year 2060 in most of the eighty-two watershed planning basins in the state as described in the 2012 Update of the Oklahoma Comprehensive Water Plan, the public policy of this state is to establish and work toward a goal of consuming no more fresh water in the year 2060 than is consumed statewide in the year 2012, while continuing to grow the population and economy of the state and to achieve this goal through utilizing existing water supplies more efficiently and expanding the use of alternatives such as wastewater, brackish water, and other nonpotable supplies. …”

OK Water for 2060 Act (2012)

• Pilot programs for water conservation for communities w/competitive grants

• Advisory Council – 15 members

• OWRB executive director (chair)• 4 appointed by Gov. (mun, rur, ag, water tech)• 5 appointed by House Speaker (Congr. Dist’s, rec, ind, oil/gas, irrig,

wastewater reuse)• 5 appointed by Senate Pres. Pro Temp (soil cons, small bus, envir, brackish

water tech)

– Duties (thru 2015)• Incentives to improve efficiency in ag• Recommend education programs• Recommend financial assistance programs to reduce water loss & increase

efficient water use• First meeting likely Feb 2013

Water Market over time:With & without “Water for 2060 Act”

Price$

Quantity of available waterQ1

D (2012)

SS’

P2

P1

P3

Q2

D (2060)

S: Supply of fresh water w/o Act, assumes continued

expansion in water supply (investment in infrastructure,

technology, etc.)

S’: Supply of fresh water w/Act, assumes no more water available

(annually) in 2060 than 2012; Price increases certain (conservation w/re-

use, technology, behavior change, trade-offs among users, etc.)

Who will benefit?

Who will lose?

What Determines Water Prices?

• Supply and demand• Cost of capture and

transportation• Water rights• Non-market impacts &

externalities

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OK Population, 1960-2010 and Trend to 2060

1960

1980

2000

2010

2030

2050

0

500

1000

1500

2000

2500

3000

3500

4000

OK (61%)

Linear (OK (61%))th

ou

sa

nd

s

• Trends suggest:– shift from ag and rural water

use to urban municipal and industrial uses

– Increased mining of aquifers– More competition for surface

and groundwater– More challenges from TX for OK

water– Large increases in water costs

from competing uses within and outside the state

– Increases in water quality pressures and cost to resolve, maintain and enhance water quality

• Energy costs will also rise, suggesting further pressure on increasing water cost

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The technological fix? Who pays?• Some suggest technology may

ease pressure on water supply:– More efficient irrigation

systems (drip; timer; moisture sensors, etc.)

– More low-water impact drought tolerant ag production

– More efficient residential systems (conserving plumbing fixtures; xeriscape, etc.)

– Replacement/upgrade to more efficient pipeline, pump and treatment systems for domestic rural and urban systems

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The technological fix (continued)?

• Some suggest technology may ease pressure on water (continued):– More efficient industrial systems (low water impact;

closed-loop systems, etc.)– Use/re-use of grey water in such industrial processes as

ethanol production– Desalinization of deep water sources– Use of water from petroleum pumping

• If/when such technology successful, costs will likely rise, including energy inputs– How will increased costs impact competitiveness and

overall economic development?

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Concerns at the Farm/Ranch/Business Level

• Individual or farm owning water rights with offer to buy or sell (ex: farm or ranch has opportunity to sell water rights to a land developer)– Opportunity cost is key factor• Compare with water production or market value to

without water production or market value• May be a nonmarket value to use that can also be

measured/considered (recreation, amenity, etc.)– Value of $ over time is also important– Water quality may also be an issue • Will loss of water diminish water quality on the farm

or improve water quality for the developer?– Some may hold onto an emotional intrinsic value that

cannot be measured

Global water extraction & use, by major consumer, 1900-2025

http://www.unep.org/dewa/vitalwater/article43.html21

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Other farm/ranch concerns

• Farm considers drought management options; net present value of alternatives (benefits less costs, over time, with the value of time considered)– Red cedar eradication– Pond/tank improvement or development– Drip irrigation system– Cell grazing– No-tillage or conservation cover crops to retain ground

moisture– Shift to drought tolerant crops– Change crop-livestock ratio or mix– Riparian zone management– Wetland maintenance/enhancement/development

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Concerns for Communities/Region/State

• Community or region or tribe may have opportunity to buy or sell water rights (ex.: sale of water to El Reno, OK, or Tarrant County, TX; ex: purchase of water to improve water quality)– Legal factors must be resolved (state moratorium, state-tribal

compact, intra-state or inter-state transer barriers, whose rights are senior or prevail)

– Opportunity cost is a key factor in valuation • what is the seller giving up in current and future income? • Can competing uses be evaluated?• May be a nonmarket value to use that can also be

measured/considered (recreation, amenity, etc.)• Water quality may affect value

– Inventory of current supply and estimation of future supply (can the supply be scientifically measured; is conjunctive use/interaction a critical component, and can it be scientifically measured?)

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Other State/Regional Concerns

• Evolving water rights and impact on economic development and quality of life for regional or state residents

• Coordinating decisions on micro scale that could impact region or state– Intra-state transfers– Inter-state transfers– Permitting for large users (municipal, industrial);

examples:• water canal in downtown OKC• water use for ethanol processing plants• recreational water use on irrigation lake• Water for hydraulic fracturing

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Global Population Issues:10-14 billion in 2060?

• Consider Strategic Opportunities for Agricultural States Like Oklahoma– More global hunger– Meat protein relatively more expensive

• Consider need for research on efficiency gains for agricultural water use

• Consider growing value of water surplus in local areas/regions– Opportunity cost?

How does OK want to be positioned for being a part of the US & global economies in 2060?

• More industrial?• More residential?• More agricultural?• More

“natural/environmental”?

• What will be the water needs for each economic path?

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Contact:Larry Sanderslarry.sanders@okstate.edu

Selected photos courtesy of OSU Ag Comm