Water marketing is the transfer or sale of water or water rights
from one user to another, typically from an agricultural to an
urban water agency, often without investing in new infrastructure
The worsening drought is cause for concern for all. But for
agricultural loan lenders, it’s all about risk management.
Keith Hesterberg, CEO of Fresno Madera Farm Credit, said that
although the experience in dealing with drought hasn’t changed,
the surrounding issues have grown more complicated. … Lenders
need to understand the water basin that growers are operating
in and the underlying diversity of their operations. Water
operations can change year to year depending on the challenges
for the given season.
One might think a severe drought would be bad news for a
company whose main business is supplying water to residential
and business customers. But — so far, at least — that hasn’t
been the case for San Dimas-based American States Water Co.,
parent company of Golden State Water, a utility that provides
water to customers in the Los Angeles basin and Central
California. In fact, quite the opposite: Investors have sent
American States Water share prices soaring to $96 as of Nov.
19, the highest level in more than five years.
I’m your host Michela Tindera, and this is Priceless. In this
episode, we’re headed West to the epicenter of one of the most
productive farming regions in the world—California’s Central
Valley—where the area is in the throes of a megadrought that
has been drying up wells and damaging crops across the western
United States. It’s there in the Central Valley, where a
billionaire couple own a majority stake in one of California’s
largest water storage facilities.
The California Water Commission staff asked a group of informed
stakeholders and experts about “how to shape well-managed
groundwater trading programs with appropriate safeguards for
communities, ecosystems, and farms.” I submitted the following
essay in response to a set of questions. In general, setting up
functioning and fair markets is a more complex process than
many proponents envision.
The Bureau of Reclamation, in coordination with the McMullin
Area Groundwater Sustainability Agency, invites the public and
media to attend a virtual public scoping meeting on the
proposed Aquaterra Water Bank Project on Nov. 10. The
project includes construction, operation, and maintenance by
McMullin GSA of a 146,000 acre-foot per year dry-year return
water bank in Fresno County. The project is anticipated to
recharge up to 208,000 acre-feet of water during wet-year
conditions once constructed.
As heat and wildfires ravaged the US in the summer of 2020,
Wall Street spotted an opportunity. In December last year,
Nasdaq and the CME Group launched a new futures index that
allowed farmers, hedge funds and municipalities to bet on the
forward cost of water in California — and hedge against any
price rises.
Now California almond farmers and electric utilities, both of
which use massive amounts of water, can bet against the future
availability of water. And just last year, the Chicago
Mercantile Exchange started the first-ever futures market for
water, meaning farmers, as well as investors, municipalities
and hedge funds, can buy a legal agreement known as a “futures
contract” that locks in a predetermined price for water that
will be used in the future.
In the universe of California water, Tim Quinn is a professor emeritus. Quinn has seen — and been a key player in — a lot of major California water issues since he began his water career 40 years ago as a young economist with the Rand Corporation, then later as deputy general manager with the Metropolitan Water District of Southern California, and finally as executive director of the Association of California Water Agencies. In December, the 66-year-old will retire from ACWA.
This printed issue of Western Water looks at California
groundwater and whether its sustainability can be assured by
local, regional and state management. For more background
information on groundwater please refer to the Foundation’s
Layperson’s Guide to Groundwater.
Although some water districts have coordinated use of surface
water and groundwater for years ,conjunctive use has become the
catchphrase when it comes to developing additional water supply
for the 21st century. This article focuses on conjunctive use. It
includes background information explaining how conjunctive use
works, discusses the potential storage capacity, provides an
overview of the hurdles that must be overcome to develop a
successful project, and profiles several projects.
The 20-page Layperson’s Guide to Water Marketing provides
background information on water rights, types of transfers and
critical policy issues surrounding this topic. First published in
1996, the 2005 version offers expanded information on
groundwater banking and conjunctive use, Colorado River
transfers and the role of private companies in California’s
developing water market.
Order in bulk (25 or more copies of the same guide) for a reduced
fee. Contact the Foundation, 916-444-6240, for details.
The 28-page Layperson’s Guide to
Water Rights Law, recognized as the most thorough explanation of
California water rights law available to non-lawyers, traces the
authority for water flowing in a stream or reservoir, from a
faucet or into an irrigation ditch through the complex web of
California water rights.
Water marketing is the transfer or sale of water or water rights
from one user to another, typically from an agricultural to an
urban water agency, often without investing in new infrastructure
Most exchanges involve a transfer of the resource itself, not a
transfer of the right to use the water.
Reallocating the available water on a supply-and-demand basis is
viewed by proponents as the best financial, political and
environmental means of accommodating an increase in population.
