5 fixes for California’s age-old water-rights system

The town of Mountain House was jolted this summer by news that its water was about to be shut off.

The water agency serving the bedroom community of 15,000 east of Livermore was caught in California’s drought-driven crackdown on those with historic rights to tap the state’s rivers and creeks. The state put the supplies off-limits.

After a brief scare for residents — and a few panicked remarks on Facebook — civic leaders found another supplier to keep the taps flowing. Still, the experience left many wondering how state water policy could threaten to leave a whole town high and dry.

“It doesn’t seem fair,” said 10-year Mountain House resident Indra Lucid. “Why is it that all this water is being pumped elsewhere and we get hammered? If you’re in a town, you need to have water.”

The answer lies in the state’s hierarchy of water rights. The system dating to the Gold Rush controls who can draw water from rivers and creeks and who cannot. After four dry years, the system’s flaws and inequities have become glaring — and critics are sounding the alarm for change.

The water rights system appropriates water largely based on who claimed it first, whether it’s a farmer, a corporation or a city.

In times of shortage, these longtime users — some with rights held more than a century — are free to draw all the water they need with little accountability for how it’s used, while the state cuts off others to protect the more senior claims. This is what happened to the water supplier for Mountain House.

Those who are restricted can turn to reserves or groundwater, if they have them, or try to buy water from more senior rights holders. In some cases, farmers with senior claims have opted to sell water while fallowing fields — calculating they’ll make more money.

Policymakers have acknowledged problems with the system, and have begun to make adjustments. However, critics say, California needs more reforms to optimize water use in the future, when limited supplies will run up against a bigger population as well as a hotter and perhaps drier climate.

Some say the state should toss out the water rights system altogether. Others recommend more gradual revisions that could lead to big improvements without a disruptive overhaul.

The following are five possible fixes, including one that would turn water rights upside-down.

1. Start with better information

Little is known about how much water many rights holders actually use — which makes it difficult, if not impossible, for regulators to limit big and illegal draws, and preserve supplies when they’re scarce.

Last year, when levels of freshwater declined in the Sacramento-San Joaquin River Delta, the biggest users there blamed each other for illegally taking water. State water regulators were ill-equipped to act.

On one side were the U.S. Bureau of Reclamation and the California Department of Water Resources, which move water through the delta to farms and communities farther south. On the other were hundreds of local farmers, growing crops like corn, alfalfa and asparagus.

To figure out who was in the wrong, the State Water Resources Control Board had to do something astonishing — begin collecting basic records on who had water rights and how much they were drawing. The matter remains unresolved.

“When you buy and sell a car, there’s some expectation that goes into registering your car and making sure it’s yours. It’s one of the things we do to suppress car theft,” said Jay Lund, director of the Center for Watershed Sciences at UC Davis. “Otherwise we end up in an uncivilized state where it’s neighbor versus neighbor.”

Better accounting of water rights, stricter reporting of water use, more measuring gauges on rivers and creeks and increased monitoring would give regulators a better grasp of the water situation. In turn, that could lead to more efficient water allocation.

A state budget bill passed in June is a good start, water experts say. The legislation demands more frequent reporting of water use and expands metering requirements for water rights holders, starting next year.

2. Ensure reasonable water use

California’s Constitution mandates that people use water reasonably and beneficially. Many suggest using this legal doctrine to clamp down on less efficient uses of water, especially among senior rights holders who have been virtually free of regulation.

State officials have done this before. For example, they’ve limited draws on rivers after findings that wildlife habitat took priority over crop production. They once stopped a water agency from wasting supplies by flushing out gopher holes. But such restrictions have been limited, and many say they should be expanded during dry times.

“I think an argument could be made that if you’re a senior water right user using 4 acre-feet of water on a crop and they could be grown with 3 acre-feet of water, that extra foot may not be being used reasonably or beneficially,” said Peter Gleick, president of the Pacific Institute in Oakland, which advocates for sustainable water policy.

3. Allow easier water transfers

Transfers allow parties that don’t get enough water under the rights system to purchase it from those who do. Economists argue that with a well-functioning market, water inherently moves to the best uses.

Although some farms, businesses and public agencies have exchanged water under the current system, they face too many obstacles, experts say. They range from the inability to measure what’s bought and sold to a cumbersome patchwork of local, state and federal regulation.

“If you’re out shopping for water, it’s not like you can go to the commodity exchange in Chicago and simply buy water,” said Leon Szeptycki, executive director of Stanford University’s Water in the West program. “Barriers need to be removed.”

Szeptycki and others warn, though, that some regulation must remain to ensure that communities with limited means don’t go without water. The state must safeguard the environment as well, making sure sellers, for example, don’t deplete a local creek and harm fish and other wildlife.

4. Regulate groundwater

Water shortages in California’s rivers and streams have prompted farmers and others to pump a lot more groundwater — a water source the state does not currently regulate. Not only has over-pumping begun to deplete aquifers, it’s sucking water out of rivers and creeks above the aquifers, interfering with surface water rights.

Near Mendota (Fresno County), where an overdrawn aquifer is collapsing, a dam on the San Joaquin River has fallen 6 inches in each of the past few years and no longer holds all of the river water local farmers need.

“As I lose elevation, I cannot get the amount of water that I historically have,” said Chase Hurley, general manager of the San Luis Canal Co. He said his agency might have to pay millions to raise its dam or to install more powerful pumps in the river.

California lawmakers last year approved first-ever groundwater regulation designed to keep the state’s aquifers from drying up. However, the legislation doesn’t require restrictions for at least five years and won’t have much effect for a decade or two.

Some are calling for quicker action in light of a NASA report this summer that showed spots of the Central Valley floor dropping nearly 2 inches a month because of overpumping.

5. Consider system overhaul

Some say the drought, by exposing problems with how California allocates water, represents the perfect opportunity to throw out the water rights system.

“It would make a lot more sense if we could just start from scratch,” said Richard Frank, director of the California Environmental Law and Policy Center at UC Davis. “I hope and expect that we could come up with a system that would bring far more reasonable water use.”

Frank is among several critics who say regulators have the power — and duty — to reshuffle the deck of water rights so that those serving the greatest good get priority.

With farmers and agricultural suppliers possessing the bulk of senior water rights, the system is benefiting a minority, Frank said. Meanwhile, it’s triggered restrictions not only for small communities like Mountain House but cutbacks — albeit less drastic — for water agencies serving big chunks of the population, such as the East Bay Municipal Utility District and the San Francisco Public Utilities Commission.

“At a time of unprecedented shortage, are you saying that growing alfalfa and rice is a higher or better use than serving urban customers up and down the state?” Frank asked.

Even Gov. Jerry Brown has suggested the system’s priorities may need to be re-examined if the drought continues. The administration, though, has conceded this is a last resort.

More than 100 years worth of investment hangs on the water rights system, and many have a lot to lose with any restructuring.

Take Bernie Dietz. The 75-year-old chemical engineer, who has dabbled in farming his entire life, sank his retirement into a plot of land outside Tracy instead of the stock market. Before buying his 85 acres and planting about $1 million worth of almond trees, he made sure the parcel was served by a water agency with senior rights.

“You’re a fool to make a capital investment in trees if you didn’t have a secure source of water,” Dietz said earlier this summer as the state began to ramp up cutbacks. “It’s sort of like when you’re buying a new house, you don’t want to be in an earthquake zone.”

Dietz, like countless others, made calculations based on existing water rights. Irrigation districts built canals. Cities constructed dams.

To limit investment losses, those in favor of overhauling the system suggest California use public funds to buy out longtime water rights holders. Others recommend that the state phase out water rights slowly, to reduce the pain, or transition the rights to fixed terms.

Australia used a combination of methods to redo its hierarchy of water rights during a drought in the 2000s. Water experts caution, however, that California’s water rights system is far more entrenched than Australia’s, and resistance would be much greater.

“There’s no chance we’ll throw out the water rights system,” Gleick said. “But I hope there’s a chance we’ll use the drought to improve it.”

What are water rights?

The water in California’s rivers and streams is allocated based on a hierarchy of rights. The holders of 30,000-plus claims include individuals, farms, corporations and public agencies. In times of short supply, those with the most senior rights are generally permitted to continue drawing, while less senior users are subject to cuts.

The following are three categories of water rights in California:

Riparian right: Those who own land along a river or creek are entitled to tap the waterway. These are the most senior water users. Riparian rights have been in place since California adopted English common law upon statehood. They don’t allow users to store water, just divert it to meet immediate needs.

Pre-1914 appropriative rights: Since most people don’t own land along a waterway, the state allows people to acquire water rights on rivers and creeks, then pipe the water off. Rights staked before 1914, when California began requiring permits for draws, are generally free of regulation and allow rights holders to divert and store water in the amounts originally claimed.

The system follows a principle known as “first in time, first in right.” The right was determined by actual use — and maintained by continuing use.

Post-1914 appropriative rights: Since 1914, the right to draw water requires approval from the state. Post-1914 permit holders, also known as junior water rights holders, are the first to be restricted in dry times.