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More than Just a Drop in the Bucket, Arizona Groundwater Supplies Pose Problems and Potential Solutions for Policy Makers

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While the local and national press inundate us with articles about the dire nature of Arizona’s water supplies and questions about why people are even allowed to live in a desert, careful planning by water leaders over decades has created resilient responses to these challenges that are unmatched in the Southwest and perhaps the nation.  Arguably, Arizona is much better positioned to withstand the challenges of drought and climate change than any state that relies largely on groundwater supplies or any other single water source.  For this article, Part 2 of our series, we will focus on Arizona’s groundwater supplies and the challenges and solutions that use of this finite resource might offer.

The Arizona Department of Water Resources (“ADWR”) has published extensive analyses of groundwater resources in Arizona. These analyses confirm that Arizona has hundreds of millions of acre-feet of groundwater located in more than 40 different groundwater basins across the state.  However, while a huge resource, this groundwater is almost entirely a non-renewable water supply (i.e., very little water is added to most of the state’s aquifers each year to offset ongoing withdrawals from each basin).  Because of this limited natural recharge, some of Arizona’s more extensively developed groundwater basins experienced significant declines in water tables in the second half of the 20th Century.  This prompted the Arizona Legislature to enact the 1980 Groundwater Code, which was intended to slow, and ultimately end, groundwater declines and related problems such as land subsidence and fissuring. 

At its most basic level, the Groundwater Code established areas of the state for enhanced groundwater protection, called Active Management Areas (“AMAs”) and Irrigation Non-Expansion Areas (“INAs”).  In these locations, the Groundwater Code imposes extensive regulatory requirements that limit access to groundwater in ways that greatly limit the “reasonable use” doctrine that applies elsewhere in the state.  In the AMAs, groundwater may only be withdrawn if the pumper has: (1) a grandfathered groundwater right based on historic groundwater use prior to creation of the AMA; (2) a service area right issued to municipal water providers and irrigation districts; (3) a groundwater withdrawal permit; or (4) an “exempt” well that pumps less than 35 gallons per minute. In addition, groundwater users exercising one of these rights generally must also comply with conservation measures intended to ensure efficient use of groundwater. These conservation measures are intended to become more stringent over time to gradually ratchet down groundwater pumping.  In the INAs, groundwater use for irrigation purposes is limited to those lands that were in irrigation at the time the INAs were established.

The Code also provides the ability to create new AMAs and INAs either through actions initiated by the Director of ADWR or by voter initiative.  In the Hualapai Valley Groundwater Basin, near Kingman, Arizona, local politicians successfully petitioned ADWR to establish a new INA this year, and local farmers are now learning how their operations will be affected by this new status.  Similarly, all groundwater users in the new AMA that voters approved in the November 2022 election face much stricter groundwater regulations than had previously applied to this basin.    

In addition, the Groundwater Code enacted the Assured Water Supply program, requiring lands subdivided for sale to have an ADWR-approved water supply that will meet the needs of the subdivision for one hundred years. This means that the water supply must be legally, physically, and continuously available for one-hundred years, that the water is of adequate quality, and that the water provider has the financial means to deliver water to the lots. To prove physical availability, among other things, the water provider must demonstrate that any groundwater used for the supply will not cause the water table to decline below specific elevations established in ADWR’s Assured Water Supply regulations. In addition, a 1995 amendment to the Groundwater Code requires that most of the water used to support an Assured Water Supply must come from renewable supplies.

As you might expect, after forty years of groundwater management under the Groundwater Code, some cracks in the regulatory framework are beginning to appear.  One of the ways to circumvent the Assured Water Supply requirements is for a landowner to avoid meeting the definition of a subdivision, which is what happened with the Rio Verde Foothills community. By selling lots that were not subject to the Assured Water Supply program, developers in the area left homeowners to secure water for themselves. With long-term drought affecting availability of renewable CAP water supplies, and with limited access to groundwater in this area, many homeowners have been unable to secure sufficient water at affordable prices. Officials at multiple levels of government have been attempting to find a long-term solution, but until one is in place, these homeowners will continue to face challenges. 

Different, but equally significant, challenges appear to be on the horizon for landowners and water providers in the Lower Hassayampa Sub-basin of the Phoenix AMA. Around the same time that the Rio Verde issue became national news, ADWR released the results of a detailed groundwater modeling analysis which concluded that the Lower Hassayampa Sub-basin is overdrawn and that previous “analyses” of Assured Water Supply likely allocated too much groundwater to proposed developments in the sub-basin.  Because this sub-basin is largely undeveloped at this time, the impact of ADWR’s conclusion will be felt more by developers than by current homeowners.

While we will address potential solutions to water supply shortfalls in subsequent articles, there are a few solutions that may be found through increased use of groundwater, as illogical as that may sound.  First, Arizona has four groundwater transportation basins, authorized in statute, for the purpose of pumping groundwater and transporting it, either through the Central Arizona Project canal, by pipeline, or other means, to one of the initial AMAs established by the 1980 Groundwater Code.  One such transportation basin is the Harquahala INA, roughly 40 miles west of Phoenix, where landowners are currently working together and with the Arizona State Land Department and the Town of Queen Creek to get approval from ADWR for a unique project to help augment water supplies in Central Arizona.

Another potential solution to groundwater overdraft is the conversion of irrigation grandfathered rights in AMAs to non-irrigation grandfathered rights, which happens as urban areas expand into agricultural areas.  This is occurring rapidly in central Arizona, where industries are locating and using substantially less groundwater than was used to irrigate the acres now devoted to industrial production.  And in some cases, water users can pump stored Colorado River water and treated wastewater that had been stored in the ground pursuant to permits authorizing the creation of Long-Term Storage Credits (“LTSCs”).[1]

More controversially, policy changes could also mitigate perceived shortfalls in groundwater availability.  As noted above, Arizona’s aquifers collectively contain hundreds of millions of acre-feet of groundwater.  With appropriate safeguards, more of this groundwater could be made available to meet short term, and even long term, needs.  For example, the Assured Water Supply requirement that limits groundwater withdrawals to specified elevations in each AMA creates essentially arbitrary limits on use of groundwater in these basins, which policy makers could change to allow withdrawals to greater depths.  This idea, however, has historically been very controversial and would be a tough sell to water regulators and managers who are successfully operating within current limitations.  Perhaps more appealing might be new laws that could take new approaches to groundwater management, such as cap and trade markets that place a limit on total groundwater withdrawals and provide water users with shares that can be bought, sold, and traded.

Groundwater is just one component of the diverse water portfolio in Arizona.  Even though there are areas of the state with groundwater supply challenges, groundwater also provides at least a partial solution to many of the challenges that Arizona communities face.  New policies and new groundwater markets are likely to be key components of Arizona’s water future. 

In the next installment in this series, we will examine Arizona’s surface water supplies and the laws and policies surrounding that vital resource.

[1] A subsequent article will address Arizona’s hugely successful efforts to store millions of acre-feet of renewable water supplies under Arizona’s underground storage permitting program.  These efforts have created a vast supply of water to help meet our needs during extended droughts.