The Water Bank — Water For A Not So Rainy Day

Water banks have been operating for years now, but generally not known to anyone outside the water industry.  Thanks to a recent withdrawal by Metropolitan Water District of Southern California of 80,000 acre-feet from their water savings account in Lake Mead last year and the announcement of another withdrawal soon, (estimated to be twice as large as the last one) many people are now learning about and discussing water banks.

What is a water bank

The term water banking describes a number of ways to manage water during times of rain and times of drought.  The basic concept is probably just what you are thinking.  If you receive a yearly allotment of water and do not need to use all of the allotment you can save or bank some of the water to use at a future date.  This is the basic concept and there are many variations of the concept.  Water banks can vary in the amount of participation they take in the exchange of water.  Sometimes a bank will be a broker, or clearing house and sometimes market maker (A market maker might buy or sell water rights to create liquidity for the market).  You have heard the term, “We don’t have a water shortage. We have a water storage and delivery system problem.”  The concept of water bank solves some of the problem. The Metropolitan Water District of Southern California receives a water allotment of around a million acre feet a year.  During rainy periods of MWD is able to take less water and store the savings in Lake Mead for a not so rainy day.

Who runs the water bank

A water bank can be either a public or private entity.  The direction of the water bank is generally given by an elected board of directors.  However, I did find one water bank near Fresno California owned an operated by one person, Marvin Meyers.

Kern County California has a water vault

The vault/bank is just West of Bakersfield and was created due to an interesting geological formation called an alluvial fan. The groundwater bank  stores all the water underground in a “vault” so checking your balance involves a little bit of guesstimating. The Kern Water Bank can store around 326 billion gallons of water underground. Also, not all the water you put into the vault stays where you put it.  Some of the water can move or leak to another area.  As a result the bank forecast around 4% of your deposit will never be withdrawn.  Think ATM fee.

Why do we care

Water banks should provide peace of mind for times of drought.  The concept provides additional ways to store water and deliver water to locations in need.  However, typically the geographical areas banking water experience similar drought and rain conditions.  In times of severe drought the concerns for a water bank are similar to the concerns of a money bank during a depression.  If everyone attempts to withdraw their deposits at the same time how much will actually be available?  Also, could it be possible we would reduce or stop water flow to one geographic area just so another area that banked water could make their withdrawal?

Fortunately there are rules.  There is a cap on how much water can be withdrawn annually.  California’s cap is  400,000 acre – feet a year.  More importantly you can’t make a withdrawal if there is a declared shortage on the river or if your withdrawal would create a shortage.  These rules seem necessary, but also can be viewed as a disincentive for banking water.

There are many other water banks around the United States you can learn more about Arizona Water Banking Authority, Southern Nevada Water BankTexas Water Bank and Trust and Idaho Water Bank.  I think the  concept of water banking is beneficial for all of us and only wish there was an easier way for me to bank water.  Water Banks also have a few drawbacks, but with additional focus on them now many of those drawbacks can be overcome.

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  1. Dr.CHAHBANI Bellachheb Reply

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