What About The Ogallala Aquifer? You Can’t Drink Oil

The Ogallala Aquifer is a vast geologic formation that sprawls underneath parts of eight states from South Dakota to Texas. Early settlers in the semi-arid High Plains were plagued by crop failures due to cycles of drought, culminating in the disastrous Dust Bowl of the 1930s. After World War II, affordable technology became available to irrigate from the Ogallala. The High Plains was then transformed into one of the most agriculturally productive regions in the world. To say that the High Plains economy now “runs on water” is probably no exaggeration. Irrigated crops provide feed for livestock, which are in turn the primary inputs for local meat processing plants. Water is also essential for the livestock production and meat processing industries. The crop, livestock, and meat processing sectors form the core of the regional economy, accounting for a large share of employment and gross output. Because the Ogallala recharges very slowly, the High Plains economy is dependent on a finite resource. The fate of the High Plains has been a policy issue since depletion of the Ogallala became apparent in the 1970s. Policy makers have wrestled with how—and whether—to conserve the groundwater resource. This debate has recently returned to the fore at both state and federal levels. In 2001, Kansas formed a special citizens’ committee to advise the governor and legislature on potential groundwater conservation policies (Ogallala Aquifer Management Advisory Committee, 2001). The renewed interest within the High Plains states partly reflects the recent drought and exhaustion of the Aquifer’s usable economic life in many areas (see Figure 1). The debate at the federal level has changed over time. Debates in the 1970s focused on conserving the Ogallala for national and international food security. During the 2002 farm bill debate, the focus shifted to the regional impacts of federal policies through their effects on water use. Because water is so fundamental to the region’s livelihood, policies affecting water use ultimately change the scope and distribution of economic activity as well as the use of land and other natural resources. Federal policies affecting water use in the High Plains include commodity price programs, the Conservation Reserve Program, and cost-share programs for investments in new technologies. Whether the current combination of state and local rules has achieved efficiency for the Ogallala is an open question. The answer depends on the difference between social and private costs, or the external costs, of groundwater pumping. These costs are made up of three parts (Provencher & Burt, 1993; see box), all of which are hard to estimate. Because the horizontal flow of groundwater is very slow in the Ogallala (a crude average is about one foot per day), external costs are local in nature. At the same time, the flow rates of groundwater depend on different geologic factors. Many previous studies found low depletion costs in large Aquifers such as the Ogallala, suggesting that economic efficiency could be nearly attained with unregulated pumping (e.g., Beattie, 1981; Gisser, 1983). More recent studies found potentially large risk costs andsignificant gains from groundwater management policies in arid regions (e.g., Tsur, 1990). Little or no evidence is available for the stock cost. Although efficiency-centered policies would satisfy the interests of private irrigators, such policies would not necessarily protect the public interest. An important part of the public interest is equity (or “fairness”) in the distribution of water within and across generations of users. Equity within generations depends on water conservation because, despite the flatness of the High Plains, the bedrock floor of the Aquifer is extremely uneven. Since most wells are drilled to reach bedrock, landowners above deep parts of the Aquifer can reach water even when nearby shallow wells have become inoperative. If conservation maintains a high water table, then access to water will be distributed more equitably. Of the three motives, economic efficiency has largely driven the shaping of water policies in the High Plains. During the early years of development, groundwater was considered inexhaustible and its hydrology a mystery. Water laws that fostered orderly and rapid development of the resource increased efficiency, but policies came to reflect the common pool nature of the Aquifer as development grew. In the 1974 Groundwater Management District Act, Kansas lawmakers concluded that rules created by local districts were needed “for the proper management of the groundwater resources of the state; for the conservation of groundwater resources; [and] for the prevention of economic deterioration.” These districts later set limits on new water permits based on the external costs to nearby water users. Sustainability motives have entered recent policy debates. The “zero depletion” proposal in Kansas would limit an area’s withdrawals to the amount of natural recharge over a prescribed time period. Similarly, the “two pools” plan would restrict withdrawals only after an area’s “usable pool” of water is gone; the remaining “conservation pool” would be preserved for future generations. Although the Kansas Ogallala Management Advisory Committee did not support these proposals, sustainability remained an important goal. The committee’s report made several recommendations for “extending the life of the Aquifer and sustaining the vitality of western Kansas”

























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