Water banking is a set of procedures that allow senior water rights holder to "lease" some or all of their water rights to junior water rights users in times when the seniors find the lease to be more profitable than would be the application of water to their fields. The main issues pertain to controlling or limiting the impact of such leases to third-party water rights holders and/or to interstate compact delivery requirements.
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Description of the Issue
Water banking provides a mechanism for use of water acquired by transactions that adhere to government water banking rules. Transactions that follow these rules are essentially pre-approved.
A water bank has "deposits" by water rights owners whose rights are currently "in-priority" but unused or which will be unused in a future year. The water bank leases use of the deposited water, in conformance with the rules.
Implementing workable water banks whose transactions do not increase overall depletions seems to be an essential part of the Middle Rio Grande's future, which will be constrained by having less surface water available due to climate change.
Water banks can help or can hurt an effort to limit and control depletions in a particular geographic area that has less wet water than water demand. A water bank can make water use transactions easier and more available, which is essential during periods when junior but essential water uses are "out-of-priority" in a water-short year. Water banks can hurt if water banking transactions actually increase depletions of water in a water-short year.
Office of the State Engineer
The New Mexico State Engineer codified water banking concepts in Rule 220.127.116.11 GENERALIZED HYDROLOGIC ANALYSIS. This Rule is part of the General Rules for Active Water Resources Administration the State Engineer promulgated in 2004. This Rule establishes conceptual steps to authorize a water bank and two conditions that a pre-approved water banking transaction must meet.
First, the water right used must be valid and "in-priority" at the time of water use. Second, water banking transactions must not result in a net increase in water depletions.
Conceptually, it's simple. However, the technical analysis to define the specific water banking rules within the hydrologic area to be served by the bank requires a significant scientific effort and good data. The scientific analysis must be performed with integrity for this concept to function fairly and without injury to others.
The Office of the State Engineer has made no progress in implementing a workable water bank pursuant to its 2004 Rule.
Middle Rio Grande Conservancy District
The Middle Rio Grande Conservancy District operates a water bank under its own rules. It leases water from its bulk water right to irrigated lands within its service area from which pre-1907 water rights were previously severed and transferred to support groundwater pumping, likely by a municipality. "Pre-1907" is a term used to describe legal rights accruing from use of water prior to the adoption of the territorial water Code in 1907.
In 2019, New Mexico's actual delivery of water through the Middle Rio Grande for use below Elephant Butte Dam was 39,000 acre-feet less than its water delivery obligation. MRGCD water banking transactions in 2019 increased depletions by providing water to irrigate land from which water rights had been severed and sold. These transactions therefore increased depletions and contributed to the net under-delivery of water through the Middle Rio Grande caused by excessive total depletions within the Middle Rio Grande in 2019.
All other depletions within the Middle Rio Grande contributed to the net underdelivery of Rio Grande water in 2019. This includes depletion of the river caused by groundwater pumping adjacent to the river, including by domestic wells.
Depletions and the Rio Grande Compact
The Rio Grande Compact requires delivery of water through the Middle Rio Grande for use below Elephant Butte Dam. Each year, a certain fraction of the Rio Grande total annual inflows to the Middle Rio Grande at the Otowi Gage must be delivered. This fraction is always 57% or more.
Compact deliveries consist of Rio Grande water that is not depleted within the Middle Rio Grande. Thus, deliveries to the Lower Rio Grande are managed by limiting and controlling Middle Rio Grande depletions.
This chart shows the history of New Mexico's compliance with water delivery requirements through the Middle Rio Grande. It illustrates the 2019 under-delivery of water, which caused the first significant cumulative under-delivery since 1990.
Water deliveries through the Middle Rio Grande have continuously complied with the Compact since 1969.