WSU study challenges economics of Yakima Basin water plan
Posted on December 4, 2014
YAKIMA, Wash. — The most expensive projects in the Yakima Basin Integrated Plan for water management don’t pass a cost-benefit analysis, according to a new study by Washington State University economists.
But supporters of the 30-year, $4 billion plan to improve drought security and salmon recovery in the Yakima River Basin call the findings misleading because each part of the plan is designed to work with the others for a net benefit, not to stand alone for economic scrutiny.
They call it a difficult case to grasp, but one in which the whole is greater than the sum of the parts.
“It’s a false premise that what we have before us is a group of disparate projects,” said Derek Sandison, the Department of Ecology’s lead on the Integrated Plan. “The elements move together as a package or they don’t move at all; it’s like a three-legged stool, you can’t remove one of the legs and still expect it to stand.”
The plan, approved by the Legislature in 2013, is a groundbreaking deal led by the Bureau of Reclamation and the Ecology Department that gained the support of groups whose competing interests had kept them at odds for decades — farmers, environmentalists and the Yakama Nation.
The Legislature also separately requested a cost-benefit analysis on each major component of the plan: new dams, expanded reservoirs, new fish ladders, habitat restoration, water conservation and water markets.
The recently released report is a first draft of that analysis and a final draft is due to lawmakers later this month, said Jonathan Yoder, a WSU economist and lead author of the report.
Yoder and his team found that none of the water storage projects called for in the plan provide economic benefits that outweigh their costs, even under scenarios in which droughts become more common in the future. However, researchers found that investment in fish ladders for the basin’s five reservoirs will really pay off.
On that point, the WSU study largely agrees with an earlier 2012 economic analysis of the plan by the Bureau of Reclamation. The bureau found that economic benefits for the plan as a whole ranged from $6.2 billion to $8.6 billion, but primarily from the value of salmon recovery.
“It’s no surprise, this study comes up with what we already came up with,” said Urban Eberhart, a Kittitas County grower and member of the Integrated Plan’s executive committee.
Last year, Sen. Jim Honeyford, R-Sunnyside, who sponsored the plan, told the Herald-Republic that this study was added to the capital budget by opponents of the plan who hoped to discredit it. Eberhart agreed.
“This is politics,” Eberhart said. “You can’t break it up into individual pieces and look at each part in isolation, it doesn’t work that way. They do work as an integrated plan.”
But Yoder said his study offers a new way of looking at the various parts of the plan and how each aspect affects the others.
Sometimes, the benefits of one project are enhanced by others, such as how fish passage and habitat restoration both encourage salmon recovery. And fish ladders require sufficient water supplies to function. But in the case of water storage projects designed to provide more supply during times of drought, each project actually reduces the value of the others in Yoder’s analysis.
“There are diminishing marginal returns to additional water storage,” Yoder said. “The value of just one project is larger than the value of the same project if all the other water storage projects are also implemented.”
It all comes back to the basics of supply and demand: During a water shortage, each gallon of water becomes more valuable. But if there’s more water, that additional water has less value.
The plan also calls for developing water markets that would allow farmers to buy and sell water during droughts so that the available water is used in the most valuable way, such as keeping an apple orchard alive, rather than raising a crop of hay. But if those markets are working well, Yoder said, it reduces the economic pain of droughts, which then reduces the value of additional water storage.
But that’s exactly why this type of economical analysis is problematic, Sandison said.
It’s not about maximizing the value of water, he said, but ensuring that the region has enough supply to weather droughts, for both farmers and fish. Estimates show that the basin needs 450,000 more acre-feet of water storage and that’s what the plan aims to do, he added.
“This is clearly a case where the whole is greater than the sum of the parts, but we’re always going to have the challenge to explain that to people,” Sandison said.
While seemingly counterintuitive, adding that expanded water supply for drought years only provides a small economic benefit relative to the cost of the projects, under the analysis used by the report.
Sandison said that’s because droughts don’t happen every year, and although they are expected to happen more often with climate changes, no one really knows exactly how common they will become.
Also, the analysis only looked at the direct economic gains from reducing the impact of drought, not how the agricultural economy then affects the rest of the region’s finances.
“We’re trying to keep the agricultural economy intact, not grow it, so it’s hard to come up with accurate valuation,” Sandison said. “What did the 2005 drought really cost us? No one can answer that.”
Michael Garrity, Washington conservation director for the conservation group American Rivers, said that the economic analysis also lacks a way to measure the benefits from restored habitat, healthier ecosystems and the recovery of threatened species, such as steelhead and bull trout.
Putting an economic value on salmon recovery is difficult as well, since fish swimming in rivers lack a conventional price tag.
The WSU team used the same method to calculate the value of the plan’s fish benefits as the Bureau of Reclamation did: predicted population gains from implementing the plan combined with a survey about how much people would be willing to pay for varying levels of salmon recovery.
Under that formula, the value of each salmon can end up at thousands of dollars. But, no one is actually purchasing the salmon. Instead, everyone who values salmon recovery benefits, allowing the value of each fish to build up, Yoder said.
It may sound fishy, but Yoder said it’s the best method they had to value salmon recovery, in addition to the smaller value of new fisheries.
But the fact that most of the economic benefits for the whole plan come from a subjective survey about the value of salmon concerns Miles McPhee, a climate scientist from Naches.
McPhee said that the more he learned about the survey, given in the late 1990s to people around the Columbia Basin, the more doubts he had about the Integrated Plan’s actual benefits.
“It just seems like a phony justification for the dams,” McPhee said. “Why spend all that money if the actual benefits are really quite small?”
In fact, according to Yoder’s analysis, the largest of the economic benefit comes from just one salmon species: sockeye. Sockeye need lake habitat, and so the population is expected to boom if fish ladders are added to all five of the region’s reservoirs, starting with the plans underway at Lake Cle Elum.
Yoder’s analysis shows the most valuable project is fish ladders, but supporters of the plan say the success of fish ladders depends on having adequate water supply in drought years.
Yoder said that his analysis attempted to capture those types of connections, and he thinks it was successful.
“It has been said that you cannot disaggregate the Integrated Plan in a meaningful way, economically or politically, but I think that’s not entirely true and our results show that,” Yoder said.
Sandison disagreed, saying that the integrated approach was necessary, both in terms of water management and political support.
“The social contract between the stakeholders in the Yakima Basin is real, it’s not lip service. All the elements of the plan have to move together or this doesn’t move,” Sandison said. “We’re always going to be fighting the notion that this can be disaggregated, when it just can’t.”
Below are important documents concerning the Yakima Basin Integrated Plan.
The overview document below was prepared to identify the important information in the Normandeau Associates Technical Review of the Yakima Basin Integrated Plan. Click Here for the overview.
For the complete Normandeau Report Click Here.
For the Infograph, “Enough Water in the Yakima Basin? No!” Click Here. The graph (with Citations) describes the possible shortfall that will occur in the storage components in the Integrated Plan.
from National Climate Assessment Report
With craggy shorelines, volcanic mountains, and high sage deserts, the Northwest’s complex and varied topography contributes to the region’s rich climatic, geographic, social, and ecologic diversity. Abundant natural resources – timber, fisheries, productive soils, and plentiful water – remain important to the region’s economy.
Snow accumulates in mountains, melting in spring to power both the region’s rivers and economy, creating enough hydropower (40% of national total) (NWPCC 2010) to export 2 to 6 million megawatt hours/month (EIA 2011). Snowmelt waters crops in the dry interior, helping the region produce tree fruit (#1 in the world) and almost $17 billion worth of agricultural commodities including 55%, 15%, and 11% of U.S. potato, wheat, and milk production respectively (USDA 2012a, 2012b).
Seasonal water patterns shape the region’s flora and fauna, including iconic salmon and steelhead, and forested ecosystems, which cover 47% of the landscape (Smith et al. 2009).
Changes in the timing of streamflow related to changing snowmelt have been observed andwill continue, reducing the supply of water for many competing demands and causing far-reaching ecological and socioeconomic consequences.
Description of observed and projected changes
Observed regional warming has been linked to hydrologic changes in basins with significant snowmelt contributions to streamflow. Since around 1950, area-averaged spring snowpack decreased 0% to 30% (depending on method and period of analysis) (Mote 2006; Pierce et al. 8 2008), spring snowmelt occurred 0 to 30 days earlier (Stewart et al. 2005), late winter/early spring streamflow increased (Hidalgo et al. 2009) and summer flow decreased 0% to 15% as a fraction of annual total flow (Luce and Holden 2009; Stewart et al. 2005), and winter flow increased, (U.S. Bureau of Reclamation 2011a) with exceptions in smaller areas and shorter time periods (Mote et al. 2008a).
Yakima wants to bank Naches River water in aquifer
By Kate Prengaman / Yakima Herald-Republic, April 13, 2014
Yakima’s four municipal wells normally pull water from a deep aquifer, but with a few adjustments, two of the wells can be reversed to send water back into the ground. These dual-action wells are about to become very handy. If temporary permits are approved, as expected, Yakima plans a test project in May to determine if the aquifer can be used to store water from the Naches River. “We want to take water out of the river when it’s available and put it in (the aquifer) when our customers don’t need it,” said David Brown, the city’s water and irrigation manager. “If we store it, then we can use it during drought years.”
Yakima relies primarily on the Naches River for its domestic water. But some of that supply falls under junior water rights, which can be cut during a drought. The city also has rights to the aquifer, which accounts for about 20 percent of the city’s supply during a normal year, Brown said. But during the 2005 drought, the city relied on that groundwater for about half its supply, he said. Brown envisions a system where the city takes advantage of its current water rights, existing wells and distribution system, and the natural groundwater reservoir to improve its ability to meet demands during times of drought. But the technology is relatively new in Washington and the path to getting the necessary permits is complicated. However, because this project is part of the Yakima Basin’s Integrated Plan for water management, the state funding of $150,000 is supporting it.
Taking stored water from the aquifer during a drought, rather than from the river, benefits all the basin’s water users, from farmers to fish, Brown said. Advocates of the technology, known as Aquifer Storage and Recovery, or ASR, point out that using aquifers as reservoirs costs less and has fewer environmental consequences than building surface storage. Dan Haller, an environmental engineer who works on ASR projects, said that while the technology is still new here, several Eastern Washington communities, including Walla Walla, Kennewick and White Salmon, are developing such projects. None, however, has received final permits.
Yakima has been researching ASR since 1998, when a consultant noted that the geology below the city would be well suited to storing water. The aquifer beneath Yakima is basically shaped like a bowl, explained Chris Pitre, a hydrogeologist for Golder Associates who has worked with the city for years. But the bowl leaks a little bit. Water in the aquifer slowly moves through a layer of sandstone to eventually feed into the Yakima River. “What we have to figure out is if we store some water in the ground, how long can we retain it?” Brown said. The pilot project planned for May will help answer that question: the city will pump water into the aquifer for five days and then use monitoring wells to track it as it moves for several months.
This will be the city’s second such test. The first was done in 2000 at a different well, Pitre said. Running a model with data from that experiment, they found that about 40 percent of the water would probably “leak” out over 10 years. Since the city’s goal is to use this technology as drought insurance, Brown said they don’t expect to get all their water back. Instead, he said, having additional supply available when they really need it will be worth some slow loss over time.
Droughts are predicted to become more frequent in the region, Brown said, and he believes this storage, along with conservation measures, will help the city prepare for that future. Moreover, the “lost” water eventually adds to the flow of the Yakima River, which has environmental benefits. So the pilot project will help the city learn how much of the added water it can expect will remain in the aquifer over time. But, Pitre said state policy is not clear on how Ecology will determine how much water cities will be allowed to recover from these systems.
State law allows ASR projects to only withdraw the water that remains from what was put in, but it’s complicated to regulate because each aquifer loses water at a different rate. Because of that, Ecology has decided to set the recovery limits on a case by case basis during the permitting process, said Guy Gregory, a hydrogeologist with Ecology. Another challenge for permitting these projects is ensuring that they meet groundwater quality standards. “The state is trying to encourage ASR as a responsible water resource management tool, but they are bumping into this (water quality) regulation we also have to deal with,” Pitre said.
Yakima plans to treat the water, just like the drinking water, before it puts it into the ground. But Haller explained that water quality regulations for groundwater can actually be stricter than drinking water standards, because they are designed to prevent pollution. Yakima treats its water with chlorine to kill pathogens to prevent disease, but that process creates chemicals known as disinfection byproducts, Haller said. The chemicals are considered safe to drink. But since they don’t naturally occur in the groundwater, they can be treated like pollution by regulators. “You have to go through an evaluation of whether it is reasonable to treat and remove (the byproducts) or whether it is OK to degrade groundwater slightly to do this project,” Haller said.
Once the water quality data has been analyzed, the director of the Department of Ecology can determine whether the project’s benefits outweigh the risks and allow it to move forward. That’s what Ecology staff has recommended for the Kennewick project and that’s what Pitre believes will happen for Yakima. During the experiment in 2000, Pitre said the water quality analysis showed that after six weeks the byproducts broke down into water, chloride and carbon dioxide. The pilot project operating under a temporary permit this summer will also study the water quality, Pitre added, and help the city get a permanent permit.
Once it has that permit, the city can start storing water right away, without needing any construction. It’s one piece of the Integrated Plan that could be up and running quickly. Eventually, Brown said, the city could work with other water users, like the county or irrigation districts, to store water for them as well. “This has lots of long-term potential,” Brown said. “There is hundreds of millions of gallons of free space in this reservoir.”