Balancing Water Accounts

Imagine logging in to your bank checking account to check your balance and finding out that the bank has not tallied deposits – only withdrawals. Of course, your balance would show only what you have spent. If you are a big spender, you may be looking at a large overdraft.

You might be unconcerned at first. Your source of income — your business or your salary — seems dependable. Deposits must have been happening, you think, you’re just not sure when and how much. It should work out. Or will it?

This is exactly how businesses, farms and communities have been treating their water resources for decades. And for most of that time and in most places, the consequences of not knowing if water withdrawals and deposits are in balance have been minor. Rivers generally continue to flow, rain continues to fall, and gravity continues to pull water into the ground to store it on our behalf. And this is an important detail: the water that makes its way into the ground is like that other account at our bank — the forgotten savings account where we keep our “rainy day” funds — the money we turn to for temporary shortfalls. The catch, of course, is that if deposits aren’t captured, they can’t be credited into either our checking or our savings accounts. With water, the source of deposits may not be obvious. Rain that fell in far off places, recently or thousands of years earlier, may be the source of water we pump from the ground locally.

What are the risks of not tracking your balance?

The most immediate risk is a surprise overdraft that hopefully carries only a short term penalty. In the worst case, the repercussions are self perpetuating; you’ve accumulated debt and your credit rating sinks. You won’t have access to capital, particularly inexpensive capital, until you have proof your account is back in balance.

And here is where our metaphor comes together: note that in the paragraph above we might have been describing either money or water. When you don’t balance your bank accounts, your credit suffers. Likewise, when you don’t balance your water resources, your credit suffers. A land’s potential is tied to the strength of its water balance.

Moreover, new Environmental, Social and Corporate Governance (ESG) investing criteria demand that companies that don’t measure and prove that their resource management methods are sustainable should not enjoy access to capital. If you have over-drafted on your money or water, or, importantly, if you don’t know if you are over-drafted or not, investors will invest elsewhere.

It should also be said that reporting horizons are shifting too. Unlike a quarterly or annual financial report, or, more to the point, the annual tax return that offers some closure on gains, losses and liability, water balance must be understood both in the present and over many years. As the following groundwater level data collected in northern Texas demonstrate: year-on-year over-drafted water compounds. Such a trend on water reserves is simply not sustainable.

Persistent groundwater level declines from 2010 to today observed north of Amarillo Texas. Source: USGS via Wellntel Analytics Dashboard

How to balance water accounts

Water is the least measured of all of the natural resources on which human life depends. This accounting shortfall is a product of centuries of ample and often free supply and, at best, limited options to monitor it. Today, however, our water resource is changing more quickly than ever, in response to climate change, population growth and density, and industrialization. Water is out of balance in more places on earth than ever before and the natural human response to the perception of scarcity is to control access. As with our banking metaphor, most water resource accounting carefully tabulates withdrawals but ignores deposits and balances. For example, a state regulator might impose a limit on a farmer’s use of water for irrigation through a moratorium, but what is the actual balance on and around the farm? Is the moratorium helpful or harmful?

In our work with water resource managers we have seen that the key to smart management is in ensuring that all the information that affects water balance is incorporated into planning and decisions. Yet few water monitoring projects require the measurement of the state of the supply and rate of deposit. The technologies that quantify and track it have not kept pace with the need, remaining expensive and cumbersome. This must change. Any water balance accounting must track withdrawals and deposits in real-time and over time and show how the availability of the resource changes in response.

Technology is changing the science of water management

Ubiquitous water monitoring that includes real time supply, demand and balance as its vital metrics and triggers is the key to managing water sustainably. The technology should enable managers to monitor surface and groundwater supply and trends, rainfall, recharge and pumping and report the ground-truth — actual resource accounting — not just models and guesses, via simple infographics and rich analytical tools. Systems to collect, combine and report on current conditions and longer term trends will support decisions to conserve or to invest, to take steps to weather a shortfall, or to demonstrate to stakeholders that accounts are in balance.

With proper water balance accounting, a farmer and his/her regulator can agree to invest in this year’s crop without risking the future of the farm, a water-dependent business can operate efficiently in the context of resources while ensuring long term financial viability to investors and insurers, and a community can continue to grow without harming the natural resource on which it depends.

If you’ve been tracking demand but need to track supply, call Wellntel. We’ll help you to become a pioneer in water stewardship and keep your water accounts in balance.