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WATER TRANSFERS AND MARKETING N~ WATER W EXPORT FROM TEHAMA COUNTY ,I State policy-makers have encouraged water market. ing - the sale and transfer of water among users - as a way to more efficiently meet water needs. But most sales have resulted in some controversy because of the potential environmental effects on streams, the physical and legal effect on future supplies, and the economic effect on third parties, such as farmworkers or seed mer- chants, who are dependent on existing water use regimes. r::==- - The role of groundwater in transfers is complicated be- cause virtually every ground- water basin that is a likely source of water for sale has not been adjudicated or other- wise defined or divided. The ambiguity over ownership raises questions over how much water can be sold and how to deal with the potential negative impacts such as subsidence and water quality degradation other pumpers may experience because of the falling water tables. The issue arose squarely when the state created a "drought water bank" in 1991, 1992, and again in 1994 to broker deals between willing sellers and buyers. In 1991, approximately one-third of the 700,000 acre-feet of bank water came from up- stream, diverters who sold their allotment of river water and turned to the groundwater to make up that supply. In 1994, two-thirds of the surface water sold through the bank was "substituted" by groundwater. The sales prompted protests from other groundwater users in the export areas who were concerned the increased pump- ing would lower water tables, resulting in higher pumping cosfs and pofentially result in land subsidence. CONJUNCTIVE USE Conjunctive use is the coordinated management of surface water and groundwater supplies. An active form of conjunctive use utilizes artificial recharge, where surface water is intentionally percolated or injected into aquifers for later use. A passive method is to simply rely on surface water in wet years and use groundwater in dry years. Informally, conjunctive use has occurred since the first drought prompted communities to dig wells. Water managers in southern California were among the first in the nation to intentionally recharge aquifers. But as officials seek to make the best use of existing water facilities and wet-year flows, conjunctive use has taken on more formal meaning. In the 1980s the SWP purchased 20,000 acres along the Kern River west of Bakersfield to develop an underground water bank - soaking water into the sandy soils in wet years and pumping it out in dry years. A variety of regulatory hurdles frustrated the effort. In 1994, as part of a renegotiation of contracts with SWP customers, the bank was "sold" to the Kern County Water Agency, which "paid" for the bank by giving up 45,000 acre-feet of its entitlement and agreeing to negotiate additional exchanges with the project's urban customers. In urbanizing San Bernardino and Riverside counties, where demand is expected to increase greatly in the coming years, federal and local agencies are examining the potential for water banking, and trying to figure out how to best avoid contaminated aquifers. Computer models can aid strategies for making the best coordinated use of surface water and groundwater resources. For example, the Mojave Water Agency is investigating ways to use the Mojave River drainage as a recharge area to store surface water in wet years for use during dry years. Conjunctive use is seen as one way to maximize water supplies so that less water is diverted from streams in dry years. Similarly, making better use of groundwater basins to store water and meet drought year needs is playing a central role in efforts to restore the Sacramento-San Joaquin River Delta, and minimize the environmental consequences of fresh water diversions in dry years. Increased 19