Groundwater Banking and SGMA’s Undesirables 

Groundwater banking is a flexible water management tool that is critical for the success of California agriculture. GSPs should include water banking operations when appropriate in their GSPs. The groundwater banking operations will need to monitor their impacts to the surrounding area and work closely with GSAs to ensure they do not run afoul of the six undesirable results.

A GSA is meant to become a vehicle for local control over groundwater management. GSAs are not able to create or implement GSPs that are contrary to the objective of sustainable yield without “undesirable results.[1] The term undesirable result means “significant and unreasonable effects for any of the sustainability indicators are caused by groundwater conditions occurring throughout the basin.”[2] California Department of Water Resources approved GSPs for critically overdrafted groundwater basins must be in place by January 31, 2020.

The six sustainability indicators that are measured to determine undesirable results include chronic lowering of groundwater levels, reduction of groundwater storage, seawater intrusion, degraded water quality, land subsidence that substantially interferes with surface land uses, and, “depletions of interconnected surface water that have significant and unreasonable adverse impacts on beneficial uses of the surface water.”[3] GSAs must avoid undesirable results by submitting monitoring reports to DWR or risk intervention from the SWRCB.[4] Additionally, GSPs must consider “interests of the beneficial uses and users of groundwater in the basin, and the land uses and property interests potentially affected by the use of groundwater in the basin.”[5]

1.     Chronic Lowering of Groundwater Levels

SGMA states that one undesirable result is the “Chronic lowering of groundwater levels indicating a significant and unreasonable depletion of supply if continued over the planning and implementation horizon.”[6] When persistent drought increases demand for banked groundwater, a groundwater bank will likely receive several calls for water in larger amounts than during a typical year. Should this persist over multiple years a bank may be in danger of depletion of water or in violation of chronic lowering. However, SGMA allows extraction during overdraft if, “extractions and groundwater recharge are managed as necessary to ensure that reductions in groundwater levels or storage during a period of drought are offset by increases in groundwater levels or storage during other periods.”[7] To ensure protections are in place, a groundwater banking operation will need to keep a thorough water accounting history. This accounting history may be reported to the local GSA as proof that offsets are made during average and wet years.[8]

2.     Reduction of Groundwater Storage

The next undesirable result occurs if there is a significant and unreasonable reduction in groundwater storage for the basin.[9] Ensuring ample storage access to groundwater users in the basin may bring conflict between a groundwater banking operation and the surrounding well users. A groundwater banking operation will need to remain cognizant of how they handle imported water for artificial recharge in the basin and potential impacts to the amount of overall basin storage in accordance with the local GSP.

3.     Seawater Intrusion

Another undesirable result is significant and unreasonable seawater intrusion.[10] Basins closer to the ocean may be impacted by increased groundwater pumping over the years which creates space for salty, brackish water to mix into the fresh groundwater supply. Should a groundwater banking operation reside in a basin combatting seawater intrusion, special attention will need to be given to the impacts of extraction and recharge on the basin’s water pressure. If the pressure becomes less, the seawater may be allowed to intrude further into the basin and contaminate the water supply.

4.     Degraded Water Quality

SGMA also includes, “[s]ignificant and unreasonable degraded water quality, including the migration of contaminant plumes that impair water supplies,” as an undesirable result.[11] Degradation of water quality may occur through water imported into a groundwater banking operation or through local contamination of various substances including nitrates from agricultural fertilizers or benzyne from oil and gas operations. A groundwater banking operation that does not control for water quality issues may run into conflict with a GSAs sustainability goals and trigger an undesirable result.

5.     Land Subsidence that Substantially Interferes with Surface Land Uses

SGMA states, “[s]ignificant and unreasonable land subsidence that substantially interferes with surface land uses” is an undesirable result.[12] Land subsidence can occur when an aquifer is pumped at a fast rate, which does not allow time for the aquifer to recharge. The lack of recharge causes an imbalance in pressure causing the land to sink into the emptied aquifer. When a groundwater banking operation delivers large volumes of water in a short amount of time, subsidence may occur. A GSP will need to monitor and plan for how groundwater trading and storage impacts overlying agricultural needs, residential areas, and damage to infrastructure such as pipes and roads.

6.     Depletions of Interconnected Surface Water

The last listed undesirable result occurs when, “Depletions of interconnected surface water that have significant and unreasonable adverse impacts on beneficial uses of the surface water.[13] The last sustainability indicator is ambiguous because the law rarely recognizes the interconnection of surface and groundwater, and any legal use of surface water is also beneficial, otherwise it is waste. From an environmental stakeholder perspective, this could mean a groundwater banking operation that pulls water too close to a surface stream, causing the stream to run dry earlier than normal or to a point that harms fish and wildlife. From an agriculture perspective, this could mean a surface water right holder is harmed because less surface water is available as it seeps into the basin, but may be unable to access that water for irrigation. In any context, it appears actions taken that impact surface water must be addressed to avoid an undesirable result.

Approved GSPs must be in place for critically overdrafted groundwater basins by January 31, 2020. Medium and high priority basins are required to have an approved GSP in place by January 31, 2022. AQUAOSO’s research tools allow you to stay updated on the GSP process for each GSA and what the GSP means for agriculture in each GSA.


[1] Cal. Water Code § 10721, subd. (w), (x).

[2] Cal. Code Reg., tit. 23 § 354.26, subd. (a).

[3] Cal. Water Code § 10721, subd. (x).

[4] Cal. Code Reg., tit. 23 § 352 et. seq.

[5] Cal. Code Reg., tit. 23 § 355.4.

[6] Cal. Water Code § 10721, subd. (x)(1).

[7] Id.

[8] Additional considerations in water banking partner agreements including are covered in Part 7.

[9] Cal. Water Code § 10721, subd. (x)(2).

[10] Cal. Water Code § 10721, subd. (x)(3).

[11] Cal. Water Code § 10721, subd. (x)(4).

[12] Cal. Water Code § 10721, subd. (x)(5).

[13] Cal. Water Code § 10721, subd. (x)(6).