Understanding groundwater markets and transfers in Nebraska

While Nebraska is fortunate to include most of the water contained in the country's largest aquifer, the Ogallala Aquifer, this valuable supply of groundwater is not unlimited. Approximately 88% of the state's residents rely on groundwater as their source of drinking water. Simultaneously, Nebraska is also home to more than 96,000 irrigation wells, and the most pivot irrigation systems of any state, pumping water to supply corn, soybeans, wheat and other crops.¹

In Nebraska, a landowner has the right to use groundwater, subject to regulation, by virtue of their ownership of the overlying land. Groundwater regulations are determined by Nebraska's Natural Resources Districts (NRDs). The NRDs are local government entities that are responsible for ensuring fair use of groundwater to benefit farmers, the general public, and the environment. Due to factors such as local hydrology and competing water use demands, the quantity of groundwater varies significantly between geographic areas within the state.

NRD water use regulations sometimes limit some farmers' ability to irrigate enough to meet the water needs of their crops, while other farmers may have more water allocated to their use than they need. To help alleviate this water-use imbalance, water markets have evolved as a tool to provide water access to the farmers who need it and source of income to those who are willing to sell it. Through this mechanism, groundwater allocation transfers can be made .Typically, these transfers are regulated and administered by the local area NRD.²

DWFI researchers have collected information from seven NRDs to better understand the variability related to groundwater transfers across the state. The rules vary significantly across the districts, including transfer types, environmental and conservation goals, and even the language used to define the rules. Some local governments have to more carefully manage groundwater pumping impacts on streamflow due to added accountability from interstate compacts, settlements, and federal endangered species programs. Groundwater market transaction costs can also vary greatly across districts.

The map was created by Aakanksha Melkani and Shunkei Kakimoto.

Learn more about the map

Groundwater transfers in Nebraska have a long history, are designed to prioritize local needs, and are highly variable across the state. Learning from them could help decision-makers seeking to implement groundwater markets in other regions (e.g., California).

The research team analyzed the findings and developed user-friendly information sheets accessible to the public from the DWFI website: https://waterforfood.nebraska.edu/our-work/research-and-policy/transferring-groundwater-in-the-high-plains.³

Sources:
1. https://nebraskalegislature.gov/FloorDocs/106/PDF/Agencies/Environment_and_Energy__
Nebraska_Department_of_/702_20201130-150859.pdf

2. https://silo.tips/download/groundwater-transfers-in-nebraska-obstacles-and-opportunities-to-buying-and-sell

3. https://waterforfood.nebraska.edu/our-work/research-and-policy/transferring-groundwater-in-the-high-plains