Case study 2 the Namoi River

The Namoi River catchment lies in north-east-central NSW and covers approximately 42,000 km2, as shown in Fig. 15.3. The river flows 350 km from east to west and there are three major storages on the main stem and its tributaries: Keepit, Chaffey and Split Rock dams. The catchment includes part of the Liverpool Plains that has been subject to long-term investigations of fertilizer and agrochemical pollution of groundwater. Rain generally occurs in summer but is highly variable between years and seasons, from as high as 1100 mm/ year over the Great Dividing Range in the east (upper catchment) to as little as 470 mm/year in the downstream area in the west. As in the rest of southeastern Australia, potential evaporation generally exceeds rainfall rising from 1000 mm/year in the east to more than 1750 mm/year in the west.

Groundwater is generally sourced from quaternary alluvial aquifers running along the major stream lines, but there are also two low-yielding sandstone aquifers. The total volume of groundwater storage is estimated to be 285 billion cubic metres, of which 89% is of low salinity (less than

Fig. 15.3. Namoi river catchment. (From Ivkovic etai., 2004.)

1000 mg/l total dissolved solids (TDS) ). In 1988, there were 1639 high-yielding tube wells, mainly in the paleo-channels or alluvium adjacent to the river, with maximum yields as high as 200 l /s. Average groundwater use at this time was 200 million cubic metres per year, which was equivalent to recharge these aquifers. Small volumes are also sourced from porous sandstone aquifers of the Great Artesian Basin, which stores the bulk of the groundwater in the Namoi Valley (243 billion cubic metres) at depths of 520-810 m below ground level. Although TDS are generally less than 1200 mg/l, the water has high sodium content and is not suitable for irrigation, but is used for stock watering and for town and rural drinking water. Groundwater in fractured rocks (basalt) is sometimes sourced for stock and domestic supplies, but yields are low and success in drilling is variable.

The Namoi accounts for about 40% of NSW's total groundwater use and is one of the most intensively developed irrigation areas in the state, with largely private investment through agri-business (e.g. Auscott and Twynhams) and large landholders who have moved into intensive irrigation development. Cotton is essentially a 'young industry', with highly mechanized large-scale layouts, mainly using furrow and bed irrigation. Substantial research has been undertaken into tightly scheduled irrigation and irrigation agronomy, coupled with trials on micro-irrigation and drip tape, but the consensus is that furrow and bed irrigation is best suited to the vertisol soils and has cheaper capital and operational costs, which attract less risk with volatile cotton prices.

Groundwater has been extensively monitored since the 1970s, with 560 piezometers at 240 sites in 1995, and a further 470 licensed bores monitored on 175 properties (Johnson, 2004). This data allowed the completion and calibration of a groundwater model of the Lower Namoi in 1989 and its subsequent refinement.

The chart in Fig. 15.4 shows the rapid development of groundwater, principally to irrigate cotton, lucerne and wheat since the late 1970s, increasing from less than 15,000 ha to around 35,000 ha. The surface-irrigated area in 1988 was marginally larger at 36,544 ha. The Commonwealth Scientific and Industrial Research Organization (CSIRO) undertook the first assessment of groundwater use in 1991, and recharge was estimated to be just over 200 million cubic metres per year. After community consultation, a contentious agreement was brokered to implement a policy of 'controlled depletion' of 220 million cubic metres per year on average, in the full knowledge that the economic life of the aquifer would then be only 30 years (i.e. till 2020). The idea of controlled depletion meant that an annual average recharge plus a further 10% or so annual depletion would be allowed.

However, it was not long before many people in the community as well as in public administration decided that a more sustainable long-term solution would be preferable, and that mining the aquifer was in very few peoples' interest. Further assessment and modelling studies indicated that average usage in the Namoi was below recharge, but at the same time it was overallocated with sleepers and dozer licences and punctuated by periodic overuse, corresponding to low surface water allocation years (Fig. 15.5). However, at this stage, the

1980

1982

1984

Year

1986

1988

Fig. 15.4. Groundwater-irrigated area development in the Namoi Valley, 1978-1988.

1978

1980

1982

1984

Year

1986

1988

Fig. 15.4. Groundwater-irrigated area development in the Namoi Valley, 1978-1988.

200,000 150,000 100,000 50,000 0

200,000 150,000 100,000 50,000 0

Sustainable yield

Allocation

Average usage

Maximum usage

Sustainable yield

Allocation

Average usage

Maximum usage

Allocation - usage = unused allocation (skepeidozer) Fig. 15.5. Comparison of allocation and use in the Upper and Lower Namoi groundwater systems, 1998 (DLWC).

assumption was still that sustainable extraction equated to 100% long-term average annual recharge and that there were no groundwater-dependent ecosystems in the valley.

Even at this most optimistic formulation of sustainable extraction, some subsystems were 3-4 times overal located, and no further development was allowed in all zones (see Table 15.9) except zone 6 where the water table continued to rise. There was an in-principle agreement to phased reductions in allocations to 35% of existing values during 1996-1998, but in practice this proved very difficult to agree and implement. Following national and state initiatives for groundwater management reforms, a series of modelling assessments were undertaken and then supported by a Social Impact Study, conducted by CSIRO with, and on behalf of, the community. Initial stakeholder assessments on fair reallocation and the definition of environmental flows were made to develop the full process (Nancarrow et al., 1998a,b). The main focus of the assessment was to understand differential treatment of active and unused licences, as well as the likely impacts on the community and their expressed priorities. The consultation was conducted in 1999, and the main characteristics are summarized in Box 15.5.

The results were incorporated into the Water Sharing Plan, seeded in 1999, which was expected to be formalized in 2000 and followed by swift implementation. The Namoi study was effectively a pilot for other groundwater management units in NSW, but in the end, the final plan was not agreed and published until 2003, and began implementation only in 2004, having progressed through one of the most severe and extended droughts on record (2000-2004).

The principle source of contention concerned the definition of sustainable extraction and the preference of many in the community to maintain this at 100% annual average recharge. In 1999, DLWC supported the continued abstraction of 100% annual average recharge and proposed a 10- to 15-year period to determine and implement a transition to incorporating an environmental share of the resource. In response to the paper 'Perspectives on the Sustainable Development of Groundwater in the Barwon Region', presented to the Namoi Groundwater Management Committee, the Nature Conservation Council of NSW drafted a hard-hitting response (http://www.nccnsw.org.au/ water), and suggested the immediate and precautionary implementation of 70% as an environmentally sustainable yield in underused zones, with a 10-year transition for the overexploited zones. They proposed formulas to cut back allocations to sustainable limits for each zone, which were eventually adopted in the water sharing plan after some modification (2003).

Simultaneously, combined surface and groundwater assessment studies were undertaken with hydraulic and social impact models linked together (Letcher and Jakeman, 2002). The investigators noted that many such studies require approximately 3 years for model completion, by which time the initial key issues might no longer be relevant. They commended the development of models to be sufficiently flexible for reapplication to other problems, and to emphasize the difference between outcomes and policy developed from models, compared to accurate prediction. Despite considerable community involvement, they note that great effort is required to explain model outputs and accept

Box 15.5. Community consultation and participation in development of the water sharing plan in the Namoi Valley: the NSW socio-economic assessment. (Adapted from Nancarrow et al., 1998a.)

1. Understanding the catchment:

(a) community water profile - socio-economic characteristics and history, water use profile;

(b) identifying change processes in the catchment;

(c) identifying key issues.

2. Goal setting (principle of balance of benefits and costs):

(a) understanding government goals and objectives;

(b) understanding community expectations of the water reform process;

(c) communities' aspirations and concerns for the future.

3. Generating management options:

(a) development of a range of appropriate options.

4. Identifying effects:

(a) on different uses, population groups, industry sectors, communities and over time;

(b) extractive and non-extractive uses - matrix of sectoral uses and options;

(c) socio-economic effects - checklist of financial effects inside and outside catchment, socio-demographic structure, community institutions and vitality, heritage values, environment.

5. Assess effects:

(a) preliminary and detailed;

(b) extent, likelihood, intensity, timing and duration;

(c) impacts of no-change - development of a common reference scenario;

(d) detailed studies - clear statement of assumptions; quality assurance principles - focus, long-term horizon and equity; targeted sensitivity analysis; identification of appropriate methods and techniques; identification of data sources.

6. Determining preferred option:

(a) impact display table;

(b) trade-offs - weighting strategies to cope with differential benefits;

(c) risk and uncertainty analysis.

7. Developing impact management strategy.

8. Reporting:

(a) required reporting on important steps (i.e. all the foregoing).

9. Monitoring:

(a) monitoring for management, feedback and adjustment;

(b) review of objectives and actions;

(c) generation of monitoring questions;

(d) identification of key factors or variables to be monitored. 10. Evaluating and adjusting.

uncertainty and iterative solutions. They also noted that stakeholders must be encouraged and assisted to have more realistic expectations on the appropriate and inappropriate uses of models and their outputs, and implied that gaining feedback through public seminars and discussions was insufficient.

The final Water Sharing Plan (MLWC, 2003) documents the agreed reductions in allocation and the rules associated with allocation and monitoring. The plan defines 13 separate groundwater management zones within the Namoi Valley and determines the long-term average recharge for each one (Table 15.9). The largest zone, in terms of geographic area, water resources and use, is the Lower Namoi, a contiguous near-stream alluvial aquifer. However, wells that were drilled deeper through unconsolidated sediments of the Lower Namoi and into the Great Artesian Basin were not included in the plan. The crux of the matter is the process by which allocations will be reduced to address current overallocation (Box 15.6).

Previous drafts of the plan were consistently opposed by the Nature Conservation Council of NSW (see Report Card on Water Sharing Plans), which recommended against gazetting the Namoi Water Sharing Plan in 2003 on the grounds of insufficient allocation for the environment.

The final assessment of extractable water for agriculture was undertaken on the basis of environmental health requirements (taken at approximately 30% of annual recharge) and other high-priority uses (utility licences and native title use), and considers the long-term aspects of climate variability. The domestic and stock rights were calculated separately, and then the actual agricultural demand was also determined (Table 15.9). In fact native title rights in the Namoi amounted to zero and so had no impact in this case, and it can be seen that the stock and domestic and utility licence volumes are generally modest. A simple formula that pro-rated new licensed volume in proportion to available resources, reserved licence and prior licence volumes resulted in the revised figures and the percentage reductions in zonal allocations summarized in Table 15.9. It can be seen that there are no reductions in zones 6, 9

Table 15.9. Summary table of groundwater allocations by zone in Namoi, water sharing agreement 2003 (in thousands m3). (From Water Sharing Plan 2003.)

Estimated

Stock

Local

Reductions

annual

and

Estimated

utility

in access

average

domestic

water

access

licence

Zone

recharge

rights

requirement

licence

(% volume)

1

2,100

39

8,510

1,716

87

2

7,200

359

23,810

59

70

3

17,300

470

56,017

1 99

69

4

25,700

667

82,590

4,660

73

5

16,000

262

36,042

56

45

6

14,000

274

11,448

97

0

7

3,700

89

6,321

4,407

41

8

16,000

1 66

48,204

-

67

9

1 1 ,400

1 87

11,342

-

0

10

4,500

36

1 ,420

-

0

11

2,200

21 0

8,740

-

75

12

2,000

73

7,487

-

73

Lower Namoi

86,000

3,304

172,187

-

51

Total

208,100

6,136

474,118

1 1 ,1 94

Box 15.6. Objectives and performance indicators for the groundwater sharing plan, Namoi.

The objectives of the plan include:

• protection maintenance and enhancement of ecosystems dependent on groundwater;

• protection of the structural integrity of the aquifers and of their water quality;

• management of extraction so that there is no long-term decline in water levels;

• preservation of basic landholder rights access to the groundwater sources and assurance of fair, reliable and equitable access through management of local impacts and interference effects;

• contribution to the protection, maintenance and enhancement of the economic viability of groundwater users and communities;

• assurance of sufficient flexibility in account management to encourage efficient use of groundwater resources and to account for the effects of climate variations.

The performance indicators selected to monitor the objectives include:

• change in groundwater level and climate adjusted levels;

• change in groundwater level adjacent to dependent ecosystems;

• change in groundwater quality;

• change in economic benefits derived;

• extent to which domestic, stock, water utility and native title rights have been met;

• change in structural integrity of the aquifer.

and 10, and water levels have been rising in zone 6 due to recharge from surface irrigation and other surface water-groundwater interactions.

The plan makes allowance for future revision of estimates of sustainable extraction volumes and sets limits on the maximum (over)abstraction within 1 accounting year, compared to the longer-term (3 years) average extraction as reported to the minister. Typically, the maximum 1-year overabstraction limit is 25% greater than the nominal long-term value given in Table 15.9.

Water availability is determined by continuous monitoring and compares the average abstraction with the extraction limit over the current and preceding 2 years, with some upper limits set on water availability in some zones. Water accounting is conducted annually over a water year that runs from 1 July to 30 June. To minimize interference between adjacent bores, no new agricultural bores can be approved within 100 m of an existing well or 200 m from an existing property boundary, and are subject to further expert hydrogeological findings as appropriate. They must also be more than 400 m from an existing monitoring well and 500 m from an existing domestic water supply well. Finally the plan was scored by the DLWC on how well it met the 38 targets of the State Water Management Outcomes Plan. The transition period allowed for the full implementation of environmental allocation was finalized at 10 years. It will be implemented through re-specification of licences, such that the sustainable licence volume is now formally allocated with supplementary water allocations that will be gradually reduced to zero over the transition period.

A socio-economic evaluation of the plan was conducted by the University of New England, Armidale, NSW, in late 2003 (Institute for Rural Futures (IRF), 2003). This was preceded by a number of studies undertaken generally for water sharing plans in NSW by Australian Consultants International Limited (ACIL) in 2002, and by the DLWC in conjunction with the CSIRO-conducted exercise. A number of expert commentaries were also written by other observers, including the Australian Bureau for Agriculture and Resource Economics (Topp, 2000), which illustrates not only the importance and pioneering nature of the Namoi case, but also the pluralistic and broader interests and perspectives brought into play by the state, the water users and the environmental lobby groups. It also shows that different studies are employed at different times for different purposes, even if they seem to cover the same territory - for example, dealing with public or users' perception and priorities in the evolution of a plan and a more dispassionate, objective assessment of the impacts of that plan after it has been declared.

The IRF study looked in detail at the economic impacts by commodity and zone, using primary data, secondary data and a farm modelling analysis. The farm analysis was extended to regions, and complemented by industry and social impacts. It was conducted at a time when an earlier version of the Water Sharing Plan was deferred for 6 months, and simplified water allocation reductions, similar to those voluntarily agreed by the user community, had been reinstated.

Some farmers indicated that they would acquire, or try to acquire, increased surface water supplies to substitute for 'lost' groundwater allocation, and set their future farming strategies accordingly; hence various scenarios of future water use were investigated, including the impact of trading. However, the authors lamented the lack of reliable information on the interaction between streams, irrigated fields and aquifers and the extent to which surface water could be substituted for groundwater.

Groundwater-irrigated farms were estimated to contribute AUS$384 million or 56% of the gross value of agricultural production in 2000-2001. The analysis of all zones indicated a future loss of production of AUS$26.7 million in 0-9 years (under the plan) and a further AUS$42.3 million in 10-20 years (post plan), considerably more than the structural adjustment compensation of AUS$18 million proposed by the NSW government. An alternative plan of AUS$120 million compensation had also been proposed, but cut back to this value, amounting to an average of about AUS$70,000 per affected property. As a result, it was felt that some owner-operators would be forced to amalgamate and expand or to cease operation due to reduced net income of reduced water allocation. The mitigating impacts of new enterprises, new technology and possible higher-price regimes in the future were all positive. Overall, it was expected that irrigated production would contract, with cereals reducing far more than irrigated cotton, and would be partially compensated by an increase in rain-fed wheat and sorghum. Lucerne production would decline and there would be an increase in feedlot cattle production and a corresponding reduction in open grazing. Little change in high-value cropping was anticipated.

At a regional scale, it was estimated that gross regional product would decline by 2% in 0-9 years and by 4% thereafter (10-20 years), with corresponding reductions in household income of 2% and reductions in employment of 2%. Social impacts were not quantified, but explained in qualitative terms, such as loss of employment, reduction in school population, reduced local spending and knock-on effects on service industries. The report identified the town of Gunnedah as the focal point of declining cotton production, which was expected to concentrate closer to existing service centres in Narrabri.

Although the Water Sharing Plan was developed in close consultation with the community over a long period, individual property owners are reported to have spent as much as AUS$ 250,000 in trying to challenge the plan in court (Rural Reporter, 30 August 2003).

The story continues to unfold with the same pressures from users, environmental groups and resource managers coming into play. The plan was due to be implemented towards the end of 2004, but was delayed and is now scheduled for implementation in 2006. In the current iterations, research continues on surface water-groundwater interactions and the resulting effects on water allocation policy (Ivkovic et al., 2004). Preliminary conclusions indicate localized reductions in stream base flow, likely to be attributed to groundwater use. More extensive investigation continues, but it is likely that there will be further pressure on limiting both surface and groundwater abstraction, until a balance that is acceptable to the community has been achieved. This will no doubt continue to be a robust and noisy process.

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