‘Water banking’ will lead to privatization and speculation, critics warn

Critics fear selling water through a market could lead to investors diverting water from rural Nevada to cities. (Southern Nevada Water Authority Investor Relations website photo)

A proposal to create a market for buying and selling water rights in Nevada is being met with skepticism from multiple sides, including factions that often don’t see eye to eye.

Lawmakers on Monday held a hearing on the measure that would allow “water banking,” a practice where surface and groundwater rights holders can buy, lease and sell water based on their needs.

Rather than stick to the prevailing use-it-or-lose-it foundation of Nevada water law, the bill would enable water users to pause their water use without risk of forfeiting their right to the water and would in theory promote conservation.

The measure seeks to add flexibility to the ways water rights are administered, said acting Nevada State Engineer Adam Sullivan.

“What we hear all the time from irrigators is that this incentivizes people to use more water than they need. Or they are being punished for not using their entire water right or they’re forced to sell off what they don’t use. There’s no real satisfying response to that except that’s how the law is written,” Sullivan said.

Critics of the proposal, however, fear selling water through a market could lead to speculation or consolidation by businesses or private investors who might divert water from rural Nevada to cities or hoard water rights and sell to the highest bidder. 

“Can you guarantee if this goes forward that someone won’t buy a farm, plow the fields, bank the water and then wait for the highest bidder so it becomes more of a commodity as opposed to using the water appropriately?” asked Republican Assemblywoman Robin Titus.

“I don’t think there are any guarantees anywhere in statute for abuse of process. Under existing law, there are certainly ample opportunities for people to find loopholes in which to exploit their own interests,” said Michelin Fairbank, deputy administrator of the Nevada Division of Water Resources. “I can’t make that guarantee.”

Water regulators said they were open to language and suggestions that would strengthen protections against water speculation and abuse.

Other western states with limited water resources have adopted water-sharing programs that provide more flexibility for users with water rights, said Sullivan. The Nevada proposal is based on a 10-year pilot project in Utah. The Colorado Legislature is also exploring the creation of “water banks.”

Another bill proposed Monday focused on water law would create a program allowing the state to purchase and retire certain water rights.

During public comment, rural water users and conservationists largely spoke in opposition to both bills submitted on behalf of the Governor’s Finance. Critics were concerned the proposal for “water banking” had too few details and argued the bill was premature and incomplete. 

“We are not going to say we are opposed to working through a thorough process airing out details which remain as questions, we simply aren’t at a place at this point and time to be able to move forward without a more comprehensive and interactive discussion,” said executive vice president of the Nevada Farm Bureau Doug Busselman.

No action was taken on either of the bills.

Jeniffer Solis
Reporter | Jeniffer was born and raised in Las Vegas, Nevada where she attended the University of Nevada, Las Vegas before graduating in 2017 with a B.A in Journalism and Media Studies. While at UNLV she was a senior staff writer for the student newspaper, the UNLV Scarlet and Gray Free Press, and a news reporter for KUNV 91.5 FM, covering everything from the Route 91 shooting to UNLV housing. She has also contributed to the UNLV News Center and worked as a production engineer for several KUNV broadcasts before joining the Nevada Current. She’s an Aries.