The Pershing County Water Conservation District’s headquarters in Lovelock sits off Interstate 80 a few miles before the Humboldt River disappears into a desert sink. Farmers here have priority rights to water in times of drought, according to the laws that govern the Humboldt River, which rises in northeastern Nevada and cuts a meandering blue line through valleys of sagebrush.

But despite their high-priority rights, these irrigators face shortage after shortage.

In three of the past 20 years, Lovelock farmers received no water from the river. In nine of those years, they received less than 50 percent of their allocations, according to a presentation the water district gave to state lawmakers in May. For some farmers, it meant no crops that year. Lovelock is a town of about 2,000 and the consequences were felt across the local economy.

Recent droughts have hit the Humboldt River hard, yet drought alone is not to blame. Officials with the district point to another factor that’s depleting the river’s flows: groundwater extraction. 

As is true across Nevada and the West, groundwater and surface water — rivers, streams and springs — can act as one interconnected supply. In certain parts of the Humboldt Basin, thirsty wells intercept water that would have otherwise flowed into the river, according to the U.S. Geological Survey, which is working to model and quantify how underground pumping captures surface water. 

All the while, farmers downstream are getting less water. Ryan Collins, the general manager of the water district, said that the pumps have stayed on, even in years of drought and in places where groundwater use exceeds what is considered sustainable. 

When the district’s water allocations are cut to zero, “they’re still getting their full allocation,” Collins said.

Since the mid-1900s, extensive groundwater pumping has become stitched into the Northern Nevada economy. It’s the backbone of vast upstream agricultural fields, drinking water supplies and the massive gold mines along I-80. State water regulators have long struggled to keep pumping in check.

The problem extends beyond the Humboldt River watershed. Groundwater stretched far beyond its limits is a nationwide issue, causing the ground to sink in some places, springs to disappear in others and river tributaries to run drier than usual. 

After prodding, lawsuits and rulings (many of which have generated more litigation), the state is trying to do something about the issue of groundwater depletion in the Humboldt and elsewhere, from the Walker River Basin to central Nevada. Exactly how to curtail groundwater pumping has proven to be a headache. Regulatory rules are often contested, and the law is far from settled.

Now, armed with $25 million in federal funds, the state is trying a different tack: Pay irrigators to voluntarily cut back.

Following a handful of other states, Nevada officials are now looking to fund entities that want to facilitate the buyback and retirement of state-issued water rights. Where there is simply not enough water to go around, policymakers want to take water allotments off the balance sheets.

Six entities, from the Southern Nevada Water Authority to the Nevada Land Trust, applied to the state program earlier this month, requesting a total of just over $65 million in funding. 

An advisory committee plans to review the applications and provide feedback to the state’s natural resources agency and Conserve Nevada, which is responsible for allocating the grants. The state expects to issue the grants shortly after the advisory board meets Oct. 26.

The grant applications exceed the funding budget by $40 million, demonstrating the high interest in addressing groundwater overuse across the state. In Southern Nevada, the water authority and Clark County are looking for $18 million to address water rights involved in the Lower White River Flow System, which feeds the Muddy River, a tributary to the Colorado River. The area is the subject of a contentious groundwater dispute before the Nevada Supreme Court.

What happens next is being closely watched by water users in overextended aquifers. Many water managers see the program as a test for a permanent buyback program.

Entity	Project Name	Funds Requested
Central Nevada Regional Water Authority	Water Right Retirement Program	$15,000,000.00
Nevada Land Trust	Forest Legacy Eastern Sierra	$950,000.00
Humboldt River Basin Water Authority	Water Right Retirement Program	$10,000,000.00
Nevada Land Trust	Carson River - Ricci Ranch	$3,091,500.00
Walker Basin Conservancy	Walker Groundwater Retirement	$15,292,570.00
Southern Nevada Water Authority	LWRFS Water Rights Retirement	$3,000,000.00
Nevada Land Trust	Red Rock Water Retirement	$3,150,000.00
Clark County Desert Conservation Program	Muddy River Acquisition	$15,000,000.00

“This is an opportunity to demonstrate that it’s an effective tool for addressing water shortages in the state,” said Jeff Fontaine, who submitted applications on behalf of the Humboldt River Basin Water Authority and Central Nevada Regional Water Authority, two organizations that he leads. 

“We’re looking at the long-term here,” he added. 

The concept of using public funds to retire water rights is not new. Colorado, Kansas and Oregon have set up similar programs. Such buyback programs are meant to provide financial incentives to willing sellers, what Sen. Pete Goicoechea (R-Eureka) has referred to as a “soft landing” for irrigators in areas where groundwater tables are dropping.

When lawmakers met in Carson City earlier this year, Goicoechea introduced legislation to create a permanent water buyback program. It received little formal opposition and backing from a coalition of agricultural and environmental interests. Even though legislators failed to advance the proposal, the state was able to fund a temporary program using $25 million in conservation funds, allocated to Nevada as part of the federal American Rescue Plan. 

“There’s probably a number of different scenarios” that would motivate an agricultural user to participate in a program, according to Doug Busselman, who leads the Nevada Farm Bureau. 

One scenario could be a farmer close to retirement, looking to cash out as they wind down their operation. Another might be someone who sees an opportunity to continue farming with less water. Another reason looming in the background: state action. If the water rights are at risk of being cut-off as state regulators crack down on overuse, irrigators might be willing to sell now. 

The federal funding is a one-time allocation, and even supporters acknowledge that $25 million is not enough to fix the larger problem. State officials are going to have to make difficult choices about how to prioritize the limited funding. Still, Peter Stanton, executive director of the Walker Basin Conservancy, said the program could ease some pressures groundwater overuse puts on a watershed. 

“I see this largely as a demonstration program,” Stanton said . “It's going to take more work like this — with local solution, state support and probably bringing in federal support — to make long-term movement on the withdrawal [of water] within these groundwater basins.”

The goal of the conservancy is to secure water to restore Walker Lake, and addressing groundwater overuse is a part of those efforts. The Walker River starts in the eastern Sierra and flows through the Nevada communities of Smith Valley, Yerington and Schurz, until it reaches Walker Lake. Once a critical habitat for birds and a tourist draw for Mineral County, the lake has shrunk to a fraction of its former size due to agricultural diversions.

Over time, groundwater withdrawals have depleted water stored underground and affected the river’s efficiency. That could make it harder to move water downstream in the future.

“We want to work with farmers and ranchers who are already at points of transition [and] are facing increased pressure — whether we’re talking about economic development or climatic variation and challenges in farming — to identify willing sellers” of groundwater, Stanton said. 

Several other conservation groups have backed the concept of water buybacks.

If the pilot program is well-executed, the Nature Conservancy’s Laurel Saito said she sees an opportunity to develop a permanent and long-term program in the state. Saito, the group’s water strategy director for Nevada, has advocated for a program that considers ecosystems naturally dependent on the way groundwater interacts with wetlands, springs, playas, rivers and streams. 

“If it’s done right, it could be a stepping stone,” she said.

There are many ways in which future programs could address overuse while prioritizing ecosystem restoration. Oregon’s program in the Harney Basin, just north of the Nevada border, includes incentives for retiring water rights that affect groundwater-dependent ecosystems — a structure she said that the nonprofit could potentially help seek funding for in Nevada. 

In this pilot phase, though, those larger conversations are constrained by a key factor: time.

With limits on federal funding, the $25 million must be spent on a tight turnaround. The state is aiming to have seller contracts in place for the transfer of water rights by next fall. 

One year might sound like a lot of time, yet in the world of water rights, that deadline is already fast-approaching. Once awarded the grant, entities will have to work on developing a price for the water. They will also have to conduct outreach to get the word out that a program is in place. Then they will have to prioritize how to divide up funds.

Figuring out the value of water can be extremely hard, said Fontaine, whose organizations have looked to what other states have done and have worked with a consulting group to model prices.

“That’s the tricky part here,” Fontaine said. “We have to be good stewards of these dollars … We need to make sure we’re not overvaluing the water and paying more than they’re really worth. On the other hand, we want to be fair and respectful to those who are considering selling their water rights — and purchase water rights so we can make a difference in these basins.”

In recent years, state and federal agencies have often looked to publicly funded conservation as a way to address water shortages in the West, particularly in the Colorado River Basin. Many of these programs have implemented temporary conservation measures, such as paying irrigators to fallow their land or to improve farming efficiency when drought conditions were most severe.

What makes buyback programs different is that they are permanent cutbacks to supply in places where there is a structural imbalance, with more rights to water than there is water to go around. 

Taking water rights off the books, Goicoechea said earlier this year, is “better than just ignoring it and looking the other way, and that’s what we’ve kind of been doing over the last 40 years.”

In many places, state and federal officials allowed for excessive water use by issuing rights that exceeded the supply and incentivizing farmers to move to areas where water was scarce. Even when the issue was identified, state regulators sometimes turned a blind eye, deferring action. 

This was particularly pronounced in Diamond Valley outside of Eureka. In 2015, Diamond Valley was designated the state’s first critical management area, and irrigators had to come up with a plan to cut back. Some are eyeing the buyback program as one way to get there.

“They see this as an opportunity to reduce some of the conflict, where the state buys back the water and they are out of the game,” said Jake Tibbitts, who serves as the natural resources manager for Eureka County. “But it’s all going to come down to the dollars and cents.”

Some groundwater users in Diamond Valley are waiting to see what price the buyback program offers and have voiced different opinions about what their water rights are worth. Tibbitts noted that there’s also “concern from quite a few of the agricultural water rights holders about establishing a value for water outside of a typical real estate transaction.”

As for the Humboldt River, the Pershing County Water Conservation District has backed water buyback programs as one potential solution for reducing groundwater use.

During the drought, the district petitioned the state to regulate upstream groundwater overuse, linked to diminishing streamflow in the Humboldt River. But it has also continued to pursue its case through the courts, said Collins, the district's general manager.

Sitting at a conference room table in the district's office building — filled with old maps and a bulletin board displaying the ever-important amount of water held in upstream reservoirs — he was hopeful that the buyback program could be one part of the solution.

“It can be a piece of the puzzle,” he said. “But it’s not the silver bullet.”