The Ogallala Aquifer is the largest aquifer within the United States, underlying a total of 111.8 million acres and spanning eight states. It is the source for 40% of all groundwater used for irrigation within the United States and supports the production of nearly $35 billion in agricultural products each year. Some regions of the aquifer are experiencing unsustainable pumping. The aquifer is projected to be able to sustain current demands for the next 50 years, with many regions of the aquifer expected to run dry in a much shorter time frame. This level of overuse is in part due to the wide variety of groundwater management practices and levels of regulation seen in the states that overlie the aquifer. In some states, water users face strict regulation, while others have little to no oversight of groundwater pumping or barriers to overuse.
Water markets often develop in areas where scarcity or regulation causes market reallocation of a limited resource. As a result, WestWater has been monitoring the Ogallala region for water market activity. Our research on the Ogallala was last documented in 2017, focusing on market activity in the southern states of the Ogallala Aquifer: Colorado, Nebraska, Kansas, Oklahoma, New Mexico, and Texas. This Water Market Insider provides an update to this prior work, examining the water market in these states to identify trends and the current state of the water market surrounding the Ogallala Aquifer.