Economic Optimization of Groundwater Resources in the Texas Panhandle

An economic optimization model for a sixty years planning horizon is developed using available groundwater resources in the Texas Panhandle. Net present value and total water use over 60 years is used to estimate the value of water for irrigated agriculture in the area. The decline of the Ogallala Aquifer, which is the primary source of irrigation water for the Texas Panhandle, due to excessive extraction rates poses questions about the economic, social and political future of the area. Economic optimization models for each of the 23 counties in the Texas Panhandle are developed with a goal of maximizing the net income from crop production. Nine major crops are selected. Results from the 60-year analysis for the 23 counties indicate a significant transition from irrigated agriculture to dryland farming. Total irrigated crop acres in the study area decrease by approximately 83 percent from 1.79 million acres to 0.30 million acres while total dryland crop acres increase by about 125 percent from 1.20 million acres to 2.69 million acres. Total groundwater use in the study area significantly declines for the planning horizon by 71 percent from 2.16 million ac-ft to 0.63 million ac-ft. The average saturated thickness of the Ogallala Aquifer in the 23 counties shows a 21 percent decline over the planning period. The model will serve as a policy tool to analyze alternative water management strategies and water conservation programs that can possibly be implemented in the area. The results from the model will also be used to assess the socio-economic impacts of depleting groundwater availability from the Ogallala Aquifer in the region