GROUNDWATER is essential to industries that contribute $34 billion to Australia's gross domestic product (GDP) each year, demonstrating for the first time the economic significance of the resource, a study has found.
A range of experts say calculating the economic value of groundwater that is stored in aquifers is an important development which could assist decision makers form effective management policies.
Concerns for the health of groundwater systems centre on regional over-development, pollution from industrial run-off (including agriculture) and inefficient water use.
The Economic Value of Groundwater in Australia study was commissioned by the National Centre for Groundwater Research (NCGR) and carried out by Deloitte Access Economics.
The report found agriculture accounts for about 70 per cent of groundwater use and irrigators and livestock producers who rely on groundwater for at least a portion of their water needs generate a combined $27 billion.
It predicted the economic value of groundwater will continue to "grow substantially" because there is significant capacity for sustainable increases in extraction, coupled with the fact that "surface water resources, in many areas, are either at capacity or over allocated" (see Fast facts below).
According to the report, there was a drive for and ample capacity to safely increase groundwater usage.
"The gap is between the entitlements on issue at 6544 gigalitres (GL) and potential sustainable yield 29,173GL (across Australia).
"Any increased water demand will need to be sourced from alternative supplies.
"Groundwater is an obvious and reliable alternative supply."
The report noted that because groundwater is a renewable resource, so long as use remains below the sustainable yield, it can continue to add economic value on a perpetual basis.
Economic activity in areas where there is ample groundwater resources is expected to increase, especially in northern Australia, due to Asian demand for food imports, the report said.
Northern Australia has limited surface water in dry inland and wet tropic areas, due to low rainfall and lack of water storage infrastructure, respectively.
"This means that groundwater will be an important, and in some cases the only, source of water."
Australian president of the International Association of Hydrogeologists and principal hydrogeologist at Sinclair Knight Merz Professor Richard Evans said the report was long overdue.
"Groundwater is a poor second cousin to surface water in decision making," he said.
"It tends to be thought about least in planning and policy making, but it is increasingly important of the future of Australia." (see Fast facts)
Professor Evans hopes calculating the economic value of groundwater will lead to discussion of the level of investment into groundwater management.
He said best practice for management of a natural resource was to invest about 5pc of the profits in administration, research and so on.
"We are nowhere near that level for groundwater in Australia," Mr Evans said.
Professor Evans cited the initiatives identified by the Commonwealth's blueprint for water reform, the National Water Initiative, as key areas for improvement of groundwater management.
Conjunctive management of surface and groundwater was very important but was not occurring in Australia, with relatively few exceptions, he said.
The nation needed to move towards a pricing model that recognised the "full value" of ground water and improve the compliance regime for licensing, drilling and usage.
"Some states are terrific and some are slack," he said.
NCGR director Professor Craig Simmons said the report focused attention on the significance of the resource and produced fresh information for policy development.
"The report provides impetus as opposed to a vacuum of knowledge," he said.
"It is hard to mount an argument for research and monitoring without these figures."
Independent hydrologist Professor Philip Pells argues that regulation of coal seam gas (CSG), a major emerging concern for groundwater management in NSW, needs to be reformed to mitigate potential damage to areas with geological characteristics that are more susceptible to damage from gas extraction.
Professor Pells said CSG extraction could and should co-exist safely in certain areas, such as Camden in south-west Sydney, where AGL operates.
However, other areas such as Sutton Forest, the Liverpool Plains and Gloucester should be exempt from development, at least until the industry is better understood, because the geology is more susceptible to damage.
Fast facts
Australia's reserves
- Australia currently uses around 3500 billion litres a year of groundwater
- Estimated sustainable reserves are 29,173 billion litres
- 6500 billion litres are held in entitlements to extract groundwater
- Groundwater is essential to 29 per cent of irrigation production, which is valued at $3.7bn
- 7pc of livestock production in groundwater dependent areas, valued at $1bn
- 38pc of mining industry, which is valued at $24bn
Industry breakdown
- Agriculture typically uses about 2GL of groundwater each year, mainly for irrigation and livestock, and groundwater underpins $4.7b of production
- Mining uses 410,000 megalitres (ML), and groundwater underpins mining production of $24.5b each year
- Manufacturing uses 588,000ML, and groundwater underpins production of $4.4b to the economy a year
Cities use 303,000 ML of groundwater a year
Chinese overuse
The North China Plain demonstrates the dangers of mismanagement. Major irrigation began in the 1950's and now 300 million people depend on its produce.
As it stands, the groundwater levels in aquifers beneath the North China Plain are falling by one to five metres a year.
UNESCO's Groundwater Governance project is designed to improve management of and raise awareness for groundwater.
It says "experts consider that few, if any, of the world's aquifers are being managed sustainably or equitably. We know much more about the planet's oceans, lakes and rivers than we do about the lifeline beneath our feet. This hasn't prevented us from pumping it with growing voracity."
