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Water Shortage Could Hurt Texas Economy

Posted on 5/20/2014 by with 0 comments

Although projected water demand in Texas may not grow as quickly as population projections, the state still faces the potential of a water shortage that could make it tough on the state’s overall economy, not just on thirsty lawns and gardens.

While Texas’ population is on pace to double by 2060 — with majority of the population growth predicted in the metropolitan regions of Austin, Dallas-Fort Worth, San Antonio, Houston and the Lower Rio Grande Valley — water demand is projected to increase by only 22 percent, a 2012 plan by the Texas Water Development Board shows. The level of water demand is due to a declining demand for irrigation water.

“If Texas does not do anything in the next 50 years, there will be a water shortage of close to 8.3 million acre-feet per year,” said Elizabeth Fazio, director of the Texas House of Representatives’ Committee on Natural Resources, who presented her findings May 19 at the 2014 Texas Water Summit, organized by The Academy of Medicine, Engineering and Science of Texas at the University of Texas.

Sheila Olmstead, associate professor at UT’s Lyndon Baines Johnson School of Public Affairs, another panelist at a session titled “Economics of Water,” told the audience that water demand responds to the changes in water prices. A 10 percent price increase in industrial water supplies results in 1 percent to 8 percent less usage in the short term and a 10 percent price increase in residential water supplies results in 3 percent to 4 percent less consumption, Olmstead’s findings showed. The city of Austin has been talking in recent weeks about hiking water prices in order to curb usage.



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