5.2 Surface water extraction and sustainability

Surface water extraction continues to affect the ecological health of riverine environments in NSW although major water reforms and new management approaches are aimed at improving the sustainability of water use.

The use of water to meet the economic and social needs of communities has affected the whole flow regimes of river systems, especially in the Murray–Darling Basin and Hawkesbury–Nepean catchment. Heavily used river systems require better management of water for environmental purposes to ensure the health of dependent ecosystems, but the recent drought has reduced the availability of water for all purposes – environmental, economic and social.

In 1995 the Murray-Darling Basin Ministerial Council introduced a 'cap' or limit on surface water extractions across the Murray–Darling Basin to limit extraction to 1993–94 levels. Since 1998, the NSW Government has also implemented flow rules in most of the regulated river valleys, with these rules amended and formalised through water-sharing plans. Thirty-one statutory water-sharing plans commenced operation in July 2004, covering the majority of water extraction in NSW. These plans set the rules for sharing water between the environment and consumption until 2014.

Compliance with the Murray–Darling Basin cap on water extractions from inland rivers has improved since 2002, with only one valley, the Barwon–Darling, exceeding the cap in the last two years.

Water-sharing plans are being prepared in 2006 for the rest of the State, including the Barwon–Darling and other unregulated rivers. These plans will account for most of the remaining 20% of water use in the State not already managed under water-sharing plans.

NSW indicators

Introduction

The natural flow patterns of NSW rivers are highly variable. These patterns are essential for maintaining biodiversity and the health of other water-dependent ecosystems, such as wetlands, floodplains and riparian zones. Because flow is one of the key factors determining freshwater ecosystem health, together with water quality, it is widely used as a measure of aquatic condition. Taking water away from rivers and modifying flow patterns can cause fundamental damage to river health.

The natural flows of many NSW river systems have been substantially modified over the past century to meet economic and social demands for water (consumptive uses and flood mitigation) within rural and urban areas. A study of NSW river condition found that 87% of the nearly 11,000 kilometres of river lengths assessed for hydrological modification in NSW had altered hydrologic regimes (NLWRA 2001). Regulation of flow and the extraction of water for use affect the whole flow regime by:

• reducing the amount, and changing the timing, of flood peak flows, thus reducing the depth, duration and frequency of wetland and floodplain inundation
• reducing the frequency of 'drowning out' of barriers to fish passage
• reducing the frequency of small rises in the river ('freshes')
• causing persistent low flows, preventing natural drying out of some riverine habitats
• changing seasonal patterns by having higher flows than natural during dry times
• changing the distribution of flows across the landscape.

Additionally, water released from storages can be poorer quality – too cold, deoxygenated or contaminated by metals and other pollutants (see Water 5.3).

The impacts of modified flows in NSW include (Kingsford 2000):

• degraded water quality
• reduced riverine habitat quality
• decline of native biota, including aquatic vegetation, floodplain forests, fish, waterbirds and invertebrates
• modified habitat conditions favouring introduced species over native species
• an increase in algal blooms
• erosion of river channels
• reduced frequency and magnitude of sediment renewal on the floodplain, thereby lowering soil fertility
• reduced breeding and recruitment opportunities (for example, for native fish and waterbirds).

These impacts have affected aquatic ecosystems (see Water 5.1) and the diversity of habitats and species (see Biodiversity 6.6 and Biodiversity 6.7).

The major challenge for water managers is to determine how to maintain or restore ecological health in rivers and on floodplains while meeting the social and economic needs of the community for urban, industrial and irrigation water use.

Current status and trends

River regulation in NSW

Water storages on NSW rivers supply a range of extractive uses – including stock and domestic supplies; irrigation; urban water supply and industrial uses – and also provide for flood mitigation. River systems with large storages that are used to actively control flows are known as 'regulated' rivers (the term is also used for rivers gazetted as 'regulated' under the Water Act 1912, which includes the inland rivers below major storages and some coastal river sections, but not the Barwon–Darling, Hawkesbury–Nepean or Shoalhaven rivers). The effects of river regulation on flows vary from valley to valley, and even within a valley, depending on the distance from the storage and where and how much water is extracted.

The impacts of regulation are shown, for example, in the Lachlan River downstream of Lake Brewster (Figure 5.1). The Lachlan is a southern NSW winter rainfall stream regulated with one major storage (Wyangala Dam), one minor storage (Carcoar Dam) and two off-river storages (Lake Cargelligo and Lake Brewster). There is extensive water use, mostly for irrigation, both upstream of, and downstream from, Lake Brewster. Regulation and water use in the Lachlan catchment have reduced the amount of water available for environmental purposes and reduced the number and height of high flow events (Figure 5.1). Regulation has also modified the seasonal flooding patterns, with higher and more persistent flows than natural in late summer (when water is being released for downstream users) and much lower flooding in late winter and spring (when water is being harvested by the dam for later release).

Figure 5.1: Modelled flows (megalitres per day) in the Lachlan River downstream of Lake Brewster, 2000–05

Source: DNR data 2005

Note: Current flow indicates the modelled flow under current water-sharing plan arrangements and levels of extraction. Natural flow indicates the modelled flow that would be expected if there were no dams or water extractions.

These impacts of regulation are typical of those in the heavily regulated rivers of the Murray–Darling Basin. While a return to natural flows is not feasible, it is important for sustainable water management to recognise that water use and river regulation affect the health of rivers and other flood-dependent ecosystems, and to attempt to address these impacts where possible.

Water extraction

The Murray-Darling Basin Ministerial Council agreed to a cap on surface water extractions in 1995. The cap is a long-term average limit with annual targets taking into account annual climatic variations. The introduction of the cap was seen as an essential step towards environmental sustainability of river systems in the Murray–Darling Basin by preventing further growth in diversions. However, while the cap is an essential step in slowing ecosystem decline, it cannot be expected to result in marked improvements because it has been set at a level of water extraction that has already contributed to the degradation of the river system (Whittington et al. 2000).

Extractions from the Murray–Darling Basin account for the majority (80%) of surface water extractions in NSW. Modelled data for the three years from 2002–03 to 2004–05 (MDBC 2004b; MDBC 2005; MDBC 2006) demonstrates that surface water extractions have been maintained consistently below the cap for all major valleys except the Barwon–Darling, compared with the previous reporting period where the cap was exceeded in three of the nine river valleys in one or more years. In addition, over these three years a greater proportion of available flows was maintained in the river in most valleys than could have been expected in a typical dry year.

Figure 5.2 shows expected water use in selected rivers for example years under dry, median and wet conditions. The total amount of water in the rivers varies greatly between dry and wet years, with more than three times the amount of water in the rivers in wet years compared to dry years, except for the Murrumbidgee, which has flows supplemented by the Snowy Scheme in all years, but particularly in dry years.

In dry and median years, it is expected that over 50% of the total water in these regulated rivers would be available for use, while in the wettest years less than 50% would be extracted. Expert opinion has suggested that a 'healthy working river' (that is, a river where water is extracted for use, but is still in reasonable ecological condition) requires over 50% of median flows to be retained for environmental purposes (Cullen 2004), with a higher level (66%) suggested for the Murray (Goss 2003). Environmental requirements should be individually determined, however, where specific information exists (Arthington & Pusey 2003). Except in the wettest of years, the inland regulated rivers normally get less environmental water than these experts have recommended. A further consideration is that the timing of environmental flows, not just the volume, is important (MDBC 2004a).

Figure 5.2: Expected water use compared to the total amount of water (gigalitres) in selected regulated rivers, in dry, median and wet years

Source: DNR data 2005

Notes: Water use is modelled under current water-sharing rules. Dry years are those with the lowest 20% of flows; median years are those where 50% of flows are higher and 50% lower; wet years are those with the highest 20% of flows.

Water that is not extracted usually has environmental benefits for the river system, although some will be lost to evaporation or seepage (some of which may reach groundwater), reducing environmental flows downstream.

Figure 5.3 shows the amount of water in these rivers and the actual amount used between 2002 and 2005.

Figure 5.3: Actual water use in inland regulated rivers, 2002–05

Notes: The gauges used to estimate total river flow are Pallamallawa (gauge number 418001) for the Gwydir valley, Mollee (gauge number 419039) for the Namoi valley, Dubbo (gauge number 421001) for the Macquarie valley, Cowra (gauge number 412002) for the Lachlan valley, and Wagga Wagga (gauge number 410001) for the Murrumbidgee valley.
The data for total flow and observed diversions in the Murrumbidgee valley is influenced by releases from the Snowy Mountains Scheme by Snowy Hydro Limited. In percentage terms the influence is greatest in dry years. Development in the valley reflects this inter-valley transfer.
^(a) Covers 1/10/2002–30/6/2003 and the financial years 2004–04 and 2004–05.

Figure 5.3 shows that total water extractions were more than 50% of the water available for the period 2002–05 and that these were dominated by use in the Murrumbidgee. However, in most individual valleys, less than 50% of available water was extracted in 2004–05. For these five regulated rivers, the last three years (2002–03 to 2004–05) have all been in the lowest 20% of flow years, that is they have been extremely dry. Total inflows were only about 35% of the long-term average. This meant little water was available for any purpose, environmental or otherwise. The stored volume also decreased markedly in each of these systems; for example, Wyangala Dam in the Lachlan Valley fell by more than 410 gigalitres (GL), from 41% to 7% of capacity between 2002 and 2005.

There are several thousand dams and weirs on rivers and streams throughout NSW. Additionally, on-farm storages can capture runoff from rainfall directly, before it reaches a waterway, or indirectly, by pumping from a waterway to large off-river storages. In most of NSW, direct water harvesting of rainfall by farm dams has been restricted to 10% of the runoff from a property before a water licence is required. This places limits on the ability of farm storages to trap runoff entering rivers. However, in northern inland catchments, many big agricultural enterprises have constructed large off-river water storages to harvest water from waterways during periods of high river flows and/or to harvest from overland flows prior to it entering the waterway. Growth in the number of off-river storages was rapid between 1980 and 2000 (the latest year for which information is available, see Table 5.1).

Table 5.1: Growth in volume of storages in NSW

Source: DNR data 2005

Sustainable water use

The National Water Initiative, agreed as the national framework for water reform by the Council of Australian Governments in 2004, defines an environmentally sustainable level of extraction as 'the level of water extraction from a particular system which, if exceeded, would compromise key environmental assets, or ecosystem functions and the productive base of the resource'.

It regards as unsustainable 'an increase in commitments to take water from water sources or parts of water sources or increase seasonal reversals in flow regimes above sustainable levels identified in relevant water plans such that environmental water or water-dependent ecosystems are adversely affected'.

A truly comprehensive assessment of sustainable water use requires a detailed understanding of ecological function and environmental requirements for water, reflecting seasonal and annual variations. This information is not available at present, but some assessment of sustainable water use has been made by the water management committees responsible for advising the Government on the establishment of water-sharing plans (see 'Water sharing' below). This assessment (summarised in Table 5.2) has determined the extent to which environmental flows in water-sharing plans contribute to the following State targets for sustainable water use from the State Water Management Outcomes Plan (NSW Government 2002):

• target 1c – long-term average annual extraction limits which are ecologically sustainable, and which minimise downstream impacts, established in all coastal water sources (coastal water-sharing plans only)
• target 2 – all management plans incorporating mechanisms to protect and restore aquatic habitats, and the diversity and abundance of native animals and plants, with particular reference to threatened species, populations and communities and key threatening processes (inland and coastal water-sharing plans).

Table 5.2: Number of surface water-sharing plans (as assessed in 2004) meeting targets 1c and 2 relevant to sustainable water use in StateWater Management Outcomes Plan

Source: DIPNR 2004a

Table 5.2 shows that nearly half of the plans (13) meet the State sustainable water-use targets to a high extent, but only one fully meets them. Coastal catchments were assessed as being closer to sustainable levels of water use than most inland catchments, reflecting their generally lower levels of extraction. Water-sharing plans for the coastal catchments supplying Sydney's drinking water are still under development, and are not included in this analysis.

Although the recent drought has contributed to the current poor condition of rivers and wetlands (see Water 5.1), river regulation and water use are other major influences, particularly in the Murray–Darling Basin and Hawkesbury–Nepean catchment. The number of storages, the effects of river regulation on natural flow regimes, the amount of water extracted by water users – all contribute to poor river health. It is too early to tell if the share of water for environmental purposes (see 'Water sharing', below) is adequate to prevent further decline in aquatic ecosystems; however, progress is being made in managing water use to provide for environmental flows.

Providing environmental flows

Due to the severity of the recent drought (Appendix 1), specific triggers for environmental flow releases (such as storage level heights or inflow thresholds), as defined in water-sharing plans, were generally limited in 2003–04 and 2004–05, although a number of environmental releases were made in late 2005 and early 2006 following good catchment rain. These have contributed to positive environmental outcomes. Examples include:

• in the Lachlan, a release of water from the wildlife allocation into Merrowie Creek was made in December 2005 following good catchment rains and a replenishment flow provided along the creek for landholders. As a result, the first major waterbird breeding event on the lower Lachlan in five years occurred with some 8000 to 10,000 breeding pairs of straw-necked ibis present
• in the Gwydir, environmental releases of 13,395 megalitres (ML) were made in the summer of 2005, inundating 12 hectares of the Gwydir Wetlands and helping to sustain a major bird-breeding event
• environmental flow releases totalling some 84,000 ML were made into the Macquarie Marshes from November 2005 to January 2006 to support waterbird breeding
• in the Murrumbidgee, an environmental allocation of 14,000 ML was released in December 2005. The water inundated up to 10,000 hectares of wetlands, triggering a successful breeding event by waterbirds and fish species
• a combined environmental release of 500,000 ML to the River Murray by the NSW and Victorian governments and higher flows from rains in late 2005 resulted in a promising recovery of river red gum and other wetland and riparian vegetation, and triggered significant bird breeding and fish spawning.

Response to the issue

A major program of water reform has been underway in NSW since 1994 concurrent with a program of national reforms, firstly under the water reform framework of the Council of Australian Governments and, more recently, under the National Water Initiative. NSW leads Australia in water management through water-sharing plans that enshrine the environment's share of water in legislation.

The installation and operation of instream structures and other mechanisms that alter natural flow regimes of rivers and streams is listed as a key threatening process under the Fisheries Management Act 1994. The alteration to the natural flow regime of rivers, floodplains and wetlands is also listed as a key threatening process under the Threatened Species Conservation Act 1995.

The State Water Corporation, formerly the Government water enterprise within the former Department of Land and Water Conservation, was corporatised by means of the State Water Corporation Act 2004. This has separated rural water supply utility operations (performed by the State Water Corporation) from the role of natural resource manager (now performed by the Department of Natural Resources). The corporation has been issued with an operating licence by the Independent Pricing and Regulatory Tribunal of NSW (IPART), which requires it to develop an environmental management plan and to provide water in accordance with water-sharing plans.

To cover the urban areas of the Sydney metropolitan and Illawarra regions, the Metropolitan Water Plan (DIPNR 2004a) and the 2006 update of the plan (NSW Government 2006) set out how Sydney's water supply will be secured for the next 25 years while improving the health of rivers in the Sydney and Shoalhaven catchments (see Human Settlement 2.2). Under the suite of measures in the Metropolitan Water Plan, one action calls for a water-sharing plan to be developed for all water sources in the Sydney metropolitan and Illawarra regions. This plan is expected to be completed by 2007.

Water sharing

A primary objective of water management is to improve the health of the State's waters, with the protection of water sources and their dependent ecosystems receiving priority in water-sharing plans. Plans have been established for 31 water sources, covering some 80% of surface water extractions. They aim to mimic natural flows and protect environmental water across a range of inflow scenarios. In drier years, the plans ensure that minimum flows are protected from extraction, and in wetter years allow a significant portion of natural inflows to flow to the environment. Specific individual and broader catchment or macro plans are being developed for the other 20% of extractions. The plans have a statutory basis and will be in force for 10 years. The environmental flow objectives established in 1999 (see Water 5.1) form the basis for the environmental flow rules in water-sharing plans. The types of environmental flow rules in the water-sharing plans are listed in Table 5.3.

Caps on diversions have been established in most Murray–Darling Basin rivers since 1995. In 2006, the NSW Government developed an interim cap for the Barwon–Darling River, and is working to establish a final cap.

Table 5.3: The types of environmental flow rules and where they apply in the regulated rivers in NSW

Source: DNR data 2006

All unregulated rivers have 'cease to pump' restrictions to protect low flows, and may have other restrictions. For example, Woronora Dam has both transparent and translucent environmental releases.

The Department of Natural Resources (DNR) operates the Integrated Monitoring of Environmental Flows (IMEF) program which examines the effects of environmental flow strategies on the hydrology and ecology of regulated rivers and associated wetlands (DLWC 2001). DNR has recently refocused the program to assess the performance of the regulated river water-sharing plans in improving the ecological condition of the relevant water sources and their dependent ecosystems (Chessman & Jones 2001).

A variety of IMEF studies since 1997 have examined the responses of wetlands, algal blooms, river biofilms and river fish, among others, to environmental flows (Chessman 2003). So far, these studies have documented a number of benefits, such as increased wetland inundation, improved wetland biodiversity and more natural ecosystem processes. For example, in the Murrumbidgee valley, environmental contingency allowances released in 2000 from Blowering and Burrinjuck dams successfully 'piggybacked' onto a natural river fresh to produce the most significant filling of mid-Murrumbidgee billabongs since 1996. This environmental release provided significant quantifiable benefits in terms of billabongs filled and the duration of connectivity between the billabongs and the river (Maguire et al. 2000).

While environmental releases have produced significant benefits to some riparian wetlands, instream benefits have been more difficult to demonstrate. For example, modelling the suppression of blue-green algal blooms in the Barwon–Darling River system showed that environmental flows were unlikely to have affected bloom frequency between 2000 and 2003 (Mitrovic et al. 2005), although in the longer term the same flows could reduce bloom frequency by up to one-third. Studies of river food webs have so far not found a strong relationship between environmental flows and ecosystem response, due mainly to a host of confounding factors. Modelling suggests that environmental flows rules have produced new alternative flow regimes, rather than a return to natural flows (Growns & Gehrke 2005). Monitoring of responses is needed over a longer period to inform future management actions and objectives, and to assess the effectiveness of environmental flows.

Water recovery

While the objectives of the water-sharing plans have been to limit extractions and provide specific allocations of water to the environment, a number of complementary programs are aiming to return water to the environment to assist in restoring riverine and wetland environments. These include:

• the Living Murray Initiative, an investment of $500 million over five years (2004–09) by the NSW, Victorian, South Australian, ACT and Commonwealth governments to recover 500 GL of water to improve the environmental health of six icon (significant) ecological sites along the River Murray
• the Snowy Joint Government Enterprise through which the Commonwealth, New South Wales and Victorian governments have committed $375 million for water-efficiency projects to increase environmental flows to the Snowy River and the River Murray. The targets include returning 212 GL to the Snowy River and 70 GL to the River Murray in a staged approach between 2003 and 2013
• the Wetland Recovery Plan, the NSW Government's four-year, $13.4-million plan to deliver long-term benefits to ecologically significant wetlands in NSW. The first stage focuses on water recovery for the Macquarie Marshes and Gwydir wetlands. The Wetland Recovery Plan has received matching funding of $13.4 million from the Commonwealth under the Australian Water Fund
• NSW RiverBank, the NSW Government's $105-million fund to recover water for environmental purposes. In the first five years of the program, the priority areas are the Macquarie, Gwydir, Narran and Murrumbidgee valleys, to provide additional water for their significant wetlands.

The Snowy Joint Government Enterprise water recovery measure is the only program so far to have released water specifically recovered for the environment – the other programs listed here have not yet resulted in more environmental water in the rivers.

Future directions

The impact of water-sharing plans is expected to be positive for the environment. However, the expected drying of south-eastern Australia due to climate change is a major risk factor for environmental flow regimes and, therefore, for the health of riverine ecosystems, because it is likely to increase the frequency of dry years. The CSIRO estimates that climate change could reduce water resources in the Murray–Darling Basin by about 5%, or by more than 1000 GL each year within 20 years (Van Dijk et al. 2006). Other risk factors for flow regimes are afforestation programs, groundwater extraction, changes to irrigation water management, farm dams and bushfires.

It is probable that additional measures will be needed to increase the environmental share of water to ensure ecologically sustainable water use, at least in the heavily regulated inland river systems and the Hawkesbury–Nepean.

Improvements to the health of aquatic ecosystems from environmental flows would be maximised if complemented by actions in land management to protect water quality and riverine, wetland and floodplain habitats, and by continued work to reduce the impacts of instream structures on water quality and fish passage (see Water 5.1).