The Murray Darling Basin
The Murray Darling Basin (MDB) catchment is the lifeblood of the southeast of Australia, made up of 77,000 kilometres of river, spanning across four states and one territory with over 40 First Nations in the Basin. The Basin supports the irrigation of 7,300 agricultural business, contributing over $22 billion to the Australian economy. The Basin contains over 100 nationally important ecological or cultural sites, including many internationally important sites protected under the Ramsar Convention. It is managed by the Murray-Darling Basin Authority (MDBA) together with the Murray Lower Darling Rivers Indigenous Nations (MLDRIN) and the Northern Basin Aboriginal Nations (NBAN); the two main First-Nation based organisations that primarily focus on natural resource management.
Managing the MDB is a constant juggling act between the amount of water available and the urgency of environmental and agricultural needs, achieved through the constant trading of water and water level management through flooding, draining, and storage practices. With climate change comes additional challenges, like more extreme drought events, rainfall and flooding events. Recently the MDBA has announced a forty billion gigalitres trading surplus at the Barmah Choke portion of the Murray River. How does water trading work, where did this surplus come from, and how does this help the management of the MDB?
Trading Water
Water is traded as entitlements, which are a perpetual right to a share of water from a particular resource, such as a river or underground aquifer. Water allocations are the right to access a volume of water, made available under a water entitlement, in a given year. This water can be used, traded (sold) or carried over. The entitlement always remains the same each year, but the allocation will differ depending on water availability and need. For example, if a farmer had an entitlement of 100 megalitres a year, but it was a particularly dry year, they may only receive 50% allocation of their entitlement, equal to 50 megalitres.
The main driver of water allocation prices in this open water market are driven by water supply, which is highly reliant on rainfall. During the Millennium drought (that spanned from 1996-2010), rainfall dropped by 17%, which led to unprecedented allocation price highs. When floods occurred during 2011, 2012 and 2016, prices declined to near zero. Since then, because of recent droughts, prices have risen again.
From 2008, the federal government began a buyback scheme to purchase water entitlements for environmental use. While this somewhat controversial scheme ended in 2020, over 2,877,111 megalitres of entitlements were purchased for environmental water holdings, though not without the hefty pricetag of A$2.6 billion.
“There are the state and federal water holders, for example there’s the Victorian Environmental Water Holder, and then there is the Commonwealth Environmental Water Office which holds the majority of the water,” explains Keith Ward, the senior wetland ecologist for the Victorian side of the Goulburn Broken Catchment Management Authority.
“If there are any water savings, like from when Lake Makoan was decommissioned, this additional water is divided up for different environmental requirements, between the state and federal governing bodies.
“There is never too much water though.”
The Barmah Choke
The Barmah Choke is a narrow section of the Murray River, that runs through the Barmah-Millewa Forest, located on Yorta Yorta land between Echuca and Cobram near the NSW border of Victoria.
“The Choke formed from geological uplifting, about 75-25 thousand years ago, so is very young in geological times. It is an internationally significant Ramsar site, and one of six iconic River Murray locations,” explains Ward.
The Choke consists of three key ‘choke points’: the Tocumwal Choke, the Barmah Choke and the Edward Choke, that restrict the flow of water to just 7,000 megalitres per day (estimated at Picnic Point), the lowest flow rate across any Murray River stretch. This makes the management of this system incredibly important in ensuring flow regimes continue during peak demand periods in Spring and Summer, but also that flooding out into the Barmah-Millewa forest is maximised during wet seasons.
“The Barmah-Millewa forest undergoes flooding annually, usually naturally,” says Ward. “This acts as a natural pressure release valve, allowing surplus water to escape into the Barmah-Millewa floodplains, preventing potentially more destructive flooding from happening further downstream. The water isn’t lost either, it returns back to the river slowly. But without the Choke and the floodplain, water-dependent species, such as the river red gum (Eucalyptus camaldulensis) wouldn’t survive on rainfall alone, which is only about 700mm annually.”
Research over the past thirty years has shown that the flow capacity at Barmah Choke has reduced by 20%, mainly due to build-up of sediment from artefactual goldmines. Ward elaborates: “This is a bogeyman causing massive headaches. It’s a result of sluicing for gold and land clearance, which has restricted the Choke even further. This is just adding more pressure for the water delivery downstream”.
Because the Barmah Choke is so crucial, and can be easily destabilised, there is a default trade restriction in place.
“A restriction on the trade of water through the Choke has been active since 2014 to protect water delivery to existing entitlement holders and to maintain the river environment in the Choke”, explains the MDBA acting Executive Director of River Management, Dr Andrew Kremor.
However, in this restriction, it is stipulated trading can occur downstream if there is sufficient matching trade capacity available in the opposite direction, known as ‘back trade’. This year, according to Kremor, the amount of water available to trade downstream from 1st July 2022 is about 40.6 gigalitres or 40,600,000,000 litres. This is equivalent to the volume of 17,760 Olympic sized swimming pools. This is the highest water trade balance since the restrictions came into force in 2014.
This surplus water balance for the Choke is based on Snowy water savings.
The Snowy Water Savings
The Snowy Water Initiative was established in 2002 to improve the river health by releasing environmental water into the Snowy, upper Murrumbidgee and upper Murray River Systems. As part of the initiative, the NSW, Victorian and Commonwealth governments, and Snowy Hydro Limited invested A$1.2 billion to infrastructure upgrades, water management and science to enable the environmental water to be released to these Snowy water sources. These water allocations are supplied each year to both the Snowy and Murray Rivers at a ratio of 2:1 (140GL versus 70GL), where any excess is provided to the Snowy River.
The surplus of water now available from the Barmah Choke are based on water savings downstream of the Choke, that were the result of the environmental water injected into the Snowy River system upstream as part of the Snowy Water Initiative. In 2019, a water savings balance of 25 Gigalitres was available for trading from above to below the Choke.
“While trading water from downstream to upstream of the Choke is always open, trades from upstream to downstream can only happen if the same or greater amount has first gone the other way – this is the ‘balance’ of trade,” says Kremor. “Each year we make this information available ahead of the new season to allow water users to make plans.”
