Dan Dooley has more than four decades of experience in California agriculture and water policy. Hailing from a fifth-generation farming family, Dooley has been on both ends of policymaking.

He served first at CDFA as chief deputy director under Governor Jerry Brown’s first administration and then as chair of the California Water Commission. In his law practice, he was involved in a landmark 20-year litigation process over restoring flows for a salmon fishery on the San Joaquin River.

He then led UC Agriculture and Natural Resources (ANR), switching later to external relations for all 10 UC campuses. As a side job, he worked with Gov. Brown as a prominent voice for agriculture in the drafting of the 2014 Sustainable Groundwater Management Act (SGMA), tempering “some of the rough edges of the legislation substantially.”

Dooley is now a partner at the water consulting practice New Current Water, advising large clients on agricultural investments.

The conversation has been edited for brevity and clarity.

1. In the timeline of your career, how would you describe where California is now in terms of water policy?

There is a unique opportunity now that hasn't presented itself quite as clearly in the past. Unfortunately, it's not simple.

The sort of basic federal and state regulatory structures don't provide a great deal of flexibility, and our water rights structure is pretty rigid as well. Our State Water Board every five or seven years will propose an update to the Bay Delta Water Quality Plan. They only have so many levers they can pull – most of them related to flows.

On the federal level, certainly the big driver has been the Endangered Species Act and the National Marine Fisheries Service and U.S. Fish and Wildlife similarly have few tools in their toolbox.

What has emerged over the last couple of years – which is interesting – is some pretty robust discussions among water rights holders and water users principally in the Sacramento Valley, although in the upper San Joaquin Valley as well, about entering into voluntary agreements with the various resource agencies, where they agree to set aside some of the rigidity of water rights law and agree to certain flow levels. But they also agree to do some habitat restoration, which can have the effect of reducing the required flow of water. It makes flows more efficacious because you've created some habitat that can benefit from the flows in ways that under the current scenarios you can’t.

If these agreements come together – and there's a reasonable probability that by the end of the year we could be pretty close to being there – it will create a more adaptive structure for managing water for habitat benefit and create some roles for more collaborative science. It will create some pots of money where people can sell water for flows and actually have a monetary benefit.

It could transform the way we manage water in California. I'm a big advocate of it.

I was called in by the governor at the end of the last administration on a very intensive six-week period to try to broker a deal. We did come up with a framework that the water users, particularly in the Sac Valley, bought into and some of the more moderate NGOs also bought into it. They have been working under the current administration to try to put the flesh to that. It would be a substitute for the State Water Board's update of the Bay Delta water quality standard.

I would say it's a 50/50 probability at the moment. But if that actually happens, there will be a major shift in how we manage water in California – in a very positive way, in my view.

Not everybody agrees with that, but there's pretty uniform support for this effort among water users in the Sac Valley, and that's where most of the water originates.

2. How optimistic are you that voluntary agreements will be signed?

The State Water Project is very actively engaged in those discussions and (Department of Water Resources Director) Karla Nemeth has been a proponent of those. (Natural Resources Secretary) Wade Crowfoot has also been a very active participant in the effort.

This is one of the more optimistic efforts that has materialized in the last couple decades. I'm pretty hopeful they can see their way through the forest to actually make these happen.

There are generational biases that exist on all sides of water issues in California. These agreements require everybody to take some risks. I would say the water users seem to be more willing currently to consider taking those risks than some in the environmental community. But some key players in the environmental community are taking this effort seriously and are active participants.

Nothing is linear in water in California. It's all multi-dimensional. But success in this arena also requires the State Water Board to get out of the way. They still retain jurisdiction, but they've got to be willing to accept a structure that is very different than their historic orders have been. They can't order what's being considered, because they don't have any authority to mandate habitat restoration or anything like that. But they do have authority to say if habitat restoration occurs, we can use less water.

3. What is your perspective on the 44 new groundwater sustainability plans for the most critically overdrafted basins?

There's a wide range of quality in the plans that have been submitted. We're monitoring 66 groundwater sustainability agencies, including all of the ones that we submitted for clients, and including all of the ones that submitted plans at the end of January for the 21 critically overdrafted basins.

There are some that are very good and address the key statutory issues. There are others that kick the can down the road. The jury's out on how the Department of Water Resources is going to view those as they review them for compliance. If they have an interactive process and engage with those agencies that have problematic plans and give them an opportunity during the two-year review window to make modifications and changes, it could be a very productive process.

The governor's proposed budget included some funding so DWR could hire some additional people to step this effort up.

There's a lot of speculation going around town about what COVID-19 is going to mean in terms of the budget. Clearly, they don't have revenues to project the May Revise because they put off the filing and payment date until July. There's some talk about even putting budget development off until July.

It's a really extraordinary time.

If DWR doesn't have the resources to do their job, I don't know what that means, in terms of the review process.

I'm one of those people who doesn't think the economy is going to bounce back particularly fast, and it may not even look the same. At the end of the day, it may be significantly different. A lot of small businesses are going to really struggle.

This governor is taking a pretty aggressive stance on funding new initiatives, and they're going to have to cut back on some of those. I don't know what that means for the implementation of SGMA.

If they don't have the funding to support the state's role and implementation, then the question becomes: Do the timelines flip? Is there some relief that's provided to the local agencies as well?

4. What advice do you have for farmers facing this uncertainty?

The fundamentals stay the same. If you're in agriculture, you need to think about firming up your water supplies, making them more sustainable over the longer term.

If you're investing in agriculture, you need to be looking at investments in areas where you'd have some reasonable confidence of adequate water supplies over time. Historically, there's been a lot of investment capital invested in groundwater-only areas where they don't have surface supplies. Those areas are going to be really challenged over time.

SGMA is clearly changing the landscape. There's likely to be groundwater credit markets and fallowing credits established in some of the overdrafted areas. Over the next four or five years, there are clearly going to be mechanisms that are implemented to achieve sustainability and allow individual landowners some flexibility in how they do that.

5. Could Cooperative Extension be playing more of a role in helping farmers with SGMA?

The answer is absolutely yes.

There's a leadership question at the highest level of the university. The Vice President for ANR has worked hard to make the argument internally at the university that a different funding mechanism needs to exist.

This governor has high ambitions, and I've encouraged people that want to see more invested in Cooperative Extension to make the argument to the administration.

If you want to think about a rural strategy, it doesn't get much better than Cooperative Extension.

There's an inside baseball argument for it, too. The current director of the Department of Finance Keely Bosler is a former sectional president of Future Farmers of America in the Sacramento Valley. She understands these issues inside out. With (CDFA Secretary) Karen Ross and Keely internally in the administration, you could give the leadership in the Legislature an issue to give to rural Democrats. They could throw $25 or $50 million at this and have only rounding error impacts on the budget and buy a lot of goodwill in rural communities.

Agriculture sometimes doesn't think big enough in terms of policy objectives. If you want to think about a long-term investment in their productivity of agriculture, investing in research in technology transfer has a lot of upside.

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