The Western U.S. is chronically short of water, and the situation is getting worse with global warming and population growth. Although this situation is good for resource economists like me, it is bad for all the people who suffer from the bad water management policies of a century ago still in use today.
Here are a few pieces to help you understand the situation. The get the best overview and economic explanation of what's going on (unless you can buy me a coffee), listen to a 15 minute podcast with Henry Vaux, an economist who's been in the business for 35 years.
The New York Times has a good overview of the situation -- with the annoying exception of bad bad bad economics when the discussion turns to Vegas. Go figure.
In the Los Angeles Times, an editorial says that everyone should pay the same price for water but then defends the decision to have cheaper power prices for hotter areas. This second idea is not just stupid because it subsidizes people who decide to live in hot places (and run the AC) but also because water and electricity prices reflect each other, i.e., it takes water to cool electrical plants (say 5% of total use) and takes power to move water (20% of power in California).
In the San Francisco Chronicle, a column reviews the NYT piece and points out the supply and demand imbalance (good economics!): There are probably going to be water wars. Water is going to be stolen and defended, just as it was 150 years ago. And wait until Mexico starts spending its oil money on water. You won't be able to build a wall tall enough. The time to start thinking about this stuff was yesterday. No one says the Sahara is in a drought.
These problems are not limited to the West. They extend to the South (that's right, the humid, dripping South) and most of the world (China and Australia facing notoriously severe problems; China is not handing theirs very well. Did I mention the Middle East? Big problems...) The only places not facing water problems of some sort may be the Pacific Northwest, Canada and the Scandinavian countries.
Bottom Line: Water supplies are stressed by population growth and bad policies. We can do something about the latter. The first (maybe only) thing to do is start charging for the scarcity value of water. We do that with oil, gold, super models and good bread, and those markets work. Bring sensible economics to water -- before it's too late.