Ground water is important. Californians get 30 percent of their supplies from groundwater in a good year and 40 percent in a drought.
The trouble is that we Californians have no state-wide monitoring or control over ground water withdrawals. That makes it more likely that we will have unsustainable, tragedy-of-the-commons-style overdrafting of groundwater. (Read this and this.)
For evidence, check out DWR's ground water report [PDF], and note two things: it's as of March 25, which is BEFORE peak summer demand, and it's comparing ground water levels to levels during the past droughts, not a "normal" year. Ouch!
Although things are looking grim in CA, I thought that the situation in other western states was better. After all, they "managed" their ground water, right?
When I visited Arizona recently, I learned about their active management areas (AMAs). The good news is that they cover about 15% of the land and 80% of the people. AMA borders are drawn (roughly) on watershed lines, and water rights can be traded within, but NOT between, AMA areas.*
The bad news is that AMAs do not regulate private wells that pump less than 35 gallons/minute. Since that works out to about 55AF/year, that's a LOT of water from ONE well -- and Arizona has thousands! Apparently, these wells are the key to "uncontrollable" development, AND they are politically untouchable. (Some people say that developers control Arizona.)
In areas with shallow water tables, water managers try to limit the impact of these wells by offering cheaper access to centralized water supplies. (The real estate meltdown and cost of thousand-foot wells slows drilling elsewhere.)
Bottom Line: Out of the frying pan and into the fire: First regulate groundwater, then regulate wells!
Addendum (30 June 2013): I forgot to add the other problem: AMAs allow pumping offsets within the "same watershed," i.e., water can be taken from one location if it's recharged at another location within the watershed. That's all, as far as administrators are concerned, but it doesn't mean that the physical water resources are offset. That depends on aquifer dynamics!