California’s reservoirs are nearly empty and rainfall is below average. Now it seems that California will NOT get much more rain this winter. It’s El Niña, and that means dry.

Prepare for more drought and water shortage announcements.

Bottom Line: The best way to compensate for a fall in supply is to reduce demand (raise prices!) and increase trading from those who prefer money to those who prefer water. The worst way is to ration and send out water cops. Watch what happens and draw your own conclusions.