Calif. residents say wineries gulping down area's only water source

(CBS News) A battle is brewing in California's wine country. Some people say they're being left high-and-dry because of an explosion of wineries. And now, that's leading to a fight over the area's one and only water source.

Paso Robles, along California's Central Coast, is known for it's gentle hills and climate, and its world-class vineyards and wines. But now, the beautiful place is embroiled in an ugly dispute over water. The verdant region sits atop the largest aquifer in California, a huge underground lake residents thought would keep wells flowing forever. That's what Elaine Hagen was told when she moved to the area. But this summer, she let her green lawn go brown after learning her well will run dry in two years. Hagen said, " 'You can water until your heart is content,' that's what they told us in 1999."

Asked what has changed, she said, "So many vineyards moving in."

Like Napa before it, wine put Paso Robles on the map. Grape cultivation has tripled to more than 36,000 acres in just 15 years. Jerry Reaugh, of Serino Vista Vineyards, grows 24 varieties of wine grapes. Reaugh said, "We've developed a fantastic economic engine here. And we are kind of, in a way, a victim of our own success."

Reaugh says it's crazy to think vineyards would drain the water -- in essence, suck the life out of their business. He said, "It's a viable agricultural product, and yet it's one of the most frugal in use of water. The crops we were growing here 20, 30 years ago used a lot more water."

Most vineyards now use drip irrigation. Reaugh monitors soil moisture on his iPad. His neighbors Tom and Kathleen Maas at the Pearl Valley Winery recycle much of their water.

"We've reduced our water application in the vineyards by 50 percent, and we still continue to pursue all of the efficiencies we can find," Kathleen Maas said.

But growing grapes and growing population are stressing the aquifer. The water level has dropped 70 feet in 16 years. Add to that a three-year drought, and you've got a crisis. Hagen said, "Our groundwater basin only gets replenished from rainfall. Last year we got three inches of rain."

Construction worker Juan Gavilanes predicts what happened to him will happen to others. His well has run completely dry. Gavilanes said it started when a big vineyard was planted at the end of his street a year ago. He said, "When they started drilling, we could see the change. The water just, our pump would just shut off."

Now, a hose to his neighbor's well is his family's only source of water. He can't afford a new well.

Asked if he could move, Gavilanes said, "Let me ask you this: would you buy this house with no water?"

With battle lines drawn and homeowners boycotting some wineries, county supervisors passed an emergency ordinance -- a 45-day "time out" on new development and vines -- time to find a solution. All agree water must be conserved and shared. But how? On that, there's no agreement.

Hagen said, "It's a small community. We see each other at the grocery store and at the football games on Friday night. We have to find a way to work it out."

Watch Bill Whitaker's report above.