This paper discusses on-going research in optimal regional aquifer management that has a multiplicity of goals: water supply, subsidence control, and energy management. Current research is directed at simulation and optimization of the aquifer system using a variety of methods. The goal of the research is to identify pumping policies that control subsidence, yet meet current and projected groundwater demands and require minimal lift (a surrogate for energy). Two fundamentally different operational strategies are studied: (1) pumping (extraction) only; and (2) pumping combined with injection where net extraction meets demand. The simulation model uses the USGS modular three-dimensional finite difference groundwater flow code with the interbed storage package for modeling flow and subsidence. The current model is a four-layer model with spatial resolution of 2.5 miles in the horizontal dimensions and 0.1 miles in the vertical dimension.