As a latecomer to all this discussion, can I address the original OP? I also live in South Australia (known as the Driest State in the Driest Continent on Earth) and I've likewise struggled with my conscience as I contemplate building a darkroom in the next few months. The solution I've decided on, which may be of some use to you, perhaps, is to dedicate one of our rainwater tanks as my photography water supply. (I'll install appropriate filters). If it runs out in mid summer, that'll be a good time to go and shoot some more film until it rains again, or -GASP! - drag out the DSLR.
I can't believe I just typed that.
PE, has anyone ever explored the possibility of some kind of dry powder process instead of water?