Trying to Get Water to California but Torpedoed by Regulators

The Obama administration and Dianne Feinstein keep blocking a private project to aid the still-parched state.

Well water bubbles into a pilot pool in Cadiz, Calif, in 2002. (AP)

By ALLYSIA FINLEY
Wall Street Journal

Although El Niño has increased the snowpack in the Sierra Nevadas, the Golden State’s historic drought isn’t over. Yet the Obama administration has decided to block a privately financed project that could supply water to 400,000 Californians, even though the project has been approved by an alphabet soup of state and local agencies. The result will be to trap vast amounts of a precious resource beneath the Mojave Desert. Is water the new fossil fuel?

This tale of political and regulatory obstructionism begins in 1998, when Cadiz Inc., a Los Angeles-based company, developed plans for a groundwater bank and well-field on 70 square miles of private land overlying the base of the Mojave’s massive Fenner Valley and Orange Blossom Wash watersheds. Over centuries the aquifers there have amassed as much as 34 million acre feet of water, enough to sustain all of California’s households for several years.

However, tens of thousands of acre feet percolate into salty dry lakes and evaporate each year. Cadiz proposed capturing and exporting the groundwater to Southern California residents. The Cadiz Valley Water Conservation, Recovery and Storage Project could also help store occasional excess flows from the Colorado River that would otherwise drain to the Pacific Ocean.

Water experts such as those at the Public Policy Institute of California have recommended using groundwater banks to recharge aquifers during wet years and expand the state’s storage capacity. Relative to dams, storing water underground reduces evaporation and environmental harm.

None of this mattered to various green lobbies and California Sen. Dianne Feinstein, who complained that the water project would deplete mountain springs and harm wildlife. But environmental reviews by hydrogeologists confirm that the nearest spring—located 11 miles away and 1,000 feet above the aquifer—would not be affected. Nor would fauna, which don’t rely on groundwater. After an exhaustive review, the U.S. Interior Department approved the project in 2002, but Sen. Feinstein maintained her opposition.

Cadiz sought to assuage her in 2008 by reducing the planned annual water exports to 50,000 acre-feet from 150,000. It also negotiated to use the Arizona & California Railroad’s (ARZC) right of way to build a 43-mile underground pipeline to the Colorado River Aqueduct (which feeds water to Southern California). But a few days after Cadiz announced its agreement with ARZC, Ms. Feinstein launched another attack, demanding that the Interior Department “conduct a detailed analysis” of “permissible uses” of railroad rights of way.

The department’s long-standing policy allowed railroads without federal permitting to run power, telephone and fiber optic lines on their rights of way, streamlining environmental review for public works, including wind and solar farms. But in 2011, Interior revised its policy to limit railroad rights of way that were granted in 1875—such as ARZC’s—to “activities that derive from or further a railroad purpose.”

Curiously, the new rules apply only to projects like the Cadiz pipeline. Telephone wires and fiber optic lines, maintenance yards and “related improvements,” could be permitted “on a case-by-case basis” if they helped the railroad operate.

Cadiz would go on to spend $12 million on capital improvements to benefit the railroad, such as a maintenance access road, turbines to power safety equipment and information systems, as well as state-of-the-art automated fire suppression. No matter. Last October the Bureau of Land Management ruled that the Cadiz pipeline “does not derive from or further a railroad purpose.” The innovative fire-suppression system “is an uncommon industry practice,” the agency caviled, and the “origin of the access road is to support the non-railroad purpose of water conveyance.” Building the pipeline without authorization, it warned, “could result in the BLM instituting trespass proceedings.”

The BLM added that its ruling cannot be appealed because “it is not a final agency decision.” A final decision would require a formal regulatory review. But Ms. Feinstein has attached riders to every Interior Department spending bill since 2008 that bar the agency from reviewing Cadiz.

Amid this regulatory hustle, a California state appellate court last month heard six challenges to the project, all of which had been rejected by a trial court two years ago. In 2012, the Santa Margarita Water District’s final environmental impact report noted that the project’s only significant effects would be temporary dust from construction and the hazard of population and employment growth from a larger water supply, which has driven opposition from green groups. While trumpeting the BLM’s decision in October, the Center for Biological Diversity complained that the Cadiz project would “increase urban sprawl in coastal Southern California.”

So the water storage project, long overdue, remains stuck in regulatory purgatory. Without a Hail Mary attempt by Congress to unplug the Obama water blockage, thirsty Californians can only pray for a Republican president who views economic development as a blessing rather than curse.

Conservationists restore East Mojave guzzlers

Guzzler #S-18 near Goffs, California. (Chris Ervin)

by Leslie Ervin
Exclusive Field Report

Goffs, CA -- The Goffs Cultural Center provided camping facilities for an important work group during the weekend of March 27-29. Cliff McDonald of Needles, California, and XX of his volunteers staged their operations at Goffs while they made day trips to repair five wildlife water guzzlers in the area.

What is a wildlife water guzzler, you ask? Guzzlers come in many shapes and sizes and are made of different materials depending on the wildlife population they are intended to serve. The ones in this area consist of a concrete slab that collects rainwater and funnels it into an underground tank. The tank is covered and has a sloped opening that allows animals and other creatures to walk in and out to reach the water. Guzzlers are vital to desert wildlife like deer, bobcat, coyote, cougar, quail, bighorn sheep, and desert tortoise.

Most of the local guzzlers were built decades ago and over time they develop cracks and collect debris, which makes them less effective. Cliff’s volunteers come prepared with trucks full of equipment to make the appropriate repairs. The work first involves prepping the pad. Chippers are used to clean off the old sealant and then QUIKRETE concrete bonding adhesive is applied to the cracks. Two coats of Merlex are then applied over 24 hours to seal the pad so the water runs down into the underground water tank. The tank is also cleaned out and tortoise nets are installed so the tortoises can get out of the tank.

On Saturday, my husband Chris and I were interested in witnessing this work firsthand, so we took a break from our weeding at Goffs and drove to the closest worksite, just two miles up Mountain Springs Road. When we arrived at guzzler #S-18, they had already fixed the cracks in the pad and were cleaning out the tank. Since this guzzler happened to be in a particularly lush area of spring flowers, we wandered around a bit to take photos. When we returned, they had finished sealing the pad and were moving on to the next work site. You can see how nice the guzzlers look when they finish.

Finished guzzler #S-18. (Leslie Ervin)

The group assembled at Goffs consisted of volunteers from the High Desert Chapter #759 of Quail Unlimited, the California Foundation for North American Wild Sheep, and…. On Saturday and Sunday they divided into work groups and headed out to the guzzlers. They even brought along a cooking crew who whipped up such delicacies as eggs and elk sausage and elk burgers. Those of us fortunate enough to be at Goffs during that time enjoyed exchanging sleepy pre-dawn greetings and friendly waves as their caravans rolled back into camp at the end of the day.

Cliff has been the driving force behind restoration of water sources inside the Mojave National Preserve and surrounding areas. He coordinates with groups like Quail Unlimited, the Safari Club, the Bureau of Land Management, and California Fish and Game to accomplish this important work. He was recently honored with a $5,000 grant as one of three finalists in the 2009 Budweiser Conservationist of the Year Award sponsored by Budweiser and the National Fish and Wildlife Foundation (NFWF).

If you are interested in helping this worthy cause by volunteering or making a donation, you can contact Cliff at 760-326-2935.

Cadiz Valley desert water-storage plan renewed

By DAVID DANELSKI
The Press-Enterprise

The owners of remote desert land have revived a $200 million plan to store water underground to send to Southern California in dry times, although the region's major water agency rejected the idea six years ago.

Cadiz Inc., owner of land and water rights in the Cadiz Valley about 40 miles east of Twentynine Palms, has secured a 99-year lease to use railroad right-of-way for a 42-mile pipeline connecting to the Colorado River Aqueduct, said Richard Stoddard, chief executive officer of a sister company, Cadiz Real Estate LLC, in a telephone interview.

Water would be diverted from the aqueduct into the Cadiz pipeline and injected into the ground for storage in an aquifer beneath the company's land. When needed, the water would be returned to the aqueduct and could meet the needs of an estimated 1.2 million people in Southern California, the company contends.

Cadiz Inc.'s announcement surprised officials at Metropolitan Water District of Southern California, the major buyer and distributor of water in the region.

The district, which built and operates the 242-mile Colorado River Aqueduct that Cadiz wants to use, rejected a similar proposal in 2002 amid environmentalists' opposition and concerns about costs. In addition, the Colorado River didn't have surplus water to fill the Cadiz aquifer, district officials said.

"We don't have any plans to proceed with the (Cadiz) project, and they haven't discussed their new approach with us," said Timothy F. Brick, Metropolitan's board chairman.

Metropolitan would have less involvement this time around, said Courtney Dedener, Cadiz investor relations manager. The previous deal would have made the water district a partner in the project, and the two entities would have jointly built the pipeline to the Cadiz Valley. Now, the company plans to build the pipeline without the water district and charge clients for water storage.

Aqueduct Rights

Cadiz Inc. owns 44,000 acres of land and related groundwater rights in the Cadiz, Fenner and Piute valleys of eastern San Bernardino County. It grows grape and citrus crops.

Stoddard said the company has been talking with several water providers that have rights or potential rights to water in the aqueduct and could benefit from the company's storage project.

California's "water-wheeling" laws give water providers the right to move supplies through the aqueduct, Stoddard said. The laws are similar to rules that allow various telephone companies to use the same transmission lines, he said.

Metropolitan spokesman Bob Muir said the district has not seen a proposal from the Cadiz company. To access the aqueduct, capacity must be available, he said.

The Cadiz clients also would have to pay access and stewardship fees, he said.

Fern Steiner, San Diego County Water Authority chairwoman, said the Cadiz venture possibly could be used to store Colorado River water the agency purchases from the Imperial Irrigation District.

"Our board should look at the Cadiz project," she said. "We should explore all possibilities to find new water sources."

Stoddard said he expects the pipeline to be operating in about three years, allowing 18 months for environmental reviews under the purview of the San Bernardino County planning agency.

It would take roughly the same amount of time to build the pipeline, he said.

Environmental Concerns

In 2001 and 2002, environmentalists who opposed the project said they feared that pumping from the Cadiz Valley would deplete natural groundwater that feeds area springs. The springs and groundwater are necessary to sustain desert bighorn sheep and various plants and other wildlife, they said.

Terry Wold, conservation coordinator for the Sierra Club's Inland chapter, said the group will continue to oppose the pipeline and storage project.

Wold said that besides concern about the springs, she is worried about contaminating the pure native groundwater with the saltier Colorado River water.

Elden Hughes, of Joshua Tree, former chairman of the environmental group's desert committee, said the environment would be damaged by construction of large-scale pumping stations.

"It they want to suck the aquifer dry, we will do our damndest to stop them," Hughes said.

Club members will write letters, lobby elected officials and, if necessary, sue to stop the project, he said.

Stoddard said native groundwater would be used but that levels would be carefully tracked to ensure the environment is protected.

He added that using the Arizona & California Railroad Co. right-of-way would be less damaging to the environment than the previous plan that routed the pipeline across public land overseen by the federal Bureau of Land Management.

"The more this project is examined, the more environmentally benign it becomes," Stoddard said.

Water as Business Taps Into Fears

Environment: Concern over possession of a natural resource as a commodity and the possibility of firms' taking treatment shortcuts hamper deals.

by Michael A. Hiltzik
Los Angeles Times

The apparent breakdown of a deal between private Cadiz Inc. and the public Metropolitan Water District to build a $150-million water storage facility in the Mojave Desert raises an issue that may become more relevant to the state's water future: What role is there for private enterprise in supplying water to the California public?

The question evokes fears of the kind of corporate profiteering and market manipulation alleged in the wake of energy deregulation in the state. If anything, privatizing water may be an even more sensitive issue, given its stature as a natural resource essential for physical, as well as economic, health.

In part because of the dangers of cutting corners on water treatment and system maintenance, public-interest advocates have long been wary of efforts to turn over public water supplies or systems to private enterprise.

"One of the things we learned in the energy deregulation debacle is not to give private companies a free hand in the management of a natural resource," said Peter H. Gleick, president of Oakland-based Pacific Institute for Studies in Development, Environment, and Security and coauthor of a study critical of global water privatization. "Water is too important to be left solely in private hands."

Still, many private entities are active in the water trade throughout the state--and some are planning to become more deeply involved.

Among them are owners of water rights in the river-rich north who deliver supplies to the parched south. Others are small-scale farmers who agree to fallow acreage during droughts in order to divert irrigation water to cities and suburbs. And some view the state's geographic imbalance of supply and demand as a long-term commercial opportunity.

In the Sacramento-San Joaquin Delta, for example, a real estate venture between two life insurance companies--Zurich Financial Services and Kemper Insurance Cos.--is proposing to build reservoirs on two marshy islands to hold surplus floodwater for release during dry periods. Layne Christensen Co., a Mission Woods, Kan.-based mineral, energy and water company, is expanding water storage facilities in Kern County that already are under contract to provide dry-year supply to the MWD.

But many other private entities have been lured by visions of riches to be made in the business of moving around water supplies within the state--only to be crushed in a bureaucratic and political wringer.

"A lot of companies trying to move water across the delta have not been successful because it's complicated," said Jerry Johns, water transfer chief for the California Resources Agency. "It requires a lot of overhead. The physical issues are hard. Water rights are complicated. If your business plan is moving water from north to south, you should be prepared to spend a lot of time working out how that's done."

As a commodity, water is protected by a shield of regulation, tradition and emotion that can turn even the determination of who owns the right to use water under what conditions into a forbiddingly complex task. These complexities have blindsided some of the country's most sophisticated private investors, leading to some spectacular missteps in recent California history.

In the mid-1990s, the wealthy Bass brothers of Texas bought up 30,000 acres of farmland in the Imperial Valley, hoping to profit from the spread between the $12.50-per-acre-foot price they paid for Colorado River water as farmers and the $250 that San Diego would pay them to divert it as urban supply. Too late, the Bass family discovered that the water rights did not belong to them as landowners but in trust to the Imperial Irrigation District, which opposed the Bass sale. (The Bass family still made a profit in the Imperial Valley. Meanwhile, the district moved to strike its own deal--still under negotiation--with San Diego.)

Three years ago Azurix, a water-trading subsidiary of Enron Corp., paid $31 million for a 13,000-acre ranch in Madera County, in the heart of the San Joaquin Valley farming region. The idea was to allow customers to store as much as 400,000 acre-feet of water in an aquifer under the ranch, extracting it in dry periods as needed. Local farmers viewed the proposal as a pretext for stealing their natural water supply. (An acre-foot is about 325,000 gallons--enough water to meet the needs of two average households for a year.)

"The Azurix project was perceived as a threat, as a means of taking our water and sending it away to the highest bidder," recalled Kole Upton, a pistachio and almond farmer who headed a local water users' group opposed to the project. The Madera County Board of Supervisors eventually passed an ordinance requiring their consent to any water transfers out of the district. Azurix later disintegrated in the Enron bankruptcy. A unit of Layne Christensen has since taken over the property.