Water Education Foundation

Water officials mull state’s drought bank; Inefficiencies, expense keep farmers from using system

Posted by: Maven on June 4, 2009 at 2:52 pm

From the Capital Press:

Water managers are working toward a more efficient version of the state’s drought water bank for next year, California’s drought coordinator told the State Board of Food and Agriculture.

The state created a water bank this year for the first time since the early 1990s. Wendy Martin, statewide drought coordinator with the Department of Water Resources, described an efficient, state-managed trading system as a key piece of the state’s future water management.

“Transfers are one of the ways that we can balance the water portfolio,” Martin said. “A transfer system is a way of leveling that market. Some people will get more money for their water, some people will pay less, but it will start to equalize. And … that is the long-term solution, not just related to drought, but for the state’s water-management system. We have to be more effective at that.”

So far, each effort at transferring water has been bogged down in battles with local jurisdictions. Martin said the biggest obstacles to water transfers have come from county governments.

“One of our biggest adversaries – and the people who are suing us now, over this year’s water bank – are the counties,” she said. “Every portion of every transaction has had a fight associated with it. We have to stop fighting about this stuff and figure out what will work.”

Read more from the Capital Press by clicking here.

June 4, 2009 · Filed Under Water Banking

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Monday’s top story: Gaming the water system

Posted by: Maven on May 25, 2009 at 8:32 am

From the Contra Costa Times, a recap story of the recent Media News Investigation:

Just before Interstate 5 climbs the Grapevine out of the San Joaquin Valley is a massive underground reservoir that its owners say is the largest water banking project of its kind in the world. Here among the tumbleweeds, sand and scrub, 15 miles west of Bakersfield, the gush of crystal-clear water appears as curiously out of place as the great blue herons cruising along the bank’s six-mile canal.

The Kern Water Bank, which was owned by the state Department of Water Resources from 1988 to 1995, is now in the hands of Kern County interests and is 48 percent owned by Westside Mutual Water Company, a private water company controlled by Beverly Hills billionaire Stewart Resnick.

It is 32 square miles of desert where one natural river and two artificial ones pass: the Kern River, which originates in the southern Sierra Nevada; the California Aqueduct, which carries Delta water more than 400 miles to a reservoir in Riverside County; and the Friant-Kern Canal, which takes water to valley farmers from behind a dam on the San Joaquin River.

“We have lots of water conveyance facilities that bring water past the Kern Water Bank,” said Jonathan Parker, general manager of the Kern Water Bank Authority. “That makes this location pretty unique.”

In wet years, the water bankers deposit water from the rivers into ponds where it percolates into the Kern River’s alluvial fan.

In dry years, they make withdrawals, which is why on a tour of the bank earlier this year water was gushing out of the ground from pipes and bubbling up into the canal from underground structures.

Read more from the Contra Costa Times by clicking here.

May 25, 2009 · Filed Under Water Banking

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Sunday’s Top Story: A Media News Investigation: Pumping water and cash from Delta

Posted by: Maven on May 24, 2009 at 11:35 am

From the Silicon Valley Mercury News:

As the West Coast’s largest estuary plunged to the brink of collapse from 2000 to 2007, state water officials pumped unprecedented amounts of water out of the Delta only to effectively buy some of it back at taxpayer expense for a failed environmental protection plan, a MediaNews investigation has found.

The “environmental water account” set up in 2000 to improve the Delta ecosystem spent nearly $200 million mostly to benefit water users while also creating a cash stream for private landowners and water agencies in the Bakersfield area.

Financed with taxpayer-backed environment and water bonds, the program spent most of its money in Kern County, a largely agricultural region at the southern
end of the San Joaquin Valley. There, water was purchased from the state and then traded back to the account for a higher price.

The proceeds were used to fund an employee retirement plan, buy land and groundwater storage facilities and pay miscellaneous costs to keep water bills low, documents and interviews show.

Revenues from those sales also might have helped finance a lawsuit against the Department of Water Resources, the same agency that wrote the checks, documents show.

No one appears to have benefitted more than companies owned or controlled by Stewart Resnick, a Beverly Hills billionaire, philanthropist and major political donor whose companies, including Paramount Farms, own more than 115,000 acres in Kern County. Resnick’s water and farm companies collected about 20 cents of every dollar spent by the program.

MORE COVERAGE ON THIS STORY:

Paper shuffle allows for vast supply of easy money: It must have seemed like easy money. The state was delivering more water than ever to its customers, and in Kern County some of those customers sold some of it back, through a simple trade, at a higher price. Tens of millions of dollars in sales to the “environmental water account” were little more than paper shuffles. It was all perfectly legal. Click here for more on this story from the Mercury News.

Water ownership murky, complicated: Kern County water users who sold millions of dollars worth of water to a program meant to help the environment said the arrangement made sense because the water was rightfully theirs. Few would dispute that water that was purchased and stored in Kern County could be sold to the environmental water account. But the sales were made easier by the fact that the state Department of Water Resources was cranking up water deliveries to unprecedented heights at the same time it was buying water back for the environment. More from the Mercury News by clicking here.

The Resnicks: farming’s power couple: Stewart Resnick is not your typical dirt-under-the-fingernails farmer. The Beverly Hills billionaire’s companies, according to tax records, appear to own more than 115,000 acres in Kern County, about the size of four San Franciscos and more than all of the East Bay Regional Park District’s parks combined. The operation is the largest pistachio and almond growing and processing operation in the world, according to the company’s Web site, and part of a business empire that Resnick runs with his wife, Lynda, whose Web site asserts they are the largest farmers of tree crops in the country. Read the rest of this article from the Mercury News by clicking here.

May 24, 2009 · Filed Under Water Banking

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California officials approve first water transfers

Posted by: Maven on May 20, 2009 at 6:17 am

From the Sacramento Bee:

California officials are moving ahead with a plan to ship water from farms north of Sacramento to growers in the drought-stricken San Joaquin Valley.

The California Department of Water Resources is buying the water from two irrigation districts in the Sacramento Valley. It will be sent to the Sacramento-San Joaquin Delta and sold to a group of 10 buyers, most of whom are located in the drier southern half of the state.

Read more of this brief story from the Sacramento Bee by clicking here.

May 20, 2009 · Filed Under Water Banking

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Sutter County makes friends with water; Entities in county selling supplies to state bank

Posted by: Maven on May 20, 2009 at 6:13 am

From the Marysville Appeal Democrat:

Sutter County supervisors voiced confidence Tuesday night that farmers and water districts will continue to be good groundwater stewards.

The Department of Water Resources’ Drought Water Bank is buying water for $275 per acre-foot from willing water rights holders upstream of the Sacramento-San Joaquin Delta. The water would then be transferred to entities suffering water shortages. “We are trying to help our brothers down in the Central Valley,” said Supervisor James Gallagher. “We are building goodwill, and that goodwill will be very important in the future.”

In giving up some of the surface water they would otherwise use, the rights holders would likely use groundwater in lieu of surface water. Other solutions include not growing crops or substituting less water-intensive crops to save on surface water usage.

The farmers and water districts can be trusted to use the groundwater responsibly because they are stewards of the groundwater, said Brad Arnold, manger of South Sutter Water District. “They rely on that for their livelihood and for their children’s children,” he said.

Read more from the Marysville Appeal-Democrat by clicking here.

May 20, 2009 · Filed Under Northern California, Water Banking

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An unnatural disaster? PCL questions exemption of environmental review for major water merger

Posted by: Maven on May 17, 2009 at 8:07 am

From the California Progress Report, this from Traci Sheehan of the Planning & Conservation League:

Last month the California Department of Water Resources (DWR) submitted a Notice of Exemption to bypass environmental review of their proposal to merge California’s two largest water projects, citing “emergency conditions.”

If approved by the State Water Resources Control Board (SWRCB), the exemption would allow the merger of the State Water Project and the Central Valley Project, fast-tracking the transfer of millions of gallons of water from Northern California farmers to Westside San Joaquin Valley agriculture. The exemption would also allow DWR to avoid commitments to protect Northern California and Bay Delta resources by minimizing requirements to mitigate impacts of these transfers.

This week the Planning and Conservation League (PCL) formally questioned DWR’s authority to act under emergency privileges and asked the SWRCB to consider the facts in the record before approving DWR’s proposal.

Read more from the California Progress Report by clicking here.

May 17, 2009 · Filed Under Central Valley Project, State Water Project (DWR), Water Banking

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Badly-needed California water transfers blocked by economic, environmental hurdles

Posted by: Maven on May 12, 2009 at 8:42 am

From the Sacramento Bee:

As another summer of drought approaches, hundreds of thousands of acres of San Joaquin Valley farmland are expected to be fallowed, and much of urban California faces 20 percent water cutbacks.

But in the Sacramento Valley, rice farmers have been busy for weeks spreading water 6 inches deep over a half-million acres. Many experts expect a larger crop than last year’s.

It’s not that no one saw it coming. The state of California devised a program to move some of that water to thirsty cities and fields south of the Delta. The plan made sense on paper, perhaps, but so far it has been hobbled by everything from high rice prices to environmental concerns.

“The state of California did not do its homework with the stakeholders to find out what the impacts of moving a lot of water would be,” said Jonas Minton, water policy adviser for the Planning and Conservation League.

Moving water around California is never simple. And the troubles with the state’s “water bank” show why.

Read more from the Sacramento Bee by clicking here.

May 12, 2009 · Filed Under Water Banking

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Underground water banks tackle drought

Posted by: Maven on May 11, 2009 at 5:50 pm

From the Western Farm Press:

Here's an idea you can take to the bank: Saving water from a rainy day can help farming operations as well as municipalities get through the dry ones.

Excess water, much of it transferred to aquifers underground and out of view, is helping meet demand in California during a third drought year marked again by cutbacks in deliveries from the Sacramento-San Joaquin Delta. Much of the water from wet years would otherwise flood farmland or go out to sea.

Players in the underground water banking business range from a family farming operation on Fresno County's West Side to huge operations in Kern County associated with the Kern County Water Agency.

It's unknown how many water banks underground or otherwise are in the state. Some say it could number over two dozen.

But the principle for their operation is basically the same as for conventional financial institutions. “It's like storing money,\” said Jim Beck, manager of the Kern County Water Agency, Bakersfield, Calif. “When you have a lot, you put it where you have access when you're short money. The general philosophy is that we can deposit water in times of plenty.

The agency is associated with 18 different water banking operations. “There are more and more being developed all the time,\” Beck said.

Read more from the Western Farm Press by clicking here.

May 11, 2009 · Filed Under Water Banking

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Kangaroo rat, Congress keep Madera County water plan bottled up

Posted by: Maven on March 17, 2009 at 3:42 pm

From the Fresno Bee:

The Madera Water Bank has been touted for a decade as a savior for Madera County farm fields and new housing tracts in dry times – like right now.

Yet the underground water storage project, which is a hit with farmers, environmentalists and legislators, is still on the drawing board.

As a third year of drought unfolds, officials search the proposed bank site for Fresno kangaroo rats and other endangered species. They’re trying to get approval from federal and state wildlife agencies to flood the land.

Madera Irrigation District, the third group to work on the water bank proposal in the last 10 years, says the project should be on a faster track because of the drought. “Sure, I’d feel good if I had the project ready right now, because we really could use it,” said farmer Carl Janzen, the district board president. “But it’s not ready, and part of the problem is all the hoops we have to jump through.”

The bank is well worth the effort, say most water experts. It would hold enough water to fill half of Millerton Lake. During wet years, the district would pipe extra water from area rivers to the grasslands southwest of Madera, where it would seep into the ground. The water would remain underground for years, ready to be pumped out and used when needed.

The water bank could provide more than 40% of the water needed by district farmers each year.

Read more from the Fresno Bee by clicking here.

March 17, 2009 · Filed Under San Joaquin Valley, Water Banking

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Few sellers lining up for DWR’s Drought Water Bank

Posted by: Maven on March 15, 2009 at 8:03 am

From the Mercury Oroville Register:

The state is shopping for water for the Drought Water Bank, but a variety of factors has supplies drying up. Despite a hefty price for the sale of water, environmental constraints and good prices for commodities have far less Sacramento Valley water users signing up to sell water to other parts of the state.

On paper, the state has conducted a California Environmental Quality Act review for more than 500,000 acre-feet of water to be transferred through the Drought Water Bank. But those numbers are the maximum. The actual amount of transferred water will be much less.

The Drought Water Bank is a way for the state to broker water from north to south. The program was revived this year and was last used in the early 1990s. Priority is given to buyers who need water to meet health and emergency needs, and then to permanent crops that could be lost due to drought.

However, “This year, because of constraints in the Delta, there is less flexibility in the water delivery system,” said Teresa Geimer, head of the Drought Water Bank for the Department of Water Resources.

The water bank deals with willing buyers and sellers, and this year the negotiating price appears to be about $275 an acre-foot of water, growers said. One acre-foot equals 325,851 gallons, enough water for two households for a year.

Read more from the Oroville Mercury-Register by clicking here.

March 15, 2009 · Filed Under Drought, Weather & Snowpack, Water Banking

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Water banks, the ESA and the Public Trust Doctrine

Posted by: Maven on November 10, 2008 at 11:00 pm

From High Country News’s GOAT blog:

Matt Jenkin's article “Liquid assets\” in the October 27th edition is a good introduction to Water Banking : a concept which westerners are likely to hear used increasingly if predictions of diminished water supplies resulting from climate change are accurate. But the article only scratches the surface of a subject which West-watchers will want to know a lot more about. And : because taxpayer funds are often involved in financing the operation of water banks as well as in some cases the water purchases themselves : it can be argued that everyday citizens need to better understand what is involved.

Fortunately, there is a goodly amount of information readily at hand. Most of the information on water banks aims to educate farmers and ranchers, many of whom have been encouraged by property rights extremists to view water banks as a socialist plot designed by government bureaucrats and environmentalists to undermine water rights. On the other side of the spectrum some river advocates view water banks as part of an attempt to turn what were intended as use rights into property rights that are not attached to specific uses. If water rights become like other property rights, these folks assert, the Public Trust Doctrine will have been all but destroyed with respect to water resources. From this perspective water banks are seen as part of a world-wide movement to privatize water resources.

Part of the confusion over water banks is the result of the fact that the term has been used to describe institutional arrangements that are radically different and which have different legal implications.

Read more from the GOAT blog by clicking here.

November 10, 2008 · Filed Under Transfers, Water Banking

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Cadiz announces agreement with Arizona & California Railroad Company for new water pipeline; 99-year lease agreement will provide Southern California with as much as 150,000 acre-feet/year of clean and reliable water

Posted by: Maven on September 18, 2008 at 8:27 am

This press release from Cadiz, Inc.:

Cadiz Inc. (NASDAQ:CDZI) announced today the execution of a 99-year lease agreement with the Arizona & California Railroad Company (ARZC). The agreement will allow Cadiz to utilize a portion of the railroad's right-of-way for a conveyance pipeline as part of the Cadiz Valley Dry-Year Supply Project.

The Cadiz Valley Dry-Year Supply Project (Project) is a water storage and supply program, which will provide Southern California with as much as 150,000 acre-feet/year (49 billion gallons) of clean and reliable water during years of droughts, emergencies, or other periods of urgent need by utilizing the aquifer system that underlies Cadiz's 35,000-acre landholding in the Cadiz and Fenner valleys of eastern San Bernardino County. Historically, such dry periods occur in approximately three out of every ten years. In any given dry year, this water would be enough to serve more than 1.2 million people.

This past August, the Metropolitan Water District of Southern California (MWD) announced that it may implement mandatory rationing in 2009 since it does not have enough water to meet demand. Furthermore, state water agencies will receive only 35% of their normal water allocations for 2008 : down from 60% in 2007 : and they expect to only receive between 10% & 20% in 2009.

“Southern California is facing chronic water shortages,\” said Richard Stoddard, CEO of Cadiz Real Estate LLC. “The Cadiz Project is an innovative and environmentally responsible way to help meet the region's need for new water supplies and more water storage.

As part of the agreement with ARZC, Cadiz now has the right to construct an underground pipeline within the railroad right-of-way to connect the Project area to the Colorado River Aqueduct (CRA) rather crossing U.S. Bureau of Land Management (BLM) lands, as was considered in earlier iterations of the Project. Although this alignment is significantly more costly, it is considered to be more environmentally friendly than routes that would have crossed federal lands because the railroad right-of-way is already active and disturbed.

“We are excited to hear about this new alternative pipeline alignment that would enable the Cadiz Project to deliver water to Southern California,\” said Fern Steiner, Chairwoman of the San Diego County Water Authority. “Given the current water crisis affecting the entire region, San Diego County Water Authority is interested in exploring all possible supply opportunities including projects like the Cadiz Project which could accelerate the delivery of much needed supplies to the region.

“In the ensuing years, the Southern California region has need of projects like Cadiz to responsibly and efficiently meet an unprecedented demand for “new\” water supplies. Along with increased recycled water and desalination, the Cadiz Project presents an important alternative that can add to the region’s water supply reliability,\” said Floyd Wicks, CEO of American States Water, whose subsidiary, Golden State Water Company, provides retail water service to more than a million Californians. “We are pleased with the news that the Project has advanced to the point which may yield an alternative that could quickly deliver these supplies to the region.

Construction of the Project facilities could begin as soon as the environmental review for the Project is completed. It is now anticipated that the County of San Bernardino will serve as California Environmental Quality Act (CEQA) lead agency and that it will oversee a comprehensive Groundwater Monitoring and Management Plan for the Project. Cadiz is currently engaged in discussions with a group of public water providers interested in participating in the Project.

“I look forward to the County playing the lead role on the Groundwater Monitoring and Management Plan and in helping to implement this important project,\” said San Bernardino County Supervisor Brad Mitzelfelt. Supervisor Mitzelfelt's District is the largest in San Bernardino County and includes the Cadiz Project area.

The Groundwater Monitoring and Management Plan will be similar to one previously authored by San Bernardino County, the U.S. Geological Survey, National Park Service, BLM, and MWD in 2001.

This Plan was originally designed to alleviate concerns raised by Senator Dianne Feinstein (D-CA), and it will maintain those principle objectives: protect the desert environment in and surrounding the Project area, ensure groundwater quality, and maintain the long-term yield and storage capacity of the aquifer system.

Information on the Aquifer System

The aquifer system that underlies the Project area has the ability to provide both a new supply of indigenous groundwater and to store approximately 1 million acre-feet of Colorado River water that could be imported from the CRA in “wet\” years. This stored water and indigenous groundwater could be delivered to the CRA in “dry\” years for distribution to participating water providers throughout Southern California. The aquifer system is recharged by precipitation (both rainfall and snow melt) that occurs within a regional watershed of 1,300 square miles. For this reason, any transfers of indigenous groundwater will be naturally replenished over time.

History of the Project

The Cadiz Project has been a decade-long effort to bring a new, clean and reliable water supply to Southern California. Cadiz's original partner, MWD, together with the BLM prepared a Final Environmental Impact Report/ Environmental Impact Statement (FEIR/ FEIS) for the Project in 2001. The FEIS for the Project, including a right-of-way for the conveyance pipeline, was approved by the US Department of the Interior (DOI) in a highly supportive Record of Decision issued in August 2002:

“By providing storage of surplus Colorado River water, and the export of indigenous groundwater under specified conditions, the Cadiz Project will help ensure needed dry-year water supply reliability and will assist California in efficiently managing its water supplies. Future water supply needs in Metropolitan’s Southern California service area, without implementation of the Cadiz Project, would substantially exceed demands by the year 2020. The public benefits of the Cadiz Project are compelling reasons for the Department of the Interior to cooperate to the greatest extent possible in assisting California in meeting its water supply goals.

However, MWD refused to accept the right-of-way offered by the DOI and decided not to proceed with the Project in October 2002. MWD is currently facing unprecedented water shortages, which would have been significantly mitigated by implementation of the Cadiz Project in 2002.

Metropolitan initially approved a $1-billion, 50-year project to pump water from the remote aquifer, as well as use it for storage of surplus Colorado River water. However, environmentalists vowed to fight, citing concern that Cadiz had overestimated the amount of water in the aquifer, and that the operations would dry up the natural springs vital to the survival of desert wildlife, such as the bighorn sheep and the desert tortoise.

Eventually, Metropolitan backed off the project and a lawsuit was filed in 2002. Just recently, a trial date was set for May 5th of this year, pending the outcome of settlement meetings, but that trial did not take place. The most recent update on the lawsuit I can find says this (from an SEC filing)

The initial mandatory settlement conference was held on April 30, 2008. Following the conference, Judge Johnson issued a 30 day stay of all proceedings while Judge Lichtman continues his ongoing mediation. If the parties do not ultimately reach an agreement through the settlement conference process and Judge Lichtman declares an impasse, the Court will set a new trial date. As is normal in such legal proceedings, applicable dates will be set and, if necessary, revised by the Court based upon availability within the Court’s calendar.

For more information on the Cadiz project:

September 18, 2008 · Filed Under Groundwater, Water Agency News, Water Banking

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