[env-trinity] SacBee Viewpoint: Northern California river water fetches high profit margins for farmers selling it through transfers

Mark Dowdle - TCRCD mdowdle at tcrcd.net
Mon Jan 9 11:20:58 PST 2012



This story is taken from Sacbee <http://www.sacbee.com> / Opinion 
<http://www.sacbee.com/opinion/index.html> / Viewpoints 

  Viewpoints: Water barons will corner market in new 'Chinatown'

      Special to The Bee

        Published Sunday, Jan. 08, 2012

There is more money in selling water in California than there is in 

A one-sentence provision inserted in the 2012 budget bill by U.S. Sen. 
Dianne Feinstein will allow a handful of powerful San Joaquin Valley 
water oligarchs to sell federally subsidized agricultural water in a 
private market for as much as 150 times more than what they pay for it.

This relaxation of publicly owned water supplies for private gain strips 
out protections approved by Congress in 1992.

They call them "water transfers," and for the last 15 years California 
has been quietly edging into a very lucrative privatized water sales 
market that seeks to expedite the movement of cheap agricultural water 
from Northern California to thirsty Southern California and Bay Area 

The cast of characters in this new water wars drama reads like a who's 
who of California corporate agriculture:

. Westlands Water District, west of Fresno, which is the largest 
irrigation district in the United States and is controlled by a handful 
of privately owned agribusiness corporations.

. Beverly Hills billionaire Stewart Resnick, who runs the privately 
controlled Kern Water Bank, a 19,900-acre underground reservoir capable 
of holding more than a million acre-feet of water. The reservoir was 
created by the state before being taken private. Resnick, a longtime 
backer of Feinstein, owns Paramount Farms and Roll International, key 
players in California's billion-dollar private water market.

Like derivatives, subprime mortgages and deregulated electricity, the 
privatization of federally owned water rights is a puzzle palace of 
complexity. Here are some of the pieces:

Winter and spring runoff from Northern California rivers, which flow 
through the Sacramento-San Joaquin Delta, are crucial to the ecological 
health of the Delta, San Francisco Bay and the state's fishing industry. 
The Feinstein legislation allows high water flows in the Sacramento and 
San Joaquin rivers to be diverted to a private water market rather than 
replenishing the Delta and the Bay.

The legislation makes it easier to move federally subsidized 
$20-an-acre-foot water from growers with federal project water contracts 
to private interests with water rights. Once in the hands of these 
buyers, the water can be resold in the open market to the highest bidder.

Westlands Water District and others who will benefit from the 
legislation will not be required to fully compensate the U.S. taxpayers 
for the public investments in the storage facilities, conveyance 
systems, electricity to pump the water or the operation and maintenance 
costs that make these private windfall transactions possible.

In short, it socializes the costs and capitalizes the profits, leaving 
U.S. taxpayers to foot the bill. Sound familiar?

The Kern Water Bank was originally owned by the state of California and 
built to store water in high water years to provide agriculture with 
water in drought years and to leave more in the Delta. In 1994, Resnick 
persuaded the state to turn over this invaluable public resource to the 
Kern County Water Agency. Within a short time the water agency turned 
over control of the water bank to a handful of local water districts.

When the dust settled, Resnick's Paramount Farming controlled more than 
50 percent. The U.S. Bureau of Reclamation recently admitted that 
Resnick's Kern Water Bank is on the list of beneficiaries of Feinstein's 
deregulation measure.

In addition, Feinstein's budget rider streamlines environmental review 
of these privatized water transfers by disguising the environmental 
impacts of individual transfers. One only needs to remember the "rape of 
the Owens Valley" and its reincarnation in Roman Polanski's classic 
movie "Chinatown" to understand the potential environmental impacts of 
moving water and water rights from one geographical area to another.

In anticipation of this Christmas gift to Westlands, the bond-rating 
agency FitchRating last year noted the benefit to Westlands from 
deregulating the federal water to allow Westlands to engage in more 
private water sales:

"The WWD (Westlands Water District) potentially has the ability to sell 
and transfer water rights outside the district should agriculture cease 
to be economic, as the demand for water in Southern California and the 
San Francisco Bay Area by users with connectivity to the CVP (federal 
Central Valley Water Project) is very high."

Climate change and global warming studies predict future water shortages 
for California. Feinstein's deregulation of vital public water paid for 
by taxpayers will enrich a handful of powerful water oligarchs. The 
measure will make it possible for a handful of these high rollers to 
dominate the California water market and squeeze whatever profits they 
can out of thirsty urban water users, leaving the fish and wildlife at 
the mercy of so-called free market economics.

The Congress must take a closer look. A privatized water supply paid for 
by U.S. taxpayers but controlled by one person or a handful of people is 
just plain wrong.

/Patricia Schifferle, a former legislative director and consultant, is 
principal/director for Pacific Advocates.

© Copyright The Sacramento Bee. All rights reserved. 

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