Along with the rains finally drenching California in recent days have come clouds over Gov. Jerry Brown’s Bay Delta Conservation Plan. Published on the website of state Treasurer Bill Lockyer, a new report by the California Debt Advisory Commission questions the BDCP’s financing with municipal bonds.

On Dec. 10, water economist Rodney Smith, Ph.D., president of Stratecon Inc., analyzed the CDAC report about whether the BDCP was a “doable deal.” Specifically, he looked at what the plan would cost the Westlands Water District in the Fresno area. Westlands provides water to 700 family-owned farms that average 875-acres in size.

Smith estimated the debt burden of the BDCP would entirely wipe out cropland values and diminish permanent planting land values by 50 percent:

• The Westlands Water District would end up paying 36.44 percent, or $3.74 billion, of the BDCP debt. That’s a 16-fold increase in Westlands’ debt. (Note: debt is not the same as total project costs.)
• BDCP debt obligations would equate to $6,585 per acre of Westlands’  croplands. The California Association of Farm Managers and Rural Appraisers’ 2014 Trends in Agricultural Land and Lease Values reports cropland values for the west side of Fresno County are $5,000 to $8,500 per acre.  Thus, the BDCP would exceed the current average market value of Westlands’ croplands per acre.
• The BDCP debt burden also would also equate to up to 50 percent of the value per acre of permanent croplands that do not need replanting (e.g., almonds).
• The BDCP debt burden would be totally unaffordable when it has to fallow one fourth of its land once every decade as part of its rotational cropping plan.
• The BDCP would mostly yield additional water in wet years when it is less needed; and very little in dry years, making the economics even more unsustainable.

The average value of California farmland in 2012 was $7,200 per acre.  California has about 8.56 million acres of irrigated cropland. Thus, the total value of irrigated farmland would be about $61 billion.

Many risks

According to Smith’s analysis of the report, the above gloomy analysis of the economics of the BDCP doesn’t even take into consideration the project’s many risks, such as:

However, the biggest risk cited in the CDAC report was drought. If water contractors “opt out” of paying bonds in low-water years, and shift to cheaper groundwater, this would result in uncertain revenues to pay the bonds (page 7). Farmers are obligated to continue to make bond payments through their water rates even if they get no water.  It is a certainty that farmers will shift to groundwater during drought.

The magnitude of the bond debt would be $55.4 billion (inflation-adjusted dollars). As the CDAC report put it, “By any measure, this is an extraordinarily large amount of bonds to be issued for a single project and would be one of the most expensive infrastructure projects ever taken in California and the United States” (page 42).

Reaction

Due to all of the above factors, Smith foresees an unfavorable reaction to financing the project in the bond market.

Smith says the BDCP needs to be downsized to a “municipal and agricultural water user project.” But that isn’t likely.

Along with the high-speed rail project, the BDCP is part of what Brown calls California’s “rendezvous with destiny.” He has branded doubters “dystopians and declinists” with a “noir view of California.”

So any clouds over the BDCP are unlikely to deter him

One of Smith’s side businesses is a new venture with Inkling Markets called Stratecon Water Policy Markets. It brings prediction markets to the water industry. If the title “California’s Hydrowonk” can be attributed to anyone, it is Smith. 

Smith was recently retained by the San Diego County Water Authority to analyze the proposed Bay Delta Conservation Plan and forecast its future.  On Sept. 12, 2013, Smith presented a slide show to the Special Imported Water Committee Meeting of the SDCA titled, “Is Bay Delta Conservation Plan a Doable Deal?”  (Click on the link to go to the slide show.)

Included in his presentation are a number of predictions for the BDCP for 2014.  Smith’s predictions are based on statistical analysis, not on crystal ball gazing.  But it might prove interesting to Californians to look into Smith’s crystal ball about what is likely to happen with the BDCP in 2014.

The BDCP is a strategy to re-engineer the freshwater biology of the Delta mainly for fish; and partly by building two tunnels under the Delta to ship water Southward.

Hydrowonk’s assessment of the BDCP

There has been a public outcry over the $14.9 billion cost to construct the twin tunnels under the Delta. The total cost, with interest, on the bonds to finance the tunnels over a 50 year period is reported to have swollen to about $67 billion, with bond interest included from years 2027 to 2057.  In Smith’s opinion:

• The BDCP has no financing plan yet;
• The capital investment is understated by billions without considering interest on the bonds to finance the project;
• The cost of the water is severely understated (at least triple the stated amount);
• The prospect for water bond funding solely for environmental activities is remote;
• There is no guaranteed water supply reliability in the BDCP. The BDCP only trims the magnitude of water shortages in average years of rainfall and snowpack, not in extreme dry years;
• The prospect of water buyer agreements is not promising but can be overcome by getting Letters of Intent (LOI);
• The importance of the BDCP to the state economy is minuscule;
• The Department of Water Resources calculation of project costs ignores the difference between the timing of capital commitment in 2015 and the start of water deliveries in 2026;
• The major flaw in the BDCP narrative is the absence of water storage in any new reservoirs;
• There is a prospect of water districts passing on the BDCP and merely looking for water storage opportunities South of the Delta to hook into the existing California Aqueduct.
  

Hydrowonk’s eight predictions for  the BDCP for 2014 

Based on an answers to questions from CalWatchdog.com, Smith has eight predictions for the Bay Delta Plan’s future starting in 2014:

1. Will agriculture walk from the Bay Delta Conservation Plan, and if so, when?

To maintain the BDCP implementation schedule, agricultural irrigation and urban water districts that have contracted for water from the Federal Central Valley Project will have to pony up $1.2 billion for design and pre-construction activities in 2014. This is risky given that the $11 billion California Water Bond won’t be voted on until the Nov. 2014 election. Smith predicts there is a 90 percent chance that agriculture will bolt from the BDCP no later than June 30, 2014, due to the risk of incurring costs before voters consider the California Water Bond.

2. Will the California Department of Water Resources treat the BDCP as a separate part of the State Water Project?

Smith guesstimates there is a 10 percent chance of this happening before June 30, 2014, but a 60 percent chance thereafter.  This predication assumes the California Water Bond has a small chance of passing.  As a result, the BDCP may end up incorporated into and funded by the existing State Water Project.

3. Can the BDCP proceed with only municipal water users?

Smith foresees a 25 percent chance of this occurring without new water storage reservoirs and a 65 percent probability with viable storage.

4. Will the California Department of Water Resources include water storage in the BDCP, and if so, when?

Here Smith foresees a 25 percent chance of water storage being included in the plan. But there would be no action until after the 2014 election. 

5. Will the DWR use market mechanisms for contracting?

Smith sees a slim 10 percent chance of this happening before June 30, 2014, but a 75 percent chance thereafter.

6. Will voters approve the California Water Bond in Nov. 2014?

Smith has done his own statistical analysis of the likelihood of the $11 billion California Water Bond passing. He found that support of water bonds falls with the increase in state debt burden.  A smaller, $2 billion bond would have a 27.4 percent chance of passing and the odds against it would be only 3 to 1. Overall, Smith sees a 3.9 percent chance the larger $11 billion bond will pass.

7. Will an alternative bond replace the current one, and if so, what size would it be, and when?

Based on his statistical analysis, Smith sees a 75 percent chance that a new bond proposal will surface by July 1, 2014 for a $2.5 billion bond.

8. Will voters pass an alternative bond?

The likelihood of a slimmer $2.5 billion water bond passing is 35 percent, according to Smith.

Smith says not to take his word about the BDCPs future. Instead, he encourages the water industry to use its operational experience, not computer modeling used by the BDCP.

Whatever the BDCP’s future may be, 2014 will be a critical year for the BDCP to proceed, die, or be reformulated.

Probably the most mentally riveting figure of speech in the history of California nature writing has been the book, “Cadillac Desert: The American West and its Disappearing Water,” by the late Marc Reisner.  Part of the book was about how California rice farmers supposedly used the largest amount of water in California due to the cheap water policies of the federal government.  The book’s title evokes the image of two things that don’t fit together, such as water in a barren desert.

Countering Reisner’s book is new research by the University of California at Davis Center for Watershed Sciences that has found rice fields can serve as substitutes for wetlands that also are feeding ponds for salmon. The study indicates the metaphor of exploitative rice farmers doesn’t meet environmental reality and it likely never did.

As reported in the Oct. 25 issue of the Sutter County “Appeal-Democrat,” it has been found that rice fields can serve as “fattening grounds” before before salmon migrate to the ocean.

The study found that salmon grew fatter in plowed rice fields than in natural wetlands or irrigated farmland with stubble or weedy vegetation. Researchers proclaimed that the Yolo Bypass rice fields were “an all-you-can-eat buffet” for juvenile salmon prior to their migrating to the sea. The project was dubbed the “Nigiri Project,” after the name of a form of sushi with a slice of fish on top of a serving of rice.

According to researchers, a salmon’s size is an indicator of its likelihood of returning to upstream fresh water spawning grounds. Salmon had a five-fold weight gain in six weeks of the study. This was among the highest ever recorded.

The nearby pictures show the size of the salmon at the beginning of the study (top photo), and after the study (bottom photo).

The U.C. Davis researchers selected three 100-acre cornfields in the Delta and converted them to rice fields with the cooperation of local farmers. The study focused on methods to grow rice that would reduce Dissolved Organic Carbon (DOC’s), Disinfection Byproducts (DBP’s), trihalomethanes (THM’s), and Haloacetic Acids (HAA’s). The DBP’s are regulated by the U.S. Environmental Protection Agency as carcinogenic (cancer causing) and mutagenic (mutation causing) at toxic levels.

Farmers cooperating with the study on their lands included Cal Marsh, Farm Ventures and Knaggs Ranch.

Funding for the study was supplied by California Trout, Knaggs Ranch, the Metropolitan Water District of Southern California, the Resources Legacy Fund, the State and Federal Water Contractors Agency and the U.S. Bureau of Reclamation.

Water shared and re-used, not exploited

Ninety-five percent of the Central Valley floodplain was historically used as Chinook salmon feeding grounds. Farming has diked, drained and altered the flooding patterns of the Delta.

The same 500,000 acres on which is grown 95 percent of the $1.3 billion annual rice crop in California serve as an “inland sea” that holds both ocean and fresh water. Delta water eventually is pumped through the California Aqueduct to Southland cities and Central Valley farms.

Delta water is reused many times over before it ends up irrigating a farm or a homeowner’s lawn. Farmers aren’t exploiters of cheap federal water subsidies as much as they are temporary stewards of the water that grows rice and also serves as habitat for fish and waterfowl.  Farmers now plant short-stature rice varieties and use rice field laser-leveling techniques to use less water.

The U.C. study has huge implications for the pending Bay Delta Conservation Plan. That is because environmental organizations oppose the plan on the basis that it will speed the extinction of the Chinook salmon.

‘Cadillac Desert’ metaphor needs to be scrapped for Delta Plan

The figure of speech “Cadillac Desert” was never accurate, despite its proliferation into the book and film media, academia and pop culture. Even the Los Angeles Times obituary page admitted that Reisner recanted the thesis of his book before his death. After he first published his book in 1986, Reisner was a responsible environmentalist and journalist who joined rice farmers and co-founded the Ricelands Habitat Partnership. He also went into business with rice farmers to make fiberboard from compressed straw.

For water and environmental policy to progress in California’s Delta, the “Cadillac Desert” image of Delta rice farming is going to have to be junked and hauled to the scrapyard as obsolescent. Or perhaps it should be kept as an historical relic to remind us of the folly of setting water and environmental policy on the basis of popular but false metaphors.

Like the 1930’s state water plan, California is stymied in its plan to re-engineer the Sacramento Delta for a massive water project.  The plan includes building a water superhighway interchange that would allow fresh water to run into the Delta to restore fish habitat, while water also would be conveyed underneath the Delta to Central Valley farms and Southern California cities.

But how will the plan be able to surmount the state’s “project killer” environmental law: the California Environmental Quality Act?  Is the only solution to have the project’s Environmental Impact Report conducted under federal rather than state law?  That is the path California’s High-Speed Rail Project and recent fracking regulations have been taking. And it may signal the path the Delta Tunnels and Bay Delta Conservation Plan will have to take.

History is not exactly repeating itself in the Delta, but as Mark Twain once remarked, history sometimes “rhymes.”  What is happening today sounds much like what happened in the 1930’s in California with the Central Valley Water Project.

Central Valley Project as forerunner

California first came up with a Comprehensive Water Plan in 1921, but the Legislature didn’t authorize the Central Valley Project until 1933.  However, California couldn’t finance the bonds for the project in the midst of the Great Depression of the 1930s.  The federal government stepped in to take over the project in 1934.  Construction didn’t begin until about 1939, 18 years after the state water plan was devised.  Today, California has been trying to implement its new water plan for 31 years since the proposed Peripheral Canal Project was defeated at the ballot box in 1982.

The federal Central Valley Project is not the same as the State Water Project, which was built beginning in the 1960s with state bonds.  To give an idea of the magnitude of the CVP, it delivers about 7 million acre-feet of water to farm, cities and wildlife.  About 6 million acre-feet of water go to farms.  An acre-foot of water is enough for two urban households for a year or one third of an acre of farmland for a year.

By comparison, the State Water Project supplies about 1 million acre-feet of water to farmers and about 3 million acre-feet of water to Northern and Southern California cities during wet years, when not blocked by environmental lawsuits.

Not only did federal takeover of the CVP in the 1930s solve its financing problem, it solved the political conflict between farmers and cities.  The CVP became a water superhighway that mainly served Central Valley farms. By contrast, the State Water Project was a high-speed water conduit mainly serving Northern and Southern cities.

Today, the solution to the state’s water issues is to build a water interchange in the Delta with a separate conveyance system for the environment and another for farmers and cities.  Mixing farm and city water with environmental water is like mixing semi-trailer trucks, bike lanes and endangered turtle crossings on the same freeway. It leads to endless conflicts and court ordered water shutdowns.  It is better to put water into separate ditches for each.

In California, water is a socialized system, not a market. But the second-best thing to a market might be separate water systems for cities, farmers and the environment, wherever possible. The proposed Bay Delta Conservation Plan accomplishes some of this.  Good fences create good neighbors and separate ditches minimize water wars. The Delta Tunnels concept of a super water interchange partly puts water into separate ditches and pipes.

Is Twin Tunnels Project on same track as High-Speed Rail?

The harbinger of what may happen with the proposed Delta Twin Tunnels Project is California’s High-Speed Rail Project.  Recently, both Democrats and Republicans have colluded to switch the environmental clearance of HSR from California’s tough green law to the more lenient federal law.

In February, Rep. Jeff Denham, R-Calif., asked the U.S. Surface Transportation Board to determine if it had paramount jurisdiction over the environmental clearance for the HSR Project.  He is chairman of the Subcommittee on Railroads, Pipelines and Hazardous Materials. The STB, chaired by Obama-appointee Daniel R. Elliott III, ruled it had superior jurisdiction over the environmental clearance process.

This means California’s HSR project will be subject to more lenient federal environmental law.  Both Democratic Gov. Jerry Brown and State Attorney General Kamela Harris had been angling for some time to find a way to run around CEQA for HSR.  This now poses the question of whether the only way to get California’s Twin Tunnels and Delta Restoration Plan approved is to find a similar way around CEQA.

California recently passed a pro-fracking bill, SB4, which establishes a threshold criterion for environment review of oil and natural gas fracking projects. If a fracking project stays within the threshold, then CEQA is not triggered.

California’s water projects may “rhyme” but have no reason. Like California’s HSR Project and new pro-fracking bill, a detour may have to be created around California’s “project killer” environmental law for its Twin Tunnels and Water Bond.  Like the 1930s, federal involvement may be the only way to get a water project done in California.

By Wayne Lusvardi

Do we care whether there is a consensus about what to do with the so-called natural resources of the Sacramento Delta among scientists and interest group “stakeholders” in California?  The Public Policy Institute of California thinks so with a new study funded by the Bechtel Corporation, the largest construction and engineering company in the U.S., “Stress Relief: Prescriptions for a Healthier Delta Ecosystem.”

But what good is a general agreement among “stakeholders” and scientists who all stand to benefit in some way from re-engineering the “ecosystem” of the Sacramento Delta?  This persuasion technique is called an appeal to authority, and is considered a logical fallacy.

A consensus of experts and stakeholders won’t help justifying the legitimacy of whether it is fair to ask water ratepayers and farmers to pay for possibly less water from the Delta; or whether statewide taxpayers should pay for making the Delta more livable for popular fish at the expense of less popular fish.

“Everyone tries to make water flow to his mill” — Arab proverb

The PPIC surveyed 225 “delta-based interested parties,” “water export interests,” “fishing and recreation interests,” “upstream water agency interests,” and “Federal and state officials,” to determine if they agreed with scientists about what to do with the Delta’s native fish species.  This report is part of ongoing research that has generated five previous reports on the Delta “ecosystem,” which basically means where fish live.

It is interesting to note that the report describes 95 percent of the 700,000 acres of former tidal wetlands in the Delta as unnatural resources: below sea level “rock-rimmed agricultural islands” protected by levees.

The new PPIC study found there is a consensus among stakeholders and scientists when it came to “stressor impacts” in the Delta:

* Upstream water diversions (for farming and flood control);
* Urban and agricultural water discharges of pollutants;
* So-called invasive species;
* Harmful fish management practices;
* Harmful land alterations.

The experts and stakeholders agree these “stressors” should be reduced or eliminated.

However, scientists expressed that water discharges, bad fish management, and invasive species were more important than did the stakeholders.  And some stakeholders didn’t agree with scientists on the priority of actions to be taken.  Scientists wanted to control habitats, reduce water flow variability, and manage upstream flows into the Delta more than stakeholders did.  While stakeholders preferred to reduce discharges, engineer water diversions, and better manage farm harvests.  This doesn’t tell us much except that farmers would prioritize what they can manage and scientists would prioritize what farmers don’t manage.

A case of “Delta Stress”

The end of the PPIC report encourages building greater public support for a “healthier Delta ecosystem.”  The PPIC researchers use therapeutic language borrowed from the “health, lifestyle, and environmental” movement in California. But fixing the Delta is an issue of cultural values more than it is simplistically reducing what might humorously be called “Delta stress.”  The Delta ecosystem can operate:

* As a cold-water Delta for salmon;
* A warmer-water Delta for bass and catfish;
* An ocean water Delta for halibut, striper, perch or shellfish;
* As a combination of all three.

Calling a salmon-less or smelt-less Delta “unhealthy” is a cultural value judgment and political choice, not a purely scientific issue.

Consensus among experts and stakeholders isn’t going to generate greater legitimacy for fixing the Delta’s natural resources.  Consensus and legitimacy are not the same thing.

Scientists, farmers, fishermen, water agencies and government bureaucrats are not going to agree on priorities.  As the Los Angeles Times summarized the PPIC study: “[T]he consensus seems to be, let somebody else fix the Delta.”  There is nothing new in this finding.  The rule in California is everybody wants public goods but doesn’t want to pay for them.

Socializing — or spreading the costs — to a large number of taxpayers creates the perception that public goods are effectively free to those few who benefit the most from them.  That is often why stakeholders prefer government solutions to markets.  Markets impose the real costs on those who benefit the most from them (“user pays”).

Shhh! The Delta needs modernizing 

“Restoring the Delta” is a misnomer because bringing back sunken farmland and greater numbers of popular salmon fish during dry years isn’t necessarily going to provide a fix for the Delta.  Salmon thrive during wet years anyway.  And reverting the Delta back to an “inland sea” that nearly cuts the state in two parts during wet years is not a fix either. That is why the project to fix the Delta’s natural resources is accurately called “the Bay Delta Conservation Plan,” or “BDCP” for short. The natural resources of the Delta need to be “conserved,” not “restored.”

The Delta needs modernizing, although that word is not as appealing to the public. It is easier to sell “restoration” or “conservation” than modernization. Ever since the coming of monopolistic railroads to California, the state hasn’t seemed to like modernization. It has preferred an image of returning to some bucolic rural past, but without all the droughts and flood damage that came with that. Like it or not, the Delta needs modernizing to meet the co-equal goals of the BDCP of greater water reliability and enhanced fish habitat.

Voters and ratepayers would have to pay about $53 billion for the whole package of Delta improvements: tunnels, habitat re-creation, levee repairs, two new reservoirs and bond interest costs. Statewide taxpayers would pay for the Delta ecosystem and levee improvements; and farmers and Southern California ratepayers would pay for the proposed Delta Tunnels.

CA not short on water, but water conveyance legitimacy 

What is more important than a consensus of experts and stakeholders is whether statewide voters are going to vote for the $11 billion California Water Bond scheduled to be on the ballot next year. Also more important is whether Southern California water ratepayers are going to accept higher water rates to provide possibly less but more reliable water.  Water unreliability has been caused by court-ordered shutdowns of contracted water deliveries to increase popular fish species to the Delta at the expense of unpopular fish species.

The real issue for voters and water ratepayers isn’t a manufactured “consensus,” but whether the massive funding for the project is justifiably legitimate.  Legitimacy, not consensus or money, is more important in any war, even a protracted water war between Northern and Southern California.

By Wayne Lusvardi

The most memorable proverb about California water is: “Water runs uphill towards money.”

But water doesn’t flow uphill towards money only.  If it did, Southern California — which has two-thirds of the state population — would have unilaterally won the water war for the Sacramento Delta long ago.

In California, water flows from the wet North to the dry South only when there is sufficient political legitimacy.  There isn’t so much a scarcity of water as there is justification for conveying it from where it naturally flows and ponds to where it doesn’t.  It doesn’t matter to much of the public that California’s imported water system is socialized. Constituents see local water supplies from the Sierra Nevada as their property.

As long as Southern California is perceived as wasting Northern California water on swimming pools in Beverly Hills and Newport Beach, it will have difficulty gaining political legitimacy to prevail in the North-South political water war.  And as long as pressure hoses have to be used to clean sticky berries on sidewalks from city-planted ficus trees in Pasadena to give artificial union jobs to city tree trimmers, Southern California must overcome the challenge of presenting its own narrow interests as legitimate.

Oddly, California voters passed Proposition 1A in 2008 for “high-speed rail” when what they really needed was a “high-speed water canal.”  Jobs were apparently perceived as legitimate, even though high-speed rail makes no sense and doesn’t really pass any cost-benefit test.  But water for farmers and Southern California cities was considered unjustified in 1982 when both Northern and Southern California both rejected the proposed Peripheral Canal around the Delta to bring water south to farms and cities.

But more recently, the State of Arizona has decided to use or water bank its full allotment of Colorado River water rather than allowing its excess to flow to Southern California.  This has shifted Southern California’s dependence on water imported from the Delta from about one-third to two-thirds.  But this hasn’t apparently changed the public’s perception of legitimacy for taking water from the Delta mainly during wet years when there is a surplus.

The legitimacy tide is changing

The recent vigorous opposition by Northern California to the proposed twin tunnels through the Delta indicates that California is on a fast rack to ram the Twin Tunnels over the public before there is even a vote on the California Water Bond on the 2014 ballot to gain the consent of the governed.

But all this may be changing because of the efforts of five cities in Southern California to eliminate or vastly reduce their reliance on imported water.  A new report by the National Resources Defense Council, “Tackling Water Scarcity: Five California Water Agencies Lead the Way to a More Sustainable Tomorrow,” was released on April 25.

The NRDC report states:

“Cumulatively the City of Santa Monica, City of Camarillo, Ventura County Water District No. 1, Long Beach Water Department, and the Los Angeles Department of Water and Power plan to reduce their demand for imported-Bay Delta and Colorado River water by more than 40 billion gallons per year, equivalent to the amount of water 1.1 million people would use in one year.” 

The City of Santa Monica is planning to be totally water self-sufficient; Camarillo 85 percent self-sufficient; Ventura County Water District No.1 will be 62 percent self-reliant; Long Beach Water Department 46 percent; and the huge Los Angeles Department of Water and Power 35 percent self-sufficient.  They plan to accomplish this fete by a combination of improved water efficiencies, use of recycled water, responsible groundwater management, and rainwater and stormwater harvesting.

Reliance on Imported Water and Total Percentage Reduction 

The plans of the above-listed five water agencies aren’t the only efforts being made in Southern California.

Harvesting desert evaporation losses

The NRDC report doesn’t even mention that a small private company called Cadiz, Inc., located in the Mojave Desert, is in the process of creating water literally out of thin air by harvesting water off natural salt flats before it evaporates.

This water will be transported through re-use of abandoned natural gas lines and existing water pipelines to the Santa Margarita Water District in Orange County, Suburban Water Systems in Irvine, Golden State Water Company based in East San Gabriel Valley, the Jurupa Community Services District in Riverside County, and the California Water Service Company in San Jose.

An emerging prospect for water “legitimacy coalitions” 

There is the emerging prospect of water “legitimacy coalitions” forming between Northern and Southern California due to efforts to gain full or larger water self-sufficiency of the five water systems cited above.  Perhaps Northern Californians would realize that it would be mostly excess water that would be shipped southward during wet years from the Delta.

Ironically, it is environmental activist groups that are often opposing such efforts at water sustainability.   But as Southern California cities gain more political legitimacy for water sustainability efforts, the legitimacy of oppositional environmental organizations will decline. Even successful and amply funded social activists need to seek external sources of legitimacy.

Conveyance

“An unjust king is like a river without water” — Arabian proverb

California may not have a water scarcity problem as much as it has a water conveyance legitimacy problem.

California’s water war is being slowly won as Southern California cities and private water resource development companies gain public legitimacy, even as support for environmental activist organizations declines.

By Wayne Lusvardi

Those who want to settle the water wars over the Sacramento Delta by first restoring “trust” rather than implementing the adopted law of the Bay-Delta Conservation Plan should take the advice of comedian W.C. Fields: “You can’t trust water. Even a straight stick turns crooked in it.”

University of Pacific law professor Gregory S. Weber just wrote an article,“The Big Divide Over Water: Mistrust is Top Obstacle to Repairing the Delta.” He contended that the main problem impeding the proposed Sacramento Bay Delta Conservation Plan is “gut level mistrust among the stakeholders.”

However, this is an odd statement from a law professor because the social function of the law is to not rely on trust. If the historical water wars in California have proven anything, it is that law has been a better vehicle, although sometimes flawed, than trust to settle water disputes.

Secondly, Weber calls Northern Californians “stakeholders” even though they may have not established any legal rights over water in the State Water Project.  A “stakeholder” is typically defined as someone who has deposited money depending on the outcome of an unsettled matter. Northern Californians are no more stakeholders in California’s socialized water system than Central Valley farmers or Southern California cities, and vice versa.

Law mandates co-equal goals

As currently put into law, the Bay Delta Plan calls for co-equal goals: 1) repair the Delta ecosystem mainly for fish and 2) improve water supply reliability.  That’s the law, not some nebulous trust.  However, different “stakeholders” likely will fund each of those two goals.

What the “Water Reliability” half of the Delta Plan would do is build tunnels to take water through and under the Delta “lake-bed” to Central Valley farmers and Southern California cities. The purpose of the tunnels would be to backfill some of the water lost to Southern California due to the State of Arizona deciding to finally take their full allocation of Colorado River water, rather than letting it flow to California.  The only replacement water source is the Delta.

The Water Reliability half of the Delta Plan would be 100 percent funded by the state and federal governments, Central Valley farmers, and Southern California water districts.  Northern Californians are not “stakeholders” in this part of the Delta Plan because they haven’t ponied up any funds for it. But Weber erroneously says they are “stakeholders” in the tunnels.

The “Repair the Delta Eco-system” half of the Delta Plan involves re-routing flows of fresh cold water over the top of the tunnels. This would rehabilitate the Delta eco-system for freshwater fish.  A tentative $9 billion general obligation bond to be put to the voters in 2014 likely would fund this second half of the Delta Plan. Thus, all water ratepayers in the State Water Project are potential “stakeholders” in the Eco-system Restoration part of the Delta plan.

Consensus failed

Weber is correct that, for over a decade, California sought a misguided “consensus” on a solution to the Delta under the Cal-Fed Bay Delta Program. But that plan, based on “trust” of the parties, failed miserably.  A mix of fraud, force, and consent of the governed — not consensus or trust — have held California’s historic water social contract together.  The elements of this contract entail Northern California giving up water to Central Valley farmers and Southern California cities in exchange for Delta flood protection, cheap hydropower and thermal power, and some potable water for themselves.

Incredibly, Weber now wants to unwind the adopted Delta Plan law first to establish “trust” by offering to serve as “mediator.”  Trust — or consensus — never  has worked to resolve the Delta water wars. Undoing the Delta Plan law now would be improbable.  Nonetheless, Weber suggests that Delta Plan should be reversed with a ballot initiative. This would just re-ignite the water wars, resulting in a greater deterioration of trust.

Better feared than loved if that is only choice that works

I agree that both Northern and Southern Californians will have to trust that co-equal goals of the Bay Delta Plan don’t “cut the baby in half.”  But for decades, California water policy makers tried “trust” and “love” and it didn’t work.

To paraphrase Machiavelli, it would be ideal if the Delta Plan could be both loved (trusted) and feared, but if a choice must be made, then fear is best.  But because circumstances have forced a choice, it is better to be feared even though this breeds mistrust with the outcome by both sides.  It will be up to the Delta Stewardship Council to navigate a course based on the rule of law that avoids hatred on the one hand and mistrust and contempt on the other.

By Wayne Lusvardi

You probably read the news headlines this past month on the Delta smelt fish with curiosity about what was really going on:

* “Delta water diversions reduced to protect smelt” — Feb. 11;

* “Once again, water supply cutbacks show need for new approach” — Feb. 12;

* “Water supplies curtailed to protect Delta Smelt” — Feb. 13;

* “Smelt threat eases, so pumping in increased” — Feb. 15.

The smelt is a tiny minnow-like fish that lives in the mixing zone — called “X-2” — between ocean saltwater and fresh river waters in the Sacramento Delta.  It is the perfect symbolic device to fight a water war.

You may ask: Why shut down the pumps on the Delta to protect the smelt when, in 2010, a federal judge ordered that the pumping be resumed and the artificial drought ended? He found no scientific basis to shut down water shipments. Environmental agencies and organizations had asserted the smelt was endangered.

Answer: Because the smelt is a political football. And political issue that in intentionally left unresolved for many reasons. In the case of the smelt, the reasons are:

* Environmental organizations can advocate that more smelt habitat be preserved, ergo also more environmental jobs preserved.

* Water agencies can exploit the curtailments of water through the Delta as justification for higher water rates or for the need for the construction of the Delta Tunnels to bring water to Central Valley farms and Southern California cities.

* Politicians and water agencies from both Northern and Southern California may use the smelt as a political symbol to draw voters to the polls to vote for or against the Bay Delta Conservation Plan or the Delta Tunnels.

* The public may not want to pay for the total $39 billion package price to upgrade the Delta water system ($14 billion for tunnels; $11.1 billion for the proposed water bond; $10 billion for Delta habitat re-creation; $4 billion for Delta levee repairs).  So divert the public’s attention to each sub-project by using the political symbol of the Delta smelt.

* The tiny smelt is the proverbial “little guy” who is just like many voters who feel alienated and powerless to change their fate, needing government to protect it.

Proxy water war

In a proxy water war fought as a game of political football, either side can take the smelt issue and “run with it” or “try to score points.”  Sometimes issues are “fumbled.”  Other times one side may decide to “quick punt” the issue to their opposition.  Or one side “intercepts” and scores a quick “pick six.”

All the low-information voter typicall wants to know is: “Is my side — Northern or Southern California — winning?”

Can you play a game of football without a football?  And can you engage in a water war without a political football to kick back and forth?  That is why the smelt is such an important issue to both sides in California’s forever water war.

In the real life sport of fishing, lures are sold that look like the tiny smelt to attract larger fish.  So if the newspaper and Internet headlines about the Delta smelt are ambiguous, just remember that the smelt is a lure for your vote and your taxes — and beyond that, for symbolic water war for overall prosperity.

Unlike sports, both sides have to win for prosperity to come about.  The politics of extremism is a “lose-lose” proposition.  So you can root for the home team. But remember, both sides have to give up something to win in the prosperity game.  That is why wealth is more prone to be created by markets than by coercive government, where the winner takes all.

And if one side wants farmers and big cities to get half the needed water — but pay for everything so the other side gets free levee repairs, new recreational and commercial fishing amenities, new tourism venues and jobs, and the lion’s share of the construction jobs — then the game is likely to end up in a stalemate and the protracted water war will continue.

Voluntary water transfers are one way to create prosperity without a government-induced economic bubble.  Whatever the outcome of the proposed Bay Delta Conservation Plan and the Delta Tunnels, it should take a clue from private water transfers as to what works best for all.

by Wayne Lusvardi

Just as Hollywood often remakes old movies, water engineers apparently rehash old forgotten plans to refashion the Sacramento Delta.  And then the proponents call these plans “new” and “cheaper” alternatives.

Water engineer Robert Pyke has gotten a lot of media attention recently for his  “Delta Tunnel Alternative Plan.”  Pyke’s plan is called the Western Delta Intakes Concept.  Pykes plan:

* Was proposed at the eleventh hour after $150 million had recently been spent on Delta studies.  Pyke’s plan ignores the 1,051 comments received by the Delta Stewardship Commission about alternative concepts for conveyance of water through the Delta;

* Is supported by a northern California water lobby, Restore the Delta, disguised as an environmental advocacy organization;

* Also has a tunnel concept.  Any above-ground canal would require very high embankments to protect the canal if a Delta island became inundated, and would have to be very wide to provide support;

* Has no detailed cost estimate other than the unsubstantiated and self-serving claim by Pyke that it is a cheaper alternative.  A similar plan studied in 1997 was two to three times the cost of an isolated eastern canal;

* Even if it had lower construction costs it would likely mean more pumping costs;

* Would likely mean more salinity, resulting in lower quality exported water and higher downstream water treatment costs;

* A key component of Pyke’s plan — a permeable fish screen — would eventually silt up and be useless.  A prior 1997 plan to use the Sacramento Deep Water Ship Channel to divert water did not provide sufficient “fishery benefits”;

* Would likely result in seepage on adjacent islands resulting in damages to landowners;

* Would eliminate reverse-flow impacts in the central and south Delta, but would not supply fresh water into the extreme eastern Delta.

The Pyke plan calls for a water intake in the western Delta near higher elevated uplands and intertidal areas.  It would be analogous to depending on water only during unusually high tides, instead of on water at low tides. Pyke’s plan is a thinly disguised way for Northern California water interests to keep more water in the Delta by only exporting water to Southern farms and cities when there is a very wet year. Pyke’s alternative would still leave farmers and Southern cities at the mercy of the rainfall cycle.  Thus, it would do little to solve so-called “climate change.”

And this “new” plan is just a rehash of several plans proposed from the 1950s up to 2008.

Rehash of old plans

Pyke’s plan apparently is an undisclosed rehash of:

* The 1957 and 1960 proposed Western Delta salinity control facilities authorized under the State Department of Water Resources Bulletin No. 60 in compliance with the Abshire-Kelly Salinity Control Barrier Act of 1957;

* The Montezuma Hills Canal Plan of 1977;

* The “isolated conveyance alternative 3G” proposed in 1997 as part of the old CALFED Delta Plan;

* The Sacramento Deep Water Ship Channel plan proposed by the Department of Water Resources in 2001;

* The Isolated Conveyance Plan for a proposed isolated conveyance as part of the Record of Decision (ROD) of the CALFED plan 2008.

Pyke’s plan is anything but new. And like all plans for refashioning the Sacramento Delta, it has already been “studied to death.”

If the current Bay Delta Conservation Plan does not pass a cost-benefit test, Pyke’s Western Delta Intakes Concept would be even less-cost effective. Even if it were a cheaper alternative, it would only deliver water sporadically on an unplanned basis. It would put Central Valley farmers and Southern California cities in a permanent state of drought.

In short, there would be no reliable water supply from such a plan.  Without a dependable water supply, farmers could not get financing to produce crops.  And there would likely be hidden costs, such as higher pumping and water treatment costs and increased need for downstream water banks and conjunctive use basins.

New plan does not provide a solution

Mike Wade of the California Farm Water Coalition commented on Jan. 17 on his blog:

 “This is not a new proposal. It has been part of the project review documented all the way back to last March and can be found here. Proponents of this “new” proposal have taken the current two-tunnel project and cut it in half to only one, reducing its ability to deliver water to farms that need it now and to meet the future needs of cities later, as the article describes. They’re also proposing a reduced ecosystem restoration program in the Delta, cutting back more costs but also reducing the effectiveness of those projects for the environment. Under the guise of cost cutting they have dramatically swept aside years of study that have resulted in the two-tunnel proposal. On the eve of the plan’s formal announcement, this plan suddenly is being shopped as a new idea. It’s not.

“The ‘new’ proposal does not provide a solution to a broken water supply system that threatens our state. This editorial admits that it will not answer long-term needs. Water supply reliability has declined, affecting everyone from urban residents through higher water costs to the farmers that grow fresh fruit and vegetables destined for the grocery store.  The end result is fewer locally grown food choices and higher food costs, all at a time when the economy is just beginning to recover.

“Significantly absent from this group of environmental organizations and business groups are public water agencies that represent large areas of some of the state’s most productive farmland. Not surprising, this ‘new’ proposal would be devastating to farmers in California’s San Joaquin Valley, home to some of the most productive farmland in the world. 

“Planning for a reliable water supply must continue to move forward.  … [A] smaller approach that ignores the needs of California’s farm community is a step backwards and is the wrong choice for California.”

The newly proposed alternative Delta Plan is like watching the remake of an old popular Hollywood movie.  And this remake is way over budget and is flopping at the box office.

By Wayne Lusvardi

Members of “Restore the Delta” have recently accused Gov. Jerry Brown of telling a “whopper” that fixing levees in the Sacramento Delta is not feasible.

Brown’s accusers are: Robert Pike and Barbara-Barrigan Parilla.  Pike is a consulting engineer and Parilla is director of “Restore the Delta.”

Pike and Parilla say it is a whopper that Delta “levees are in imminent danger of collapse from earthquakes or other events.”  They believe that an earthquake is a bogeyman used to justify the building of the proposed Delta tunnels.

By the term “Delta tunnels” is meant twin tunnels that would bring melted snowpack water from the Sierras under and through the Sacramento Delta. The tunnels would be constructed instead of a canal on the ground surface that would go around the Delta (a “Peripheral Canal”).  The tunnels would convey water to farmers in the Central Valley and to cities in Southern California.

Pike and Parilla may be right about Delta Plan proponents using an earthquake as an overblown scare story to build the tunnels.  But that is not the main reason for proposing what might seem as an absurd notion to convey water in tunnels under the gigantic lake of the Delta.  Why would anyone want to transport water under a lake in the first place?  Why not just pump water from the other side as they do now?

And who cares if fixing levees is feasible?  What does strengthening levees have to do with the dual goals of the Bay Delta Conservation Plan of environmental restoration and the increased reliability of exported water?  Or are levees a “red herring” diversion from what should be asked? 

Restore Salmon Runs, Not Levees

Fixing the Delta for both water agencies and fish means restoring more of the east-to-west flow of water from the mountains to the sea.  This would allow salmon to spawn upstream in fresh water and then migrate back to the saltwater sea.  So diverting some water upstream to flow under the Delta would enhance east-west water flow.

Today, water is pumped southward from the south end of the Delta to farms and cities.  This interrupts the natural east-west flow just as pulling the plug on a bathtub pulls water toward the drain.

The only way to convey water from North to South, so that it does not interfere with East-West flow, is in a separate conveyance facility: a peripheral canal around the Delta or tunnels under the the Delta..

Under the co-equal goals of the Bay Delta Conservation Plan, it is supposed to split the difference between East-to-West for fish and North-to-South for people.

In fact, water is stored upstream from the Delta by the State Department of Water Resources and the U.S. Bureau of Reclamation so that Delta levees are less threatened by flooding.

Levees are a Diversionary Issue

Strengthening levees has nothing to do with real Delta fish “restoration” per se. Delta restoration would literally mean removing the levees and returning the Delta to an Inland Sea like it was 150 years ago.  The pre-levee Delta occasionally suffered from disastrous floods that destroyed both human and wildlife habitats, including fish. The issue of levee feasibility is meant to divert attention from the real ecological restoration issue.  What the Delta Plan is all about is the modernization of the Delta so that it works for both fish and people.

What half of the Bay Delta Conservation Plan is about is the restoration of the East-West flow of water so that it doesn’t impede the natural course of fish migration.

So why would Pike and Parilla raise a diversionary issue of levee feasibility that has nothing to do with restoring fish migration routes?  The answer seems obvious.  They want to shake down farmers and cities to fix Northern California levees as a condition of approving the Bay Delta Plan.

Brown has properly called their bluff.  Spending huge sums upgrading all levees that may or may not be damaged in an earthquake is not cost-effective.  Anything can be engineered if cost is no consideration. Levees located on land that is prone to liquefaction can probably be engineered to withstand most earthquakes. But the cost would likely be astronomical. It would be more cost-effective to try to engineer locks that would prevent seawater intrusion into the Delta than to try to unrealistically upgrade levees from collapse.

Big Ag Bogeyman

Pike and Parilla float some “bogeymen” of their own: “Big Agribusiness.”  This is not too wise a move since Central Valley farmers are needed to pay their share of the Bay Delta Plan costs through higher water rates.

Southern California cities could finance the Delta Plan alone. But that would entail about a $240 per year water rate hike for all their water ratepayers, including households, by this writer’s estimate.  And it would mean providing a gift of more reliable water to Delta farmers and water users at the expense of higher water rates on Central Valley farmers and Southern California cities.

Central Valley farmers could not likely pass higher water rates through to the retail buyers of their agricultural products.  This is because agriculture is now a globalized business and cheaper foreign imports would put them out of business.

Farmers have indicated they may be willing to absorb their share of the Bay Delta Plan costs. But they would do so only under the condition that they would not be subject to any future environmental lawsuits.  This is what is called “regulatory assurance.”

The payoff of any bonds issued to finance the Delta Plan could not be secured unless environmental lawsuits were held in abeyance.  Without assurances of no green lawsuits, bond underwriters would have to charge something like 20 percent interest rates to recover money for investors quickly.  Or bond underwriters would just have to refuse funding the Delta Plan.  This might be the hidden agenda of environmentalists and northern California special interests.  But it doesn’t serve the greater public good.  Southern California in particular needs a reliable water supply.

Enviros are Blocking a Solution to the Delta Environment

So it is odd.  Environmentalists are the ones blockading any environmental restoration of the Delta fish migration routes.  And northern Californians are just holding everyone hostage until they can raise the Delta Plan costs so high that it would reduce the chance it would ever be built.  This is a problem of the California Environmental Quality Act: it can be used to hold any project hostage and increase mitigation costs — such as levees — so high that the project is not economically feasible.

The enviros are perpetually willing to sacrifice the Delta for fund raising.  If they had not fought the Peripheral Canal in 1982, the Delta ecology would be much better off today.

The consequence of a centrally re-plumbed Delta is that only the highest cost alternative — tunnels instead of an outer canal — can be built.  The Delta Plan would be much less likely to be able to be financed, with environmentalists driving up the costs.

Markets, on the other hand, are mechanisms to find the least cost. Many natural resource economists say the best way to conserve water is to merely raise its price: to tack surtax on water.  But we are witnessing a “blue sky” $50 billion-plus total cost for a new Delta water system that is rendering it economically too costly.  Nothing can be built when the costs are limitless.

For example, water agencies have already spent $150 million on environmental studies to tell us what we already know: water has to be allowed to flow to the sea to restore salmon runs.

Despite Brown rejecting levee upgrades as part of the Delta Plan, financing for the project remains a “whopper” fish story anyway.

If the Delta Plan fails, the California water system situation would go back to the stalemates experienced with the Peripheral Canal vote of 1982, the inaction of the Bay-Delta Accords and the Cal-Fed Plan of 1994.

In California, some political Progressives want to move ahead with a newly engineered Delta water interchange.  Other Progressives want to use “restoration” slogans to stop the Delta Plan or make its costs prohibitive in order to halt population growth.  The California Constitution declares all water in the state to be commonly owned by everyone in the state and that it is supposed to be put to beneficial use.

Granting Southern California state water agencies the power of eminent domain for subsurface tunnels could be one way to simply solve this political logjam. And granting waivers of the environmental impact clearance process in return for the greater ecological benefit upon completion of the Delta Plan might also be considered.

Anything short of complete authorization of the Delta Plan and its accompanying Water Bond, or the alternative proposed above, would regress the implementation of the Delta Plan back to merely telling “whopper” fish stories.