1 Dec 2008

Reconsidering the Peripheral Canal

I supported the Peripheral Canal [here and here], saying:
The combination of higher sea levels (global warming), earthquake risk and dodgy levees (really dikes) means that the Delta ecology is going saline and farming will end.

Combine this "soon to be fact" with the political necessity of continued water exports (otherwise agriculture in the south Valley will end as water is diverted to cities), and we arrive at the "Peripheral Canal Solution".
But things look different now that I've read an analysis of the PPIC report by Jeff Michael (professor at University of the Pacific*). Michael highlights two assumptions that weaken the bottom line in the PPIC report (and my conclusions):

First, PPIC overestimated the 2050 population of California (at 65 million). An adjustment to realistic population levels (under 60 million) would mean that the benefits of exporting water from the Delta to SoCal are lower.

Second, PPIC overstated the cost of desalination (at $2,072/AF -- in constant dollars, I assume). Now we know that desal currently costs $1,200-1,500/AF, a cost that will rise with energy prices (and they will rise!) and will fall with technology (and that will happen!). Thus, an adjustment to more realistic (lower) desal costs would make it cheaper to replace "lost" water.

These two problems, taken together, flip the cost/benefit ratio from favoring the Peripheral Canal to ending exports from the Delta to SoCal.**

Now, I don't consider ending exports to be politically viable (see my words above), but I do agree that the economic argument in favor of the Peripheral Canal is much weaker. (The environmental argument for "no exports" has always been strong.)

To add a little more weight to Michael's argument, consider how "south of the Delta" people are now dealing with the short-term, de facto ban on exports:*** They are trading more, changing crop patterns, raising prices, etc.

If exports ended permanently, they would do the same things (and more, with more intensity). I wonder, in fact, if ending exports -- politics aside -- would really mean the end of the world. After all, urban SoCal uses roughly 4 MAF/year and "local" supplies (the LA aqueduct, local rainfall, and the Colorado River Aqueduct) can cover at least half of that.

The BIG missing piece is water currently allocated to agriculture -- especially ag in the southern Central Valley and near Imperial Valley; see post above.

As the PPIC authors remark, the unplanned end of Delta exports would mean the end of ag in the southern valley (as their water was seized/sold), but it would also put pressure on IID et al. to sell to cities.

What if exports ended on purpose? The results would be very similar. I am sure that competition over water in SoCal would raise prices and eliminate about half to two-thirds of ag (by water use, not value), but it would not be the end of the world.****

What's left to prevent this outcome? Politics. But "we need the Peripheral Canal to support agriculture" isn't quite as sexy as "...to keep the kids in LA from dying," is it?

[BTW, I still think that farming the in Delta will end (should end) when the levees break -- if not before.]

So, yeah -- I am reversing my position in support of the Peripheral Canal. I now think that Plan B (end exports) should be Plan A. Political delusion, corruption, cynicism reality aside, the economics are not clear, and SoCal can manage with its existing supplies -- via markets and higher prices, of course.

Bottom Line: Let's not be overhasty in allocating $10 billion to build that canal. There are cheaper and better ways to reform water allocation in the State.
* UoP is in Stockton (i.e., far from the Pacific) but in the middle of south-of-the Delta farm country, which makes his analysis all the more remarkable.

** Michael is so sure of his numbers that he's offered to bet the PPIC folks (a la Simon-Ehrlich) that desal will cost less that $1,000/AF before the State population reaches 46 million. I'm with him on that!

*** Not really, but they are pretty low. 2008 SWP deliveries were 35% of contracted amounts. 2009 deliveries are forecast [doc] to be 15%.

**** Typical statement by an academic blogger :)

4 comments:

  1. Interesting reasoning, and also pragmatic to realize that ending Delta exports ain't going to fly politically. So we are still left with the canal as the safest and most flexible way to restore Delta health.
    It is very encouraging to think de-sal costs might come down so far so fast. A largely overlooked use of de-sal is to clean up agricultural drain water so that it can be used for irrigation again. This solves two problems, and since the amount of salt that needs to be removed is so much less than that which needs to be taken out of sea water, it should be a less costly process. It long has been my hope that municipalities might pay for the necessary desalination of some west side agricultural runoff. In return, they could get more of the water delivered through the Delta. Having that plumbing in place makes it possible for more buyers to reach more sellers, and that is a good thing, in the long run. In the short run, a catastrophic levee failure would lead to panicked and environmentally damaging responses.
    The sooner we realize that a fair portion of Delta agriculture is doomed, regardless, the sooner we can move on.

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  2. As counsel for the South Delta Water Agency I appreciate your honest evaluation and comments. I believe the issues are much broader than outlined by PPIC. The choices are not limited to ending exports OR building the PC. The real choices are to apply the laws protecting fisheries and water users, decrease exports as necessary and focus on finding additional supplies for areas of shortage. The question of whether the Delta is "doomed" due to sea level rise, though related, is outside the scope of the current debate. The statutes governing fishery protections don't allow someone to decide "I think the conditions in 50 years won't support a species so I can act in a manner that destroys the species now." If society wants to be able to make such decisions, radical change to the laws must be done now. Our reclamation district engineers tell us we can maintain the Delta even with sea level rise. Hence contrary to PPIC, there is a debate about how or whether we can preserve the current configuaration of the Delta; and thus no basis for allowing species to die off because "it's inevitable." Also part of the debate are the ongoing violations of water quality standards; being alowed not because they can't be met, but because export interests choose to ignore the law. The PC will necessarily result in the southern and central Delta salting up to the point where ag disappears and habitat unalterably changes. Such results should not follow from decisions based on the idea that "well, it's doomed anyway." Again, I appreciate your analysis. FYI, the PPIC reports are full of many more "errors" than just the population and desalinization "mistakes." JOHN HERRICK

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  3. By "a fair portion" of the Delta being doomed, I was referring to the peat soil regions, where oxidation of the soil (which is sometimes misidentified as subsidence) combined with weak old levees, makes it a pretty dubious proposition to keep hoping something will change. The cost/benefit is just not there, as far as I know (and I am certainly no expert; I am perfectly willing to be proven full of beans).

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  4. Good post, but it is not appropriate to call for an end to Delta agriculture or to say it is doomed. Farming is sustainable in much of the Delta, where many farmers have been good land stewards for over a century. The Delta produces valuable crops in an area with local water supplies that don't have to be shipped from elsewhere. While levees need to be maintained, they are in nowhere near as bad a condition as the peripheral canal proponents would have you believe. Family farms in the Delta should not be grouped with the larger unsustainable farming operations in the San Joaquin valley.

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