This ag-to-urban, central-to-southern California sale upsets enviros. Why?
- WWD has been making A HUGE FUSS about how it needs MORE water. How is it possible now that they can be selling water? (Short answer is that WWD has to sell it, to avoid losing it from storage; the long answer is that WWD will eventually sell ALL of its water to SoCal urban buyers. No, it's NOT about the workers, food or community. It's about MONEY.)
- MWD's water has driven SoCal sprawl, and more water means more lawns at MWD and more sprawl into new housing developments.
- Some enviros just dislike WWD (and other irrigators using imported surface water); they want it shut down and its water left in the environment/Delta.
OTOH, I am not happy about this (prospective) sale:
- WWD water is subsidized.That means that price may be too low and profits come out of our pockets.
- A backroom sale does not allow others to bid. That's not good from a social perspective.
- Feinstein and other politicians are writing special rules, changing the definition of water rights to make them worth more cash -- and more water -- when we have already overallocated our water supplies. These special interest giveaways merely rob The Public a second time.
Bottom Line: Water trading is good, as long as the good for sale is clearly owned and the price reflects its real cost.
* It's interesting that they are talking about a water swap -- 3 af today for 2 af in the future -- instead of a cash sale. The swap makes sense for three reasons: (1) They do not want to haggle over price (except that "net af" of water), (2) they do not want the public to know how valuable the water is if it WAS priced, and (3) they do not want to worry about cash flows. OTOH, the swap creates a long term relationship (good!), but also creates uncertainty. Will MWD be able to return the water in the future? What if it's dry for 5 years and MWD needs the water for toilets, showers and lawns?
Addendum: Tom Birmingham wrote me an email on this post, and I am waiting for him to let me post it as a comment. Until then, the gist of his comment is that this is a swap, not a sale, and that MWD has the storage space to let it happen. I replied that this swap seems a poor substitute for a market (in which WWD and MWD would be able to buy and sell when and if they wanted), but a necessary substitute given the current distribution of water rights -- a distribution that favors WWD and MWD over other water users.