4 Feb 2014

California drought update

First, Governor Brown said*
State agencies, led by the Department of Water Resources, will execute a statewide water conservation campaign to make all Californians aware of the drought and encourage personal actions to reduce water usage. This campaign will be built on the existing Save Our Water campaign and will coordinate with local water agencies. This campaign will call on Californians to reduce their water usage by 20 percent.
That website is devoted to residential water use, so I take this to mean the same as the 20x2020 campaign, i.e., it says nothing about agricultural irrigation, which accounts for 80 percent of the water people use.**

Second, the aggies are in trouble because State Water Project deliveries are now pegged at 0 percent. That has make markets for water attractive for buyers and sellers. One district is already offering water at $600/af, or about 3-20 times as much as farmers are used to paying. One columnist complains of "champagne prices," but that's what you get with markets, supply and demand.

Third (addendum), some water managers are talking criminal penalties for people who violate conservation regulations. Seems like a recipe for abuse of customers by water cops, corruption and wasted resources (remember that San Diego's water cops cost $75k+ each). How about raising prices?

Bottom Line: Markets are responding to the drought, even if the politicians are floundering.

* He also ordered more firefighters to be on duty. The State was successful in hiring more firefighters. Woo hoo. It's always easier to buy than sell.

** It's pathetic predictable that nothing has happened on ag water since I wrote that in 2009.

H/Ts to CM and RM


Mr. Kurtz said...

At least on the sell side, the district is using a sealed bid process, which is encouraging. They ought to do an all in or Dutch auction on the buy side, but I guess they are not ready for that. The BVWSD has senior rights on the lower Kern, augmented by a pretty well operated (that is to say, governed by safe-yield thinking) well system. It is largely bottom land, so there are not a lot of permanent crops. I suspect that the growers will use alfalfa acres as their flexibility, since the crop can go without water for extended periods without dying. Since the District will likely get far less than their "legally guaranteed" deliveries, a lot of growers will have to fallow land anyway. Thus the $400, even though it is less than what decent crops might deliver, is better than zero, which is what you get with no water.

It's going to be a wacky summer. Prices for things like alfalfa and melons may go through the roof. People are going to go into Safeway and see weird brown veggies from Texas or Guatemala.

JBD said...

Re; Criminal penalty talk. In Sacramento the City is recruting neighbors to turn in neighbors (i.e.; if sprinkling on a weekday). A local television station has their own a hot line so people can give anonymous tips that they will investigate.....

Reminds me too much of what my Mom said was one of the worst aspects of the centrally controlled Soviet economic system she escaped from to come to America......turning neighbors and children into State informants....

Not that anyone is being sent to "re-education" camps here; but, in both cases less central control and more free economics seem like a better way to achive happiness and prosperity.

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