California's Subprime Water Problem

Recently, the Bureau of Reclamation increased its water supply allocation for agricultural contractors south of the Delta to 45% of their maximum contract amounts.  Although 2010 is classified as a “below normal” water year type, and reservoirs started the year with low storage after 3 years of drought, the Bureau already had announced that most other agricultural and municipal contractors would receive 100% of their maximum contract allocations.  So the recent announcement is particularly good news for Westlands Water District and other large agribusinesses south of the Delta thathold CVP contracts.  In fact, Westlands is projecting that it will have 885,000 acre feet of water this year -- the equivalent of at least 70% of their maximum contract amount -- when you include the water that they have acquired through transfers and have carried over from last year, not to mention the 135,000 to 200,000 acre feet of ground water Westlands states they can safely pump each year. 

After three years of drought that dramatically reduced water allocations, Westlands appears to have a surplus of water this year: they are actually projecting that they may have up to 350,000 acre feet of water left unused at the end of the year; some landowners in Westlands are selling water this year; and Westlands apparently is declining some water transfers that were being arranged through the Bureau of Reclamation earlier this year, when it looked like California was going to endure a fourth year of drought.

Unfortunately, what’s good news for the large landowners in Westlands may not be good news for farm workers on the Westside, as Alegria De La Cruz’s recent article makes clear.  There’s no question that the past several years have been very tough in this part of the Valley, but it seems that broader economic forces, rather than water supply issues, are the cause (particularly given the high unemployment in many of these communities in both wet and dry years).  Addressing these underlying social and economic concerns – sustainable wages for farmworkers, clean drinking water for all communities, better educational opportunities, and the like – needs to be a priority.

Ultimately, much of why California seems to have a water supply crisis is that the state and federal governments have contracted for far more water than the Projects can safely deliver.  As the Environmental Protection Agency recently noted, the SWP and CVP together have never before delivered the maximum contract allocations: compared with 7.4 million acre feet in contracts, the most that the Projects have delivered was around 6.3 million acre feet. 

There is no question that water exports from the Delta by the SWP and CVP have been reduced substantially in the past few years as compared to the unsustainable levels seen in the early 2000s, primarily due to drought.  But as the drought ends, water exports from the Delta will on average return to the level of Delta exports that occurred in the 1990s, before the massive increase in Delta pumping that seems to have precipitated the collapse of fish populations in the Delta. 

Like the subprime mortgage debacle, the CVP and SWP have promised more water than they could deliver, and while things looked ok for a little while, they’ve since collapsed.  In both cases, regulators failed to act before things got out of control.  And in both cases, now we’re essentially back where we started (or worse off than before – certainly true for the fish, and for fishing jobs that depend on them).

And if things seem bad now, they could get a whole lot worse: the State estimates that climate change will substantially educe Delta exports in the coming years, by as much as 25% by 2100, and the State Water Board has acknowledged that water rights exceed average actual water supplies in the Bay-Delta watershed by as much as 800%.  We’re already seeing water users suing other water users over scarce supplies on the Colorado River and in the so-called Area of Origin lawsuits in the Bay Delta watershed, and climate change and the overallocated water rights are likely to mean more fights between water users in the future.

The good news is that there are solutions to these problems.  California can meet the reasonable water needs of farmers and cities while sustaining our rivers and the environment by reducing reliance on the Delta and investing in a 21st Century water policy of water efficiency, water recycling, groundwater cleanup, stormwater (and rainwater) capture, and similar alternatives.  At the same time, the Bureau of Reclamation must reform expired CVP contracts to include realistic (and reasonable) water quantities, so water users can plan and invest according to a realistic set of expectations (while continuing to invest in alternative supplies to complement their CVP contract allocations). This Virtual River of drought proof supplies will sustain California, if we choose to invest in it.  It sure seems like a better investment than betting on California’s subprime water to suddenly boom again.