WaterWired

Are California's Water Laws Being Enforced?

Lloyd G. Carter, whose blog has the wonderful title, Chronicles of the Hydraulic Brotherhood, has a recent post in which he asks, "How about enforcing current water laws?" That's certainly a reasonable inquiry.

He begins:

 

Seventeen years ago, Patrick Porgans and I co-authored an article that ran at length in the Forum section of the Sacramento Bee. We argued then that new and proposed state and federal water marketing changes would enrich some people "by turning [publicly-owned] water into a freely transferable commodity."

Sadly, as proven by a recent below-the-radar $73 million water transfer from a small irrigation district in the western San Joaquin Valley to an urban district in the Mojave Desert, time has proven us right. Profiteering by buying cheap water from the public and selling it to the highest bidder is now making small groups of people enormously rich, to the detriment of farming, the Delta, and the state treasury.

An appropriate post for the holiday season, when gift-giving abounds.

Give it a read.

 

And here's a letter he wrote to the New York Times in 1996. I keep thinking: the more things change, the more they remain the same.

 

"In regard to the identified illegal diversions, although I am obviously aware of them, the Division has not taken follow up action because of a lack of resources." - Vicky Whitney, Chief, Water Rights Divsion, California State Water Board (quoted in the article)

Asit Biswas: Pricing is the Answer to Global Water Crisis. Will That Be True in the Future?

Asit K. Biswas, 2006 winner of the Stockholm Water Prize (the closest thing we have to a water Nobel Prize), is interviewed in Forbes (the picture is from the article) about the global water crisis. A similar story published last month in Wend Magazine can be found here.

Thanks to David Zetland at Aguanomics for alerting me to this story.

Biswas, who has had a long, distinguished career in water, now runs his own water think tank, the Third World Centre for Water Management in Mexico City.

No water crisis? There is, but it is not one of scarcity -  just mismanagement. There is a lot of truth in what he says.

Here's how Megha Bahree's story begins:

Asit Biswas loves to tell the story of the Phnom Penh Water Authority. It was 1993 and a new manager, Ek Sonn Chan, had been appointed to the then bankrupt utility. Of the water that it piped from its reservoirs, 72% disappeared without ever being paid for. Chan decided to chase down errant customers, among them all of Cambodia's government agencies and the Army. When asked to pay up, the officer in charge pulled out a gun. Chan retreated but went back the next day with a handful of journalists in tow. The general once again pulled out his gun. Chan cut off the water supply. The next day the Army paid its dues, and all the other agencies followed. Today the utility is flush with cash, and there is clean drinking water--the kind that can be had straight from the tap--available through the city, around the clock.

As governments across the world, and especially the developing world, worry about a looming water crisis, Biswas dismisses it as a self-inflicted wound. The problem we have, he says, is not scarcity but mismanagement. The solution to shortages is simple: "Water must have a price. Anything that is free won't be used prudently."

The last sentence is the key element of his argument, and it closes this post. But in some cases it is too simplistic. Shortages can be caused by other things: hegemony or conflict, for example. I suspect we will see such cases as climate change affects water supplies. And what if the price becomes too high because of diminishing supplies caused by hydrologic factors?  

And water should be declared a human right, but that does not mean it has to be provided free.

 "Water must have a price. Anything that is free won't be used prudently." -- Asit Biswas

Report: Charting Our Water Future

I've been getting emails from McKinsey & Company announcing the report, Charting Our Water Future, that was unveiled yesterday.

Here is a video of the presentation.

The report is the product of  something called the 2030 Water Resources Group.

Charting Our Water Future is a report of the 2030 Water Resources Group, which was formed in 2008 to contribute new insights to the increasingly critical issue of water resource scarcity. Members include McKinsey & Company, the World Bank Group, and a consortium of business partners: The Barilla Group, The Coca Cola Company, Nestlé SA, New Holland Agriculture, SAB Miller PLC, Standard Chartered and Syngenta AG.

Interesting cast of characters - a consulting firm; then heavy on ag, food, and beverage; chemicals; a bank; and the World Bank.

Note the part about 'contributing new insights'.

Do we need an SOS alert?

Here's the report's blurb on the WWW site:

Growing competition for scarce water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities and the ecosystems upon which they rely. It is an issue that has serious implications for the stability of countries in which businesses operate, and for industries whose value chains are exposed to water scarcity.

Charting our water future: Economic frameworks to inform decision-making shows that while meeting competing demands for water will be a considerable challenge, it is entirely possible to close the growing gap between water supply and demand. This report provides greater clarity on the scale of the water challenge and how it can be met in an affordable and sustainable manner.

The report offers case studies from four countries with drastically different water issues, which will collectively account for 40 percent of the world’s population, 30 percent of global GDP and 42 percent of projected water demand in 2030: China, India, South Africa and Brazil. The report’s methodology identifies supply- and demand-side measures that could constitute a more cost effective approach to closing the water gap and achieve savings in each country.

Here are the Executive Summary and the entire report.

I've got a couple of long plane trips coming up soon; think I'll bring this along - all 200 pages (almost) of it.

Time for me to rest now.

“One man's urine is another man's drinking water.” -- Unknown

The Pavlovian Response to Western Agricultural Water

The title of this post could be that of a PhD dissertation in agricultural economics or some similar discipline. But whether the term is used improperly or not it's designed to pique your curiosity.

Shaun McKinnon of The Arizona Republic wrote this piece on the water used by Arizona agriculture and how urban water managers are thinking of some of that water for cities.

It's a story that rings true in most, if not all, Western states: agriculture uses by far the greatest amount of water, has many senior water rights, but contributes a disproportionately low share to a state's GDP. So water managers begin salivating about purchasing/leasing some of those senior agricultural water rights for urban growth.

Why, I seem to recall that none other than Western water expert/reputed mob lawyer Mayor Oscar Goodman of Las Vegas made a comment a few years ago that Vegas wouldn't run out of water, because they could just buy the IID (Imperial Irrigation District) water. Oh, Oscar, this ain't criminal law.

So choose your preference - you want more growth, replete with a sea of red-tiled rooftops, or verdant fields of alfalfa with riparian strips along irrigation ditches? That's how one farmer in New Mexico's Middle Rio Grande Valley put it to an audience several years ago.  

Unfortunately, it's usually not that simple a choice.

McKinnon's article is even-handed - no "good guys vs. bad guys" stuff.

What really struck me was this statement:

Most planners start with the idea that water shouldn't limit growth. [emboldening mine]

Huh?

That attitude is a major part of the water problem in the Southwest, as is the problem embedded in today's quote:

"Because I can." -- Middle Rio Grande farmer, when asked why he flood-irrigated his land.

A Nobel Laureate for Us Common WaterWonks

It is not too often that those of us in the water community can claim some disciplinary kinship with a Nobel Laureate, especially one from the economics realm. But this year we can take pride in seeing Elinor (Lin) Ostrom of Indiana University share the Nobel Prize in Economic Sciences.

She is the first woman to win this particular Nobel, first awarded in 1969. She is also a member of the U.S. National Academy of Sciences.

And she is not an economist - well, maybe a political economist -  but was trained as a political scientist.

Her connection to water comes via her specialty: common-pool resources and their governance. She wrote her PhD dissertation (UCLA) on groundwater management, and that was just the beginning (see quote at bottom).

Here's what the Royal Swedish Academy of Sciences said in recognizing her for her analysis of economic governance, especially in the commons:

“Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized,” the academy said. “Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories.”

She's the first Nobel Laureate whose material I read long before she won her prize. I have read a number of her papers, and her 1990 book, Governing the Commons, also comes to mind. I've also met several of her students.

Her is a link to her IU CV with a number of hot links to her publications.

And, for some additional significance of her award, the Indiana Daily Student said it all in its editorial:

Additionally, because of the nature of Ostrom’s work and her position in the political science department, it is a demonstration of the increasing importance of interdisciplinary focus in research.

Previously, Ostrom herself has stressed the importance of developing an “interdisciplinary language” among researchers. This, she says, is necessary because the problems and issues with which they are dealing cross disciplinary lines and cannot be solved by looking exclusively through one prism.

Finally, the award is an indication of the increasing relevance of testing established theories about numerous economics against actual situations, especially as dozens of developing countries make their way out of poverty and into the globalized economy.

You can find more links at the IU site.

Rob Emanuel has an excellent post on Ostrom and her work. David Zetland has a great post over at Aguanomics about Ostrom and her co-winner , Oliver Williamson.  David is pleased at the awards, and says both are people who deal with the messy realities of how things get done in an imperfect world. 

Dr. Williamson, at UC-Berkeley, can now get a lifetime free parking space in the Noble Laureate Grove. Go, Ollie!

So are you wondering what some other economists thought about Ostrom's award? Zetland has that covered, too.  I doubt you'll be surprised at some of the comments.

"I grew up in Los Angeles ... The ocean is right there. And if you pull the groundwater down, surprise, surprise, the saltwater comes in. And if they had not found a way of reducing the quantity of water they pumped, and doing a variety of other things, they would have had to give up the groundwater basin to saltwater. I was very fortunate, I started that as a seminar paper, and I kept going and going." -- Elinor Ostrom

Lawyers, Guns, and Money...and Water

No, I'm not talking about gunplay here - just thought I would toy with the title of the great Warren Zevon song, Lawyers, Guns and Money. It's apropos.

Dorian Roffe-Hammond sent me the following  items about the involvement of lawyers in the Georgia water issue and Gov. Sonny Perdue's water task force. As Jerry Seinfeld might say, "Not that there's anything wrong with that."

Here are the first few paragraphs of an article by David Beasley from the 9 October 2009 issue of Global Atlanta:

Atlanta law firm Arnall Golden Gregory LLP (AGG) has launched a new water resources team, betting that water, or the lack of it, will be a contentious legal issue for years to come.

"All the rain we had recently didn’t change a thing,” Bruce Jackson, a partner in the law firm who, along with fellow partner John Gornall, is leading the eight-member water resources team, told GlobalAtlanta.

Although heavy rainfall temporarily filled lakes and streams, most of the water flowed downstream and is now on the way to the Gulf of Mexico or the Atlantic Ocean. “It’s gone,” said Mr. Jackson.

What remains, however, is a federal lawsuit pitting Georgia, Alabama and Florida in a long-ranging fight centering on Atlanta’s main water source, Lake Lanier. Georgia is currently on the losing side of the contest. 

More from the article:

Georgia Gov. Sonny Perdue recently named Mr. Jackson to the Water Contingency Plan Task Force, a panel that will figure out what Georgia will do if it is forced to severely cut withdrawals from Lanier.

"While I am confident we will be successful in securing the ability to draw water supply from Lake Lanier, we cannot take that for granted and must plan accordingly,” the governor said when appointing the panel. “We will consider conservation measures as well as opportunities to enhance our water supply options.” 

As the tri-state water wars increase in intensity, Arnall Golden Gregory sees a need for lawyers who specialize in the field. It envisions representing state and local governments and business owners in legal disputes over water while also working for foreign companies seeking to sell their water-saving products and technology here.

“People are going to need lawyers to deal with these issues as they develop,” said Mr. Jackson.

After purchasing retirement property in Colorado, Mr. Jackson developed first-hand knowledge of the water wars in the Western U.S. and knows how intense they can be. He points out that in Colorado, water commissioners, who have the right to shut off water sources, carry weapons when they go into the field.

Mr. Jackson has completed several courses in water law and is licensed to practice law in Colorado.

Someone is preparing for the future (lucrative) water landscape in Georgia and environs.

There was also another article about AGG and Jackson in 13 October 2009 edition of The Fulton County Daily Report. This segment from Andy Peters' article caught my eye:

Jackson is among 80 real estate developers, bankers, politicians, business community representatives and others on the task force, which is planning for the contingency that a water deal with Florida and Alabama is not approved by Congress by 2012.

Again, shovers and makers abound; nine of the eighty are lawyers.

Later in the article Jackson discussed the concept of a water court, like the one that Colorado has, as a mechanism to help Georgians deal with water issues:

Jackson said he has been asked to convene a panel of experts on western U.S. water law to compile a list of the “best practices” of water laws in the western U.S. He said one confirmed member of Jackson's panel is Colorado Supreme Court Justice Gregory J. Hobbs, a noted authority on water law and the author of “The Citizen's Guide to Colorado Water Law.”

Because the western U.S. has fewer water resources available, western states have been dealing with water-law issues for much longer than the eastern U.S., Jackson said. Georgia should be able to learn from how the western U.S. has established its laws to deal with a much lower quantity of water, said Jackson.

The West's reliance on prior appropriation of water has led some states, including Colorado, to establish water courts, and Jackson suggested such an approach may be what's needed in Georgia.

Somewhat like a bankruptcy court, water courts require the holder of a water permit to post a notice if he wants to make a significant change to how he's using the water. Any concerned or affected party has the chance to state their case on whether the proposed change should be approved. The water court judge makes the final determination, although, unlike a bankruptcy court, a water court judge does not have the authority to force all parties to abide by a specific plan, he said.

“Those concepts can easily translate to Georgia, and there are many ways to go about it,” Jackson said. “I like the idea of an adjudicated water system because of its transparency.”

The establishment of water courts in Georgia would require that the state conduct much more extensive measuring of water resources than is currently done, Jackson said.

The fact that Easterners may be looking to the West for guidance on water issues is interesting. It reminded me of a time about ten years ago when a retired University of New Mexico professor headed to Georgia to lead a new water policy institute at a state university.

I soon received a call from a Georgia newspaper reporter inquiring about the reputation and motives of the man, whom I did not know that well. It became clear to me that the reporter was out to do a 'hatchet job', and even expressed amazement to me that someone from the West could even begin to understand Georgia, its people, and its water issues. He even suggested that perhaps the fellow should just take his ideas and return to New Mexico. I realized that whatever I said would be misquoted and/or misunderstood, so I politely extricated myself from the interview.

We sure do live in interesting times.

"Send lawyers, guns and money...the shit has hit the fan." -- Warren Zevon, Lawyers, Guns and Money

IFPRI Report: Climate Change Impact on Agriculture and Costs of Adaptation

The International Food Policy Research Institute (IFPRI) produces some very good reports that don't always get read by those who should read them. Why? We spend too much time in our own little silos thinking, "I'm a WaterWonk, what do I care about food?" Well, duhhhh..... And I'm as guilty as the next person, and I should know better.

One example is its recent brief report, Climate Change: Impact on Agriculture and Costs of Adaptation.

Download a free copy.

From the report's WWW site:

The unimpeded growth of greenhouse gas emissions is raising the earth’s temperature. The consequences include melting glaciers, more precipitation, more and more extreme weather events, and shifting seasons. The accelerating pace of climate change, combined with global population and income growth, threatens food security everywhere.

Agriculture is extremely vulnerable to climate change. Higher temperatures eventually reduce yields of desirable crops while encouraging weed and pest proliferation. Changes in precipitation patterns increase the likelihood of short-run crop failures and long-run production declines. Although there will be gains in some crops in some regions of the world, the overall impacts of climate change on agriculture are expected to be negative, threatening global food security.

Populations in the developing world, which are already vulnerable and food insecure, are likely to be the most seriously affected. In 2005, nearly half of the economically active population in developing countries—2.5 billion people—relied on agriculture for its livelihood. Today, 75 percent of the world’s poor live in rural areas.

This Food Policy Report presents research results that quantify the climate-change impacts mentioned above, assesses the consequences for food security, and estimates the investments that would offset the negative consequences for human well-being.

This analysis brings together, for the first time, detailed modeling of crop growth under climate change with insights from an extremely detailed global agriculture model, using two climate scenarios to simulate future climate. The results of the analysis suggest that agriculture and human well-being will be negatively affected by climate change:

• In developing countries, climate change will cause yield declines for the most important crops. South Asia will be particularly hard hit.
• Climate change will have varying effects on irrigated yields across regions, but irrigated yields for all crops in South Asia will experience large declines.
• Climate change will result in additional price increases for the most important agricultural crops–rice, wheat, maize, and soybeans. Higher feed prices will result in higher meat prices. As a result, climate change will reduce the growth in meat consumption slightly and cause a more substantial fall in cereals consumption.
• Calorie availability in 2050 will not only be lower than in the no–climate-change scenario—it will actually decline relative to 2000 levels throughout the developing world.
• By 2050, the decline in calorie availability will increase child malnutrition by 20 percent relative to a world with no climate change. Climate change will eliminate much of the improvement in child malnourishment levels that would occur with no climate change.
• Thus, aggressive agricultural productivity investments of US$7.1–7.3 billion are needed to raise calorie consumption enough to offset the negative impacts of climate change on the health and well-being of children.

Enjoy!

"Once during Prohibition I was forced to live for days on nothing but food and water." -- W. C. Fields

The Civil Rights Act and Environmental Justice

Noah Hall's excellent Great Lakes Law blog featured a guest post by Chris Winter of the Crag Law Center  in Portland, OR.

Here is Noah's introduction:

This guest post is by Chris Winter, Co-Executive Director & Staff Attorney of the Crag Law Center in Portland, Oregon.  Chris and I went to law school together, and despite his Pittsburgh roots, he moved out west after graduation.  After several years in private practice with Stoel Rives LLP, Chris founded the Crag Law Center to provide affordable legal assistance to groups working on environmental and natural resource issues.  Chris had a huge victory this week in a precedent setting environmental justice case under the Civil Rights Act.  The case received national coverage (see this article from the New York Times) and will put legal and political pressure on the Obama Administration’s EPA to finally enforce the law to protect poor and minority communities from pollution and other environmental harm.

Read Chris' post. It's a great story, and I suspect we'll see more like this.

"What the district court initially classified as an 'isolated instance of untimeliness' has since bloomed into a consistent pattern of delay by the EPA." -- Judge A. Wallace Tashima, writing for the 9th U.S. Circuit Court of Appeals

Noah Hall: Protecting Freshwater Resources in the Era of Global Markets - Lessons From Bottled Water

Noah Hall, who runs the excellent Great Lakes Law blog, recently posted an item, Protecting Freshwater Resources in the Era of Global Water Markets: Lessons Learned from Bottled Water. The post is based on an article of the same name that will be published in the University of Denver Water Law Review. You can download a prepublication copy.

I like the points he makes, especially about how disputes involving bottled water have led to meaningful reforms in our water laws, especially regarding groundwater.

Here are the abstract and conclusion.

Abstract:

Throughout human history, water has defined our sense of place.  American water law reflects the connections between water and local people, communities, and the environment.  Against this backdrop, global water markets have developed to sell and export this increasingly precious resource.  Water markets are recognized in international trade law and take many forms, from tankers of freshwater crossing the Mediterranean to bottles of spring water coming to America from distant pacific islands.  While the scale of water sales and exports is still relatively small, this emerging market represents a new challenge for management of water resources.

This article examines the challenge of protecting freshwater resources in the era of global water markets by looking at the most mature and developed example – bottled water.  Bottled water in America dates back to colonial times, but over the past decade it has become a massive global industry.  As bottled water has grown, so has the backlash against it.  The resulting lawsuits and legislation offer a glimpse of the future of domestic water law in the global water market era.  Bottled water fights provide important lessons for how the law should (and should not) respond to globalization of water use.  By learning from these lessons, we can meet the challenge of global trade in water by developing effective legal protections for our freshwater resources.

Conclusion:

Along with climate change, globalization may be the most significant challenge for state water law in the twenty first century.  The pressures on water resources are no longer limited to local users and property owners, but now include supply for a global water market.  Bottled water is the oldest and most mature water market that transcends state lines.  Bottled water disputes have forced state courts and political leaders to reevaluate old doctrines and water management regulations.  In most cases, bottled water disputes have lead to meaningful and useful legal reforms, especially in the area of groundwater management.  However, in some cases bottled water disputes have exposed problematic flaws in state water law and protectionist knee-jerk reactions by state political leaders that would do nothing to better protect water resources.

Unsatisfied by modest reforms in the courts and legislatures, bottled water opponents have turned their hopes to the public trust doctrine and taxing water bottlers, strategies with significant legal and political weaknesses.  Instead, bottled water opponents and state leaders should take the challenge of bottled water as an opportunity to further reform water management law with an emphasis on resource protection, science-based decision making, and water conservation.  These approaches will help protect water resources from the pressures of globalization while respecting property rights and international trade law rules.

Good stuff!

“O Lord, help me not to despise or oppose what I do not understand.” --William Penn

Tennessee Revises Water Laws

Since Atlanta and Georgia are is doing their best 'Las Vegas imitation' vis-a-vis Southeast water, neighboring states might do well to ensure that their own 'water houses' are in order. Remember Georgia's effort to move its border so it could access Tennessee River water?

Looks like Tennessee has taken that advice to heart. Gov. Phil Bredesen (D) has signed into law a bill that revises Tennessee's water laws. It takes effect immediately.

But not everyone thinks it is a great idea. From U.S. Water News Online:

Sponsors say the new law is necessary to clarify what are “waters of the state.”

Opponents, however, say some provisions of the measure weaken the state's oversight by shifting the decision making from the public to the private sector.

For instance, the law allows a company or individual to hire a professional to determine how a watercourse should be classified and allow that person's finding to be conclusive.

Read it for yourself:

Download SB0632

Hey, I'm classified as a 'qualified hydrologic professional' by the law. Awesome.

"The solution to our water problems is more rain." -- attributed to Mark Twain

More On Mississippi vs. Memphis: First Transboundary Aquifer Case Before U.S. Supreme Court?

I posted on this case a few days ago, but Gabriel Eckstein of the International Water Law Project  at Texas Tech University has more on this case from a legal perspective.

You can also follow the case on the SCOTUS blog, as suggested by dlb in his comment on my original post.

Back to Gabriel - check out his post.

I like his last paragraph:

Ground water resources, for too many years, have been treated as the neglected stepchild of water law. This is especially true in a transboundary context but also in the domestic laws of many nations, including the US. The adage “out of sight, out of mind” comes to mind. The US Supreme Court has a great opportunity here to develop US jurisprudence and provide guidance for this nascent legal area. It also has a wonderful occasion to influence the evolution of international law in this area.

Neglected stepchild? Amen!

"Before enlightenment, Chop wood
Carry water.
After enlightenment, Chop wood
Carry water. " --Zen Saying

Memphis Sand Aquifer Pumping: U.S. Supreme Court Could Decide Mississippi vs. Memphis

Non-sequitur alert: since I am now in Panama, why not update a story about which I posted in early 2008? 

On 2 February 2008 and 5 February 2008 I posted about the court case involving the State of Mississippi, the City of Memphis and Memphis Light, Gas, and Water (MLGW). Mississippi accused the MLGW of stealing water from beneath Mississippi by pumping from the Memphis Sand aquifer, which underlies both states and Arkansas.

From my 2 February 2008 post (where there is more information, including graphics):

In a nutshell, the case boils down to Mississippi claiming that Memphis Light, Gas and Water (MLGW), the municipally-owned utility for the Memphis area (Shelby County), is deriving about 30% of the water it pumps from the Memphis Sand aquifer (aka the Sparta aquifer) from beneath Mississippi. This amounts to about 60 mgd (million gallons per day) coming from beneath the Mississipians' land. Total MLGW pumpage from the aquifer is about 160-200 mgd. The Memphis Sand's water is reputedly some of the best ground water in the USA, and the aquifer supplies drinking water to over 1.1 million residents of Shelby County.

This is no nickel-and-dime lawsuit; the damages sought by Mississippi amount to $1 billion, and if the Memphis utility loses, it would be forced to reduce its pumping and obtain some of its water from the Mississippi River, which would entail the construction of an expensive water treatment plant.

Most of the "harm" to Mississippi occurs in DeSoto County, a rapidly-growing suburb of Memphis. Well water levels there have been dropping -- that's what happens when you pump water from an aquifer, folks, until you increase recharge or decrease discharge to offset the pumping rate.  Mississippi contends that some of the declines are due to Memphis' pumping and constitute "harm". Memphis claims that its use is "reasonable" and not reducing the water availability in Mississippi.

The Supreme Court may decide this case. Here is Tom Charlier's 5 June 2009  Memphis Commerical-Appeal article and the first few paragraphs:

It'll be up to the U.S. Supreme Court to settle the billion-dollar question of whether Memphis has been stealing Mississippi's water.

In a decision hailed by the city, the Fifth Circuit Court of Appeals in New Orleans on Friday affirmed a lower court's dismissal of Mississippi's 2005 lawsuit against Memphis and its municipal utility over the use of water from a aquifer beneath several states.

The case must be refiled with the Supreme Court, which has exclusive jurisdiction in disputes between states, the court said. Tennessee is an "indispensable party" to the suit, the judges said, even though it wasn't named as a defendant.

Here is a copy of the court's decision:

Download 08-60152-CV0

Here is more from Charlier's article:

Affirming a February 2008 decision by U.S. Dist. Judge Glen H. Davidson, the appellate court said that because the aquifer is an interstate resource, the water must be formally divvied up before one state can sue another for "invading its share."

Although it lies hundreds of feet underground, the aquifer, for legal purposes, is "indistinguishable from a lake bordered by multiple states or from a river bordering several states depending on it for water," the court said.

"The aquifer must be allocated like other interstate water resources in which different states have competing sovereign interests."

Mississippi has indicated that it will pursue the case in the USA's highest court. The appellate court's ruling did not judge the merits of the case, only that Tennessee is an 'indispensable party" to the case.

I am intrigued with this case because it involves transboundary groundwater and it's relatively novel to see Eastern USA political jurisdictions involved in a good old-fashioned Western USA-style fight over water quantity (much like the Georgia-Alabama-Florida kerfuffle over the ACF Basin).

Stay tuned.

Note that the U.S. Supreme Court has not yet decided to take this case (thanks to Noah Hall at the Great Lakes Law blog).

As I said earlier, it ain't over till it's over, or:

"The opera isn't over till the fat lady sings." -- Unknown

Bill Phillips' 1949 Hydraulic Computer Uses Water to Predict the Economy

A colleague sent me a link to a blog post about this remarkable computer developed by Bill Phillips at the London School of Economics in 1949.  It uses water flow to predict the flow of money in the economy.

The guest post on Olivia Judson's blog is by Steve Strogatz and describes a recent visit to his friend Allan McRobie, an enginnering professor at the University of Cambridge. McRobie showed him the amazing machine.

Two weeks ago, while visiting Cambridge University, I arranged to have lunch with my friend Allan McRobie. He’s a professor of engineering, so it seemed a bit strange that he kept insisting we meet at the department of applied economics. “There’s something there you’ve really got to see,” he said in his Liverpudlian lilt. “It’s utterly fab. Just brilliant. The Phillips machine — it uses water to predict the economy.”

Skeptical but willing to go along with the gag, I met him at the appointed place. He led me inside and stopped at the receptionist’s window. “We’re here to see the machine,” he said. She nodded and handed him a key. We made our way through a maze of corridors to the Meade Room, where the machine is housed.

In the front right corner, in a structure that resembles a large cupboard with a transparent front, stands a Rube Goldberg collection of tubes, tanks, valves, pumps and sluices. You could think of it as a hydraulic computer. Water flows through a series of clear pipes, mimicking the way that money flows through the economy. It lets you see (literally) what would happen if you lower tax rates or increase the money supply or whatever; just open a valve here or pull a lever there and the machine sloshes away, showing in real time how the water levels rise and fall in various tanks representing the growth in personal savings, tax revenue, and so on. This device was state of the art in the 1950s, but it looks hilarious now, with all its plumbing and noisy pumps.

Here is the schematic in Strogatz's post:

 

Strogatz describes what happened on that 1949 day when Phillips demonstrated his machine before skeptical economists at the LSE:

Phillips’s machine worked perfectly that day at the L.S.E., and soon attracted worldwide interest. Copies of the “Moniac,” as it became known in the United States, were built and sold to Harvard, Cambridge, Oxford, Ford Motor Company and the Central Bank of Guatemala, among others. In all, it is thought that only 14 Phillips machines were ever built.

View a video showing the machine in action, explained by Allan McRobie.

Strogatz provides some interesting insight:

Though it’s tempting to view the Phillips machine as a relic of a bygone era, in one way it’s just the opposite; there’s something about it as fresh as the day it began gurgling. Look at its plumbing diagram. It’s a network of dynamic feedback loops. In this sense the Phillips machine foreshadowed one of the most central challenges in science today: the quest to decipher and control the complex, interconnected systems that pervade our lives.

He mentions how we've spent centuries breaking things down to learn about them. Now, the hard part begins:

Now, after three centuries of profound discoveries, the real challenge is to master the process of reassembling the pieces, in ways that faithfully reflect the inevitable interactions among them. Bill Phillips, along with many other pioneers of the 1950s, took the first steps on this difficult road. By rendering the workings of a complex economic system visible in real time, he helped us embark on one of the most momentous scientific journeys humanity will ever take.

No question - Bill Phillips was ahead of his time.

"Let us consider an alternative style of thinking, which we can call 'creative thinking.' It is playfully instructive to note that the word 'reactive' and the word 'creative' are made up of exactly the same letters. The only difference between the two is that you 'C' [see] differently."  -- John Quincy Adams

 

Another New Blog: The Water Law

Alex Basilevsky is an attorney with a Philadelphia law firm. He's runs The Water Law blog, which he just started.

Alex is in the Environmental Department of Obermayer Rebmann Maxwell &  Hippel, primarily practicing complex litigation. 

Take a look...at Alex - he looks too young to be an attorney!

But give his blog a read.

"The people's good is the highest law." -- Cicero (106 - 43 BCE), De Legibus

New Blog: International Water Law Project

This is Texas Day at WaterWired.

Friend and colleague Gabriel Eckstein, George W. McCleskey Professor of Water Law, Director of the Center for Water Law and Policy, and Director of the International Water Law Project (IWLP) at the Texas Tech University School of Law, has just started the IWLP blog.

 Here are the last few paragraphs of his first post, explaining the blog's raison d'être:

These are interesting times we live in. And contrary to the intention behind that Chinese curse, I tend to like interesting times. So many fascinating water issues; so little time to consider them all.

 

This blog, though, is my effort to do just that – to consider and comment on what I think are the most interesting and significant international water issues and developments of our times. While there certainly are others that offer commentary on global water issues (WaterWired is one of my favorite), given my interests in international and transboundary water law and policy, I hope to keep my posts to this narrow portion of the universe.

 

Of course, this blog is intended as a conversation, a dialogue among any and all of us who are inclined toward equity, ethics, and sanity in our water laws and policies globally.  Accordingly, I hope to provoke discussion in this realm and very much welcome constructive opinions, ideas, and information.

 

Thanks for visiting, and I hope you will return frequently.

 

I will. And thanks for the plug, Gabriel!

 

Welcome to the blogosphere!

"Water is the best of all things." -- Pindar (522-438 BCE), Olympian Odes

The Bingaman (D-NM) - Murkowski (R-AK) Bill Tackles the Energy-Water Nexus

Ahhh....the energy-water nexus! Haven't we heard that before? Well, it's still here.

Leslie Kryder sent me this information about a bill being introduced by Sen. Jeff Bingaman (D-NM), Chair of the Senate Energy and Natural Resources Committee, and Sen. Lisa Murkowski (R-AK),  the ranking Republican.

The bill is S. 531, the Energy and Water Integration Act of 2009, and it seeks to obtain a better understanding of the relationship and interdependence between energy and water.

Here is the blurb that I was sent:

“The bill Sen. Murkowski and I introduced is a necessary first step in the
direction of integrating America’s energy and water policies,” Bingaman
said.  “Developing new policies that integrate energy and water solutions
will become increasingly vital as populations grow, environmental needs
increase and a changing climate continues to affect our nation’s energy
and water resources.”

“Energy and water resources are essential to our nation’s future and
security,” Murkowski said. “This bill provides an opportunity to identify
the major areas we should be focusing on to better understand the
interdependency between water and energy development, as well
mechanisms that could further our investment into technology to more
efficiently use these systems that are so important in our daily lives.”

A tremendous amount of water is used in this country to produce energy.
 Similarly, a tremendous amount of energy is consumed in the delivery and
treatment of water supplies.  With the exception of certain renewable
energy sources, building more power plants and creating new fuels will
impact scarce water resources.  Similarly, increasing demand for water
will drive up energy use.  The linkage between the two is too often overlooked.

The Energy and Water Integration Act of 2009 contains the following:

1) National Academy Energy-Water Study– Requires a study to assess
water use associated with developing fuels in the transportation sector,
and the water consumed in different types of electricity-generation.

2) Power Plant Water and Energy Efficiency– directs DOE to
identify best available technologies and other strategiesmaximize water
and energy efficiency in producing electricity.

3) Reclamation Water Conservation & Energy Savings Study– directs
the Bureau of Reclamation (BOR) to evaluate energy use in storing and
delivering water from Reclamation projects, and identify ways to reduce
such use through conservation, improved operations, and renewable
energy integration.

4) BOR Brackish Groundwater Desalination Facility– Organic
legislation to establish research priorities for this existing Facility,
including renewable energy integration with desalination technologies.

5) EIA Energy Use for Water Assessment– a requirement for Energy
Information Administration to continually report on the energy consumed
in water treatment and delivery activities.

6) Energy-Water Roadmap– directs the Secretary of Energy to
develop an Energy-Water Research and Development Roadmap to address
water-related challenges to sustainable energy generation and production.

Here is the statement of Carl O. Bauer, Director of the National Energy Technology Laboratory:

Download Bauer NETL Testimony 031009

Hey, didn't we do the roadmap thing a few years ago? The NAS study is a good idea. We'll see about the other items.

'The trouble with roadmaps is that they're usually left in the glove compartment." -- Unknown

UC-Berkeley and UCLA Law Schools Start Blog - Legal Planet: Environmental Law and Policy

New blogs just keep on coming!

The law schools of UCLA and UC-Berkeley have launched a new blog: Legal Planet.

Here is the blurb I received via email:

"Legal Planet focuses on significant developments in law and policy for a general audience," said Dan Farber, director of Berkeley Law's environmental law program and faculty co-director of the school's Center on Law, Energy, and the Environment. "We highlight the latest legal and policy initiatives, and examine the impact they might have on our planet. Do they protect our natural resources, or impair our legacy for future generations? Do they reduce our carbon footprint, or worsen climate change? Are they real steps forward, or merely political posturing?"

"The rich academic environment of both law schools makes this cross-campus collaboration a natural fit," said Ann Carlson, faculty director of the Emmett Center on Climate Change and the Environment at UCLA School of Law. "Each law school's environmental law program is steeped in public policy and analysis, and reflects the broad interdisciplinary nature of this field."

Legal Planet co-creators Farber and Carlson said the site fills a unique space on the blogosphere, not only by bridging the worlds of law and policy, but also by translating the latest developments in a way that's understandable to a mass audience. The "global challenge of climate change" is the driving force behind the blog, said Carlson.

Contributors write about Supreme Court decisions, new policy developments, major regulatory actions, and state and national legislation that affect water resource management, toxic waste disposal, renewable energy, air quality, land use and more.

The blog also links to new policy ideas generated by the law schools' environmental, energy and climate change think tanks.

In addition to Farber and Carlson, contributors to Legal Planet include Eric Biber, acting professor at Berkeley Law; Holly Doremus, professor at Berkeley Law; Ethan Elkind, joint fellow at the law schools at UC Berkeley and UCLA; Richard Frank, executive director of Berkeley Law's Center for Law, Energy & the Environment (CLEE); Sean Hecht, executive director of the UCLA Environmental Law Center; Cara Horowitz, Andrew Sabin Family Foundation executive director of the UCLA Emmett Center on Climate Change and the Environment; Timothy Malloy, law professor at UCLA; Cymie Payne, director of Berkeley Law's Global Commons Project; Steven Weissman, associate director of CLEE; and Jonathan M. Zasloff, law professor at UCLA.

Should be a good one!

"Law school taught me one thing: how to take two situations that are exactly the same and show how they are different." -- Hart Pomerantz

New Water Blog: Southwest Water Economics

Another WaterWonk has joined the club - Bruce K. Darling, a denizen of Austin in the Lone Star State of Texas, has started Southwest Water Economics, on which he will expound on water economics, rights, and management. Hard to get timelier (or more contentious) topics than those!

I've known Bruce for a number of years and it'll be good to have his voice in the blogosphere. I did not realize he had a Master's in Mineral Economics. 

And he's also 'Aquadoc'!

Nice picture of Bruce and one of his faithful readers.

Welcome, Bruce!

“If I owned Hell and Texas I would rent out Texas and live in Hell." -- Philip Henry Sheridan (apologies to Austin and San Antonio)

Who Owns Pore Spaces?

Oh, boy - this is an interesting story by Staci Matlock from the Sante Fe New Mexican: who owns pore spaces?

Check out the picture above (from the USGS) - the pores are shown in detail in the bottom part.

The schematic below (from G. Hornberger et al., Elements of Physical Hydrology) shows open spaces (pores) and solid particles (dark shapes).

Those little things could be valuable, for storing water or some other fluid, sequestering CO2 (itself a  fluid). The latter issue is what is motivating the individuals and the New Mexico legislature and elsewhere, too.

From Matlock's story:

Jack Chatfield has an easygoing drawl, a rancher's calloused bear grip of a handshake and an eye toward a new source of revenue.

The Mosquero, N.M., man has been at the Roundhouse frequently in the last few weeks promoting pore-space ownership — an idea catching on in the West.

[cut]

Legislators are considering two pore-space ownership bills that are facing opposition from some oil and gas developers. While a pore-space property right bill sailed through its first Senate committee last week, a House version stalled in its first hearing because of opposition, according to Chatfield.

"I think this is a matter of educating people," Chatfield said. "This is a new idea, and newness always takes awhile to get used to."

Chatfield thinks the pore space should belong to surface property owners unless the rights have already been sold to someone else.

This issue is being addressed in other states - Montana and Wyoming come to mind, and you can bet there are others.

It would be interesting to see how the value of pores is calculated. David Zetland would love this stuff!

Maybe I can get a job as a 'pore assessor'. Hey, gimme a gross of those little ones over there.

"I don't know, but someday you'll tax it." -- Michael Faraday, when asked about the uses of his new invention, the electric generator

Non-Navigable Streams: Rapanos Decision Muddies Western Waters

Tony Davis' lead article in the current High Country News describes the chaos induced by the Supreme Court's Rapanos decision.

The photo of kayakers in the Los Angeles River is from the article.

Davis frames his story with the saga of Heather Wiley, who ran afoul of her Federal government employers. He begins:

Heather Wylie found herself out of a job in December. And it really had nothing to do with the economic crisis or her workplace performance. The 29-year-old biologist, who had worked for the U.S. Army Corps of Engineers in Southern California for five years, left because of a little kayak trip. It wasn't exactly a whitewater wilderness adventure: Wylie and her companions were more likely to encounter discarded car parts or grocery carts than frothing rapids, and much of the scenery was covered by elaborate graffiti. Parts of the stream more closely resembled a giant concrete trough than a burbling brook.

Wylie, however, was not out there for the scenery. She'd joined a dozen boaters on a 52-mile, three-day trip on the Los Angeles River in July 2008 to prove a point: that her own employer's declaration that the L.A. River was non-navigable was simply wrong. If the boaters could make the trip, that proved that one could, in fact, navigate the river. And that, in turn, increased the likelihood that the river's dozens of major tributaries (many of which are dry, sandy washes most of the year) fell under the jurisdiction and protection of the Army Corps of Engineers.

When Wylie's bosses found out what she had done (Wylie says they scoured blogs and Web sites in search of incriminating photos), they were not happy. First, they threatened her with suspension. Then, in December, after Public Employees for Environmental Responsibility took up her case because they felt she was being retaliated against for her opposition to Corps policy, she resigned under a settlement that both sides agreed to keep secret.

Here's more:

In the meantime, Wylie's troubles drew activist, media and even congressional attention to the murky consequences of a 2006 Supreme Court ruling and its subsequent interpretation and enforcement. The Rapanos v. United States case was supposed to clarify the scope of the Clean Water Act. Property rights activists initially hailed the court's split ruling as a victory.

"Our constitutional way of life got a boost last year from the U.S. Supreme Court when the court rejected the idea that federal officials have unlimited control over every pond, puddle and ditch in our country," said the Pacific Legal Foundation, a property-rights organization.

Today, however, almost no one is happy with the ruling. Environmentalists say that Rapanos leaves thousands of once-protected streams, arroyos and wetlands without federal oversight. About 350 miles of streams were removed from federal control in a single six-month period, for instance, and enforcement of many anti-pollution cases was stopped in its tracks. Developers, meanwhile, have found the new guidelines to be even more cumbersome and time-consuming than the old ones were.

In other words, it's a mess. Though Congress is poised to intervene in an attempt to clean things up, that will likely only provoke a bigger battle over the Clean Water Act and its enforcement, especially when it comes to the ephemeral waters of the arid West.

Read this article in its entirety; it will be worth your while.

Here's a short video about Heather Wylie, Heather and Goliath (thanks to Rob Emanuel).

Love those ephemeral waterways!

"America is a great story, and there is a river on every page." -- Charles Kuralt

Tough Sledding for Poland Spring in Maine

Todd Jarvis, Mr. Bottled Water himself, sent me this item.

The Portland Press Herald's Noel K. Gallagher reports that challenges are piling up for bottled water purveyor Poland Spring, a subsidiary of Nestlé Waters North America. Check this out from the story: 

After 146 years of doing business in Maine, Poland Spring is fighting battles on three fronts these days -- over test wells in Shapleigh, a proposed tax that would cost the company $7 million a year, and a state Supreme Court case over a pumping station in Fryeburg.

"Where have we done harm or where have we caused issues that have caused people to take drastic steps like this?" asked Mark Dubois, natural resource director for Poland Spring, a subsidiary of Nestle Waters North America.

Poland Spring is the third-leading brand of bottled water in the country, behind Aquafina (Pepsi) and Dasani (Coke), and employs about 800 Maine residents.

Gallagher further reports that 14 bills concerning ground water have been introduced in the Maine legislature, including measures to declare Maine's ground water a public trust (like its surface water), and repeal the "absolute dominion" law, whereby a landowner can pump as much ground water as s/he desires.

There are also a number of municipal regulations on the table.

Could be a long winter for the folks at Poland Spring.

"Bottled water has certainly animated the conversation in the last several years." -- Andrew Fisk, director of Land and Water Quality, Maine Department of Environmental Prtotection 

Takings Claims in the Klamath Basin

So all is well in the Klamath Basin, right?

Shana Jones of the Center for Progressive Reform (CPR) alerted me to this post by Dan Tarlock and Holly Doremus on the CPR blog. I thought it would be worth repeating on WaterWired.

Tarlock and Doremus discuss last week's decision by the Oregon Supreme Court to decide whether irrigators in the Klamath Basin "own" water delivered to them by the U.S. Bureau of Reclamation's Klamath Basin Project (the photo of Tule Lake is from the WWW site). 

 This may not sound significant, but it is, since the irrigators claim they own the water, not simply the right to use the water. There is a huge difference, as Western water law recognizes that people can own rights to water, but not the water itself.

Doremus and Tarlock wrote Water War in the Klamath Basin: Macho Law, Combat Biology, and Dirty Politics, which I have not read.

The first paragraph of their post:

Last week, the Oregon Supreme Court agreed to decide whether irrigators in the Klamath Basin "own" water delivered by the federal Klamath Reclamation Project. This latest development is one more twist in an ongoing property rights case that illustrates both how difficult it can be to determine who holds precisely what rights in western water and how property rights claims, even spurious ones, can frustrate ecosystem restoration efforts.

The last two:

In the end, it won't even be much help to the irrigators themselves. They are unlikely to ultimately win their case. Even if they do, the courts cannot save them from the real threats to farming in the area, global economic and climatic change.

By definition, ecosystem restoration must displace the status quo to some extent. Sometimes, the losers may deserve some help in dealing with transitions. But takings litigation is too crude a tool for calibrating that help. It tells us little about the extent of the pain caused by change, the extent to which that pain is properly charged to the government or (as is clearly the case in the Klamath) has other causes, or about the appropriate way to distribute its costs.

To be continued....you can bet on that.

“We all live under the same sky, but we don’t necessarily share the same horizons.” -- Unknown

New Mexico's Deep Ground Water Rush: It Still Flows to Money

So why would I think otherwise? More fun times in the Land of Entrapment.

I've posted about the rush to tap into New Mexico's deep (nontributary) ground water several times in the past few months: 30 December; 4 November; 13  November; and 26 November; and  17 August. I've broached some of the "unintended consequences."

Until now, most of the focus tapping this resource was the Rio Puerco Basin west of Albuquerque. But now, the 'gold rush' has spread to the Santa Fe-Española  area.

Here is Staci Matlock's story from the Santa Fe New Mexican. She reports:

On Monday [26 January 2009], five companies with undisclosed ownership notified the State Engineer that they intend to drill deep wells in the Santa Fe area and pump out up to 24 billion gallons a year [about 74,000 acre-feet per year].

In the last year, 18 companies have notified the state of plans to drill 190 deep wells and pump up to 345,000 acre-feet of water per year.

Wow! That's a lot of water!

A bill by Rep. Mimi Stewart (D-Albuquerque) is pending in the legislature to give the State Engineer authority to regulate these deep aquifers. Matlock reports:

While the state engineer is charged with managing New Mexico’s water, state law contains an exception — wells that tap into aquifers that start at least 2,500 feet below the land’s surface, contain briny water and are disconnected from upper aquifers.

The Santa Fe New Mexican opines about the issue and supports more authority for the State Engineer to regulate these new sources.  I agree.

They also warn:

There's already language in our laws protecting potable-water aquifers from being drained from below. But are there teeth in those provisions? Will deep-well legislation actually protect our state's most valuable resource, or will it turn into cosmetic reform? Rep. Stewart and her legislative colleagues must make sure it's the real thing.

The editorial also notes that of the five companies angling to drill in the Santa Fe-Española area, only one's true identity is known. The other four are hiding behind a New Mexico law that allows them to do so. Not good, folks.

Here is a flyer announcing a forum, Desalination: Silver Bullet or Pipe Dream?, to be held in Albuquerque on 21 February 2009 (thanks to Elaine Hebard).

Download Desal_meeting

"...It's time for transparency. Meanwhile, New Mexicans might freely suspect that these guys are sprawl promoters and water brokers, prepared to literally salt their drill holes like Old West mine-claimants were known to "salt" their diggings with specks of gold." -- Santa Fe New Mexican editorial, 28 January 2009 

Roundup of New Federal Water Legislation

From the American Water Works Association...

Here is some of the new legislation affecting the water industry that was introduced in the opening days of the 111^th Congress.

[Editors Note: The hyperlinked bill numbers go to Thomas, the federal Web site that allows tracking of legislation. Readers will need to re-enter the bill’s number (HR for House of Representative or S for Senate plus the number) and click “Bill number” to read the text, get sponsors’ names, and track the bill’s progress through subcommittees, committees, hearings and both houses of Congress before being sent to the White House for the President’s signature.]

• Twenty-First Century Water Commission (HR135)
  A bill to establish the Twenty-First Century Water Commission, to study and develop recommendations for a comprehensive water strategy to address future water needs. The bill discusses methods to optimize water supply reliability, availability, and quality, while safeguarding the environment; recommends means of capturing excess water and flood water for conservation and use in the event of a drought; and suggests financing options for comprehensive water management projects and for appropriate public works projects. Sponsor: Rep. John Linder, R-Ga., and 5 Democratic co-sponsors. Introduced Jan. 6. Referred to the House Natural Resources Committee and the House Transportation and Infrastructure Committee.
• Drug Free Water Act of 2009 (HR276)
  A bill to direct the administrator of the US Environmental Protection Agency to convene a task force to develop recommendations on the proper disposal of unused pharmaceuticals. Sponsor: Rep. Candice S. Miller, R-Mich. Introduced Jan. 7. Referred to the House Transportation and Infrastructure Committee.
• Appropriations for the San Gabriel Basin Restoration Fund (HR102)
  This measure extends by $61.2 million the authorization of federal funds for the San Gabriel Basin Restoration Fund, created in 2000 to help clean up perchlorate contamination and provide safe drinking water to Southern California. The San Gabriel Basin Water Quality Authority will receive $50 million and the Central Basin Municipal Water District will receive $11.2 million. The initial federal authorization was $85 million, most of which has already been allocated to the ongoing clean up. The estimated total cost of clean up is now $1 billion. With the additional federal assistance that this bill provides, the federal investment is 14 percent of the total cost. Sponsor: Rep. David Dreier, R-Calif. Three bipartisan co-sponsors from California. Referred to the House Committee on Natural Resources.
• Great Lakes Water Protection Act (HR54)
  A bill to amend the Federal Water Pollution Control Act to establish a deadline for restricting sewage dumping into the Great Lakes and to fund programs and activities for improving wastewater discharges into the Great Lakes. Establishes a trust fund to be known as the `Great Lakes Cleanup Fund' and effective Jan.1, 2029, authorizes appropriations for the fund equivalent to the penalties collected for violations of section 402 of the Federal Water Pollution Control Act. Funds to be made available to Great Lakes states for improving wastewater discharges and other activities, in proportion to fines collected. Sponsor: Mark Steven Kirk, R-Ill. Co-sponsors: one Democrat. Introduced Jan. 6 and referred to: House Transportation and Infrastructure Committee.
• San Joaquin River Restoration Settlement (S161)
  A bill to authorize implementation of the San Joaquin River Restoration Settlement. Authorizes appropriations not to exceed $250 million; $88 million to be collected in the San Joaquin River Restoration Fund through Oct. 1, 2019; authorizes use of monies from the Central Valley Project Restoration Fund ($20 million); commitment of at least $200 million by the state of California. Sponsor:Dianne Feinstein, D-Calif. Co-sponsor: Sen. Barbara Boxer, D-Calif. Introduced Jan. 6.  Referred to Senate Energy and Natural Resources Committee.

Establishing Markets for Ecological Services: Beyond Water Quality to a Complete Portfolio

Dick Enberg of AWRA sent me this article (same title as the post) by G. Tracy Mehan, III, former EPA Assistant Administrator for Water (2001-2003) and now with the Cadmus Group.

Download Mehan - Markets for Ecological Services

"Whom the gods would destroy, they first give forty years of success." -- Peter Drucker, quoted in Mehan's article.

The Girl Effect: Empower 600 Million

Take a look at this video from The Girl Effect (from the Nike Foundation).

The Girl Effect: The powerful social and economic change brought about when girls have the opportunity to participate in their society. 

Desalting Deep Brackish Ground Water

Fifteen billion acre-feet of ground water? That is about a 25-year supply for the world at current pumping rates!

That's how much brackish ground water lies beneath New Mexico, according to Sean Olson [thanks to John Fleck for alterting me] in the 29 December 2008 Albuquerque Journal (you will have to view an ad to read his article).  I know a lot of brackish ground water underlies New Mexico but I am a little skeptical of that figure - it seems awfully high.

But the exact number is not relevant to Olson's article,  which basically says that desalting New Mexico's huge supply of brackish ground water will likely cost a lot of money because of the energy required.

Mike Hightower of Sandia National Laboratories, a good guy (even though he attended New Mexico State University) who knows as much about the energy-water nexus as anyone I've ever met. says that it will cost about $3-$5 per 1000 gallons to treat brackish water to drinking-water standards. It costs about $1-$2 per 1000 gallons to treat 'normal' fresh water to the same standards.

Then there's the problem of waste disposal, about which I posted in August 2008.

For more information on the topic: here is Bruce Thomson's Op-Ed about the New Mexico brackish water issue, and another one of my posts on this subject from November 2008. 

Never a dull moment in the Land of Entrapment!

"We know accurately only when we know little; with knowledge doubt increases. " -- Goethe

Paying (More) for Water?

Todd Jarvis sent me this opinion piece from the Idaho Mountain Express. It's about a sensitive issue - paying for water. No, not for the infrastructure to provide it or the maintenance of the infrastructure. Most of us pay nothing for the actual water itself. Should we? Jon Marvel makes a case for doing so (I've not reproduced the entire article). He is the executive director of the Western Watersheds Project in Hailey, ID.

Marvel contends that charging for water is a way to mitigate the impact of recent state agency budget cuts mandated by Gov. Butch Otter (R-ID). He urges the legislature, "Don't Give Away Idaho's Water".

One possible area for this kind of fiscal reform is in the administration of Idaho's most precious natural resource—water.

Under current Idaho law water right holders do not pay the State of Idaho anything for that right even though the Idaho Supreme Court has affirmed that the State owns the surface and ground water within its boundaries. Every Idaho State water right establishes a point of diversion, a point of use, a season of use and the amount of water for that right, but the State charges nothing for the water.

Of course, there are costs for water users: farmers pay water districts for delivered water and may have costs for pumping water. City dwellers pay city water departments or private water companies for water but other than these costs, water is free for the taking.

One consequence of this free water policy is that the majority of the Idaho Department of Water Resources annual budget of $26,000,000 comes from the Idaho's general fund and not from water users.

Instead of this drain on public coffers and the sales tax revenues that could be supporting public education, why doesn't the State start charging all water users for the use of public water ?

Such a water charge could also encourage conservation of water by establishing a rising fee as the amount of water use increased. In this way large water users like irrigators would become accountable for their impacts that contribute to currently declining surface and groundwater flows in the Snake River Plain.

Hard times like these can lead to innovative ways to sustain important public programs like public education. The earlier we start to discuss new ways of funding critical public needs, the sooner we can help insure our children's future.

Rural (self-supplied) folks who pump their own water may balk because they generally pay more for water than city dwellers. A recent presentation (see slide 11) by colleague Jerry Schmidt shows that in Oregon, over 10 years a rural resident who pumps ground water can expect to pay about $17,000 versus about $5,200 for the city dweller. But the $17,000 figure includes $14,000 for the intitial cost of the well and pump and then $300 per year for operation (but nothing for replacement and repair), so the comparison is slightly misleading.

No one is paying anything for the water (although some municipal systems now levy a "scarcity" or "commodity" charge that purports to include the cost of the water). This needs to change. Such fees for using water should be used to support the various activities of state water resources agencies in the fields of outreach and education, and to provide funds to communities to plan/manage their own water supplies.

"Talk is cheap because supply exceeds demand." -- Unknown

Water Economics Lecture Series Online

Lectures from the Institute for Water and Watersheds' Fall 2008 Water Resources Seminar series,When Water Does Run Uphill: The Economics and Politics of Water in the 21st Century, are now online. Presenters and titles are shown below - click here to access.

• Oct. 1 - Bill Jaeger, Oregon State University, The Klamath Water Crisis -- an Economic Perspective

• Oct. 8 –Molly Whitney, National Fish & Wildlife Foundation, The Water Transactions Program in the Columbia Basin

• Oct. 15 - Carlo Giuponni, University of Venice Ca'Foscari, Climate Change, Water Scarcity and Agriculture in Italy: the Common Agricultural Policy and its Relationships with Adaptation and Mitigation Policies

• Oct. 22 - Janie Chermak, University of New Mexico, Residential Water Pricing: Economics and Policy Issues

• Oct. 29 - Senator David Nelson, Pendleton, OR, Oregon’s Oil

• Nov. 5 - John Haines, MercyCorps, Portland, OR, Microfinance and Water

• Nov. 12 - Chuck Howe, University of Colorado, Water Law vs. Economic Efficiency in Water Administration

• Nov. 19 - Ron Griffin, Texas A&M, Texas Experiences with Water Marketing and Water Pricing

• Nov. 26 –  No Lecture, Thanksgiving Break (this is a real good one!)

• Dec. 3 - Clay Landry, WestWater Research, LLC, The New Economy of Water: Changing Attitudes and Emerging Markets for Water

"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." -- Winston Churchill

Water Trumps OJ's Day: Four Indicted in Nevada Water-Data Scam

So the big news in Nevada yesterday was the sentencing of O.J. Simpson, right? 

Or perhaps the indictment of Nevada Lt. Gov. Brian Krolicki?

Or the continuing marital woes of that ersatz hydrologist, Nevada Gov. Jim Gibbons (shown to the left in his official gubernatorial garb), and First Lady Dawn Gibbons?

WRONG!

"The Juice" may be joined in prison by water administrators from the Truckee-Carson Irrigation District (TCID) in northern Nevada, who have been indicted in a water scam.

What ? A scam? In Nevada?

Friend and Nevada WaterWonk Alan McKay sent me this article from the Reno Gazette-Journal. Seems like the two top administrators of the Truckee-Carson Irrigation District and two other employees, along with the District itself, have been indicted by a grand jury on charges of falsifying flow records and altering flow meters in an effort to gain the District more flow credits to sell on the open market, partly to pay for the District's litigation with the Pyramid Lake Paiute Tribe.

From Martha Bellisle's story:

The Truckee-Carson Irrigation District and four of its Fallon employees were indicted Wednesday on 10 charges of conspiring to defraud the federal government, making false claims and falsifying records in a scam to secure Sierra water and gain credits from the federal government.

David Overvold, 58, project manager for the irrigation district based in Fallon; Lyman McConnell, 64, the district's lawyer; Shelby Cecil, 65; and John Baker, 63, manipulated or disabled water meters, changed numbers on water-use reports and submitted inflated figures from 2000 to 2005 to secure additional water credits from the U.S. Bureau of Reclamation, the indictment said.

Part of the money earned through their alleged water diversion scheme was used to pay a civil lawsuit won by the Pyramid Lake Paiute tribe, which had sued the district in 1995 for illegally diverting water that should have gone to Pyramid Lake and caused it to drop by 70 feet, the indictment said.

The TCID operates the irrigation system for the Newlands Project and distributes water to landowners, ranchers and farmers in the Fallon, NV, area, about 50 miles east of Reno. The Newlands Project was the U.S. Bureau of Reclamation's first project, undertaken in the early 1900s shortly after its creation.

More from the story:

"The object of this conspiracy was for TCID to fraudulently obtain from the Bureau of Reclamation incentive credits in the form of thousands of acre-feet of water," the indictment said.

To do this, the district used false numbers for the amount of water it delivered and maintained for irrigation from 2000 to 2005, the indictment said.

At times, they wrote in higher numbers for the amount of water delivered to certain landowners, when no or little water was delivered, the indictment said. They also manipulated water meters to record more water than was flowing, and turned in inflated figures for water delivered, the document said.

The fake numbers suggested that they met efficiency levels, which triggered the granting of incentive credits, the indictment said.

Looks like I will need a new category: "Criminal Actions".

Moral: calibrate your flow meters and gaging stations.

Alan went on to comment that times are not good for TCID, as homeowners in Fernley, NV, may file suit over a levee breach that caused flooding earlier this year.

"Flush twice. It's a long way to Reno." -- unofficial motto of Truckee, CA

Supreme Court to Decide Superfund Liability Issue

A colleague sent me this notice of an upcoming Supreme Court case that will decide whether the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund, can be reasonably apportioned.

Ground water remediation and law are not my fortes so I will post this without comment.

Here is a link to the complete article by Steven Jones from the Marten Law Group. The first paragraph:

This term, the United States Supreme Court will decide a question that many environmental lawyers thought they already knew the answer to – when liability under CERCLA is “joint and several” and when it can be “reasonably apportioned.” From CERCLA’s earliest days, EPA and the Justice Department have argued that liability under the statute is joint and several, except in very rare circumstances where the defendant can prove divisible harm. The government routinely takes the position that it can name fewer than all Potentially Responsible Parties (PRPs) and compel any of them to clean up an entire Superfund site, subject to the PRPs’ ability to pursue cost recovery or contribution actions against other liable parties. Moreover, in cases where one or more PRPs are insolvent or defunct, EPA and Justice have sought to compel the PRPs that are still solvent to pick up the “orphan share.” Most district and circuit courts have agreed with the government’s position, and most liable parties, and their lawyers, have come to accept it as an immutable, if unfair, fact of life.

My colleague feels this passage from Jones' article is key:

Acceptance of Shell's arguments by the Court could have a significant impact on CERCLA practice, since it would create a large incentive for any PRP [Potentially Responsible Party] that possessed evidence that might support apportioned liability to hang back and wait for the government (or other plaintiffs in contribution or cost recovery cases) to prove its case, rather than settling and then seeking to apportion cleanup costs through contribution or cost recovery actions. Otherwise, such parties would face the possibility of shouldering the costs of orphan shares or disproportionate allocations. In addition, if the Court allows apportionment based on the relatively simple allocation factors used by the district court, then EPA will have to pick up the cleanup costs of orphan parties such as B&B [Brown & Bryant, Inc.].

My colleague's comment:

Without making any comments on the merits of how costs should be allocated, if we see PRPs holding back and waiting and the government having to take on more costs to prove its case, we could see a slow down at Superfund sites.  The second point about greater reliance on the government picking up orphan shares is problematic on its face given that the taxes that supported the Superfund Trust Fund are no longer being collected.   Money is coming out of general funds and in both cases, the amount of funding is subject to annual appropriations and working within funding allocations.

So there you have it. Questions? Comments?

"A young horse knows how to run fast. An old horse knows the way." -- Unknown

Value of H2O: Results of The Economist's Online Debate

Here are the results of The Economist's debate on pricing water value according to its market value.

Even though the voting is over, you can post comments until 17 October.

Dear Reader,

After a torrent of incisive statements and comments over the past two weeks, our debate has now reached a close—and we have a winner. You have voted against the proposition by 59% to 41%. Vandana Shiva prevails.

This house does not believe that "water, as a scarce resource, should be priced according to its market value".

The no vote had been ascendant from the beginning, although the final margin was narrower than in some previous debates. Judging by the number of comments along the lines of "What next, pricing the air we breathe?", the weight of participants who were simply appalled by the notion of free-market water was just too great for Steve Hoffmann, of the proposition, to overturn.

We owe a great debt of thanks both to him and to Ms Shiva for the vigorous but courteous cut-and-thrust of the past ten days. I am also very grateful to all our guest participants and commentators.

The Economist is sympathetic to water pricing, although it also believes that governments round the world need to do much more to advance rural development and to help people out of poverty. If nothing else, the outcome of the debate illustrates how important it is to make the case that these two goals are not incompatible.

The outpouring of views during the debate suggests that there is plenty of appetite for further analysis of the subject, and we will aim to provide it in our coverage. In the meantime, you can continue to post comments both about the debate and about its outcome until Friday, October 17th. I look forward to seeing what else you have to say on the subject.

Let the wasting continue!

"Never appeal to a man's 'better nature.' He may not have one. Invoking his self-interest gives you more leverage." -- Robert A. Heinlein

The Economist's Water Debate: Sneak Preview of Pro and Con Closing Statements; Vote By 10 October

Lauryn Nicasio sent me this update on The Economist's online water debate, 'The Value of H2O' (read my original post).

I wanted to give you a quick update on the current online debate at The Economist on the value of water. Currently, 60 percent of Economist readers oppose the proposition, “This house believes that water, as a scarce resource, should be priced according to its market value.”  There are three days to vote and comment before a winner is chosen by the community on Friday, 10 October.

Here is the link to the debate. Participation is free, but you must register to comment or vote. 

Below are the Pro and Con closing statements.

Pro Closing Statement

Stephen J. Hoffmann, Managing Director, WaterTech Capital & co-founder, Palisades Water Index Associates

In closing I want to make sure that my position is well explained. Let us break down the statement into its constituent parts. The statement is generalised but the intent of the subject is clear, that is, should the price of water charged to end-users be based on a market-driven methodology or should it be based on some other, most likely institutional, mechanism. An institutional mechanism in this instance would be predicated upon governmental intervention independent of the reality of economic interrelationships.

The price of water is the monetary consideration that a given user is charged for the water that is used. Users are broadly defined as residential, industrial, commercial or agriculture. The ultimate uses are more varied: drinking water, irrigation, process water, power generation, ecological or recreational. And the applications are an even greater combination of the uses and the users.

Participants in the debate have understandably questioned the meaning of market value. The definition is critically important because the price charged for water goes well beyond mechanical computations based on cost to encompass broader social goals and objectives. I am in no way denying the importance of those social imperatives. Indeed, it is because of my belief that the human species must reconcile its drive for a higher standard of living with safeguarding ecological systems that I advocate the pricing of water at its true value. Placing the word “market” in the phrase does not need to imply something insidious.

What is the market value of water? Let us start with what it is not. It is not simply a willingness to pay, as Ms Shiva suggests. It is not an arbitrary metric derived by capitalists to profit from scarcity. The market value of water should be a reflection of all the factors that make water a prerequisite for life and for living. Contrary to what Ms Shiva would like us to believe, it can encompass ecological stewardship, biodiversity and sustainability in use. It also encompasses all of the costs associated with achieving those results: regulations, marginal supply costs and advanced treatment technologies.

I am ardently opposed to bottled water both as a sustainable solution to the lack of access to potable water and as an application that has dire environmental consequences. Bottled water has become an alternative to safe tap water because the social institutions upon which Ms Shiva so adamantly relies have failed to provide a safe, cost-effective alternative. China is industrialising and urbanising in anticipation of a higher standard of living. It has an increasing middle class as a result. And the consumption of bottled water in China is increasing exponentially. While the middle class of China could be spending pennies per thousand gallons for safe tap water, they are increasingly spending dollars per litre for water in a bottle. They are doing so because governmental officials in China have failed to allocate water as a public good. If the largest, centralised, socialistic government in the world cannot mandate an effective allocation of a public good, then what hope do we have that any other country can do so? This is the practical failing of Ms Shiva’s emotion-laden argument. Do not blame Coca-Cola for meeting an unmet consumer need. Blame the public sector for not creating an alternative, cost-effective, market-driven solution.

Ms Shiva states that “the value of a public good vital to life is allocated by society on principles of ecology and justice. The value of a commodity is allocated by the market.” These statements are incredibly naive and have no practical application.

Witness the following points.

·         Vital to life does not make a good a public good. A public good is one that exhibits specific characteristics. Is food not vital to life?

·         Just how does society allocate water based on principles of ecology and justice? A blanket statement is not a solution.

·         There is nothing intrinsically wrong with treating water as a commodity in some respects. But it is not a commodity in the market sense of the word.

·         Market mechanisms will play a key role in the management of water resources in the 21st century; be part of the solution rather than part of the problem.

Another conclusion from viewing the observations of readers is that although many want to believe that markets can contribute to resolving the water challenges that we face, there is a reservation that the most difficult challenges will be ignored. In other words, the invisible hand may be too invisible when it comes to the world’s most disadvantaged populations. With those I must agree. But again the philosophy of charging the market value for water extends to the inhabitants of sub-Saharan Africa. It must be recognised that public (governmental) or other social institutions must address those costs and then make a policy decision to distribute scarce water resources differently.

The Millennium Development Goals established by UNESCO include the reduction by half of the proportion of people without sustainable access to safe drinking water by 2015. The key words in this statement are ”sustainable” and “access”. Sustainable does not mean some artificial public-sector allocation that is subject to the whims of the current political regime. And access equates to the infrastructure needed to provide safe drinking water and basic sanitation. The mandate refers to the development of permanent investment in water infrastructure to cost-effectively deliver safe water.

While I choose to look for solutions by incentivising the free market, many like Ms Shiva simply blame everyone else for the problems. They are blinded to any solution that involves the profits that keep the process advancing. As a scientist I am perplexed by Ms Shiva’s lack of knowledge of the relationship between the hydrologic cycle and the science that permits economic solutions. We are advancing market mechanisms to alleviate global warming which is caused by the interplay of the carbon cycle with anthropogenic activities, yet Ms Shiva refuses to apply the same methodology to the hydrologic cycle. Does the fact that air is a public good allow us to pollute it without consequence?

If we follow the irrationality of emotional decisions, as Ms Shiva suggests, we will forever be dumbfounded by the fact that millions of people are needlessly suffering from the lack of safe drinking water and basic sanitation. Quite simply, the resolution of the planet’s water resource challenges must have a market component to ensure access by all people and to preserve ecological integrity.

Con Closing Statement

Dr. Vandana Shiva, Director, Research Foundation for Science, Technology & Natural Resource Policy

Good science constitutes being able to discriminate between spheres to which a specific theory applies and spheres to which it does not. Applying the principles of Newtonian physics to the quantum world is inappropriate, as is applying the principles of mechanistic science to complex self-organising living systems. Applying the principles of the market economy of trade in commodities to the ecological and social world of our living and precious water resources is similarly inappropriate. Blind adherence to false assumptions is ideological. In fact this is what makes for various hues of fundamentalism And Steve Hoffmann exposes himself as a market fundamentalist by repeating the false assumptions that market principles can be applied to how water is managed and distributed, without causing harm to people and their human right to water or to ecosystems and their ability to provide ecosystem services in perpetuity.

Market fundamentalists do not recognise that there are not one, but three economies: nature’s economy, people’s sustenance economy and the market economy. The first two can survive without the third, but market economics are dependent on nature’s ability to provide ecological services and societies support systems—the invisible work of women, of third-world people, the human relationships beyond markets which support markets and market transactions. One could not bring up a child on market principles, just as much as one cannot conserve water resources or share them equitably on the basis of market values set by the greed of water corporations or the willingness to pay of the privileged in society.

Market fundamentalism applied to seed has given us terminator technologies to create sterile seeds, seed monopolies and seed famine. It has driven 200,000 farmers to suicide due to debt.

Market fundamentalism applied to water will create water monopolies and water famine. It will aggravate water scarcity for fragile ecosystems and vulnerable communities.

Water privatisation cannot respond to the diversity of water systems needed to adapt to the diversity of ecosystems to ensure sustainability. Markets support and are supported by uniformity and the one-size-fits all mentality. Markets are also built on resource extraction, not on returning water to ecosystems. They are linear not cyclical.

And the drivers of markets are corporations, not people or nature. Mr Hoffmann confirms this when he says: “If the market value of water is not charged to end users what incentive does Badger Meter have for developing automatic meter reading technology to measure real-time consumption demands, what incentive does ITT have for developing efficient water pumps, what incentive does IDE Technologies have for engineering integrated watershed management programmes? Mr Hoffmann’s water world is companies, water meters, pumps, engineering. My water world is women, children, rivers, lakes, snowflakes and raindrops.

In India 25 different water conservation and management systems have been built to provide water. The eri, keri, kunta, kulani, ahars, bandh, bandha, khadins, bundhies, sailata, kuthi, bandharas, low khongs, thodu, dongs, tanks, johad, nade, peta, kasht, paithu, bil, jheel and lakes are only a few of them. To this day, these ancient systems are the mainstay of survival in ecologically fragile zones.

In the desert of Rajasthan, human care and efforts have provided water through the huin, kuan, kundi, kund and tanka. Since every drop of rain has to be conserved, the indigenous knowledge is based on the sensitive observation of rainfall and its patterns. The first drop of rain is called hari. Rain is also called meghphusp (cloud flower), vrishti or birkha; water drops are called bula and sikhar. It is not markets but sophisticated knowledge and sensitive care which have made Rajasthan the most vibrant desert of the world. People invest their labour and care to provide water. Thus investment is not based on the market value of water but on its pricelessness. It is not based on profits but on the gift economy. Our communities are water keepers, not water privateers. If markets define the “relationship between mankind and the environment”, as Mr Hoffmann states, mankind is not humanity. It does not include women, children or the vulnerable members of society. It is the sub-sect of humanity that defines the world through the lens of Wall Street, because Wall Street is their world.

Mr Hoffmann also explains the current financial crisis as stemming from the public policy directive that home ownership is tantamount to a right and that everyone, even if unable to afford it, should be able to buy a home. This is totally false. Market fundamentalism led to public systems withdrawing from providing affordable housing, on the assumption that the poor can be left to predatory banks to meet their housing needs. Wall Streets created the subprime crisis. The human right to housing would have ensured affordable housing for all, just as the human right to water is the only way to ensure water for all. The predatory market has left thousands homeless and it will leave millions waterless.

That is why I work with our communities to keep water and other vital resources beyond the greed of the market. In the 1970s women in my region started the Chipko movement because commercial logging was leading to deforestation, and deforestation was leading to floods and droughts. They fought against the rule of the market over their forest. They hugged trees so that the greed of the market forces would not dry up their springs and streams and they would not have to walk miles to water. Women are not walking additional miles to water because of the absence of the market, as Mr Hoffmann suggests. It is the women who walk long miles for water who are leading the movement against the privatisation and commodification of water. They are building the movement for defending water as a public good and a human right. They know their water security lies in protecting, conserving and sharing our common and precious gift of water.

 

The Value of H2O: Online, Oxford-style Debate at The Economist - Schedule and Opening Statements

The Economist will have an online, Oxford-style debate on its website from 30 September - 10 October.

The topic: The value of H2O

The proposition: This house believes that water, as a scarce resource, should be priced according to its market value.

Some of the issues the debate will cover include: Would water supplies be better managed if it were treated as a commodity, and priced accordingly? Or is water a basic human right that governments should secure for their citizens? As both an industrial input and a prerequisite of life, water has become extremely scarce for roughly a billion people who do not have a constant supply of clean and safe water, so the issue is of extreme importance.

Debate Schedule

·         September 30th. Opening statements and comments and voting open to the public

·         October 1st. Guest Participant post by Dr. Michael W. Hanemann, chancellor's professor, Department of Agricultural & Resource Economics, University of California

·         October 2nd. Guest Participant post by Anup Jacob, partner, Virgin Green Fund

·         October 3rd. Rebuttal statements and Guest Participant post by Colin Chartres, director general, International Water Management Institute

·         October 6th. Guest Participant post by Dr. Peter Gleick, president and co-founder, Pacific Institute

·         October 7th. Guest Participant post by Peter L. Cook, executive director, National Association of Water Companies

·         October 8th. Closing statements

·         October 9th. Guest Participant post by Dr. Ashok Gadgil, senior scientist and deputy director, Environmental Energy Technologies Division, Lawrence Berkeley National Laboratory

·         October 10th. Winner announced

Pro Opening Statement

Stephen J. Hoffmann, Managing Director, WaterTech Capital & co-founder, Palisades Water Index Associates

The severe spatial and temporal imbalances in the supply of and demand for water—and safe drinking water in particular—dictate that water be priced at the true market value in order to resolve our global water challenges.

The notion of sustainability is gaining momentum with respect to the use of water and is likely to permeate virtually every aspect of water-resource management in the 21st century. While the hydrologic cycle is a closed biogeochemical process, the fact that the aggregate amount of water on Earth, in its various forms, is virtually constant on a human time scale does not mean that we do not face enormous challenges with respect to its spatial and temporal distribution.

Water is a critical factor in poverty, has a fundamental impact on human health, and is increasingly crucial in economic development. The World Health Organisation reports that 1.1 billion people worldwide lack access to safe drinking water and 2.7 billion people lack basic sanitation needs. Yet despite its stature as a prerequisite for life and for living, the price of water remains artificially low based on an institutional ideology that developed when accessible freshwater was relatively abundant and when contamination was mitigated by the ubiquity of the resource.

Sustainability is the mantra behind many emerging regulations, water-policy initiatives and technological advances. And nowhere is the market price of water more critical than in the concept of sustainability. Efficiency is critical in achieving sustainability and a market-driven price is paramount to the efficient allocation of water resources. The sustainability criterion suggests that, at a minimum, an allocation must leave future generations no worse off than current generations. Economics has much to say about the efficiency of the allocation.

The pricing of water must go beyond the mechanical and political aspects to the basic factors that affect the relationships between producers and consumers, and that are implicit in the rate structure. The principle of sustainability is critically dependent upon efficiency in water use. And efficiency cannot be achieved without the proper signals included in market prices. Market value is equivalent to water rates based on economic principles of water-resource pricing. In that regard, resource economics requires the convergence of two key principles: equimarginal value in use and marginal cost pricing.

Economic principles of resource allocation dictate that when costs are incurred in the acquisition, treatment and transport of water supplies to customers, the principle of equimarginal value in use should be combined with the principle of marginal cost pricing; that is, market value must govern. Additional units of water can always be made available by expending more resources to acquire and transport it, that is, at a given marginal cost.

The question of where to stop in increasing the supplies made available is then added to the question of how to arrange for the allocation of the supplies in store at any point in time. On efficiency grounds, additional units should be made available as long as any customers are willing to pay the incremental or marginal cots incurred. To meet the criterion of equimarginal value in use, however, the price should be made equal for all customers in a class.

It is precisely because of practical considerations such as alternative supplies, location, use patterns, types of service etc, that the marginal costs of serving all customers will not be the same. Pricing should be arranged, then, so that all customers within a class served under identical cost conditions pay the same amount equal to the marginal cost or market value. Between classes, however, prices should differ, and the difference should be the difference in marginal costs involved in serving the two. In general, the economic principles of resource allocation indicate that customers served under identical cost conditions should be charged equal prices and that the water should be supplied and priced in such a way that the price for each class of service equals the marginal cost of serving that class.

Water rates should be designed to fully recover the costs of providing water by charging customers in accordance with how they contribute to the costs. Schedules of water rates that charge customers in accordance with the cost of service would be efficient from the economic point of view, in that the price of a unit of water would be equal to the cost of the resources used to obtain and deliver that water. Further, they would be equitable in that no customer would be required to subsidise any other customer. To sum it up, the dictates of efficiency are clear: water should be allocated so that the marginal net benefit is equalised for all users. If marginal net benefits are not equalised, it is possible to increase net benefits by transferring water from those uses with low net marginal benefits to those with higher net marginal benefits. Again, the pricing of water at the ‘market’ value is the only way to make these determinations.

The amount of easily accessible freshwater is coming under increasing pressure as a result of global population growth, particularly in developing countries where urbanisation and industrialisation are underway, and the degradation of existing supplies. The amount of readily accessible freshwater is a minuscule percentage of the Earth’s total water budget. If per capita consumption of water continues to increase at its current rate, we will be using over 90% of all available freshwater with 20 years.

Scarcity, spatial and temporal, must be reflected in a pricing mechanism. Water is like any other economic good for which there is supply and demand and a pricing mechanism that seeks equilibrium between the two.

This is not a process-oriented enchantment with the free market that it may appear to be. While this might sound like so much economic rhetoric, the reality is that market pricing is central to enabling the forces that allow the efficient allocation of the resource. It is simply a recognition that market prices convey a great deal of information; information with respect to incentives, efficiency and allocational considerations. The pricing of water based on its true market value is also critical in resolving the issues associated with its allocation among competing beneficial uses.

Desalination is an example of where the market value of water plays an important role as a catalyst for problem resolution. In regions of the world where water is permanently scarce, desalination has emerged to meet demand. And it has done so only because there are few options. Granted, desalination is more attractive where energy is cheap, but it points to the reality that if water is simply unavailable, the market value argument is easy to acknowledge. It stands to reason that water priced at the market value (which includes scarcity, regulatory costs, treatment costs and resource management considerations) would be beneficial for the entire spectrum of conditions.

The signals and incentives contained in pricing water at its market value also enable the processes of recycling, reuse and conservation that are central to achieving sustainable water use. That water is not priced (valued) at its market value is the main reason why we are experiencing many of our severe water-quality and -quantity issues. Resource economics dictates the allocational efficiency of market-driven pricing.

Con Opening Statement

Dr. Vandana Shiva, Director, Research Foundation for Science, Technology & Natural Resource Policy

Between last year and this the market value of Lehman Brothers dropped from $38.4 billion to $5 billion, Merrill Lynch from $71.9 billion to $33.1 billion, and Morgan Stanley from $70.2 to $43 billion. Since then Lehman Brothers has collapsed. There is clearly no reliable "market price" in a volatile world driven by greed and profits, with no social regulation. The idea that the management and distribution of and access to a scarce and vital resource like water can be left to the market—and that the market can assign a reliable price reflecting the real value of water—is both absurd and irresponsible.

All cultures have viewed water as the basis of life. Marketisation, however, allows water to be perceived as no different from any other commodity in the global market place–to be owned and bought and sold at arbitrary, unreliable prices.

The commodification of water shifts the focus from the water cycle on to water markets – diverse species, ecosystems and water systems adapted to millions of years of evolution are replaced by instantaneous relationships between “sellers” and “buyers” negotiating a commodity transaction which determines how water will be used, where it will flow, and where and to whom it will stop flowing. It is assumed that water will flow from “low value” to “high value” use. This increase in “value” (which refers to price) is supposed to magically overcome water scarcity and allocate water equitably.

We need to focus our thinking on water cycles rather than water markets, on human rights to water rather than profits to be made from commoditising a scarce resource. It is our relationship with the ecology of water that has the capacity to sustain water supplies for us and other species. Trade in water can help water markets grow in the short term, but unregulated markets will make our scarce and fast-disappearing water resources disappear ever faster. It is the discipline of ecology and hydrology that we need to guide our efforts at conservation, not the ecological indiscipline of markets.

The anarchy of the water market can be a good guide to profits – but it is a bad guide for the equitable, just and sustainable use of our precious water systems.

In the years ahead, the ecological and commercial paradigms will clash intensely as globalisation displaces cultures of water conservation and replaces them with a commercial monoculture of water as a commodity.

The commodification of water resources is being promoted by the World Bank and free-trade agreements like NAFTA and WTO. The World Bank is using Structural Adjustment programmes to privatise water resources. Free-trade agreements are defining water as an environmental service covered by rules of free trade in services. Privatisation and commodification are threatening to accelerate the processes that have led to the growing crisis of drought, desertification and water famines.

The market paradigm of water involves the assumptions that:

1.         Increase in price is increase in value.

2.         Increase in water trade is increase in water supply and hence free trade in water can overcome the water crisis.

The assumption that water markets will overcome the water crisis is, however, fallacious and malicious. Firstly, water markets cannot reduce water use and conserve water because commercial exploitation has created water scarcity by fuelling over-exploitation. In a world of inequality, higher prices do not tame consumption–they increase the luxury consumption by the rich and deprive the poor even of survival needs.

Secondly, water trade cannot increase water supplies. Water cannot be created by markets. It can be stored, diverted, polluted and also over-exploited, but its overall availability cannot be enhanced.

Water is defined by the water cycle and renewed if the water cycle is maintained. The ecological paradigm recognises that:

1.         Water is the basis of all life on the planet including diverse species and all human communities.

2.         Non-sustainable water use spurred by non-sustainable economies and technologies which violate the limits and the integrity of the water cycle are creating a water crisis.

3.         The current water crisis can only be overcome by respecting the limits on water use that are enforced by the water cycle.

Markets driven by commercial values can neither recognise or respect the ecological limits set by the water cycle, nor give water its real value as the very basis of life. The real value of water is assigned by culture, which treats water as sacred; it is also assigned by rules of social equity and justice which recognise that everyone has a human right to water.

Water Markets Violate the Water Cycle

Water markets define “value” only as commercial and market value, and try and maximise this value as profits through commercial transactions and trade.

In nature’s economy, the primary value is sustainability and maintenance of nature’s essential ecological processes. Conservation is the imperative in nature’s economy for maximising ecological values.

In the sustenance economy, meeting people’s biological and livelihood needs for water are the primary objectives. Equity, justice and human rights are the primary values. Sharing of scarce water equitably is the imperative in the sustenance economy.

When water's social and ecological values are ignored and markets determine how water flows, it starts to move against the law of gravity. It moves upwards – to money – from the poor to the rich, from agriculture to industry, from the countryside to the city. In water markets, water moves from having a high ecological and social value, but a low market value, to having a low ecological and social value, but a high market value.

Water markets take water from where it is needed by nature’s economy, people’s economy and the countryside, to where there is purchasing power for water as a commodity—the urban areas, industry and industrial agriculture. Managing a scarce and precious resource like water requires conservation, equity and the recognition that as the basis of life, water is priceless.

Thanks to Brock Tabor and Todd Jarvis for first sending this my way. Lauryn Nicasio graciously provided all the detail on the schedule and opening statements.

“Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else.” -- Lyndon B. Johnson

Montreal Economique Thinque Tanque: Let's Sell Quebec's Water

Just a few days I posted an item about a Canadian government report speculating about potential fresh water shortages in Canada.

So now comes an article (thanks to R. Teeter) by business writer Lisa Wright from the 28 August Toronto Star, based on a report from the Montreal Economic Institute, Freshwater exports for the development of Quebec's blue gold by Marcel Boyer. In this case, the seller would be a public, not private, entity - the Province of Quebec.

Reading the comments to the newspaper's story is worthwhile.

Here are copies of the press release, and the entire report.

The report claims that Canada has far more annual renewable fresh water reserves per capita than the USA: 100,000 cubic meters (26.4 MG) versus fewer than 10,000 cubic meters (2.6 MG). In Quebec, the figure is even higher: 130,000 cubic meters (34.3 MG). Canada has 9% of the world's renewable fresh water reserves, and Quebec has 3%.

The report further asserts that Quebec uses only 0.5% of its annual renewable fresh water, versus 19% in the USA. If Quebec sold just 10% of its annual renewable fresh water at the current price for desalted water (about 65 cents per cubic meter) and the Quebec government took 10% in royalties, that would amount to about $6.5B profit each year for the provincial government.

As you might guess, this idea doesn't go over real well with the Council of Canadians.

From the article:

But the Council of Canadians is adamantly opposed to the practice of selling the nation's water, and says it's actually not as plentiful as people think.

"We're concerned about that. We know there's pressure from the U.S. to export Canada's water. But we see water as a human right and a public resource," said Meera Karunananthan, the Council's national water campaigner.

"We don't want to see water commodified and commercialized in this manner," she said, noting it's a myth that Canada has abundant supplies of water.

"They see it as an economic opportunity, and clearly the motivation here is profit," added Karunananthan.

The last comment is interesting, because Quebec's "water profits" would presumably go to support the public good, unless I've missed something and provincial governments have become profit-making enterprises.

Regardless of how you feel about this topic, Boyer's report contains some useful information. Among other things, it discusses:

• Technologies and options for shipping water

• Main conditions for exporting water

• History of Canadian export projects (NAWAPA, NARA-GRAND Canal)

• Canada's obligations under NAFTA

• Water transfer agreements: Israel-Turkey, Lesotho-South Africa, France-Spain, intra-national

Noah Hall's Great Lakes Law blog also has a good analysis of this issue.

Nothing like the keeping the pot stirred in the Great White North.

"The great themes of Canadian history are as follows: keeping the Americans out, keeping the French in, and trying to get the Natives to somehow disappear." -- Will Ferguson