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November 06, 2010

Comments

Thanks for writing about a policy problem that is not economics or foreign affairs, russell -- tis like a breath of fresh air.

I'm normally sympathetic to arguments about how we're underinvesting in infrastructure, but does that really apply here? I mean, I've heard bits and pieces about water/sewage systems not getting enough cash, but the problems with the midwest drying up don't seem related. Am I missing something obvious?

More to the point, do you have any info on how much of the water being consumed is used for residential purposes versus other uses? When last I looked, it seemed that actual home use was fairly insignificant compared to agriculture and industry. But I might be mistaken.

It may be time (and past time) to get real about water. But don't hold your breath. To take the obvious, oldest, and longest lasting example: Southern California. (It's not just LA, it's the whole state south of the mountains.) This area is, basically, a desert. In a sane world, it would have landscaping much like Phoenix: rock, with the occasional low-water plant. Instead, it has lush lawns everywhere -- watered with every drop that they can get from not only the Colorado River (tapped out, as you say), but the rest of California as well.

And the water from Northern California is running out, too. Unfortunately for the south, the environmental impact is starting to result in constraints on how much water gets shipped to them. (I wonder if this is why the conservative bastions in Orange County, etc. are so furious in their rejection of anything that suggests that the environment cannot support anything and everything indefinitely: it's their lifestyle that is going to take an early hit.)

The (multi-sided) "water wars" in California go back decades. So far, there is no sign of any of the principals admitting that the positions of any of the other principals are based on anything other than a nasty-minded desire to do ill to all the rest. The only good thing, so far, it that they are metaphorical "wars." But if California is a model for the rest of the world, when the rivers cross national borders (see China and all its neighbors) things could get nasty indeed.

There are no cities that are "running out of water". There may be farms that are running out of water, but cities aren't.

How do you think astronauts stay alive? Do they get deliveries of water every day?

You don't need water to stay clean, you don't need water to brush your teeth, you don't need water to flush a toilet. You need water to drink, and most of that water can come from piss. Astronauts now drink water that came from piss and it's purer than the water most of the rest of us drink.

I'm not a libertarian nor a capitalist, but most of the "running out of water" issues are pricing issues. Market issues. It should cost a lot of money to have a green lawn in the desert, and in a lot of places it doesn't. If you want to live in the desert and you don't want to spend a lot of money, your front yard should look like a desert.

The agricultural issues are real, but they don't really have anything to do with cities. I live in a city and I don't care if my arugula comes from ten miles away or ten thousand miles away. Couldn't care less.

They're starting to push more "toilet to tap" solutions, where the city water system's intake is downstream of the sewage treatment plant's output.

Slight problem: unlike the purification systems used in the space station, or the Earth's natural systems (ie waste water evaporates and comes back as rain), the current waste water recycling systems don't necessarily filter out contaminants such as the anti-depressants one needs to take when considering this issue.

It all comes down to the Republican dream: turning the US into a third-world country, where the privileged few live in their walled estates while the peasants (that'd be us) starve and die while blaming their problems on whatever scapegoat the ruling class-controlled media whips up.

You need water to drink, and most of that water can come from piss.

I'm thinking there's a chicken-and-egg issue here. Possibly along with other problems.

I'm thinking there's a chicken-and-egg issue here.

If you're alive, you have enough water to stay alive. If you're going to have a kid, you might need a few bucks to pick up a gallon or two.

As long as people in a city are watering their lawns, or washing their cars, or washing their clothes, or taking showers, cities are not "running out of water".

There may be cities that are refusing to let markets set the price for water, but that's a different problem.

The toilet to tap problem is mostly one of perception. It's not like it's new . . . except it was other people's toilets going to your tap.

For example, most of the towns along the Mississippi get most or all of their water from the river at the upstream side of the town. And empty their sewage into the river on the downstream side of town. Which, of course, is just upstream of the next town's water intake. It's not as bad as when it was raw sewage going into the river, but still....

Orlando is on track for demand to exceed supply in 2014.

This is the first I've heard of it. You'd think with impending doom just a few years around the corner, the local papers would be chock-full of dire warning.

But no. We're on the same irrigation restrictions we've been on since I moved back here almost a decade ago.

Now, it's not news at all that if the rapid growth rate continued, we'd be someday in trouble. But I think Orlando growth has slowed way, way down.

Really. You'd think someone would have said something.

"We're on the same irrigation restrictions we've been on since I moved back here almost a decade ago."
In other words, Orlando's water rates are well below the market value of the water.

If I understand this chart correctly, the current Lake Lanier level appears to be high.

Hurricanes dump water that eventually fills these reservoirs, so it is in a way helpful to have yearly storm events.

I think the deal with Lake Lanier is that Atlanta is not the only party interested in making use of it.

Slarti I will see what else I can dig up about Orlando, specifically.

One word, young man: stillsuits.

There may be cities that are refusing to let markets set the price for water, but that's a different problem.

I think that suggests that this is just a market failure and could be alleviated by letting market forces work their magic. And while I agree that water prices need to rise dramatically in much of the Southwest (and perhaps other areas) to encourage conversation via market forces, I don't think "let the market do it" is the full answer here.
Free markets are not good at dealing with commons, such as the Oglalla Aquifer. They aren't good at pricing ecosystem services. They *are* good at finding the best conversation methods for households and businesses though.

I think the first step in a sane water policy would be stripping away the legacy of convoluted politics around water, particularly in the West. But I don't see that happening, there are too many entrenched interests. See, for example, the Colorado River Compact.

Nice article on dams, russell, thanks. Good book about Floyd Dominy and the Damming of the West- Cadillac Desert by Marc Reisner (made into a series by PBS apparently available on youtube, first clip here- altho I havent watched the movies so can't vouch for them).

Infrastructure has a lot to do with it - leaky water mains loose billions of gallons of water every year. Texas cities lose between 4 and 20 billion gallons each every year.
Only 1 city I lived in had increasing water rates - the more you used, the more you paid. but it worked. We did minimal lawn watering, no car washing, and made sure the washing machine had a full load.

http://www.ajc.com/news/alabama-florida-see-water-98745.html
pretty good piece on the fight over lake lanier

If it affects mainly the big cities then it is obviously a Dem problem and thus nothing that should interest real Americans (who don't support the degenerate urban lifestyle in any case).
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'Market based solutions' have a very high probability of being Enron squared, especially given the observed behaviour of involved companies (Nestle the best known example) in e.g. Central/South America.
Those guys wait for the day that they can privatize the air supply.
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What about a scheme where each person is guaranteed a limited amount of water for an affordable price and any amount exceeding that is priced exponentially? The revenue has to be used 100% for solutions to the water problem.

Really. You'd think someone would have said something.

So here is what I could find with a little Googleing around.

From this Central Florida Urban Land Institute report:

The CFCA report (refer to Section 3.6.1) found that current potable water consumption will reach an unsustainable level by the year 2013.5 With these population and demand projections, the WMDs concluded that alternative water supply sources must be developed to meet increased demands in Central Florida beyond 2013.

The 2013 date comes from this St Johns River Water Management District rule:

SJRWMD’s consumptive use permitting rules provide that increases in groundwater withdrawals in CFCA will generally not be authorized for amounts greater than an applicant’s demonstrated demand through the end of 2013 (Section 40C-2.12.10, F.A.C.).

The cite comes from this report.

A lot of the planning recommendations are based on this report, created for the Central Florida Coordination Area, which includes Orange Country and Orlando. From its executive summary:

The districts have each concluded—through detailed water supply planning and individual permit actions—that the growth in public water supply (PWS) over the next 20 years in central Florida from traditional groundwater sources is not sustainable

and:

In general, the districts have jointly concluded that the availability of sustainable quantities of groundwater in central Florida is insufficient on a regional basis to meet future demands and there is an immediate need to develop and implement alternatives water supply (AWS) projects in addition to continued aggressive conservation and reuse of reclaimed water.

This report from the East Central Florida Regional Planning Council is also cited a lot (see Chapter 9 - Water). Its discussion of groundwater supply begins:

Ninety-three (93%) percent of Florida’s drinking water and potable water comes from groundwater. This supply can and is being exhausted.

Net/net, the folks who manage the aquifer are shutting everybody off at 2013 demand levels. If central FL wants to keep growing, it's going to need to find other sources of water.

Orlando is making plans to supplement groundwater with water from the St Johns River.

Folks who are downstream of Orlando aren't happy about it. Quel surprise.

And, of course, both the aquifer and the problem extend beyond Florida.

Long story short, Orlando (and central Florida generally, and the whole coastal Southeast serviced by the Floridan aquifer) has water issues.

I can't explain why there isn't a lot of media noise about it.

The relevant planning organizations appear to be aware of it, and the process of regional arm-wrestling for available resources appears to be underway.

“Our traditional water source is not going to sustain us in some areas past 2025 or 2030,” said Teresa Monson, communications specialist at St. John’s River. “The cheap, easy water is not unlimited. We have to make hard choices and look at alternative, more expensive water supplies.”

Good luck!

There may be cities that are refusing to let markets set the price for water, but that's a different problem.

Just to follow on Gary's apt reply to this: what you're talking about here is using a market mechanism (i.e., price) to manage water consumption. You're not talking about a "free market" in water.

A free market in water would mean that anyone could set up shop to extract or produce fresh water in whatever clever, efficient, and/or value-adding way they could. They would then sell their fresh water to any buyer in competition with all of the other fresh water producers.

Without getting into gory details, I'd say this is a fairly impractical proposal. For starters, contra Duff, without fresh water you will die.

I don't know if water consumers pay the full cost of delivering water to their tap. I imagine it varies from place to place.

Perhaps oddly, where I live, you pay *less* for water if you are not using it for human consumption, because it doesn't go into the sewer system. That makes sense for us, because water scarcity is not the issue, water treatment post-use is.

But I agree with Gary, the "free market" for making fresh water available to the US population is probably not a good fit.

Fresh water is about as textbook a case of a common good as I can think of.

Where but in America do people pay more for water than for gasoline and complain the gasoline is overpriced?

I imagine this is what it's going to take to make people take climate change seriously, even though it's not the only (or even primary) cause-- A major American city running out of drinking water.

I can only hope the Great Lakes aren't drained in a stopgap attempt at a solution.

I can only hope the Great Lakes aren't drained in a stopgap attempt at a solution.

The Mississippi/Great Lakes Basin borders are generally close to the Great Lakes, so close, in some areas, that suburbs of Milwaukee and Chicago are in the Mississippi Basin. Chicago has its own deal, but everyone else now needs approval to divert water from an international water district. Waukesha, a Milwaukee suburb a half-hour away from Lake Michigan, is running out of safe aquifer water and is having a hard time being allowed to borrow from Lake Michigan, even though they promise to put it all back after they are done with it.

The Great Lakes Region is being hit harder than most by this recession. Water is a big long-term advantage. I am confident that Ontario will not allow our newly elected Republican governors sell Great Lakes water to balance their budgets.

It's mostly the ick factor, I'd say; Municipal sewage systems have been capable of turning out drinkable water since *I* was a kid, and I'm no spring chicken. Is there really any reason except "ick!" for throwing that water away?

"Is there really any reason except "ick!" for throwing that water away?"

The fact that "ick" is reason enough to vote politicians out of office?

Net/net, the folks who manage the aquifer are shutting everybody off at 2013 demand levels. If central FL wants to keep growing, it's going to need to find other sources of water.

I think what that means, russell, is not that we will run out of water by 2014, but that we will run out of room for growth by then. In other words, permits for additional levels of groundwater extraction will not be approved, so building that requires such permitting will not be approved.

There is a "http://plants.ifas.ufl.edu/guide/springs.html">fairly constant water supply. Once the demand approaches supply level, that's pretty much the end.

So: not so much that we are headed for disaster in the near future, but that the Florida growth-based economy is going to come to a screeching halt, at least in this area.

Which is also a disaster of sorts, but much less dire.

I have no idea what went wrong on the html, there. Sorry.

Oh, and this is probably going to help things some, even though it brings its own headaches:

Aug. 18 (Bloomberg) -- Florida’s population declined for the first time since 1946 as the housing-market collapse cut migration, research shows, making it harder for the state to balance a budget dependent on sales taxes.

The fourth-most populous U.S. state lost 58,294 residents in the year to April, Stan Smith, director of the University of Florida’s Bureau of Economic and Business Research, said in an interview. It’s the first decline since military personnel stationed in Florida left after World War II, he said.

That was August of last year. I don't know it that trend is continuing, but I expect that it probably is.

This (and peak oil and climate change) are why I think Las Vegas is an abmonination-I don't seriously think the city will survive this century.

Only in America would we build a massive, truly massive water guzzling suburban sprawl in the middle of the fucking desert. Plus, since the GOP hates trains, good luck getting that LA-LV HSR built, so as gas prices go up, expect fewer tourists.

Seriously, Las Vegas in 2100 will be a small military town that mostly functions to serve the needs of Nellis AFB.

If, for some foolish reason, we actually have a free market in water, I want to make certain that all of the executives are held criminally responsible for any cholera epidemics or other public health disasters.

Of course we should make our current sewage district officials responsible for treating the water so hormones and other biochemicals do not end up in public waterways.

Please heed the posting rules, Amanda. The f-bomb is frowned upon, here, along with most other profanity.

Thank you.

If central FL wants to keep growing, it's going to need to find other sources of water

Or they could use less water per person. The average person uses one hundred gallons a day. That's not all being used for drinking water or for sanitation. It's so cheap that some people keep fifty thousand gallons of it in their back yards to swim around in once in a while.

It looks like Orlando is charging six one hundredths of a cent per gallon for water, at least for the first few thousand gallons a month. You could double that and no one is going to die of thirst. You could double it again and no one is going to die of thirst.

You wouldn't need to double it a third time because you can desalinate water at a cost of three tenths of a cent per gallon. At which point it is problem solved for Orlando, at least. Still cheap enough for most people to keep tons of the stuff around to swim in if they really want to.

If you're selling a product so cheaply that ordinary people can buy enough of it to swim in while at the same time claiming you are running out of that product, it is pretty clear that you've got a pricing issue.

"I think that suggests that this is just a market failure and could be alleviated by letting market forces work their magic. And while I agree that water prices need to rise dramatically in much of the Southwest (and perhaps other areas) to encourage conversation via market forces, I don't think "let the market do it" is the full answer here."

It may not be the full answer, but it would be a great start. Agricultural water policy is such that it still makes sense to use rice paddy farming techniques in California because the water for farmers is really that cheap. California is one of the largest rice exporters in the world. I'm sorry but that is just crazy. Shifting to even 1/2 the water consumption of rice paddy farming (which is to say most other crops) would be enough to correct the water problems of municipal users for decades. The reason rice paddy farming makes sense is only because the PRICE (which is to say the market mechanism) is so amazingly low for those farmers, and because the negotiated water rights are such that they can't sell water they don't use. If either of those two were changed, the market forces would come to bear in a way that would make much more efficient water use.

May I suggest that anyone arguing for increasing the price of water first read Francis' comments in this thread? Unlike everyone posting here, Francis is an attorney who actually deals with water disputes for a living. Water pricing is far from simple; as Francis points out, many farmers have a property right protected by the California constitution; simply stripping them of that rate without compensation seems...not very conservative.

@Free Lunch
I want to make certain that all of the executives are held criminally responsible for any cholera epidemics or other public health disasters.

Sure. We'd all like to make heads or executives of organizations more responsible...

Like DeCoster, the egg guy, for instance...

Or Blankenship, the Massey Energy guy...

Or all those execs at Goldman, BofA or ING that have been indicted.

Wait... What?

And the recent supremes decision which made the Masters of the Universe into, well, the Masters of the Universe...

Only way to get the bastards is *actual* (not metaphorical) torches and pitchforks.

Past due, you ask me.

It's mostly the ick factor, I'd say; Municipal sewage systems have been capable of turning out drinkable water since *I* was a kid, and I'm no spring chicken. Is there really any reason except "ick!" for throwing that water away?

Sure! It works like this:

1. Spend three or four generations convincing people that government is bad at everything it touches.

2. Run for municipal office on the "We're going to clean up sewer water for you to drink!" ticket.

3. Profit!

I think what that means, russell, is not that we will run out of water by 2014, but that we will run out of room for growth by then.

Yes, I do get that.

In the case of Orlando in particular, all of the water in the Floridan aquifer is not being exhausted. The city will simply not be allowed to take more than it does in 2013.

So, the city's water supply as currently organized will not support the expected level of growth.

Likewise, in most of the other cases, it's not likely that all of the available water will be immediately exhausted, merely that sustainable water supplies do not exist for either the current population or the anticipated population.

So, in my original post, for "run out of water", please read "does not have a water supply that will sustain the current or expected population".

My mistake for assuming that would be understood.

Net/net, a lot of very large population areas are outgrowing their water infrastructure, and not a few are doing so quite rapidly.

So, the city's water supply as currently organized will not support the expected level of growth.

At the risk of beating a dead horse here, this statement is simply false.

Adding 10% to the population of Orlando does not mean that you need 10% more water. There is not something magic about the current rate of water consumption in Orlando that must be preserved forever. To argue otherwise is to take a position so conservative that it is ridiculous.

Every human in the US could feasibly live within the city limits of Orlando if you desalinate water. That water would cost about 5 times what water in Orlando costs now. If you don't desalinate water, every human in the US could still feasibly live within the city limits of Orlando if you use existing technology to provide alternatives to water for most of the things for which water is used.

You would need a population density a couple times denser than Manila to do that, but it could be done. I'm not arguing that it should be done, but it could.

People are used to living in places where water is so cheap that when you take a shower, you don't ever even think how much it costs. That's not a birthright. In my opinion it is not the job of government to preserve that situation. It is, in my opinion, the job of government to make sure no one dies of thirst. But there is no threat of people in Orlando dying of thirst, even if the current population grows by an order of magnitude.

It's also, in my opinion, the job of government to manage health risks like cholera. Has an astronaut ever died of cholera?

So, the city's water supply as currently organized will not support the expected level of growth.

I hope Duff will point us to the desalination plants that currently exist for the Orlando area. Or, failing that, perhaps point to plans for water consumption patterns to be changed in the Orlando area.

I hope Duff will point us to the desalination plants that currently exist for the Orlando area.

Why would anyone build a desalination plant that could produce water at a cost of three tenths of a cent per gallon when the government was committed to providing water at a cost of six hundredths of a cent per gallon? That would make sense to you as a businessman?

Or, failing that, perhaps point to plans for water consumption patterns to be changed in the Orlando area

There are no such plans, that's the problem. Orlando is going to provide it's residents with clean water at a rate so cheap they can buy a few tons of it to swim in, and they're going to refuse to change the price.

Changing the price would change the consumption patterns. They don't want to do that. But it is the only reasonable thing to do.

You can turn ocean water into drinking water at a cost of three bucks per thousand gallons. That's the limit and that is the area for governments to screw up in before the private markets step in.

I'm a leftist and in general I will defend government. But this is ridiculous. There is no crisis here.

@Turbulence: "Water pricing is far from simple; as Francis points out, many farmers have a property right protected by the California constitution; simply stripping them of that rate without compensation seems...not very conservative."

As Prop 8 showed, stripping people of their Constitutional rights in California is as easy as 50% +1. It seems like an easy issue to demagogue, too. Just tell the city and suburb dwellers that the reason their water rates are going through the roof is because farmers are using subsidized water to grow rice in the desert, and they'll be happy to vote for a ballot proposition revoking those rights. It even has the advantage of being true. I'd bet you could even get the 2/3 majority needed for a Constitutional revision, not just the 50% needed for a regular amendment.

Every human in the US could feasibly live within the city limits of Orlando if you desalinate water.

The internets appear to have eaten my first reply to this, my apology if this ends up being a duplicate.

Your comment here is something of an overstatement, but yeah, if Orlando got is fresh water from desalinized ocean water, population growth would be less of an issue.

Likewise, if it charged ten times as much for water, such that folks only used water for stuff they really needed to live by, there would be less of an issue.

But those things are not true.

As noted above, my point here is not that there is physically no more water in central Florida. There is more water there than in most places.

My point is that there is not enough groundwater for all of the folks that actually want it, and groundwater is where most of them get their water.

They do have a desalinization plant in, frex, Tampa, but not in Orlando.

My broader point is that we, as a nation, are letting the fundamentals of governance to straight to hell while we argue about crap like (FOR EXAMPLE ONLY) the founders intended us to have government provided health insurance.

And just to nip that in the bud, no, they did not, because health insurance as we know it did not exist then. They did not intend us to have government provided health insurance, or an air force, or a nuclear research program.

Moving on...

My town has city gas, and it has more gas leaks per linear foot of gas line than any other town or city in my state. To my knowledge, there is no coherent plan to address this. My wife and I smell the rotten egg aroma when we take walks in the AM.

Two or three miles from my house as the crow flies, there is a crappy old coal-fired electric plant, which wobbles back and forth from offline (but still receiving millions of ratepayer dollars for being "on standby"), or online and raining coal ash on my head 24/7.

Two very good friends of my wife and I died recently, fine vigorous men in their 50's, from bizarre rare bladder cancers whose most likely cause was heavy metals deposited in the nearby harbor from 100 years of the upstream tannery industry.

There's a brownfield zone in my town that is right on the harbor, abuts a wildlife protection area and hiking path, and is in the middle of a residential area, and nobody can do anything with it because it's poisonous and the various actors who might deal with it spend their days playing hot potato with it.

Stuff like that gets me really angry.

While we argue about where everyone wants to draw their personal line of liberty in the sand, or whether somebody is treading on them, or whether Obama should have given Rahm Emmanuel a hug, poisonous crap is falling on my head and people I know are dying because they liked to go swimming a lot when they were kids.

And very large cities in this country are going to start finding it hard to keep their citizens supplied with fresh water.

If you can't keep the wheels on, the rest is noise.

My two cents.

Maybe we will see the day of the Wally Hickel-proposed water pipeline from Alaska.. Won't do anything for Orlando, and it's too expensive still for California, but the day may be coming.

OTOH, California's last election result would seem to promote more eastward migration, so maybe demand will start to decrease.

Farms burn water. Water is evaporated by way of evapotranspiration of plants. No water, no plants, no food.
Cities borrow water. It is run through sewage systems and put back in the ground, it leaks out of pipes...back into the ground, it spills into the sewer when you wash your car...into the sewage system...into the ground. Cities burn water raising grass lawns and shade trees.

"My broader point is that we, as a nation, are letting the fundamentals of governance to straight to hell while we argue about crap like (FOR EXAMPLE ONLY) the founders intended us to have government provided health insurance."

That comment is hilariously ironic. You don't see the connection?

We have, as has been occasionally observed, a constitution written over 200 years ago for an agrarian nation. We have a modern, leviathan government. How do we square the two?

By systematically lying about the meaning of that constitution.

Whether or not you think the lie we're enforcing in place of the actual document is better or worse, that sort of systematic, organized dishonesty has it's implications. It requires that the government be staffed with people who are comfortable with systematic dishonesty.

You think they're going to only tell the lies you like? Only cheat for the ends you approve off?

That CRAP you're complaining about is the rule of law trying to dust itself off, and being stomped back into the ground. It's the little boy pointing out the Emperor is stark naked.

It's the fundamentals of government you claim to want.

That CRAP you're complaining about is the rule of law trying to dust itself off

I take your point, and for the record I have no problem with a national discussion about whether the government should provide health insurance or not.

That said, I'm just not that concerned about what the founders envisioned at the detail level because, as you note, they lived and operated in an 18th C, pre-industrial agrarian society.

To the degree that we have a "leviathan" government, it's because we live in a leviathan society.

If there's not a lot for government to do, government can be small. If the opposite, the opposite.

If you'd like to have a conversation about how to scale *society as a whole* back to a more distributed and locally self-sufficient model, that is cool with me. I just don't hear much of that, from anyone. Maybe the Amish and some hippies, otherwise no.

And to keep things honest, for "leviathan" I think we need to read "bigger in scope than it was in 1789", rather than "brutally and absolutely sovereign". We don't live in Hobbes' world, either.

The city will simply not be allowed to take more than it does in 2013.

Sure. It's important to realize, though, that the aquifers feed several important rivers, here, and the restrictions on taking absolutely all of the aquifer output has something to do with keeping those rivers alive, as well as keeping the water supply to downstream communities flowing.

Not arguing with you, russell, so much as supplementing.

A belated thanks for your Google-fu, upthread. One thing that disturbed me about the first couple of links in your original post is the presence of so many financial institutions in the game. It's almost as if they've decided that water is the next big commodity market.

When one of your source documents for making the water-shortage case is entitled "Water Risk in the Municipal Bond Market", I think it's indicative of other forces at play than simply water supply and demand. Try Googling Matt Diserio, and see what you get. Diserio is a mergers & acquisitions guy who's been attempting (with some success, I think) to acquire various water utilities around the country.

Maybe the financial/water resources collaboration isn't a new thing; perhaps it's that I'm just way out of touch in these matters. That wouldn't be a new thing.

Anyway, all of that is a bit hackle-raising. It may be nothing, but when I see financial advisers hawking down-the-road problems, I see dollar signs behind their eyes. Which is not necessarily a bad thing, but sometimes people have a different agenda than concern for the local populace.

Farms burn water. Water is evaporated by way of evapotranspiration of plants. No water, no plants, no food. Cities borrow water. It is run through sewage systems and put back in the ground, it leaks out of pipes...back into the ground, it spills into the sewer when you wash your car...into the sewage system...into the ground. Cities burn water raising grass lawns and shade trees.

But, see, there's this cool thing called the water cycle. Maybe you've heard of it.

The problem is not farms, necessarily. The problem is population pressure.

One thing that disturbed me about the first couple of links in your original post is the presence of so many financial institutions in the game. It's almost as if they've decided that water is the next big commodity market.

In a country where marketers can convince people to buy bottles of water, filled from a plain old tap, for about a hundred times what they pay for the same water from their own tap, I have little doubt that they'll get away with essentially whatever they want to.

Rare moment of agreement with Phil.

For me, the major attraction of bottled water is the combination of container and hygiene. I could keep the containers and refill them, but I'd have to sanitize them periodically to keep the inevitable mung from growing.

We don't buy the stuff much except during hurricane season; then we lay in a couple of cases.

But in general, people (I include myself, here) are stupid, or willing to pay extra money for convenience.

When one of your source documents for making the water-shortage case is entitled "Water Risk in the Municipal Bond Market", I think it's indicative of other forces at play than simply water supply and demand.

This is a very good point.

The specific article that is the basis for my post was mostly concerned with raising a red flag for investors in municipal paper. Their claim, or point, is that the risk of there just not being enough water was insufficiently accounted for in the financial models behind bond issues.

Something like that.

Which is (I think) not exactly the same thing you're concerned about. But does not exclude the thing you're concerned about.

Which also concerns me.

There is a common pattern, here and elsewhere, of things that should by rights (to my mind anyway) be held and managed as common, public assets either being transferred directly to private hands, or for their usufruct (for lack of a better word) to be transferred to private hands.

That has happened elsewhere with water, but as of yet not here to any large degree. But it certainly could, and would IMO be a freaking disaster. Just as it has been elsewhere.

Our legal tradition demands a respect for private property, but it does not require all property to be private.

It just makes me think of Arrakis, is all; sans spice and sandworms.

@Turbulence: "Water pricing is far from simple; as Francis points out, many farmers have a property right protected by the California constitution; simply stripping them of that rate without compensation seems...not very conservative."

Just to expand on Roger Moore's point, the fact that something is in California's Constitution is much less impressive than it may be elsewhere. There is lots of garbage in the California Constitution -- that's a significant part of why the state government is so dysfunctional. For just one example, vast chunks of the state budget have been mandated by initiatives which locked them into the state constitution.

Sometime soon, if there is to be any hope for governing the state, we're going to have a constitutional convention and start over. The thing is such a mess, that it would be easier and fast (really!) to spend a year or two rewriting from scratch than trying to fix what we have.

It's the fundamentals of government you claim to want.

Sorry Brett, but I don't get your point.

Let's see. Tanneries dump crap in the water. Kids swim in the same water. Later, as grownups these kids develop bladder cancer, likely as a consequence of aforementioned crap in the swimming water.

What do all your ideas about a misinterpreted constitution have to with that? Is there any flaw in modern society that you don't attribute to the fact that the Constitution is not being applied in the way you think is correct?

Where but in America do people pay more for water than for gasoline and complain the gasoline is overpriced?

From the Onion, twelve years ago:

AUSTIN, TX — The University of Texas released a report Monday stating that, for some inexplicable reason, gasoline, a steadily depleting, non-renewable fossil fuel buried far beneath the earth's surface, is still far less expensive than the milk of a cow. Milk, a plentiful substance which is not made of dinosaur remains and requires no multi-million-dollar machinery to draw it from deep within the earth's core, costs approximately $2.45 a gallon, compared to $1.30 for a gallon of gas. "This is puzzling," University of Texas agriculture-school professor Herbert Roth said. "It's almost as if someone is trying to get people to buy more gas."

The average person uses one hundred gallons a day.

This.

This is nuts.

I'm in the rare position of knowing exactly how much water we use. Every 19 days (give or take a couple) I get out my pump and hoses and fill up our 6,750 litre holding tank from the lake. That means we use 350 litres a day. For a family of 5. That makes 70 litres per person per day. That is 18.5 US gallons per person per day.

We have flush toilets. We have a dishwasher and a clothes washer. We take showers and the occasional bath. We don't go out of our way to conserve water. The toilets are low flush, the clothes washer is a front load type and doesn't need a lot of water and there is a low flow head on the shower but those things work automatically. To use 500 US gallons a day I would have to leave a tap running around the clock.

My imagination boggles.

Let water have a real price = people will use it more wisely.

It really is that simple.

If we get to the point where farmers and city dwellers for some reason won't listen to the price and there is still a problem, or if we get to the point where the price is so high that people can't fulfill basic needs, THEN we can talk about the horrible market failure.

But right now we are so far from that, that it is ridiculous. Right now we have rice paddy flooding in California, lush lawns in the desert by people who pay an access fee rather than a usage fee, and golf courses all subsidized by the government flushing the price of water.

US freshwater use by sector as of about 2000, revised up through 2005, courtesy of the USGS.

Haven't had a chance to read it through, just wanted to put it out there to add some information to the discussion.

It discusses both ground and surface water extraction and use. From the executive summary:

52% of fresh-water withdrawals are for purposes of cooling in thermonuclear power generation.

65% of the rest go to irrigation.

So, presumably a little under 20% goes to all consumer uses, including washing the dog and watering the lawn.

CA, TX, and FL account for 1/4 of all water withdrawals of all kinds.

CA, TX, and NE have the largest groundwater withdrawals.

Pricing can be used to discourage or encourage use, and to make frivolous use uneconomic. All good goals.

I don't know if that gets us all the way to "no problem" or not.

Per Yukoner's comment, I wonder if "each person uses 100 gallons a day" means each person uses 100 gallons a day, or if overall water consumption across all sectors averages to 100 gallons per capita.

russell, this says residential average per capita is 95 gallons/day.

That includes irrigation.

Dunno how they're counting me; I have a well. But I have to comply with watering restrictions just like everyone else.

"You can turn ocean water into drinking water at a cost of three bucks per thousand gallons. That's the limit and that is the area for governments to screw up in before the private markets step in."

Now that I live in FL I think this is a good idea. I think we should build desalinization plants that keep up with the rising oceans caused by GCC. Fresh water and no inland beaches, and it is stimulative to the economy. A threefer.

Russell: that's "thermo-electric", not "thermonuclear". The coal-fired plant across town from you needs cooling water too.

I'm not sure that water gets "used up" by dint of flowing once through the cooling system of an electric power plant, but then again I'm not sure it's fair to say that water gets used up by soaking into a lawn in Vegas. It's not literally true in either case. Still, the difference is large as a practical matter.

--TP

Russell: that's "thermo-electric", not "thermonuclear".

This has been another episode of "russell is a dope". Thanks for the correction TP!

Also, I agree that cooling power generators doesn't "use up" the water. I imagine the issue as far as scarcity is whether we are drawing water from one source point faster than *that source* can be replenished through the natural operation of the water cycle.

It would be extremely wonderful if we had fusion power plants. Unfortunately, they've been ten to twenty years in the future for almost sixty years now.

Wow, that long?

I did a paper on the impending breakevenness of nuclear fusion back in 1979; I thought it was a new thing back then.

The first serious attempt was here:

[...] Registration of the first patent related to a fusion reactor[5] by the United Kingdom Atomic Energy Authority, the inventors being Sir George Paget Thomson and Moses Blackman, dates back to 1946. This was the first detailed examination of the pinch concept, which would dominate efforts in the UK through the 1950s and 60s. Data passed on by Klaus Fuchs led to similar experiments in the Soviet Union.

Around the same time, an expatriate German proposed the Huemul Project in Argentina, announcing positive results in 1951. Although these results turned out to be false, it sparked off intense interest around the world. In the US, pinch experiments like those in the UK started at the Los Alamos National Laboratory. At Princeton University a new approach developed as the stellarator, and the research establishment formed there continues to this day as the Princeton Plasma Physics Laboratory. Not to be outdone, Lawrence Livermore National Laboratory entered the field with their own variation, the magnetic mirror. These three groups have remained the primary developers of fusion research in the US to this day.
[....]

When I was a lad, fusion was just around the corner in a few more years. Lots of reputable people said it.

And now I'm 52 as of last Friday, and that much less of a lad.

Concerning desalinization:
1. This needs energy and significantly more than getting rid of the water to get at the salt (a little bit of sunshine will do that for you).
2. This produces highly concentrated brine that has to be disposed of. The Saudis and the Emirates encounter(ed) significant problems with that by either creating too close loops (i.e. the effluent brine finds its way back to the intake) and/or changing the marine environment significantly for the worse (essentially creating Dead Sea conditions on those parts of the coast where the brine is discharged). Throwing it into the desert will sooner or later bring it back to you by way of the wind (ask the people in the Aral Sea region).
=> Definitely not a panacea.

When I was a lad, they'd already achieved http://www.youtube.com/watch?v=NNcQX033V_M>breakeven. Everything since then has just been about making the fuel pellets smaller.

Ought to just stop wasting their time, and build a plant that works with the current fuel pellets. It's feasible, just conventional engineering on a large scale.

Concerning desalinization:

Theoretically, desalinization can proceed without any external, artificial energy input. You take a rigid pipe, put an osmotic membrane across the end, fill it with fresh water, and sink it in the ocean.

Fresh water is less dense than salt water, so it builds pressure with depth more slowly. The deeper the pipe goes, the more the pressure difference between the inside and outside becomes. At depths which are perfectly feasible, (We're not talking the Mariana trench here.) the pressure difference becomes enough to drive the desalinization process, and you get a fountain of fresh water coming out of the top of the pipe.

This doesn't violate any law of thermodynamics, the energy is supplied by the work done by salt dropping to the bottom of the ocean. All it really requires is low maintainance osmotic membranes. (Because the end of the pipe WILL be too deep for easy access.)

And http://www.sciencedaily.com/releases/2006/11/061106144813.htm>here is the membrane. Heard about this work, and the concept I described above, at a nanotechnology conference years ago. Glad to see it's approaching fruition.

When I was a lad, they'd already achieved breakeven.

That's not breakeven, Brett. They didn't convert any of the reaction energy into electric power.

Part of the problem with the easier modes (D-T, etc) of nuclear fusion is that quite a bit (~80% in the case of D-T) of the energy is released in the form of fast neutrons. IIRC it's not all that challenging to capture a chunk of the neutron energy (because it eventually winds up being expressed as heat), but the fact that you're constantly irradiating the confinement vessel's walls with fast neutrons causes the material to become radioactive and suffer physical damage after a while.

Which eventually converts to a nuclear waste disposal problem.

oh lord. I stop reading this blog for a while, and people intrude on my turf.

The Colorado River is running way below its long-term average of 15 million acre-feet per year (MAFY). This is a huge problem for Las Vegas, which has the lowest priority on the CR, and Arizona, which has fewer options. Less so for LA.

Los Angeles (ie, the greater Southern California metropolitan area, including the Inland Empire and San Diego), very roughly, imports between 1/3 and 1/2 of its water. The rest comes from groundwater basins recharged by local rivers (plus imports when there's an extra slug of water around). Of the imports, only about 1/2, long-term, comes from the CR. The rest comes from the Feather River in northern California, across the Bay Delta (big problem there) and into the California Aqueduct, down the state and over the mountains around LA.

A lot of water still goes out to the sea every day, in the form of sewage, although much much less than even a few years ago. Worst offender? SH's hometown of San Diego. Sewage management is harder in SD because SD is built on rock, so you can't dump the treated water back into the ground and pull it up a year later. It has to be mixed directly into surface reservoirs, which makes people (especially San Diego conservatives) go ick.

Treated sewage water is about the purest water you can find on the planet; it's far cleaner than what falls from the sky in any urban area or what's in any stream.

Many water agencies in SoCal are looking at adding desal to their portfolios. But the planning window is long, the cost of power is a huge issue, and reclamation is still a lot cheaper.

Yes, California grows rice. It does so north of the Delta in water-rich counties. California also grows alfalfa with CR water. One consequence of transferring that water from ag to urban uses is higher food prices. Another is reduced food security. Keep in mind that some global warming models show food exporting countries like Brazil getting hit very hard by drought. Reducing the US's food security in this day and age is one of the dumbest ideas I've heard in a while.

Despite my best efforts, some people refuse to understand that there's no such thing as a "market" in water, at least not in the way that 99% of people understand the word. It's a life necessity and at the retail level the purest of monopolies. People want their water safe, affordable and reliable. So they put their local government in charge. Elected officials who raise prices unnecessarily get voted out of office.

While the provisions of California's constitution affecting water rate-setting are way too complex for a comment, the short answer is that government-supplied water must be supplied at actual cost. Water agencies can adopt a price structure that promotes conservation, but the dollars collected above cost must then be dedicated to conservation projects.

Water rights exist pursuant to the State constitution. They are protected by both the State and Federal Constitution's 5th Amendment (both the due process and just compensation clauses are useful and relevant). Voters are reluctant to change the State constitution's water rights, because if cities can take from farmers, then one city can take from another. Better the devil you know ...

Lots of people (like SH here) complain about 'inefficient' water use. What does 'inefficient' mean? Virtually always it's a hidden value judgment about a societal decision on how to allocate a scarce resource. I find debating 'efficiency' aggravating and ultimately irrelevant. Debating the underlying values is a much better use of time.

"What does 'inefficient' mean?"

Rice farming in California is an inefficient use of water. There are other, calorie intensive but less water intensive crops that could be grown. You don't have to get to the outer margins of a hyper-precise philosophical definition of inefficient to note that the example falls clearly within the borders.

"Virtually always it's a hidden value judgment about a societal decision on how to allocate a scarce resource."

I don't think it is particularly hidden. We're talking about a scarce resource. That resource is water. We are talking about societal decisions on how to allocate water. What is hidden?

Last time I checked in here, SH, you were an expert in dendrochronology. Now you're an expert in efficient rice growing? Master Of All Trades (MOAT)?

How 'bout you convince me that you've made a detailed study of the water rights, growing practices, investments in crop research, alternative land uses and profitability of rice farming in California, and then I won't be quite so dismissive of your use of value-laden terms like 'inefficient'.

Note: before we, as a society, become too comfortable in telling farmers what they get to grow on the land and water that they own, think about the implications of society deciding what private decisions are too 'inefficient' to be tolerated.

And the irony of a libertarian like SH telling farmers that rice growing is inefficient is just too much. Revisiting your view of the Kelo decision?

Last time I checked in here, SH, you were an expert in dendrochronology.

I'm not sure what this has to do with anything at all, Francis. It's not advancing your case, nor is it doing anything damaging to Sebastian's.

I've lived in Santa Fe for some years, and before that in Colorado, where I was on the local planning commision for a couple of terms. Both are places where water issues are often on the front pages.

Considering that we're a high mountain desert, you'd think Santa Fe would have fairly expensive water. And we do, at least compared to the Orlando figures somebody noted upthread: we pay a half cent per gallon for the first 7,000 gallons (that's 60 gallons per person per day for a family of four) and about 2 cents/gallon for every gallon more than that. There are also major fees (and restrictions) on new water tap hook-ups. But, in spite of the price and all the encouragement to conserve, we don't -- we still use 100 gallons per person per day, the average noted above. Why is that? Shouldn't that good old, reliable invisible hand of the free market fix everything?

I think it's because, at least out here, water policy needs to be better coupled with development policy. Because what happens now is that, looked at cynically, there is no real incentive to conserve water. If we do, the developers will just put in more development to use up the margin we just conserved, leaving us just where we were before. And even at the prices we pay, water is still pretty cheap in most folks' minds. Although water truly is the rate-limiting step for development, nobody wants to do realistic planning. When I was on the planning commission the developers' data about water usage were often laughable low-ball figures. I doubt much will change until we almost run out of water.

And, as has also been pointed out upthread, water law is about the most arcane legal specialty ever. That's particularly the case in New Mexico, where the rights of the Pueblo tribes, old Spanish land grants, ranchers, small farmers, and towns collide in a big way.

As they say out here: "Water flows uphill to money."

Slarti: I've gotten awfully tired of people who pretend to have expertise.

Last I was here, SH was claiming that the diversion of temperature readings using tree proxies from the recorded temperature invalidated the use of trees as temperature proxies altogether. The people who actually study the issue maintain that they have other proxies and other evidence to validate their interpretations. SH, apparently, has his gut. So maybe he's right, but he'll need a PhD and a bunch of published papers before I'll take his word for it.

Now he pretends to know that rice growing in the Central Valley is inefficient. Mostly people don't care much when the private sector is inefficient; in our capitalist economy that just creates room for competitors to come in and provide the same service at a lower price. And SH purports to be a libertarian, which should make him even more deferential to private economic decisions. But San Diego is at the very end of California's water supply system; every single time water comes up as a topic SH complains about the existing system of allocation. And now he purports to make a claim which requires real expertise -- the efficiency of rice growing in northern California -- on a topic in which he has no demonstrated expertise.

Take another quote: "The reason rice paddy farming makes sense is only because the PRICE (which is to say the market mechanism) is so amazingly low for those farmers." The price of the water is low because the farmers own the use right. The government only charges the cost of delivery. This is essentially what govt does for the rest of us, by building public roads with tax dollars, so we can access our own property.

In both cases SH has an underlying value judgment -- "I don't trust GHG science" in one and "I want cheaper water" in the other. But instead of debating those values, he claims to have the expertise necessary to make a much stronger claim. He doesn't, and he should be called on it.

I think debate works much better when people are honest about what their values are, instead of hiding value judgments behind false claims of expertise.

Note: the citizens of SD are substantially wealthier than those of the Central Valley. And living in San Diego is, arguably, an extremely inefficient use of energy (to get the water to the residents there) and water. On both a measure of ability to pay and efficiency, the PRICE (which is to say the market mechanism) for water in San Diego should rise substantially. As the city depopulates to a more efficient level, I'm sure that both Long Beach and Oakland (both of which have much more diversified water portfolios and economic tax bases) would be happy to offer the Navy a home.

Slarti: I've gotten awfully tired of people who pretend to have expertise.

I'm sorry about that, Francis.

Last I was here, SH was claiming that[snip]

Again: irrelevant.

All of this could be condensed by challenging him on the facts, which you kind of did, but then diverted to this curious exhumation of a completely unrelated discussion

I submit that challenging Sebastian on the facts would make this a much more compact discussion and less of an angry lecture. You're free to do as you please, of course, within the posting rules.

Just one minor question:

What's frex?

frex is "for example".

my apologies for indulging in jargon!

What's frex?

An abbreviation of "for example."

[...]
• 2 of every 5 drinking water systems nationwide are privately owned, regulated utility systems.

• 1 of every 6 Americans gets drinking water from privately owned, regulated utility systems.

• Roughly 1 of every 25 communities in the rest of the nation has a government-owned and privately operated water utility.
[...]

Annual Privatization Report 2005 - Water/Wastewater

That's an interesting article Charles. I'm not surprised to find the folks at Reason endorsing a sort-of free market approach, but the article has a lot of worthwhile things to say.

Here is my issue with all of this:

It's hard to think of a more textbook case of a common good, in the economic sense, than water. But nearly all of the discussion that's gone here, and anywhere else I can find, about how to manage our use of water fails to note that it is by nature a commons.

Exceptions here are Gary and Francis.

I have no problem with communities of people hiring private organizations to implement the delivery of water to its point of use. Conversely, I have no problem with communities establishing public agencies to do the same.

Whatever makes the most sense in each case.

But privatization, by which I mean *real* privatization, not just hiring a private firm to implement a delivery infrastructure, is to me a non-starter.

It's not a private asset. Neither the actual ownership, or the exclusive right of use, of water should belong to any private party.

Poland Spring in ME, or wherever it is they get Pellegrino from, OK. Whatever.

The Colorado River or the Floridan Aquifer, no.

If folks want to use pricing as a way to discourage wasteful use, that's certainly one approach, and in some cases it might be a good one.

But focusing on folks who are watering their lawns seems kind of dumb to me.

Per the link in my 4:07, domestic use of water in its entirety -- drinking, bathing, cooking, washing the car, watering the lawn -- is about 1% of fresh water use.

If there's waste there, it's noise.

I have no opinion on the rice farming controversy, because I don't have enough information to have a useful point of view.

We do allocate a lot of water to agriculture, but then again, we all like to eat. We allocate a lot of money to highways, too, but then again we like to drive, and have things delivered to us from far away.

Costs take many forms.

My basic point in kicking off this thread was to highlight what seemed, to me, to be a fairly significant aspect of public infrastructure that was kind of being neglected, or ignored.

People want to move to Orlando, and Arizona, and Texas. People want to grow stuff in Nebraska and Kansas.

Maybe they shouldn't want to do that, and maybe we shouldn't enable them to do that by providing public infrastructure. That's a very interesting question, and probably a much, much more fraught and complex one.

But in the meantime, they *do* want to do those things.

Where's the water going to come from?

It takes thought, and effort, and money, to make water arrive where you want and/or need it to be.

I'm not seeing stuff like that on the national agenda. It makes me wonder why not.

Per the link in my 4:07, domestic use of water in its entirety -- drinking, bathing, cooking, washing the car, watering the lawn -- is about 1% of fresh water use.

Looked into the numbers a little bit more- about 21% of non-power freshwater use is "public supply", which "refers to water withdrawn by public and private water suppliers that furnish water to at least 25 people or have a minimum of 15 connection.... About 242 million people depended on water from public suppliers." "Domestic" here means well water: "In this report, domestic use refers to self-supplied withdrawals only."
And ianawe but I think we need to be looking at freshwater non-power uses, since using water for cooling isn't necessarily 'destructive' of the resource for downstream users (altho, I dont know, maybe a significant chunk of this cooling water escapes as water vapor rather than being discharged back into the source).

"Domestic" here means well water

Pardon me while I put on my dunce cap.

21% it is for the lawn-waterers among us.

Thanks Carleton.

I think we need to be looking at freshwater non-power uses, since using water for cooling isn't necessarily 'destructive' of the resource for downstream users

Agreed.

http://www.netl.doe.gov/technologies/coalpower/gasification/pubs/pdf/WaterReport_Revised%20May2007.pdf
page 30
looks like power plants use a lot of water, most in the cooling process. and none of us are talking about limiting their supply.

A problem with cooling water is that it leaves the plants at a higher temperature and that can mean lots of trouble for the ecosystems downstream even without pollution.
In hot summers many a power plant has to shut down already because there is not enough water available (in some cases the intake tubes literally are out-of-water). In theory plants can adjust to changing water supply with changing flow rates and higher exit temperatures but in reality most systems are not designed for that (and be it just because fixed rate pumps are way cheaper than variable ones, also few plants have enough extra heat exchangers).

Francis,

The price of the water is low because the farmers own the use right.

Are they allowed to sell the use right? If not, then it is entirely plausible to argue that its use is inefficent, if certain conditions are met - mostly that they would be better off selling the use right than using the water to grow rice.

It i shard for me to believe that the best use of that land and water really is growing rice, which is quite an inexpensive good. Maybe, but I'd like to learn more before I'm convinced.

Hartmut: that is a hard question and one that depends on the nature of the right and the year the right was asserted. In general, the answer is no. Water that is conserved (ie the farmer can demonstrate that she has installed facilities that allow her to do the same farming with less water) can be sold. But an unused right is either given to the next person in the priority line or flows out to sea or made available to a big municipal provider who can capture it. Right not used for several years in a row are deemed abandoned, and available for appropriation by someone else.

The soils where rice is grown tend to have a high clay content, thus allowing paddies to form. My understanding is that few (none?) other commercial crops like clay soils.

Francis,

I assume you were answering me, and not Hartmut.

If the use right can't be sold then it is really impossible to know whether this use of water is efficient. In other words, even if there are buyers for the rights who would pay more than they are worth in growing rice, the farmers can't take advantage of that. The water can't be put to the presumably more productive use.

If they could sell, and chose not to, that would be evidence of efficiency.

BY: yup. Analogies to water law are hard to come by. The best one I've thought of is a kind of homesteading. The government makes an asset available on a first-come, first-served basis. In order to keep this asset -- vacant land in a faraway place -- you have to work it; if no crops show up at the marketplace the government will take the land and give it to someone else.

See, already the analogy doesn't make a lot of sense. But like homesteading, water rights are tied to a place. (This is grossly oversimplified.)

Asserting that a particular water use is "inefficient" is about as meaningful as asserting that SH's continued occupancy of his own house is "inefficient" because someone else is willing pay more to live there than he is paying now. The underlying premise of the statement (ie, that real property should move to the person willing to pay the most for it) is completely inconsistent with our system of laws.

You can, if you'd like, try to throw away the entire constitutional system that creates property rights in the use of water, and replace it with an allocation based on willingness to pay. (California's constitution is amended by simple majority vote.) I guess the closest analogy there would be the FCC's sale of EM spectrum. But who would want to do this?

Francis,

I agree that it's hard to think of water allocation as being a good fit for ordinary market approaches.

But your analogy to Sebastian's house does not work. It's not a question of whether someone is willing to pay more than what Sebastian is paying. It's a question of whether Sebastian is allowed to sell to that potential buyer. The holder of the property right decides.

Suppose someone comes along and offers him a price he finds attractive, so he is willing to sell and move. Note that both Sebatian and the buyer are made better off by this, in their own opinion, since otherwise one or the other wouldn't make the deal. That's generally what I mean by "efficient." But if Sebastian is forbidden to sell even though he would like to, the result is not efficient. He'd prefer the money to the house; the buyer would prefer the house to the money. But it can't happen.

I'm not proposing any changes to the CA constitution. I'm just suggesting that the same sort of deadweight loss, as it's called, occurs when the holders of the rights can't sell them. I'm not proposing that they be expropriated. I'm actually not proposing policy at all. I'm just pointing out that if they were allowed to sell the rights then it would be much more likely that we wouldreach an efficient allocation of that water.

I don't think just selling to the highest bidder makes sense, since there is a clear need to guarantee water supplies. But where the recipients of low-priced water have no real justification for their privilege it contributes to the problem. And if they have the privilege regardless, and are not allowed to sell it, an avenue for improvement is shut off.


Francis,
Is there any precedent for exercising eminent domain over CA water rights?
Seems like it'd be a puzzle- do you compensate with the replacement cost at market rates, or is that too high since the farmer can't get market for the resource under the current arrangement? Do you have to compensate the downstream users who would've had a shot at the water if it hadn't been used by the first user?

Just curious.

This is why few analogies work in water law.

The fundamental idea behind a use right is that you get to use what you need, but no more, then the next guy gets to help himself. You can see why use rights are particularly appropriate for water -- it protects the economic investment of the first guy to install diversion works in a river, but also encourages other people to come to the river and put the remaining water to economic use. (And all of this substantially pre-dates the construction of the facilities that allowed for the movement of enormous volumes of water hundreds of miles.)

But once you establish that baseline legal system, it's difficult to change. Junior appropriators have a legitimate argument that they expected to move up in priority once the senior appropriator stopped using the water. Put another way, the inability of others to line-jump forms part of the legitimate expectations of junior appropriators. And I haven't even touched public trust issues (the power of the state to keep a certain minimum flow in the river) or return flow issues (the ability of junior appropriators to capture what goes back into the river after use).

Also note that I was responding to SH's claim that the price of water to the ag users was too low. Returning to the real property hypothetical, his argument is that because someone else is willing to pay higher property taxes, they should get his house / homesteaded land.

(Of course, the water itself is free. It just falls from the skies. The cost of water comes from getting it from where it falls to where it's wanted. So, at some level SH's argument is that the state should charge everyone for roads, take roads away from poor people, only build roads where rich people live, and charge them as much as it can for their use. That's one way to run a country, but it's neither democratic nor libertarian.)

Returning to the real property hypothetical, his argument is that because someone else is willing to pay higher property taxes, they should get his house / homesteaded land.

Id say that's not quite right either- you're going past the part where he *can't* sell, and also that his proposed transaction was voluntary on both sides. It seems to me like one of those situations where someone's property taxes have been limited and will rise greatly if the properly is sold- the owner of the inexpensive resource can't sell what he possesses at market value. But that's an inexact analogy too.

The thing about the homestead analogy is that it only temporarily put the property in this limbo- after a few years, the homesteader got clear title to the land to use as he saw fit. Here, the 'property' is perpetually in this weird state. Weird enough that calling it 'property' doesn't seem quite right. But still, it seems that the original owners of the right ought to get some grandfathering in a proposed re-division of the resource- perhaps water at the current rates for a period of time, perhaps a fraction of their current water draw with the right to resell.

Francis,

Let me boil my point down, so to speak, to a simple question. Suppose the CA constitution were changed tomorrow to permit the owners of water use rights to sell those rights.

Who would be harmed?

Or even more fairly, what if the CA constitution were changed tomorrow to permit the owners of water use rights (to the average extent that they actually used them in the past 5 years) to sell those rights?

That largely takes care of the downstream expectation problem (where the person most upstream just sells all the water in the river leaving nothing for the former downstream users).

My understanding is that few (none?) other commercial crops like clay soils.

Apart from cotton, soybeans, and corn, which are all extensively grown in clay soils, you might be right.

Note that when water is diverted, a relatively small amount (depends on the crop) goes directly to plant growth. The rest flows back to the river and groundwater basins, supports local habitat or just increases the humidity. So, entities affected by sale of water rights include:

1. Fish / riverine habitat / recreational uses. [See Lake Mono and the first application of the public trust doctrine to rivers.]

2. Ducks and other species that rely on the habitat created by the environment where the water is used. [This is especially important in rice farming and in Imperial County, where farming is the principal source of water to the Salton Sea, an important stop on the Pacific Flyway.]

3. The groundwater basin and those who drink from it in reliance on recharge from ag.water. [Mexico actually filed suit in the US to prevent the lining of the All-American Canal.]

4. Other legal users of water in the system downstream of the new point of diversion, from the loss in return flows. [This comes up all the time along the Santa Ana River system that supports San Bernardino, Riverside and Orange counties.]

5. The agricultural community in which the farm is located, from the loss of use of that land (farm equipment, seed, temporary labor, banking, kids in school, property taxes, etc.) [Fallowing land for water sale is disfavored in many farm communities.]

Note also the huge windfall profit you're giving the farmer. He acquired a very limited property right from the government in the first instance. You are giving him, by wave of the hand, two additional rights -- title to the corpus of the water in addition to the right to sell that title to a third party.

It's possible to eliminate that windfall and also leave in the system water which he only temporarily borrowed. You could limit what could be sold to that which he traditionally consumptively used. But California is already heading in that direction by allowing long-term leases where the lessor can show no net impact (ie, the water sold must be water truly saved).

It's also worth noting that water is, for its unit price (about $500 per acre foot wholesale), both bulky and heavy. So getting it from its old point of use to its new point of use is not trivial.

So let's say that a hotel developer in the City of La Jolla, outside San Diego, is told by the City that he needs to increase the reliability of the City's water supply before the City will allow him to build a new destination resort hotel and let's say, for grins, that the City owns an underused reservoir (or can buy space in one), and let's say that the law allows rice farmers to sell their water rights to the developer.

The developer needs to rent space in the pipeline that serves that reservoir. There's a fee to the San Diego County Water Authority. The developer needs to rent space in the pipeline that feeds SDCWA's pipeline. There's a fee to the Metropolitan Water District of Southern California. It's a big fee; the cost of getting water over the mountains that separate southern California from the Central Valley is staggering. A huge percentage (like 1/3) of the electricity consumed in California is used by governments to move water around the State. The developer needs to rent space in the system that feeds into MWD. There's a fee to the State Water Project (which controls the California aqueduct.) SWP's pumps are fully allocated to pumping SWP water out of the Delta. There's an additional fee to SWP to expand its pumping capacity. Plus SWP's system is in open aqueducts, so it will tag the developer with evaporative losses.

Then the developer needs to work with the farmer to satisfy the State Water Resources Control Board that the long-term lease won't have any adverse impacts. Then, since the Delta is home to a lot of endangered species, the developer needs to satisfy the US Fish and Wildlife Service and the California Department of Fish and Game (California has its own stand alone endangered species act) that permits should be issued authorizing the movement of this additional corpus of water across the Delta. (That's for starters. I'm sure that there's more that I'm missing.)

There's a reason that there's not much of a market for large volumes of water; the transactional costs are enormous. Our hypothetical developer would abandon his project rather than take on this task. Nobody at the retail level actually wants to do any of this work, so they (we) delegate it to large governmental agencies.

So, were the owners of water rights have the right to sell those rights, they would still find 1 (okay, maybe a couple) buyer. But that buyer would be a government, either representing Southern California or representing the Bay area.

[Simple question; hard answer.]

Slarti: none of those crops are grown much in CA. My guess is that California is a relatively high-cost state and those three crops have narrower margins. So let me edit my former comment by saying few commercial crops grown in California like high-clay soils. Here's a link to California Dept of Food and Ag's webpage that has lots of interesting statistics.

Francis- thanks for all of the info.
I am curious on one more point- you've spent most of the thread combating ideas that you disagree with rather than putting forth your own positions- so do you think there is a problem with how water is allocated & transported in Cali, and if so what should be done to address it? I mean, there will always be incremental stuff, but if you got to design a bill or ballot measure to address these issues, what would it look like?
[altho I understand if you feel you've already spent enough time on this thread :)]

Wonderful post and thread, Russell. I've been expecting oncoming fiscal collapse to eventually do away with public utility water systems as an uneconomic model. You know what happens after that : privatization.
What people don't seem to 'pick up on' is the danger of such happening : something that has caused riots in other countries. And that danger is, of course, the reason why access to water has recently been designated as a basic human right - perhaps an ominous omen indeed considering the success we have in preserving 'human rights' globally. ( If you think that we have had success I'd like to know where ! )
Which is why my old 'End of an Era' post at My Opera morphed into a collection of related data and articles not easily available just by pressing the button and saying 'Search'
Have some Really scary intel - and do watch 'Home'
http://opitslinkfest.blogspot.com/2009/07/water-wealth-power.html

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