MERCED COUNTY, Calif. - Wells are drying up across the county from an overtaxed and sinking water table.

Drought and climate change threaten the future of local water supplies.

Safeway's water bottling plant on Ashby roady in Merced, CA May 29th, 2009 (SUN-STAR PHOTO BY LISA JAMES ) And Merced has been selling its tap water since 2002 to a water bottling plant, which then sells that water at rates far above what it costs the plant to buy it from the city.

The Safeway Inc.'s water bottling plant in Merced -- one of the top five commercial/industrial water users in the city, which bottles Safeway's in-house purified and spring water brand Refreshe -- uses roughly 50,000 gallons a day, five days a week, for its bottling operation.

The plant, which provides most Refreshe drinking and spring water to Safeway stores in the state, filters city water, puts it in bottles and sells it as purified water. The bottles note that the water was bottled in Merced, but not that it was pumped out of the ground by the city. (Refreshe spring water is shipped in from a spring and then bottled in Merced.)

Some say the operation is just like any other business that buys water from the city.

But others claim it represents a troubling trend. Environmentalists and water rights activists contend that the increasing commercialization of public water and the selling of tap water not labeled as such isn't how water pumped out of the ground by cities is meant to be used. They claim that bottled water sells itself as safer and healthier than tap water, but in many cases is not.

The Sierra Club's Water Privatization Task Force noted that the growth of the bottled water industry -- spearheaded by companies like Nestle, Coca Cola and Pepsi Cola -- is not only depleting aquifers and springs across the country, but also represents a step toward increasing water privatization.

The task force also noted that the industry advertises bottled water as better than tap water -- even though much of the water in bottles comes from the tap. "The bottled water industry promotes bottled water as a healthy, trendy drink, without mentioning that it can cost 500 to 4,000 times more than tap water," commented the task force.

In Safeway's case they pay more than $1,000 a month for more than a million gallons of water. The retail cost for that much purified bottled water at Safeway is just under $3 million. Safeway would not say how much it costs them to produce their water.

Despite these concerns, the public's taste for the stuff is growing.

According to a 2009 report on the industry by Bottled Water Reporter, bottled water sales in the U.S. accounted for more than $11 billion in 2008. Over the last decade bottled water consumption jumped from more than $4 billion in 2000 to double that by 2008. According to Food & Water Watch, over 112 bottling plants exist in the state and over 1 billion gallons of bottled water are sold in California every year.

In the report, tap water was distinguished from bottled water. "Clearly," noted the report, "consumer perceptions matter, and consumers regard bottled water very differently from tap water. Even where tap water may be safely potable, many people prefer bottled water, which they regard as superior in taste."

Safeway spokeswoman Teena Massingill said that criticisms about commercializing municipal water and replacing it with expensive bottled water are baseless and unfounded. "There will always be critics of products," she said. "We are providing a product that did not exist previously. So I think that the argument that they are making is unfounded," she said.

As for the Safeway's operation in Merced, Merced spokesman Mike Conway said the city treats Safeway as it would any other industrial water consumer.

"There's no difference between any kind of water user who uses our water to process a product -- whether it's bottled water or anything else," said Conway.

"As for some additional perspective," wrote Conway in an e-mail, "if the city pumps about 21 million gallons of water a day, and Safeway uses 50,000, that works out to be 0.238 percent of our total gallons pumped."

But the plant doesn't only use water. It also produces waste. The plant's purification process discharges roughly 52,000 pounds of salts a year into the city's wastewater system, according to their permit.

Safeway's in-house brand Refreshe, bottled in Merced with well water, doesn't say on its label that it was originally municipal tap water.

Massingill's reply is simply that the product that Safeway provides -- fresh water -- isn't tap water.

But a new law could force water bottlers to at least let consumers know the source of their bottled water -- not just where it was bottled.

Assembly Bill 301 would require bottling facilities to register with the state and disclose the source of their water.

Currently, the state's Department of Public Health only requires that bottled water labels list where the water was bottled, not the actual source of that water.

Another area of concern with bottled water, says Ruth Caplan, the national coordinator for the Defending Water for Life campaign, is that while bottled water sells itself as better than tap water, it contributes to pollution and has been found to be less healthy than tap water -- at least in some cases.

Many of the bottles end up in landfills, Caplan added, and in some cases contain industrial chemicals and bacteria above state and industry standards.

According to the Sierra Club, nine out of 10 plastic water bottles end up as garbage or litter.

The National Resources Defense Council tested a wide array of bottled waters in the late '90s and found the majority contained either industrial chemicals and other contaminants, such as chloroform, that were above levels set by the state and the industry. The study included Safeway-brand bottled waters whose labels indicated they had gone through reverse osmosis filtration like the purified water in Safeway's Merced plant.

Safeway's Massingill declined to comment on NRDC's study, but said that Safeway is fully conscious of its environmental footprint and the healthfulness of its products. The company uses as little packaging as possible in its products. For instance, its plastic bottles are among the thinnest in the industry.

In addition, Safeway uses wind and solar energy on a wide scale. "We operate in the most environmentally conscious manor possible," she said. Safeway is one of the largest retail users of renewable energy in the United States as well, she said.

On top of the company's efforts to be green, Massingill said it provides jobs for roughly 70 people at its Merced plant. It's also actively involved in the community through the sponsorship of events, among other contributions.

The Wild West was founded partly over water wars. It's clear some are still being fought, even inside the bottle.