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the Sacramento Bee (Calif.)

Badly-Needed California Water Transfers Blocked by Economic, Environmental Hurdles

Jim Downing

An aerial view of the Sacramento-San Joaquin Delta in California April 15, 2009. Following an aerial tour of the Delta, Governor Arnold Schwarzenegger and Secretary Ken Salazar announced $260 million in economic stimulus projects from the American Recovery and Reinvestment Act to help California address its long-term water supply challenges and drought conditions. (REUTERS/Robert Durrell/Pool)

As another summer of drought approaches, hundreds of thousands of acres of San Joaquin Valley farmland are expected to be fallowed, and much of urban California faces 20 percent water cutbacks.

But in the Sacramento Valley, rice farmers have been busy for weeks spreading water 6 inches deep over a half-million acres. Many experts expect a larger crop than last year's.

It's not that no one saw it coming. The state of California devised a program to move some of that water to thirsty cities and fields south of the Delta. The plan made sense on paper, perhaps, but so far it has been hobbled by everything from high rice prices to environmental concerns.

"The state of California did not do its homework with the stakeholders to find out what the impacts of moving a lot of water would be," said Jonas Minton, water policy adviser for the Planning and Conservation League.

Moving water around California is never simple. And the troubles with the state's "water bank" show why.

Fish-related pumping restrictions in the Delta narrowed the window for moving water from north to south, limiting the amount some farmers could sell and scaring off potential buyers.

A collection of environmental groups sued the state for what they claim is a failure to properly assess the impacts of the water sale on everything from local aquifers to the habitat of the threatened giant garter snake. One provision of the bank would allow farmers to sell their river-water allocation but pump ground water for irrigation. That sort of arrangement depleted some rural drinking-water wells during the last state water transfer program in 1994, said Barbara Vlamis, executive director of the Chico-based Butte Environmental Council.

Many farmers were leery of entering into a complex water deal with the state, fearing they might be liable for unexpected environmental damages, become ineligible for federal subsidy programs or simply lose money if the sale fell through. The diesel engines some would have to use to pump water are considered air polluters, subject to a complicated permit process.

What's more, rice prices are at their highest levels in nearly 30 years, thanks in part to a prolonged drought in Australia that has knocked out the California rice industry's biggest international competitor.

"The economics make it a lot better to farm rice than to sell the water," said Brad Mattson, general manager of the Richvale Irrigation District and a Butte County rice grower.

Mattson, like many other Sacramento Valley farmers in districts with strong, historic rights to river water, pays less than $10 an acre-foot for his irrigation supply.

The state water bank offered farmers $275 an acre-foot, a price meant to roughly compete with this year's rice returns. Teresa Geimer, who is coordinating the program for the Department of Water Resources, said it is likely to transfer about 82,000 acre-feet. The target was as high as 600,000.

Even though the irrigation season is well under way, some farmers and water districts are still trying to figure out whether they'll sell.

"If everything can be ironed out, we will participate," said Walt Trevethan, who farms about 500 acres of rice near Pleasant Grove in south Sutter County.

Manuel Massa, who farms about 700 acres of rice with his son near the Colusa County town of Princeton, is one farmer who's selling. Massa, 66, is recovering from quadruple-bypass surgery and decided not to irrigate 100 acres. The farm will likely forgo some profits, Massa said, but he could use the time off.

An acre-foot is 325,851 gallons, enough to serve about two average California households for a year. The roughly 520,000 acres of rice planted in the Sacramento Valley this year will consume about 1.8 million acre-feet of water.

Buyers from the water bank will pay for the state's administrative expenses as well as the cost of transporting the water, on top of the $275 base price.

It can get pricey, but it's in line with other supplies available to Southern California cities this year. In recent years, emergency irrigation supplies for orchards in the San Joaquin Valley have traded for well over $500 an acre-foot.

Economists, many water users and some environmental groups have maintained for years that freer trade in water would lead to better allocation of the resource. In theory, it has the potential to drive improvements in water efficiency, reduce the acreage of low-value crops and enhance the state's ability to cope with drought.

That's one argument in favor of major modifications to the Delta, such as a new aqueduct that would bypass sensitive areas.

"Until you get the plumbing fixed, I think you're going to have a market that can't respond," said Jeff Kightlinger, general manager of the Metropolitan Water District of Southern California.

But environmental groups caution that a market can't cure every ill. Barry Nelson, a senior policy analyst with the Natural Resources Defense Council, said it's more important for the state to focus on maximizing water conservation and efficiency than on removing barriers to water deals.

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