Tag Archive for: California water policy

The Abundance Choice (part 13) – The Lords of Scarcity

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One of the farmers who supported our attempt to qualify the Water Infrastructure Funding Act for the November 2022 ballot was John Duarte. It was a privilege to speak with Duarte, because his reputation had preceded him. Duarte is the man who had the temerity – and uncommon courage – to sue the U.S. Army Corps of Engineers when they ordered him to stop farming one of his properties. The Corps argued that the rain puddles that formed on Duarte’s 450 acres in Tehama County were vernal pools.

The case was eventually settled in 2017, but only after the government counter-sued and a federal district court rejected Duarte’s claims. Facing the infinite resources of the federal bureaucracy, Duarte decided against filing an appeal and paid the fines. During our first conversation, and subsequently, it was Duarte who coined the phrase the Lords of Scarcity. It is a vividly accurate way to describe the many special interests, public and private, that benefit from regulations and rationing.

This economic fact remains underappreciated: When regulations are imposed on businesses and public agencies that make it almost impossible for them to build something, whatever that something produces becomes more expensive. This fact rests on the law of supply and demand, and only requires a minor intuitive leap from that foundation: When demand exceeds supply, because supplies have been restricted, whoever owns existing supplies makes more profit. These owners are the Lords of Scarcity, and California is their citadel.

One of the profound ironies of our time is how, especially in recent years, financial and corporate interests that once were pariahs to the American Left have now become their champions. There’s plenty to chew on in that statement, since social issues have been coopted now by corporate America almost to the point of parody, but let’s stick to the issues of economics and the environment. Corporations and financial special interests have long since realized that environmentalism is a means to control markets and capital.

The consequences of that realization are predictable and have been in full effect for years. Environmentalist overregulation is no longer an economic burden to large corporations, if it ever was. Rather, it is a way to create barriers to entry to emerging competitors, and a way to wipe out existing competitors that lack the scale or the financial resilience to comply with new environmental edicts. And here again, irony abounds.

Our initiative campaign was vilified as a vehicle for “wealthy landowners” and “powerful multinational corporations” to “subvert environmental protections” and “create a bottomless slush fund for the super rich.”

But what is really happening? Could it be that the biggest, wealthiest landowners do not want the price of water to go down? Why would they want that? They also do not want the price of land to go down. The more these necessities cost, the wealthier they get. Here is the exact transcript of an email I received from a wealthy landowner, in response to my request to support our initiative:

“I am not for it. I think it will not be helpful.”

You don’t have to try too hard to read what is unwritten in that statement. Affordable land and abundant water are unhelpful if your wealth is tied up in land with water rights.

As for powerful multinational corporations, here is the exact transcript of an email I received from a member of a partnership formed to financialize water markets:

“Thanks for the details, Edward. Unfortunately, I can’t support this as I think it is fundamentally the wrong strategy. More supply? Really? The exact opposite of my beliefs.…”

Precisely. There is no incentive for wealthy landowners or powerful multinational corporations to see the value of land or water go down. There is no incentive for companies that want to privatize water supply infrastructure to see the value of water go down. And yet the environmentalist community, which derives its support from millions of left-leaning voters and activists who digest left-leaning rhetoric that opposes the privatization of water, somehow became apoplectic over our initiative, which would have socialized significant costs for water infrastructure, thus lowering the market price of water for everyone.

Years of successful environmentalist opposition to more water supply infrastructure is driving a consolidation of property ownership, as smaller farmers, lacking the financial resiliency to outlast the drought, are being forced to sell their holdings. The buyers are huge agribusiness corporations or hedge funds. Often the motive for the buyers isn’t even to grow food, but merely to acquire the water rights. In a drought, water becomes more expensive — and the more water costs, the more valuable their investment.

This explains why Harvard’s $32 billion endowment is buying land for the water rights in Central California, and why Saudi investors are buying land for the water rights in the Imperial Valley. It explains why Trinitas Partners, LGS Holdings Group, Greenstone, and other out-of-state investment firms and hedge funds are buying out California’s financially stressed farmers and ranchers. Their profit model relies on water scarcity.

The Lords of Scarcity have correctly identified energy and water as essential prerequisites for almost every other product or service. In a guest editorial published in Eurasia Review on April 20 by Michael Shellenberger, a writer who is currently running for governor against Gavin Newsom, he identifies nuclear power and desalination as two game changing options that have been suppressed.

In his column, Shellenberger, who has long advocated for construction of more nuclear power plants, presents the original blueprints for Diablo Canyon nuclear plant, showing that PG&E originally planned to construct six reactors. As it is, Diablo Canyon’s two operating reactors are scheduled to be shut down by 2025, which Shellenberger alleges is 40 years premature based on their design life. With its continuous output of 1.1 gigawatts, just one reactor at Diablo Canyon produces enough energy to desalinate over two million acre feet of water per year. But there’s much more to this story. Shellenberger writes:

“Why is Newsom talking out of both sides of his mouth? Because he cares more about running for president than he does about the people of California. And he believes that running for president requires the support of pro-scarcity environmentalists like Sierra Club and Natural Resources Defense Council (NRDC), and their financial backers. The two groups oppose desalination and favor closing Diablo Canyon nuclear plant. They have a combined annual revenues of nearly $300 million, a significant share of which comes from the very same natural gas and renewable energy companies that stand to make billions replacing the energy from Diablo Canyon. [italics added] Naturally, many of the same financial interests back Newsom. Some pro-nuclear people think they can change Newsom’s mind by appealing to his donors, but a big part of the reason Newsom sought to kill Diablo Canyon was to deliver a scalp to his pro-scarcity donors.”

This is yet another economic agenda that favors the policies of scarcity. The more expensive energy becomes, the more investment goes into renewables. This is a good thing if you believe renewable energy is more sustainable and planet-friendly than conventional energy, but it certainly doesn’t make the case for shutting down Diablo Canyon. The reason continuous energy from nuclear power is a threat is not only because it displaces renewables, but because it also displaces natural gas power plants which, unlike nuclear power, can be rapidly brought on and offline and thus are needed to fill in when intermittent renewable power falters.

Energy scarcity in California is the result of political choices, driven by economic special interests that profit from that scarcity. The evolution of Shellenberger, who was honored in 2008 by Time as a “Hero of the Environment,” is a defining example of how the conventional wisdom could change in California. One of Shellenberger’s earliest works was the EcoModernist Manifesto, which proclaimed that prosperity and environmentalism are not in inherent conflict, and that we can achieve both. Taking this inspiring message from concept to implementation, however, is undermined by the Lords of Scarcity. Shellenberger, who recently authored a book about environmentalist alarmism with the self-explanatory title “Apocalypse Never,” came to realize that excessive environmental laws and regulations are very profitable for the few, at the expense of prosperity for the many.

Another critical resource that must be abundant and affordable in order to nurture economic prosperity is land. Here again the Lords of Scarcity have managed to use environmentalism to create prohibitive barriers to land ownership and land use. It isn’t as if there is a shortage of land in California. But the process of clearing the land for any sort of development requires so much time and money and political connections that most people don’t bother. New housing is the obvious example. What few parcels of land are approved for subdividing aren’t nearly sufficient to make up for the demand.

The many cost variables that combine to make housing unaffordable are all attributable to environmentalist policies. Water infrastructure isn’t built, which means fewer homebuilders are able to identify a source of water to supply to the homes they intend to build, which means fewer building permits are issued. California’s timber industry has been decimated – one of the unheralded true reasons for super fires – which means more expensive imported lumber has to be purchased by homebuilders. And then there is the land itself, thousands upon thousands of square miles of open land, most of it only suitable for grazing, situated along the major freeway corridors.

California is only five percent urbanized. Five percent. The significance of this bears further explanation. The state of California sprawls across 163,000 square miles, there are 25,000 square miles of grazing land and 42,000 square miles of agricultural land. Of that, 14,000 square miles are prime agricultural land. You could put 10 million new residents into homes, four per household, on quarter acre lots, with an equal amount of land set aside for roads, parks and commercial districts, and you would only consume 1,953 square miles. If you built those new cities on the best prime agricultural land California’s got, you would only use up 14 percent of it. If you scattered those homes among all of California’s farmland and grazing land – which is far more likely – you would only use up 3 percent of it.

The reason this doesn’t happen is because in every case, on every potential building site, there is an irreplaceable ecosystem that must remain pristine, and well funded environmentalist attorneys prepared to engage in endless litigation to preserve it. If California’s current land use policies were in force for the last hundred years, where would anyone live? Would anything have ever been built?

The Lords of Scarcity, using an extreme and self-serving interpretation of environmentalism as moral cover, have declared war on every essential resource necessary to deliver Californians an affordable and decent quality of life. Every building block of prosperity and every enabling economic foundation of the civilization we enjoy – water, energy, housing and food – is under attack.

The consequences of unaffordable housing only hurt ordinary families who want to own a home and build wealth. By contrast, unaffordable housing benefits the investment community which has recognized that by limiting the supply of real estate, they can invest in real estate and realize spectacular profits. So now families that aspire to own their own homes must also bid against real estate trusts, hedge funds, and major “multinational corporations” that stand to earn billions thanks to the policies of scarcity.

At this point, and once again, we must step back and reaffirm that everyone cares about the environment. The problem isn’t the value of environmentalism, which any conscientious person acknowledges. The problem is the balance between the needs of the environment and the needs of ordinary working families has been lost. And the reason it has been lost is because environmentalism is a useful political weapon for any financial special interest that benefits from scarcity.

Most people critical of environmentalist overreach will correctly point out that these policies cause disproportionate harm to low income and underserved communities. That observation has been repeated so often it has become a cliche. But it’s true and it’s tragic. The Lords of Scarcity are California’s privileged elites, unwilling to accept the lower profits that come with a more competitive marketplace, or a vision of environmentalism that embraces resource development and rejects self-serving anti-growth extremism.

The Lords of Scarcity have taken over California. They hide behind environmentalism to further their financial interests. If broad based economic prosperity is to return to California, the narrative they’ve successfully sold to voters must be challenged, and the power they wield must be broken.

This article originally appeared one the website of the California Globe.

The Abundance Choice (part 12) – Fighting Scope Insensitivity

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Scope insensitivity happens whenever a statistic has huge emotional impact but in reality has little relevance to the issues and challenges it purports to illuminate.

It is scope insensitivity that makes conscientious Californians willing to put a bucket in their shower. They believe that by faithfully capturing some of that shower water that otherwise goes down the drain, and painstakingly reusing that water to fill their toilet tank, or water some houseplants, they’re going to help manage water scarcity in California.

This is well intentioned but ridiculous. Imagine if 40 million Californians saved a gallon of water from their daily shower every day, never missing a day, as if every Californian would ever do such a thing. That would amount to 44,836 acre feet per year, which equates to one-half of one percent of California’s average annual urban water consumption. And water going down the drain in California’s homes is already either reused, or could be with investment in upgraded wastewater treatment plants.

Examples of scope insensitivity abound. On a grander scale, consider the previously mentioned impact of the proposed Huntington Beach desalination plant, which if they ever built it, would release 55 million gallons of brine into the ocean every day. That seems like a terrifying amount of brine, even though desalination brine is merely somewhat saltier seawater. But the California current sweeps an estimated 250 quadrillion gallons per day of ocean water past the west coast. The Huntington Beach desalination plant’s projected 55 million gallons of daily brine represents roughly one five-millionth of the water moved by natural current along the coast each day.

In both of these examples, two causes of scope insensitivity can be identified. The first is the unit. If you express a quantity using a smaller unit of measure, you can come up with a bigger number. So instead of saying 169 acre feet, why not say 55 million gallons? An eight digit number sounds far more impressive than a three digit number. The second cause of scope insensitivity is when there is a lack of relevant context. Putting something into an honest context is to offer a relevant denominator.

In the example of the bathtub bucket, for example, the numerator is 40 million gallons per day, and the unit is gallons. A numerator that would put this into a genuinely informative context would be acre feet per year, i.e., 44,836 acre feet per year. One can then assign a relevant denominator, which is all urban water consumption per year, i.e., 7.7 million acre feet per year. If the goal is to make an impact on urban water consumption by convincing 40 million Californians to perform this daily exercise, then Californians deserve to understand whether or not it will actually make any difference.

Instead, the type of context one typically gets is “enough water to fill 61 Olympic sized swimming pools every day, which emphasizes the message – this is a lot of water. But that comparison is just replacing one numerator, buckets in showers, with another, big swimming pools. There is no denominator. There is no context.

Combatting scope insensitivity ought to be a top priority for objective journalists, but thanks to either bias, innumeracy, or both, they rarely bother. And thanks to America’s decision to join with Liberia and Myanmar to remain the only three nations in the entire world that retain the Imperial System of weights and measures, even if you try, it’s not easy to intuitively perceive proportions and easily make meaningful comparisons between small and large, between numerator and denominator.

America’s Confusing Choice of Units to Measure Water Volume

Using the metric system, it is much easier to develop an intuitive grasp of how much impact a change in some small unit will have on a big unit. Everything is based on the decimal system. Ten millimeters equals a centimeter. Ten centimeters equals a decimeter. Ten decimeters, or 100 centimeters, equals a meter. One thousand meters equals a kilometer. For area, it is equally straightforward. A square that is one hundred meters per side is a hectare. A square that is one thousand meters per side is a square kilometer.

As for water volume, the metric system is also straightforward. A one millimeter cube is a microliter. A cubic centimeter is a milliliter. A cubic decimeter is a liter. A cubic meter is a kiloliter, and that volume of water is a metric ton. And one billion cubic meters is a cubic kilometer.

That’s about all you have to know. The rest follows logically. Learning the metric system may not be a cakewalk, but how much more numeric aptitude does one require to understand the imperial system? Without a decimal based system of measurements, how many people can possibly make intuitive comparisons between large and small units? Consider this summary of the imperial system:

Three teaspoons are a tablespoon. Two tablespoons make an ounce. Eight ounces make a cup, and sixteen ounces make a quart, which is also a pound. Four quarts make a gallon. It takes 7.48052 gallons to equal a cubic foot, and a foot is twelve inches, and inches are typically divided into eighths and sixteenths. An acre is 208.71 feet on a side, and a mile is 5,280 feet.

Are you kidding? The imperial system of weights and measures is an archaic joke, and all it does today is make it harder to overcome scope insensitivity. Back in the 1970s the United States was on the verge of adopting the metric system with the Metric Conversion Act of 1975. But conversion was voluntary, and it never took off. It would be harder now, because today’s ubiquitous and powerful computational tools make it far easier for engineers to use these byzantine measurements. But ordinary people who want to figure out what’s going on with American water infrastructure are among the losers.

Even if Americans used the metric system, it still would not be easy to put data in context. Even if weights and measures were all using the decimal system, there would still be units of time which must always be taken into account. Units of time, for example, require a year to be divided into approximately 365.25 days, a fractional inconvenience that is nonnegotiable. Perhaps hours and minutes could have been put into the decimal system, but like Esperanto, that’s probably not going to happen.

So here are some helpful flow conversions: One cubic foot per second is 724 acre feet per year. One gallon per minute is 1.6 acre feet per year. One million gallons per day is 1,121 acre feet per year. And here are some useful volume conversions: One million acre feet is 1.23 cubic kilometers. One trillion gallons is 3.1 million acre feet. And so on.

Rather than belabor these conversions, the interested reader may download this WATER CONVERSIONS SPREADSHEET. Instructions are on the spreadsheet. If you mess it up just download a fresh one. There are two tabs, one for flow conversions and one for volume conversions. Any journalist or analyst writing about water policy may find this useful, if not indispensable.

Without Abundant Energy, Water Abundance is Impossible

As we have seen, where there is water, there is energy, and no discussion of optimal water policies can ignore units of energy. Without water, there is no hydroelectric power, and without electricity, water cannot be pumped anywhere, not through treatment filters, nor over mountains and into taps. And since electric energy must be generated, i.e., converted, from some raw fuel, whether it’s photons, or mechanical, or chemical, or combustible, we can’t ignore other units of energy. For that matter, since environmentalists are concerned that most of the current forms of energy in the world are unsustainable and dangerous, we have to consider overall global energy production. Can we produce enough sustainable energy in the world to produce abundant water?

That question will generate as many answers as there are experts to ask, and an attempt will be made to address it in a later chapter. For now, let’s focus on California. Here again, we must overcome scope insensitivity. To do that, let’s establish the denominator: Total energy consumed in California. To get an idea of how complex the process is of getting from raw energy sources—fossil fuels, nuclear, hydro, wind and solar—to actual electrons running appliances or furnaces heating homes, Lawrence Livermore Labs and the U.S. Department of Energy have produced a flow chart that merits close study.

While there is a lot to digest in this energy flow chart, it offers valuable insight even without bombarding the observer with numbers. On the left, source fuel inputs are depicted, with the thickness of the lines (not the boxes) denoting the relative quantities of each fuel. Because electricity is not a source fuel, but has to be manufactured either using solar photons, or a fuel cell, or using a generator turned by wind, water, or fossil fuel, the box “Electricity Generation” shows up in the center left of the flow chart, in order to aggregate and redirect the quantities of source fuels that were converted into electricity. Further to the right, four boxes are used to aggregate and categorize what sectors make use of the various fuels including electricity, they are “Residential,” “Commercial,” “Industrial,” and “Transportation.”

It is immediately obvious that solar (yellow line) and wind energy (purple line) currently contribute an insignificant share of the total. Moreover, the method used by the study’s authors  to estimate the amount of solar energy contributed to the grid greatly overstates the actual amount. Their error was to take the amount of actual solar electricity generated in 2018, 27.5 gigawatt-hours which converts to 93 TBTU (trillion British thermal units), and improperly inflate it.

Instead of recognizing that photovoltaic power generation is directly transmitted to the grid without significant loss, the amount of solar power shown in the yellow box on the upper right of the flow chart declares 382 TBTUs of energy flowed into the grid. The reason for this error, based on a flawed assumption that is explained in the footnotes on the flow chart (which I confirmed with an electricity grid expert at the California Department of Energy), was to assume that solar power is subject to the same conversion inefficiencies as burning fossil fuel.

The implications of this are interesting. Out of 7,404 TBTUs (adjusted for the error, 7,115 TBTUs) of raw source fuels consumed, only 93 TBTUs came from solar electricity; that’s 1.3 percent. That means Californians are a long way off from entering the solar electric age.

And yet the fact that solar electricity loses very little power when going from photovoltaic power to the grid to an EV battery to an engine is an encouraging fact. Electric transmission losses are about 5 percent, with another 10 percent lost in a modern onboard battery’s charge/discharge cycle and the electric motor’s conversion of electrons into traction. Compare this to the average natural gas power plant, which can only achieve efficiencies of around 42 percent, or a gasoline powered automobile, which at best can achieve efficiencies of 35 percent.

The consequences of energy inefficiency—the amount of source fuel inputs that are lost to excess heat and friction—are seen on the far right of the flow chart, in the box “rejected energy,” which is twice as much as the box “energy services.” Of the estimated 7,404 TBTU of source fuel consumed by Californians in 2018, 4,907 TBTUs were wasted, and only half that much was enjoyed by Californians in the form of lighting, heating and air-conditioning, vehicular traction, and so on. By how much could Californians reduce the amount of fuel input, while keeping level or increasing their actual energy services, if they went totally electric?

Understanding Units of Energy

Anyone who has spent enough time reading the publications and reports that tout a clean energy future sees the marketing images: windmills presiding benignly over green pastures, solar panels glinting in the sunlight, row after row, set against a scenic horizon. But how many of California’s politicians, much less the marketing consultants and graphic artists who are selling this dream, have actually tried to parse gigawatt-years into quadrillion British thermal units? It’s not tough math. But it’s awfully tedious.

The first variable to understand is quadrillion BTUs. A BTU, or British thermal unit, is a measurement of energy typically used by economists. It is the amount of energy required to heat one pound of water by one degree Fahrenheit. Economists refer to the total energy consumption of entire states and nations in “Quad BTUs,” which refers to 1 quadrillion (1,000,000,000,000,000) BTUs. California, in 2019, consumed 7.8 Quad BTUs of energy (up five percent from 2018). Another common term is TBTU, which stands for “trillion British thermal units” (1,000 TBTUs equals 1 Quad BTU).

The second variable to understand is gigawatt-years, discussed in previous chapters, which is a measurement unit used to measure large amounts of electricity. A gigawatt-year is the amount of electric energy that would be produced by a one gigawatt power plant, operating continuously for one year. Economists, energy planners, and utility executives typically prefer to report terawatt-hours, probably since most consumers understand kilowatt-hours. But gigawatt-years is a more useful measurement of electric power.

Conceptually, these units of energy measurement are all convertible. Which is to say that one Quad BTU is equivalent to 33.4 gigawatt-years, and one gigawatt-year is equivalent to 8.8 terawatt-hours. For all units of energy, from horsepower to joules, to kilowatt-hours to British thermal units, or cubic feet of natural gas to barrels of oil, there are conversion constants that allow any unit of one form of energy to be expressed using units of another form of energy. Understanding how BTUs of natural gas or gasoline convert into electricity is necessary in order to estimate how much electricity is required to eliminate natural gas or gasoline.

Another essential energy concept is conversion efficiency. If every form of energy converted into another form of energy with 100 percent efficiency, the conversion constants would be all that was ever needed. But as previously noted, natural gas converts into electricity in a modern power plant at about 42 percent efficiency. Gasoline converts into traction in modern automobiles at around a 35 percent efficiency. And solar electricity can be delivered through the grid to an EV and converted into traction at up to 85 percent efficiency.f

How Much More Electricity Would California Need to Go 100 Percent Electric?

Returning to the question of how much fuel input can be reduced while retaining the same amount of energy services, note that on the NREL flowchart, 7.4 QBTUs (quadrillion BTUs) of raw energy is input, while only 2.5 QBTUs of energy is actually utilized. This is an overall efficiency of 34 percent. If the entire energy input were electrical, at an overall efficiency of 80 percent, you would only have to come up with 3.2 QBTUs of electric power input. Since 33.4 gigawatt-years is equal to one quadrillion BTUs, it would take just over 100 gigawatt-years of electricity, i.e., on average a continuous generation of 100 gigawatts into California’s grid, for the state to go all-electric. How those 100 gigawatts would be generated, of course, is the trillion dollar question.

To bring all of this back to California’s water future, and to combat scope insensitivity, here are a few connections between water and energy in the state. The following chart shows the additional generating capacity that would be necessary for California to run 100 percent of its economy on electricity. The chart also shows how much additional electricity would be required to produce and supply 1.0 million acre feet of additional water under three scenarios – via aqueduct, via desalination, and via wastewater reuse.

The data to prepare this chart is documented in the chapters preceding this one, with the exception of the “minimum gigawatt output for California to go 100 percent electric.” As discussed, that figure, 100 gigawatts, roughly corresponds to 3.0 quadrillion BTUs, which is slightly more than the 2.5 QBTUs California used in 2018. It implies over 80 percent efficiency in transmission, storage and use of electricity, as well as zero growth in absolute energy consumption. This assumes extraordinary engineering achievements as well as aggressive energy conservation programs. It is therefore the absolute minimum amount of electricity required for California to go 100 percent electric.

Much more on what it would take to accomplish this can be found in a 2022 California Policy Center Report “Examining California’s Renewable Energy Plan.” Foes of scope insensitivity are particularly encouraged to wallow in the overwhelming facts in that report, they lead to only one logical conclusion – wind, solar, geothermal, and tidal power will not be sufficient to replace existing electricity generation in California, much less nearly double it to usher in an all electric age.

How Much Electricity Would it Take for California to Have Abundant Water?

More to the point, however, are the figures on the second set of rows on the above chart, which show how much electricity it would take to produce more water in California. To transport 1.0 million acre feet via aqueduct, assuming the torrential storms that tomorrow will bring are captured above or below ground, 390 megawatts of continuous power for a year would be required – using the California Aqueduct as the example – or 3.4 terawatt hours. Treating 1.0 MAF of municipal wastewater has the most efficient energy cost at 150 megawatts of continuous power for a year, or 1.3 terawatt-hours. Energy costs for delivering treated wastewater are minimal if the upgraded treatment plant is close to the existing treatment plant, and if those are in-turn near the groundwater storage aquifers. With this favorable topography, expect an energy cost of 40 megawatts of continuous power for a year, or 0.4 terawatt-hours, to deliver 1.0 MAF from treatment plant to aquifer. With an unfavorable topography, expect the energy cost to be twice that much or more.

Which brings us to desalination, which is produced at an energy cost slightly higher than the California Aqueduct. Depending on the delivery topography, desalination can use a lot of energy, as the worst case scenario depicts. But to suggest this eliminates desalination as a viable option is a failure of imagination. If Californians desalinated one million acre feet of seawater per year, and at the same time doubled their electricity generating capacity – which the state legislature is committed to doing – that scale of desalination would only consume one-half of one percent percent of the total energy produced in the state. And those numbers rely on an unfavorable delivery scenario, as well as a magnitude of desalination development that even its wildest proponents have not suggested. Desalination, in a state where energy and water are ultimately rendered abundant and cheap through technological innovation and massive infrastructure investments, can be an essential part of a resilient water supply portfolio.

To summarize: California’s average electricity consumption is 57 gigawatts. Very best case, to convert all end user energy to electric – transportation, heating, everything – would require California’s grid to expand its capacity to deliver on average just over 100 gigawatts. Using electricity to deliver an additional million acre feet per year via the California aqueduct would consume 400 megawatts of continuous power, roughly the same as the amount necessary to desalinate one million acre feet of seawater; 400 megawatts is 0.4 percent of 100 gigawatts. Therefore to deliver five million acre feet of new water in either of these manners would only consume two percent of 100 gigawatts.

The energy cost to reuse wastewater is less than half that, i.e., about 150 megawatts of continuous power per million acre feet per year. In the case of desalination and wastewater reuse, energy is also required to deliver the water, but because these facilities are typically located near municipal groundwater basins or municipal water systems, the required delivery energy is unlikely to ever require more than half-again as much power, i.e., no more than 75 megawatts of continuous power per million acre feet per year; depending on the topography, potentially much less. Water pumped via aqueducts will typically develop enough pressure as it is pumped over the hills from inland sources and then piped downward into coastal cities to not require additional power for final delivery to consumers.

Anyone who has waded through this entire assault on scope insensitivity is to be commended. The fact that the top-down totals regarding the key financial and quantitative denominators of water and energy in California had to be painstakingly and inadequately compiled in this report, instead of being widely available, is a shortcoming of California’s water agencies, especially at the state level. Informed estimates for these variables – how much power it takes to produce and distribute water, and how much these projects cost – need to be at the fingertips of every elected official in the state. The figures produced here should be available from more authoritative sources, in formats that are equally if not more accessible to non-experts. Journalists can be forgiven for not successfully navigating the numerical realities that must inform energy and water policy, but they cannot be forgiven if they don’t try.

The conventional wisdom in California has been that we must conserve water, as if that is all it’s going to take. If you examine the quantitative facts, with appropriate sensitivity to scope and scale, the conventional wisdom is proven wrong and must be challenged. Conservation is an important part of the solution to water scarcity, but it cannot possibly be enough. Numbers don’t lie.

This article originally appeared on the website of the California Globe.

Towards a Grand Bargain on California Water Policy

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When it comes to water policy in California, perhaps the people are more savvy than the special interests. Because the people, or more precisely, the voters, by huge majorities, have approved nine water bonds in the past 25 years, totaling $27.1 billion. It is likely they’re going to approve another one this November for another $8.9 billion.

The message from the people is clear. We want a reliable supply of water, and we’re willing to pay for it. But the special interests – or whatever you want to call the collection of politicians, unelected bureaucrats with immense power, and other stakeholders who actually decide how all this money is going to be spent – cannot agree on policy. A recent article in the Sacramento Bee entitled “Why San Francisco is joining Valley farmers in a fight over precious California water,” says it all. “Precious California water.” But what if water were so abundant in California, it would no longer be necessary to fight over it?

As it is, despite what by this time next year is likely to be $36 billion in water bonds approved by voters for water investments since 1996, the state is nowhere close to solving the challenge of water scarcity. As explained in the Sacramento Bee, at the same time as California’s legislature has just passed long overdue restrictions on unsustainable groundwater withdrawals, the political appointees on the State Water Resources Control Board are about to enact sweeping new restrictions on how much water agricultural and municipal consumers can withdraw from the Sacramento and San Joaquin rivers.

This is a perfect storm, and every conservation, recycling and storage project currently funded or proposed will not make up the shortfall. In 2002, well before these new restrictions were being contemplated, the California Dept. of Water Resources issued an authoritative study, “Averting a California Water Crisis,” that estimated the difference between demand and supply at between two and six million acre feet per year by 2020. An impressive response from the public during the most recent drought, combined with some investment in water infrastructure has narrowed that gap. But the squeeze is ongoing, with tougher challenges and tradeoffs ahead.

Abundance vs Scarcity

When thinking about solutions to California’s water challenges, there is a philosophical question that has to be addressed. Is it necessary to persistently emphasize conservation over more supplies of water? Is it necessary to always perceive investments in more supplies of water as environmentally unacceptable, or is it possible to decouple, or mostly decouple, environmental harm from investment in more water supplies? Is it possible that the most urgent environmental priorities can be addressed by increasing the supply of water, even if investing in more water supplies also creates new, but lessor, environmental problems?

This philosophical question takes on urgent relevance when considering not only the new restrictions on water withdrawals that face Californians, but also in the context of another great philosophical choice that California’s policy makers have made, which is to welcome millions of new immigrants from across the world. What sort of state are we inviting these new residents to live in? How will we ensure that California’s residents, eventually to number not 40 million, but 50 million, will have enough water?

It is this reality – a growing population, a burgeoning agricultural economy, and compelling demands to release more water to threatened ecosystems – that makes a grand political water bargain necessary for California. A bargain that offers a great deal for everyone – more water for ecosystems, more water for farmers, more water for urban consumers – because new infrastructure will be constructed that provides not incremental increases, but millions and millions of acre feet of new water supplies.

The good news? Voters are willing to pay for it.

How to Have it All – A Water Infrastructure Wish List

When considering what it would take to actually have water abundance again in California, the first step is to try to determine the investment costs, imagining a best case scenario where every good idea got funded. Here’s a stab at that list, not differentiating between local, state and federal projects. These are very approximate numbers, rounded upwards to the nearest billion:

Projects to Increase Supplies of Water

(1) Build the Sites Reservoir (annual yield 0.5 MAF) – $5.0 billion.

(2) Build the Temperance Flat Reservoir (annual yield 0.25 MAF) – $3.0 billion.

(3) Raise the height of the Shasta Dam (increased annual yield 0.5 MAF) – $2.0 billion.

(4) So Cal water recycling plants to potable standards with 1.0 MAF capacity – $7.5 billion.

(5) So Cal desalination plants with 1.0 MAF capacity – $15.0 billion.

(6) Desalination plants on Central and North coasts with 0.5 MAF capacity – 7.5 billion

(7) Central and Northern California water recycling plants to potable standards with 1.0 MAF capacity – $7.5 billion.

(8) Facilities to capture runoff for aquifer recharge (annual yield 0.75 MAF) – $5.0 billion.

Total – $52.5 billion.

Projects to Increase Resiliency of Water Distribution Infrastructure

(9) Retrofit every dam in California to modern standards, including Oroville and San Luis – $5.0 billion.

(10) Aquifer mitigation to eliminate toxins with focus on Los Angeles Basin – $7.5 billion.

(11) Retrofit of existing aqueducts – $5 billion.

(12) Seismic retrofits to levees statewide, with a focus on the Delta – $7 billion.

Total – $24.5 billion.

The total of all these projects, $77 billion, is not accidental. That happens to be the latest best case, low-ball estimate for California’s completed high speed rail project. Without belaboring the case against high speed rail, two comparisons are noteworthy.

First, an ambitious program to create water abundance in California and water infrastructure resiliency in California based on this hypothetical budget is achievable. These numbers are deliberately rounded up, and the final costs might actually be lower, whereas it is extremely unlikely that California’s high speed rail project can be completed for $77 billion.

Second, because people will actually consume these new quantities of water that are being supplied and delivered, private financing will be attracted to significantly reduce the taxpayer’s share.

The Impact of a $77 billion Investment on Water Supply, Resiliency, and Ecosystems

As itemized above, at a capital cost of $52.5 billion, the total amount of water that might be added to the California’s statewide annual water budget is 5.5 million acre feet.

This amount of water would have a staggering impact on the demand vs. supply equilibrium for water. It is nearly equal to the total water consumed per year by all of California’s urban centers. Implementing this plan would mean that nearly all of the water that is currently diverted to urban areas could be instead used to ensure a cool, swift flow in California’s rivers, while preserving current allocations for agriculture. The options for environmentalists would be almost unbelievable. Restore wetlands. Revive the Delta. Refill the shrinking Salton Sea.

The environmentalist arguments against the three dams are weak. Shasta Dam is already built. The impact of expanding the Shasta Dam is purportedly the worst on McCloud creek, where it will affect “nearly a mile” of what was “once a prolific Chinook salmon stream,” (italics added). That negative impact, which seems fairly trivial, has to be balanced against the profound benefit of having another 500,000 acre feet of water available every summer to generate pulses of swift, cool water in the Sacramento River. The proposed Temperance Flat Reservoir is proposed on a stretch of the San Joaquin River that already has a smaller dam. The Sites Reservoir is an offstream reservoir that will not interfere with the Sacramento River.

The environmental benefits of these dams are not limited to their ability to ensure supplies of fresh water for California’s aquatic ecosystems. They can also be used to store renewable electricity, by pumping water from a forebay at the foot of the dam into the reservoir during the day, when solar energy already brings the spot price of electricity down to just a few cents per kilowatt-hour, then generating hydro-electric power later in the evening when peak electrical demand hits the grid. This well established technology has already been implemented on dams throughout California, and remains one of the most cost-effective ways to store clean, but intermittent, renewable energy. It will also be a profit center for these dams.

The environmentalist arguments against desalination are also weak. The energy required to desalinate seawater is comparable to the energy necessary to pump it from Northern California to the Los Angeles Basin. The outfall can be discharged under pressure a few miles from shore, where it is instantly disbursed in the California current. The impact from the intakes is grossly overstated by environmentalists, when considering that even if all of these contemplated desalination plants were built, the water they would intake is only a fraction of the amount of water taken in for decades by California’s power plants that are sited on the coast and use seawater for cooling.

As for the Delta, the primary environmental threat to that ecosystem is the chance that an earthquake destroys the hundreds of miles of levees, causing the agricultural areas behind those levees to be flooded. Not only would agricultural contaminants enter the water of the Delta, but the rush of water flooding into the areas behind the levees would cause salt water from the San Francisco Bay to rush in right behind, creating conditions of salinity that would take years to remove, if ever.

This is why investing in levee upgrades and a Delta Smelt hatchery is a preferable solution to the Delta tunnels. The tunnels would ensure a resilient supply of water from north to south, but the Delta would still be vulnerable to levee collapse. Levee upgrades and a Delta Smelt hatchery would accomplish both goals – resiliency of the water supply and of the Delta ecosystem. Moreover, the presence of massive water recycling and desalination facilities in Southern California would take a great deal of pressure off how much water would need to be transported through the Delta from north to south.

How to Finance $77 Billion for Water Infrastructure

Funding capital projects depends on three possible sources: operating budgets, general obligation bonds, or revenue bonds. Operating budgets, which used to help pay for capital projects, and which ought to help pay for capital projects, will never be balanced until real pension reform occurs. So for the most part, operating budgets are not a source of funds.

A useful way to differentiate between general obligation bonds and revenue bonds are that the general obligation bonds impose a progressive tax on Californians, since wealthy individuals pay about 60% of all tax revenues in California. Revenue bonds, on the other hand, because they are serviced through sales of, for example, water produced by a desalination plant, are regressive. This is because all consumers see these costs included in their utility rates, and utility bills constitute a far greater proportion of the budget for a low income household.

The Grand Bargain – Creating Water Abundance in California
(MAF = million acre feet)

By financing water infrastructure through a combination of revenue bonds and general obligation bonds, instead of solely through revenue bonds, water can remain affordable for ordinary Californians. The $24.5 billion portion of the $77.0 billion wish list, the funds for dam, aqueduct, and levee retrofits, along with aquifer mitigation, are not easily serviced through revenue bonds. A 30 year general obligation bond for $24.5 billion with an interest rate of 5% would cost California’s taxpayers $1.6 billion per year. Some of these projects, to the extent they are improving water delivery to specific urban and agricultural consumers, might be funded by bond issuances that would be serviced by the agencies most directly benefiting.

To claim that 100% of the revenue producing water projects can be financed through revenue bonds is more than theoretical. The Carlsbad Desalination Plant financing costs, principle and interest payments a nearly $1.0 billion for the plant’s construction, are paid by the contractor that built and operates the plant, with those payments in-turn funded through the rates charged to the consumers of the water. The contractor also retains an equity stake in the project, meaning that additional capital costs incurred privately are also funded via a portion of the rates charged to consumers.

Some of the revenue producing assets on the grand bargain wish list may also have a portion of them paid for by general obligation bonds. Determining that mix depends on the consumer. For example, a revenue bond for the reservoir projects may be applied to agricultural consumers who are willing to pay well above historical rates to have a guaranteed source of water for their orchards, which have to survive through dry years.

For urban consumers in particular, making the more expensive projects financially palatable may require general obligation bonds to cover part of the costs, so the remaining costs are affordable for ratepayers. For example, desalination is a relatively expensive way to produce water, making it harder to finance 100% with revenue bonds. But without desalination, wastewater recycling and runoff capture are not sufficient local sources of water in places like Los Angeles. The overall benefit to Californians of adding another 1.5 million acre feet per year to the state’s water supply, using desalination which is impervious to droughts, may be worth having some of its cost financed with general obligation bonds.

To fund roughly 50% of the revenue producing water supply infrastructure ($26.2 billion) and 100% of the water resiliency and distribution infrastructure ($24.5 billion) on this list would cost taxpayers about $3.0 billion per year. While this might strike some as an unthinkable amount to even consider, these projects meet all the criteria for so-called “good debt.” Constructing them all would solve California’s challenge of water scarcity, possibly forever. All of the projects are assets yielding ongoing and long-term benefits that will outlast the term of the financing. At the same time, water would become so abundant in California that prioritizing water allocations to revive ecosystems would no longer provoke bitter opposition. And California’s residents would live again in a state where taking a long shower, planting a lawn, and doing other water-intensive activities that are considered normal in a developed nation, would once again become affordable and normal.

Other Ways to Help Pay for Water Abundance in California

Enable and Expand Water Markets

Even if a grand bargain is struck between environmentalists, farmers, and water districts, and massive investments are made to increase the supply of water, enabling and expanding water markets will help optimize the distribution of available water resources. Similarly, reforming California’s labyrinthine system of water rights might also help, by making it easier for owners of water rights to sell their allocations. Fostering water markets while protecting water rights have interrelated impacts, and ideally can result in more equitable, appropriate water pricing across the state. It might also help make it unnecessary to impose punitive tiered rates or rationing on household consumers.

Reform Environmentalist Barriers to Development

CEQA, or the California Environmental Quality Act, is a “statute that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible.” While the intent behind CEQA is entirely justifiable, in practice it has added time and expense to infrastructure projects in California, often with little if any actual environmental benefit. An excellent summary of how to reform CEQA appeared in the Los Angeles Times in Sept. 2017, written by Byron De Arakal, vice chairman of the Costa Mesa Planning Commission. It mirrors other summaries offered by other informed advocates for reform and can be summarized as follows:

  • End duplicative lawsuits: Put an end to the interminable, costly legal process by disallowing serial, duplicative lawsuits challenging projects that have completed the CEQA process, have been previously litigated and have fulfilled any mitigation orders.
  • Full disclosure of identity of litigants: Require all entities that file CEQA lawsuits to fully disclose their identities and their environmental or, increasingly, non-environmental interest.
  • Outlaw legal delaying tactics: California law already sets goals of wrapping up CEQA lawsuits — including appeals — in nine months, but other court rules still leave room for procedural gamesmanship that push CEQA proceedings past a year and beyond. Without harming the ability of all sides to prepare their cases, those delaying tactics could be outlawed.
  • Prohibit rulings that stop entire project on single issue: Judges can currently toss out an entire project based on a few deficiencies in environmental impact report. Restraints can be added to the law to make “fix-it ticket” remedies the norm, not the exception.
  • Loser pays legal fees: Currently, the losing party in most California civil actions pays the tab for court costs and attorney’s fees, but that’s not always the case with CEQA lawsuits. Those who bring CEQA actions shouldn’t be allowed to skip out of court if they lose without having to pick up the tab of the prevailing party.

Find Other Ways to Reduce Construction Costs

The Sorek desalination plant, commissioned in Israel in 2015, cost $500 million to build and desalinates 185,000 acre feet of water per year. Compared to Carlsbad, which also began operations in 2015, Sorek came online for an astonishing one-sixth the capital cost per unit of capacity. Imagine if the prices Israelis pay to construct desalination plants could be achieved in California. Instead of spending $15 billion to build 1.0 million acre feet of desalination capacity, we would spend less than $3.0 billion. How did they do this?

The bidding process itself adds unnecessary costs to public infrastructure projects. Moving to a design-build process could significantly reduce duplicative work during the plant’s engineering phase. Project labor agreements are another practice that at the very least deserve serious reconsideration. Would it be possible objectively evaluate the impact of project labor agreements, and determine to what extent those mandates increase costs?

What about economies of scale? If ten desalination plants were commissioned all at once, wouldn’t there be an opportunity for tremendous unit savings? What about creativity? Elon Musk, who has disrupted the aerospace industry by building rockets at a fraction of historical prices, said “the construction industry is one of the only sectors in our economy that has not improved its productivity in the last 50 years.” Is he even partly correct? Is that worth looking into?

Shift Government Spending Priorities

Cancel High Speed Rail: The most obvious case of how to redirect funds away from something of marginal value into water infrastructure, which is something with huge public benefit, is to cancel the bullet train. The project is doomed anyway, because it will never attract private capital. But what if Californians were offered the opportunity to preserve the planned bond issuances for high speed rail, tens of billions of capital, but with a new twist? If voters were asked to redirect these funds away from high speed rail and instead towards creating water abundance through massive investment in water infrastructure, there’s a good chance they’d vote yes.

Cancel the Delta Tunnels: By investing in levee hardening, the Delta’s ecosystems can be fortified against a severe earthquake. Reducing the possibility of levee failure protects the Delta ecosystems from their worst environmental threat at the same time as it protects the ability to transfer water from north to south. Investing in hatcheries to increase the population of the threatened Smelt is a far more cost-effective way of safeguarding the survival of that species. And investing in infrastructure on the Southern California coast to make that region water independent greatly reduces the downside of a disruption to water deliveries through the Delta. Canceling the Delta Tunnels would save $20 billion, money that would go a long way towards paying for other vital water infrastructure.

Reform Pensions: The biggest out of control budget item, by far among California’s state and local agencies, is the cost of public sector pensions. A California Policy Center analysis released earlier this year, based on public announcements from CalPERS, estimated that the total employer payments for pensions for California’s state and local government employees is set to nearly double, from $31 billion in 2018 to $59 billion by 2024. And that is a best case baseline. If there is a severe market correction, those required contributions will go up further. No discussion of how to find money for other government operations can take place without understanding the role of pension costs in creating budget constraints.

Reduce State Spending: Other ways to shift spending priorities in California, while worth a discussion, are mostly controversial. Returning the administrator to faculty ratio in California’s UC and CalState systems to its historical level of 1:2 instead of the current 1:1 would also save $2.0 billion per year. Outsourcing CalTrans work and eliminating redundant positions could save $2.5 billion per year. Reducing just state agency headcount and pay/benefits by 20% would save $6.5 billion per year. Just enacting part of that, incremental pension reform for state workers, could stop the runaway cost increases that are otherwise inevitable.

California’s state budget this year has broken $200 billion for the first time. Of that, general fund spending is at $139 billion, also a record. Revenues, however, have set records as well. The rainy day fund is full, and an extra deposit of $2.6 billion has it overflowing. Why not spend that $2.6 billion on water infrastructure? For that matter, why not spend all of the $1.4 billion of cap and trade revenue on water infrastructure?

Financing more water infrastructure will more likely come via public and private debt financing. But redirecting intended future borrowings, in particular for high speed rail and for the Delta Tunnels, could cover most if not all of the infrastructure investments necessary to deliver water abundance to Californians. And at the least, redirecting funds from government operating budgets can defray some of the operating costs, if not some of the capital costs.

Work to Build a Consensus

How many more times will California’s voters approve multi-billion dollar water bonds? The two passed in the last four years, plus the current one set for the November ballot, raise $20 billion, but only $2.5 billion of that goes to reservoir storage. Only another $3.3 billion more goes to any type of supply enhancements – mostly to develop aquifer storage or fund water recycling. Meanwhile, consumers are being required to submit to permanent water rationing, and dubious projects are being funded to save water. Artificial turf is a good example. There isn’t a coach in California who wants their athletes to compete on these dangerous surfaces. On a hot day in Sacramento, the temperature on these “fields” can reach 150 degrees. They are actually keeping sprinkler systems operating on these horrendous boondoggles, just to reduce the deadly heat buildup.

Credibility with voters remains intact to-date, but cannot be taken for granted. If a grand bargain on California’s water future is struck, it will need to promise, then deliver, water abundance to California’s residents.

Change the Conventional Wisdom

California’s current policies have stifled innovation and created artificial scarcity of literally every primary necessity – not just water, but housing, energy and transportation. Each year, to comply with legislative mandates, California’s taxpayers are turning over billions of dollars to attorneys, consultants and bureaucrats, instead of paying engineers and heavy equipment operators to actually build things. The innovation that persists despite California’s unwelcoming policy environment is inspiring.

California’s policymakers have adhered increasingly to a philosophy of limits. Less water consumption. Less energy use. Urban containment. Densification. Fewer cars and more mass transit. But it isn’t working. It isn’t working because California has the highest cost of living in the nation. Using less water and energy never rewards consumers, because the water and energy never were the primary cost within their utility bills – the cost of the infrastructure and overhead was the primary cost.

Changing the conventional wisdom applies to much more than water. It is a vision of abundance instead of scarcity that encompasses every vital area of resource consumption. A completely different approach that could cost less than what it might cost to fully implement scarcity mandates. An approach that would improve the quality of life for all Californians. Without abandoning but merely scaling back the ambition of new conservation and efficiency mandates, embrace supply oriented solutions as well. Build wastewater recycling and desalination plants on the Pacific coast, enough of them to supply California’s massive coastal cities with fresh water. Instead of mandating water rationing for households, put the money that would have been necessary to retrofit all those homes into new ways to reuse water and capture storm runoff.

Paying for all of this wouldn’t have to rely exclusively on public funds. Private sector investment could fund a large percentage of the costs for new water infrastructure. Water supplies could be even more easily balanced by permitting water markets where farmers could sell their water allotments without losing their grandfathered water rights. If the bidding process and litigation burdens were reduced, massive water supply infrastructure could be constructed at far more affordable prices.

The Grand Bargain

Water abundance in California is achievable. The people of California would welcome and support a determined effort to make it a reality. But compromise on a grand scale is necessary to negotiate a grand bargain. Environmentalists would have to accept a few more reservoirs and desalination plants in exchange for plentiful water allocations to threatened ecosystems. Farmers would have to pay more for water in exchange for undiminished quantities. While private financing and revenue bonds could cover much of the expense, taxpayers would bear the burden of some new debt – but in exchange for permanent access to affordable, secure, and most abundant water.

This is the third and final part of an investigation into California’s water future. Part one is “How Much California Water Bond Money is for Storage?,” and part two is “How to Make California’s Southland Water Independent for $30 Billion.” Edward Ring is a co-founder of the California Policy Center and served as its first president.

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How to Make California’s Southland Water Independent for $30 Billion

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The megapolis on California’s southern coast stretches from Ventura County on the northern end, through Los Angeles County, Orange County, down to San Diego County on the border with Mexico. It also includes the western portions of Riverside and San Bernardino counties. Altogether these six counties have a population of 20.5 million residents. According to the California Department of Water Resources, urban users consume 3.7 million acre feet of water per year, and the remaining agricultural users in this region consume an additional 700,000 acre feet.

Much of this water is imported. In an average year, 2.6 million acre feet of water is imported by the water districts serving the residents and businesses in these Southland counties. The 701 mile long California Aqueduct, mainly conveying water from the Sacramento River, contributes 1.4 million acre feet. The 242 mile long Colorado River Aqueduct adds another 1.0 million acre feet. Finally, the Owens River on the east side of the Sierras contributes 250,000 acre feet via the 419 mile long Los Angeles Aqueduct.

California’s Plumbing System
The major interbasin systems of water conveyance, commonly known as aqueducts

California’s Overall Water Supplies Must Increase

Californians have already made tremendous strides conserving water, and the potential savings from more stringent conservation mandates may not yield significant additional savings. Population growth is likely to offset whatever remaining savings that may be achievable via additional conservation.

Meanwhile, the state mandated water requirements for California’s ecosystems continue to increase. The California State Water Board is finalizing “frameworks” that will increase the minimum amount of flowrequired to be maintained in the Sacramento and San Joaquin rivers order to better protect fish habitat and reduce salinity in the Delta. And, of course, these rivers, along with the Owens and Colorado rivers, are susceptible to droughts which periodically put severe strain on water users in California.

At about the same time, in 2015, California’s legislature began regulating groundwater withdrawals. This measure, while long overdue, puts additional pressure on urban and agricultural users.

California’s water requirements for healthy ecosystems, a robust and growing farm economy, as well as a growing urban population, are set to exceed available supply. Conservation cannot return enough water to the system to fix the problem.

How Can Water Supplies Increase?

In Southern California, runoff capture is an option that appears to have great potential. Despite its arid climate and perennial low rainfall, nearly every year a few storm systems bring torrential rains to the South Coast, inundating the landscape. Until the Los Angeles River was turned into a gigantic culvert starting in 1938, it would routinely flood, with the overflow filling huge aquifers beneath the city. Those aquifers remain, although many are contaminated and require mitigation. Runoff harvesting for aquifer storage represents one tremendous opportunity for Southern Californians to increase their supply of water.

The other possibilities are sewage recycling and desalination. In both cases, Southern California already boasts some of the most advanced plants in the world. The potential for these two technologies to deliver massive quantities of potable water, over a million acre feet per year each, is now predicated more on political and financial considerations than technological challenges.

Recycling Waste Water

Orange County leads the United States in recycling waste water. The Orange County Sanitation District treats 145,000 acre feet per year (130 million gallons per day – “MGD”), sending all of it to the Orange County Water District’s “Ground Water Replenishment System” plant for advanced treatment. The GWRS plant is the biggest of its kind in the world. After being treated to potable standards, 124,000 acre feet per year (110 million GPD), or 85 percent of the waste water, is then injected into aquifers to be stored and pumped back up and reused by residents as potable water. The remainder, containing no toxins and with fewer total dissolved solids than seawater, is discharged harmlessly into the ocean.

Currently the combined water districts in California’s Southland discharge about 1.5 million acre feet (1.3 billion GPD) of treated wastewater each year into the Pacific Ocean. Only a small percentage of this discharge is the treated brine from recycled water. But by using the advanced treatment methods as are employed in Orange County, 85% of wastewater can be recycled to potable standards. This means that merely through water reuse, there is the potential to recycle up to another 1.2 million acre feet per year.

Needless to say, implementing a solution at this scale would require major challenges to be overcome. Currently California’s water districts are only permitted to engage in “indirect potable reuse,” which means the recycled water must be stored in an aquifer or a reservoir prior to being processed as drinking water and entering the water supply. By 2023, it is expected the California Water Board will have completed regulations governing “direct potable reuse,” which would allow recycled water to be immediately returned to the water supply without the intermediate step of being stored in an aquifer or reservoir. In the meantime, it is unlikely that there are enough uncontaminated aquifers or available reservoirs to store the amount of recycled water that could be produced.

Desalinating Seawater

The other source of new water for Southern California, desalination, is already realized in an operating plant, the Carlsbad Desalination Plant in San Diego County. This plant produces 56,000 acre feet per year (50 MGD) of fresh water by processing twice that amount of seawater. It is the largest and most technologically advanced desalination plant in the Western Hemisphere. It is co-located with the Encina Power Station, a facility that uses far more seawater per year, roughly ten times as much, for its cooling systems. The Carlsbad facility diverts a portion of that water for desalination treatment, then returns the saltier “brine” to the much larger outflow of cooling water at the power plant.

Objections to desalination are many, but none of them are insurmountable. The desalination plant proposed for Huntington Beach, for example, will not have the benefit of being co-located with a power plant that consumes far more seawater for its cooling system. Instead, this proposed plant – which will have the same capacity as the Carlsbad plant – will use a large array of “wet filters” situated about 1,500 feet offshore, on the seabed about 40 feet below the surface, to gently intake seawater that can be pumped back to the plant without disrupting marine life. The outgoing brine containing 6 percent salt (compared to 3% in seawater) will be discharged under pressure from an underwater pipe extending about 1,800 feet offshore. By discharging the brine under pressure, it will be instantly disbursed and immediately dissipated in the powerful California current.

While desalination is considered to be energy intensive, a careful comparison of the energy cost to desalinate seawater reveals an interesting fact. It takes a roughly equivalent amount of electricity to power the pumps on the California aqueduct, where six pumping stations lift the water repeatedly as it flows from north to south. To guarantee the water flows south, the California aqueduct is sloped downward by roughly one foot per mile of length, meaning pump stations are essential. The big lift, of course, is over the Tehachapi Mountains, which is the only way to import water into the Los Angeles basin.

Barriers to Implementation – Permitting & Lawsuits

The technological barriers to large scale implementation of water recycling and desalination, while significant, are not the primary impediments. Permitting and financing are far bigger challenges. Moreover, financing costs for these mega projects become more prohibitive because of the difficulties in permitting.

The process necessary to construct the proposed Huntington Beach Desalination Plant is illustrative of just how difficult, if not impossible, it is to get construction permits. The contractor has been involved in the permitting process for 16 years already, and despite significant progress to-date, still expects approval, if it comes, to take another 2-3 years.

One of the problems with permitting most infrastructure in California is that several agencies are involved. These agencies can actually have conflicting requirements. Applicants also end up having to answer the same questions over and over, because the agencies don’t share information. And over the course of decades or more, the regulations change, meaning the applicant has to start the process over again. Compounding the difficulties for applicants are endless rounds of litigation, primarily from well-funded environmentalist organizations. The failure to-date of California’s lawmakers to reform CEQA make these lawsuits potentially endless.

Barriers to Implementation – Financing

Even if permitting were streamlined, and all technical challenges were overcome, it would be a mistake to be glib about financing costs. Based on the actual total cost for the Carlsbad desalination plant, just under $1.0 billion for a capacity of 56,000 acre feet per year, the capital costs to desalinate a million acre feet of seawater would be a daunting $18.0 billion. On the other hand, with permitting reforms, such as creating a one-stop ombudsman agency to adjudicate conflicting regulations and exercise real clout among the dozens of agencies with a stake in the permitting process, billions could be shaved off that total. Similarly, CEQA reforms could shave additional billions off the total. How much could be saved?

The Sorek desalination plant, commissioned in Israel in 2015, cost $500 million to build and desalinates 185,000 acre feet of water per year. Compared to Carlsbad, Sorek came online for an astonishing one-sixth the capital cost per unit of capacity. While there’s undoubtedly more to this story, it is also undeniable that other developed nations are able to deploy large scale desalination plants at far lower costs than here in California.

Financing costs for water recycling, while still staggering, are (at least in California) not comparable to those for desalination. The GWRS water recycling plant in Orange County was built at a capital cost of $905 million – $481 million was the initial cost, the first expansion cost $142 million, and the final expansion cost $282 million. This equates to a capital cost of $7,300 per acre foot of annual yield. If that price were to apply for new facilities to be constructed elsewhere in the southland, one million acre feet of recycling capacity could be built for $7.3 billion. Until there is direct potable reuse, however, it would be necessary to add to that cost the expense of either constructing storage reservoirs, or decontaminating aquifers for underground storage.

It’s anybody’s guess, but with reasonable reforms to contain costs, and taking into account additional investments in aquifer mitigation, a budget to make California’s Southland water independent might look like this:

  • 1.0 million acre feet from water recycling – $7.5 billion
  • 1.0 million acre feet from desalination – $15.0 billion
  • 0.5 million acre feet from runoff capture and aquifer mitigation – $7.5 billion

Total – $30 billion.
How much again is that bullet train? Water abundance in California vs. high speed rail…

While runoff capture, water recycling, and desalination have the potential to make Southern California’s coastal megapolis water independent, it will take extraordinary political will and innovative financing to make it happen. The first step is for California’s voters and policymakers alike to recognize that conservation is not enough, that water supplies must be increased. Once the political will is established, it will be necessary to streamline the regulatory process, so cities, water agencies, and private contractors can pursue supply oriented solutions, at realistic prices, with a reasonable certainty that their applications will be approved.

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How Much California Water Bond Money is for Storage?

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Californians have approved two water bonds in recent years, with another facing voters this November. In 2014 voters approved Prop. 1, allocating $7.1 billion for water projects. This June, voters approved Prop. 68, allocating another $4.0 billion for water projects. And this November, voters are being asked to approve Prop. 3, allocating another $8.9 billion for water projects. This totals $20.0 billion in just four years. But how much of that $20.0 billion is to be invested in water infrastructure and water storage?

Summaries of how these funds are spent, or will be spent, can be found on Ballotpedia for Prop. 1, 2014, Prop. 68, 2018 (June), and the upcoming Prop. 3, 2018 (November). Reviewing the line items for each of these bonds and compiling them into five categories is necessarily subjective. There are several line items that don’t fit into a single category. But overall, the following chart offers a useful view of where the money has gone, or where it is proposed to go. To review the assumptions made, the Excel worksheet used to compile this data can be downloaded here. The five categories are (1) Habitat Restoration, (2) Water Infrastructure, (3) Park Maintenance, (4) Reservoir Storage, and (5) Other Supply/Storage.

California Water Bonds, 2014-2018  –  Use of Funds
($=millions)

The Case for More Water Storage

It isn’t hard to endorse the projects funded by these water bonds. If you review the line items, there is a case for all of them. This November, voters will have a chance to approve $200 million to restore Salton Sea habitat, a sum that joins the $200 million of Salton Sea habitat restoration approved by voters in June 2018 in Prop. 68. This November, voters will have a chance to approve $150 million to turn the Los Angeles River back into a river, instead of the concrete culvert that was completely paved over between 1938 and 1960.

Who would be against projects like this? But Californians are heavy water consumers in a relatively arid state. Habitat restoration and park maintenance spending must be balanced against spending for water infrastructure. And conservation mandates must be balanced with investments in infrastructure that increase the overall supply of water. Here’s how Californians are currently managing their water:

Total Water Supply and Usage in California

As can be seen on the above table, residential water consumption represents less than 6% of California’s total water diversions. Indoor water consumption, only about half of that. Yet conservation measures imposed on California’s households are somehow expected to enable more water to be returned to the environment. Even with farmers, where conservation measures have the potential to yield far more savings, putting more irrigated land into agricultural production easily offsets those savings.

Not only does conservation fail to return sufficient water to the environment for habitat maintenance, but there is a downside in terms of system resiliency. During the last drought, when households were asked to reduce water consumption by 20%, it wasn’t an impossible request to fulfill. But as these reductions in consumption become permanent, far less flexibility remains.

California’s climate has always endured periods of drought, sometimes lasting several years. Meanwhile, the population continues to increase, farming production continues to rise, and we have higher expectations than ever in terms of maintaining and restoring healthy ecosystems throughout the state. We cannot merely conserve water. We need to also increase supplies of water. Ideally, by several million acre feet per year.

How Much California Water Bond Money is for Surface Storage?

Prop. 1, approved by voters in 2014, was called the “Water Quality, Supply, and Infrastructure Improvement Act of 2014.” It was marketed as necessary to increase water storage in order to protect Californians against droughts, and was overwhelmingly approved by over 67% of voters. But only about one-third of the money actually went to water storage, and it took nearly four years before any of those funds were allocated to specific storage projects. It was only this month, July 2018, that the California Water Commission awarded grants under their “Water Storage Investment Program.”

A review of these grants indicates that only two of them allocate funds to construct large new reservoirs. The proposed Temperance Flat Reservoir will add 1.2 million acre feet of storage. Situated south of the delta, it will be constructed on the San Joaquin River above a much smaller existing dam. It is estimated to cost $2.7 billion, and the California Water Commission awarded $171 million, only about 6% of the total required funds.

The proposed Sites Reservoir is situated north of the delta, west of the Sacramento river. It is an offstream reservoir, meaning that it will be filled using excess storm runoff pumped out of the Sacramento river during the rainy season. It is designed to store up to 1.8 million acre feet of water and is estimated to cost $5.2 billion to construct. The California Water Commission awarded $816 million, a large sum, but only about 16% of the total required funds.

Two other surface storage projects were approved, expansion of the existing Los Vaqueros and Pacheco reservoirs. Both of these reservoirs serve water consumers in the San Francisco Bay Area, both are supplied water via the California Aqueduct, and both expansion projects are estimated to cost not quite a billion dollars – $795 million for Los Vaqueros and $969 million for Pacheco. The California water commission awarded Los Vaqueros $459 million, and they awarded Pacheco $484 million.

When you consider surface storage, the total capacity of a reservoir is a critical variable, but in many ways more significant is the annual “yield.” This is the amount of water that on average, over decades, the reservoir is planned to deliver to water consumers in normal years. While the Los Vaqueros and Pacheco reservoir expansions combined will add roughly 250,000 acre feet of storage capacity, most of this added capacity is to save for drought years. Los Vaqueros may actually yield up to 35,000 acre feet per year in normal years; Pacheco may yield around 20,000 acre feet per year in normal years.

With respect to annual yields, the case for the much larger Sites and Temperance Flat reservoirs becomes more compelling. The Temperance Flat Reservoir is projected to yield 250,000 acre feet of water in normal years, the Sites Reservoir, a massive 500,000 acre feet. To put this in perspective, 750,000 acre feet represents 20% of ALL residential water consumption in California, or, put another way, each year these reservoirs will yield a quantity of water equivalent to 100% of the reductions achieved via conservation measures imposed on California’s residents during the drought. But will they ever get built?

According to spokespersons for the Sites and Temperance Flats projects, some federal funding is expected, but most of the funding will be from agricultural and urban water districts who will purchase the water (as well as the right to store surplus water in the new reservoir) as soon as its available. The projects still require congressional approval, and then will face a multi-year gauntlet of permit processes and the inevitable litigation. If all goes well, however, both of them could be built and delivering water by 2030.

How Else is Water Bond Money Being Used to Increase Water Supply?

All three of the recent water bonds had some money allocated to invest in water supply. Prop. 1 in 2014, in addition to investing $1.9 billion in surface water storage, allocated $1.4 billion to other projects intended to increase water supply. The projects they approved are either intended to store water in underground aquifers, or fund advanced water treatment and recycling technologies which have the practical effect of increasing water supply. While it isn’t clear from these groundwater storage proposals how much water they would then release in normal years, it appears that cumulatively the projects intend to eventually store as much as 1.0 million acre feet in underground aquifers.

At a combined cost total cost of under one billion, the aquifer storage projects just approved appear to be more cost effective than surface storage. It is also a critical priority to recharge California’s aquifers which have been drawn down significantly over the past several years, especially during the recent drought.

Prop. 68, the “Parks, Environment, and Water Bond” passed earlier this year, while mostly allocating its $4.0 billion to other projects, did allocate $290 million to “groundwater investments, including groundwater recharge with surface water, stormwater, and recycled water and projects to prevent contamination of groundwater sources of drinking water.”

The upcoming Prop. 3, the $8.9 billion “Water Infrastructure and Watershed Conservation Bond Initiative” that will appear on the November 2018 ballot, invests another $350 million to maintain existing, mostly small urban reservoirs, along with $200 million to complete repairs on the Oroville Dam. Prop. 3 also includes $1.6 billion to otherwise increase water storage and supply, including $400 million for wastewater recycling and $400 million for desalination of brackish groundwater.

It is important to emphasize again that all of the funds allocated in these three water bonds are paying for what are arguably worthwhile, if not critical projects. $6.3 billion for habitat restoration, $6.2 billion for water infrastructure, $1.6 billion to maintain our parks. But despite the worth of these other projects, Californians urgently need to increase their annual supply of water to ensure ecosystem health, irrigate crops, and supply urban consumers. And to address that need, out of $20 billion in water bonds passed or proposed between 2014 and this November, only $5.8 billion, less than one-third, is being used to increase water supplies.

What Other Ways Could Water Bond Money Be Used to Increase Water Supply?

Clearly the most important region to increase water supply is Southern California. Two thirds of all Californians live south of the Sacramento River Delta, while most of the rain falls on in Northern California. One way to increase California’s supply of fresh water is to build desalination plants. This technology is already in widespread use throughout the world, deployed at massive scale in Singapore, Israel, Saudi Arabia, Australia, and elsewhere. One of the newest plants worldwide, the Sorek plant in Israel, cost $500 million to build and desalinates 120,000 acre feet of water per year.

Theoretically – because capital costs in California are far higher than in most of the rest of the developed world – desalination offers a cost-effective solution to water scarcity. Uniquely, desalination creates new water, not dependent on rainfall, not requiring storage for drought years, not requiring redirecting of water from other uses. Imagine if Californians invested in desalination plants along the entire Southern California Coast. Eight desalination plants the same size as the Sorek plant would cost $4.0 billion to build if constructed for the same cost as the one in Israel cost. They could desalinate 1.0 million acre feet per year.

The energy costs for desalination have come down in recent years. Modern plants, using 16″ diameter reverse osmosis filtration tubes, only require 5 kWh per cubic meter of desalinated water. This means it would only require a 700 megawatt power plant to provide sufficient energy to desalinate 1.0 million acre feet per year. Currently it takes about 300 megawatts for the Edmonston Pumping Plant to lift one million acre feet of water from the California aqueduct 1,926 ft (587 m) over the Tehachapi Mountains into the Los Angeles basin. And that’s just the biggest lift, the California aqueduct uses several pumping stations to transport water from north to south. So the net energy costs to desalinate water on location vs transporting it hundreds of miles are not that far apart.

The entire net urban water consumption on California’s “South Coast” (this includes all of Los Angeles and Orange County – over 13 million people) is 3.5 million acre feet. It is conceivable that desalination plants producing 1.0 million acre feet of new water each year, combined with comprehensive sewage reuse and natural runoff harvesting could render the most populous region in California water independent.

Why is Infrastructure so Expensive in California?

The Carlsbad desalination plant in San Diego cost $925 million to build, and it has a capacity of 56,000 acre feet per year. That is a capital cost per acre foot of annual yield of $16,500. How is it that the Sorek desalination plant in Israel cost $500 million to build and has a capacity of 120,000 acre feet per year – a capital cost per acre foot of annual yield of only $4,100? Why did it cost four times as much to build the Carlsbad desalination plant?

This is the prevailing question when evaluating infrastructure investment in California. Why does everything cost so much more? The Sites reservoir is projected to cost $5.2 billion. An off-stream reservoir of equal size, the San Luis Reservoir, was constructed in California in the 1960s at a total cost, in 2018 dollars, of $2.3 billion. That all-in cost includes not just the dam, but also includes pumping stations, the forebay, the intertie to the California Aqueduct, and conveyances to get some of the water over the Diablo Range into the Santa Clara Valley. All of these costs (in today’s dollars) for the San Luis Reservoir, compared to the proposed Sites Reservoir, cost less than half as much. Why?

It’s easy to become enthusiastic about virtually any project that will increase our resiliency to disasters and droughts, improve our quality of life, steward our ecosystems, and hopefully create abundance of vital resources such as water. But when considering the need for these various projects, it is equally important to ask why they cost so much more here in California, and to explore ways to bring costs back down to national and international norms. We could do so much more with what we have to spend.

Edward Ring co-founded the California Policy Center and served as its first president.