More Mythical “Privatization” in the California Water Bond

In an earlier post, I discussed the errors contained in certain criticisms of the proposed California water bond to be voted on in November 2010. Those criticisms were centered on the provision that allowed investor-owned public water utilities to receive bond funding for projects to benefit their customers, who make up 20 percent of all Californians. Critics asserted (incorrectly) that the provision could lead to “privatization” of California’s water.

Now, a new group called Salmon Water Now! has formed to oppose the water bond under the broad criticism that other provisions would lead to “privatization” of California’s water. Their rationale for this claim seems to be that agribusinesses in the Central Valley will use the infrastructure built by the water bond to sell water to cities in southern California at a profit. They use as examples several ag-urban water transfers that took place in 2009. You can find the Salmon Water Now! positions at their website, especially in a video facetiously called “The Water Pirates”.

There are several problems with their claims. First, they vastly overstate the potential for water transfers and profit in California. Despite the passage of water wheeling and water transfer state statutes in 1986 and 1988, respectively, and the federal Central Valley Project Improvement Act in 1991 (which is highlighted in the video), there have been relatively few ag-urban transfers of significant size. This is largely due to the labyrinthine permitting process for water transfers, which involves several state and federal government agencies; environmental restrictions on movement of water through the Sacramento-San Joaquin River Delta; and the absolute control over backbone water conveyance infrastructure by large public agencies such as the California Department of Water Resources, Metropolitan Water District of Southern California and US Bureau of Reclamation. These agencies work hard to keep access to their infrastructure as limited as possible, despite laws requiring them to make unused capacity available to bona fide transferors. As an attorney who has participated in a number of water transfer efforts in California, I can report that accomplishing a transfer is much harder than opponents would suggest. Well-designed and structured transfers can succeed, but their primary usefulness is to conserve water on the margins, not to fundamentally “privatize” water.

Second, the proposed water bond would not have a direct effect on water transfers. The single largest improvement for water transfers, which is discussed in “The Water Pirates” video as though it would be funded by the water bond, would be new infrastructure to convey water around the fragile Delta, e.g., a peripheral canal. In fact, however, the water bond statute expressly prohibits the bond proceeds from being used to design or build Delta water conveyance infrastructure. The proposed bond would not resolve any of the significant problems I identified above that limit water transfers.

Third, although Salmon Water Now! looks at first glance like an environmental advocacy group, in fact it was formed and funded by organizations of commercial fishermen. The spokespeople hail from groups like Pacific Coast Federation of Fishermen’s Associations, the Small Boat Commercial Salmon Fishermen’s Association and the San Francisco Crab Boat Owners Association. Given this, their arguments against the profits of “agribusiness” sound more like the self-serving claims of profit-seeking economic competitors than a noble defense of the public interest.

It has started to seem like every criticism of a water project or initiative leads inevitably to a claim of “privatization”, even when as here that concept has no real application. I suspect in future we will see other arguments against the California water bond, and numerous other water projects, that also use the “privatization” bogeyman to instill fear and loathing in the public. I also wonder how long it will take for the “privatization” argument trend to move on, and what spurious argument will replace it?

One Comment on “More Mythical “Privatization” in the California Water Bond

  1. Pingback: Democrats and Environmentalists Opppose California Water Bond « PrivateWaterLaw Blog

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