Hiltzik: Cadiz, California’s worst water supply project, is it dead?
Desperation in the face of water scarcity has produced a number of projects to alleviate the crisis. But few are as chuckle as a plan to pump groundwater beneath the Mojave Desert and haul it 200 miles to the Southern California city.
This is the Cadiz water project, which has been going on since the turn of the century.
I have followed this program almost since its inception, starting with an investigative article in 2002 that called for the Metropolitan Water District to bail out a partnership project with its promoter, Cadiz Inc. The MWD did, this that should have killed the plane.
This is not a case where BLM has performed an appropriate level of analysis, in which the court could find technical legal errors. Instead, BLM did not prepare the required scans at all.
The Bureau of Land Management takes it out on itself
But he has continued to stalk water policy ever since. Now, finally, the Biden administration may have stuck a stake in its heart for good.
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Officials at Biden’s Home Office on Friday called on a federal judge to reverse project approvals issued in 2020 by the same agency under President Trump; a hearing on the petition is scheduled for March. More on that in a moment.
Even if Cadiz is killed, the problem of ill-conceived solutions to the water scarcity will not go away. The best illustration of how desperation affects water policy is the More Water Now voting initiative, which I described a few days ago as a dangerously ill-conceived measure. Supporters of the proposal are now collecting signatures to place it on the November 2022 ballot.
The Cadiz plan is, if possible, even worse. The proposal has remained alive so far not because it has practical value. This is not the case.
As I wrote in 2009, the plan “still had a kind of shimmering authenticity, like a desert mirage”. But it did not stand close inspection.
As proposed by Cadiz Inc., the idea was to store excess water from the Colorado River under a company-owned expanse of desert, pump it during times of drought, and transport it by pipeline or canal to urban users. from southern California.
One of the problems is that there is no surplus water in Colorado. The basin is in a long-term drought, and for the foreseeable future California will have the chance to obtain its full statutory allocation of water from the river. Just one more drop? Forget.
In addition, there is considerable disagreement over how much groundwater actually underlying the territory of Cadiz, not to mention how much legally allowed to pump and how much could be pumped out before neighboring aquifers were contaminated with it. carcinogenic minerals.
The US Geological Survey calculated that the company’s estimates of water available for pumping were about seven times higher than what was reasonable.
Then there is the difficulty of transporting water, which would require pipelines crossing delicate desert ecosystems.
No, what kept the project alive was the political attraction. This was exercised primarily by the designer from Cadiz, an investment promoter named Keith Brackpool, who – as I reported in 2002 – came to the United States after pleading guilty to criminal charges related to trading in securities. movable property in Great Britain.
As he pushed the deal at MWD, Brackpool served as a contributor and fundraiser for the government of the day. Gray Davis, a political opponent of the MWD who appointed his friend to two statewide water committees. “The idea was, you make a deal with Keith Brackpool and you’re on the good side of Gray Davis,” a former MWD board member told me in 2002.
Former representative Tony Coelho of California, a prominent Democratic Party fundraiser, served on the Cadiz board. Former Home Secretary Bruce Babbitt, former Democratic governor of Arizona, joined his payroll to work on international water deals, none of which came to fruition.
In 2005, the company paid then-public services commissioner Susan Kennedy, soon to be Governor Arnold Schwarzenegger’s chief of staff, an advisory fee of $ 120,000. In 2009, while Kennedy was working for Schwarzenegger, he endorsed the Cadiz program as “an innovative, new and sustainable groundwater conservation and storage project”.
Brackpool befriended former Los Angeles Mayor Antonio Villaraigosa, contributing to his political campaigns, giving him a job between electoral posts and joining him on a business trip to East Asia.
Despite all this, the project continued to face roadblocks, in part due to opposition from Senator Dianne Feinstein (D-Calif.), Who was determined to protect the desert ecology. Cadiz has also faced lawsuits from environmental groups, as well as unfavorable rulings from the Bureau of Land Management, a branch of the Home Office responsible for overseeing federal lands, including those that the proposed pipelines would cross. .
Enter the project’s latest patron: Donald Trump’s Home Secretary David Bernhardt, one of the many Cabinet Secretaries Trump has put in place with the obvious aim of undermining the agencies they were supposed to run.
Bernhardt came to the Home Office from the law firm Brownstein Hyatt Farber Schreck, which represented a wreath of natural resource industry clients who had paid the firm “millions of dollars in legal and lobbying fees,” as my colleague Bettina Boxall reported. (Among Bernhardt’s goals inside was the gutting of the Endangered Species Act, the pet peeve of some of these patrons.)
Cadiz had paid the Brownstein firm $ 2.75 million in lobbying fees and 200,000 shares while Bernhardt was there. One of Bernhardt’s partners in the firm, Scott Slater, is the Managing Director of Cadiz. Bernhardt is now back at the firm, as a senior advisor in his Washington, DC office.
When Bernhardt was initially appointed Deputy Home Secretary in August 2017, he pledged to step down from business related to those clients for a year after his appointment, which expired in mid-2018. He was appointed to the top post in February 2019, succeeding Ryan Zinke. The BLM’s decision now disowned by the agency came in December 2020.
During all this time, Cadiz has distinguished itself primarily as a stock trading device rather than an operating company. In 2020, the company lost $ 37.8 million on revenue of $ 541,000, mainly from certain farming operations on its land holdings. From 2017 to last year, his losses amounted to $ 127.5 million. The company says its future is tied to the “ultimate implementation of the Water project”.
Meanwhile, Brackpool continued to withdraw compensation of $ 275,000 in cash per year, along with bonuses ranging from $ 200,000 to $ 300,000 and stock awards. Slater received $ 600,000 in salary and bonuses last year, plus approximately 198,000 shares.
The company’s stock price doesn’t appear to be associated with actual business performance, as for the most part it doesn’t have much. Indeed, after the price fell about 35% from $ 14.55 to $ 9.42 between August 17 and September 13, Cadiz issued a press release saying it couldn’t explain activity, as there had been “no new hardware developments or pending announcements.” . “On Monday, the shares were trading below $ 4.
This brings us back to the government’s court application.
In historical terms, it may be unusual for a federal agency to ask a judge to overturn its own past actions. It has happened with some regularity this year because Trump has worked so diligently to overturn established regulations.
The specific issue raised in the BLM petition was the agency’s approval for Cadiz to convert an old 200-mile natural gas pipeline right-of-way to carry water across the desert. Under Trump and Bernhardt, BLM found a series of excuses to avoid performing the environmental scan required by federal law, according to the agency.
In their petition to court, current BLM officials charitably stop before dishonestly calling the prior approval of their predecessors. Rather, they are content to have advised the tribunal that it was incompetent, wrong and illegal.
“This is not a case where BLM has conducted an appropriate level of analysis, in which the court could find technical legal errors,” they wrote. “Instead, BLM did not prepare the required analyzes at all.”
Most blatantly, they observed, Trump’s BLM approved the pipeline right-of-way without establishing the Cadiz water source; therefore, it could not have assessed “the potential impacts on the environment or the historical properties of water withdrawal at its source”.
Cadiz said on Sunday it would fight in court to preserve the old BLM approvals and that the process of converting the pipeline for water would continue in the meantime.
The company continues to exploit the drought in California to advance a project that experts have long viewed as unnecessary as a drought-fighting measure.
Last week, after state water authorities informed farmers in the Central Valley that they shouldn’t expect water from the state’s water project year round Next, Cadiz issued a statement calling the pipeline project “an immediate opportunity” to address “supply inequalities and infrastructure problems”.
It doesn’t matter if the pipeline’s completion is probably years away, if ever. The company recognizes that construction of the water project will require additional capital, which it cannot be sure of raising.
Cadiz’s plan probably never worked, and despite the company’s claims about the current drought, it’s dumber than ever today. It’s time to bury him in the Desert Tomb where he belongs, and with any luck the new BLM court case will complete a long overdue job.