Hiltzik: is Cadiz, California’s worst water project, dead?

Desperation over water scarcity has spawned a number of measures to alleviate the crisis. But few are as smiling as the plan to pump groundwater out of the Mojave Desert and transport it 200 miles to urban Southern California.

This is the Cadiz water project that has been in the river since the turn of the century.

I’ve followed this pattern almost since its inception, starting with an investigative article in 2002 advocating the Metropolitan Water District’s proposed partnership with its promoter Cadiz Inc as the plan.

This is not a case where BLM has conducted an adequate analysis that the court could find some technical errors of law. Instead, the BLM was unable to complete the required analyzes. “

Bureau of Land Management berates itself

But she has continued to pursue water policy ever since. Now the Biden government may have finally driven a stake in the heart.


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On Friday, Interior Department officials from Biden petitioned a federal judge to overturn the project approvals issued by the same agency under President Trump in 2020; a hearing on the petition is scheduled for March. More on that in a moment.

Even if Cadiz is killed, the problem of poorly thought out solutions to water scarcity will not go away. The best example of how desperation affects water policy is the More Water Now electoral initiative, which I described a few days ago as a dangerously ill-conceived measure. Supporters of the proposal are now collecting signatures to put on the November 2022 ballot.

The Cadiz plan is worse if possible. The proposal has stayed alive to this day, not because it has any practical value. It doesn’t.

As I wrote in 2009, the plan always had “a kind of shimmering authenticity, like a desert shimmer”. But it did not stand up to any scrutiny.

As suggested by Cadiz Inc., the idea was to store excess water from the Colorado River under one of the company’s desert tracts, pump it out during dry spells and transport it via a pipeline or canal to urban users in Southern California.

One of the problems is that there is no excess water in Colorado. The basin is in a long-term drought and for the foreseeable future California will be fortunate enough to receive its full legal allotment of river water. A single extra drop? Forget it.

In addition, there is significant disagreement about how much groundwater is really in the Cadiz countryside, not to mention how much the company is legally allowed to pump out and how much can be pumped out before neighboring aquifers are contaminated with carcinogenic minerals.

The US Geological Survey calculated that the company’s estimates of the water available for pumping were about seven times what is reasonable.

Added to this is the difficulty of transporting the water, which would require pipelines through fragile desert ecosystems.

No, what kept the plan alive was political pull. This was mainly done by Cadiz’s inventor, an investment promoter named Keith Brackpool, who, as I reported in 2002, came to the US after facing criminal charges had pleaded guilty in connection with securities trading in the UK.

While driving the deal at MWD, Brackpool served as a contributor and fundraiser for the government at the time. Gray Davis, a political opponent of the MWD, who called his friend to two national water committees. “The idea was, you get a deal with Keith Brackpool and you are on the good side of Gray Davis,” a former MWD board member told me in 2002.

Former California MP Tony Coelho, a major fundraiser for the Democratic Party, was on the Cadiz board of directors. Ex-Home Secretary Bruce Babbitt, a former Democratic governor of Arizona, joined his payroll to work on international water deals, none of which came through.

In 2005, the company paid then-public utility commissioner Susan Kennedy, soon to become Governor Arnold Schwarzenegger’s chief of staff, an advisory fee of $ 120,000. In 2009, while working for Schwarzenegger, Kennedy supported the Cadiz program as a “groundbreaking, new, sustainable groundwater protection and storage project”.

Brackpool worked with former Los Angeles Mayor Antonio Villaraigosa, contributing to his political campaigns, giving him an between-electoral job and joining him on an East Asian trade junket.

Nevertheless, the project repeatedly encountered roadblocks, also because of the resistance of Senator Dianne Feinstein (D-Calif.), Who was determined to protect the desert ecology. Cadiz has also faced lawsuits from environmental groups as well as negative decisions from the Bureau of Land Management, a branch of the Interior Ministry that oversees the states, including those who would cross the proposed pipelines.

Enter the project’s newest patron: Donald Trump’s Home Secretary David Bernhardt, one of several cabinet secretaries Trump appointed with the obvious intention of undermining the agencies they were supposed to run.

Bernhardt came to the Home Office from the Brownstein Hyatt Farber Schreck law firm, which represented a bunch of customers in the extractive industry who had paid the firm “millions of dollars in legal and lobbying fees,” as my colleague Bettina Boxall reported. (One of Bernhardt’s goals at Interior was to eviscerate the Endangered Species Act, a bête noire of some of those customers.)

Cadiz had paid Brownstein $ 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 CEO of Cadiz. Bernhardt is now back with the firm and is serving as Senior Counsel in his Washington, DC office.

When Bernhardt was first appointed Deputy Minister of the Interior in August 2017, he undertook to withdraw from the affairs of these clients for one year after his appointment, which expired in mid-2018. In February 2019 he was nominated for the top job as the successor to Ryan Zinke. The BLM decision, now invalidated by the agency, came in December 2020.

During all this time, Cadiz was known primarily as a trading instrument rather than an operating company. In 2020, the company lost $ 37.8 million on $ 541,000 in revenue, mostly from a few farms on its land holdings. From 2017 to last year, losses totaled $ 127.5 million. The company says its future is linked to the “ultimate implementation of the water project”.

Meanwhile, Brackpool has continued to cut compensation from $ 275,000 in cash per year as well as bonuses ranging from $ 200,000 to $ 300,000 and stock bonuses. Slater received $ 600,000 in salary and bonuses and approximately 198,000 shares last year.

The company’s share price does not appear to be associated with actual business performance, as there is usually not much of it available. After the price fell about 35% from $ 14.55 to $ 9.42 between August 17 and September 13, Cadiz issued a press release saying the activity could not be explained because it was “No new material developments or pending announcements.” “On Monday, the stock was quoted below $ 4.

That brings us back to the government’s court motion.

Historically, it can be unusual for a federal agency to ask a judge to reverse their own previous actions. That happens with some regularity this year because Trump has worked so diligently to undermine established regulations.

The specific issue raised in the BLM petition was the government agency’s approval for Cadiz to convert an old 200-mile natural gas pipeline to carry water across the desert. Under Trump and Bernhardt, the BLM has come up with a number of excuses to avoid the environmental analyzes required by federal law, the agency now says.

In their court application, the current BLM officials benevolently adhere to calling their predecessors’ prior consent as dishonest. Instead, they content themselves with telling the court that it was incompetent, flawed and unlawful.

“This is not a case where BLM has conducted adequate analysis that the court could find some technical errors in law,” they wrote. “Instead, the BLM did not complete the necessary analyzes.”

Most egregiously, they found that Trump’s BLM gave right of way for the pipeline without determining the source of Cadiz’s water; Therefore, it would not have been able to assess “the potential environmental impact or historical properties of the water being drawn from its source”.

Cadiz said Sunday that it would fight in court to get the old BLM approvals and that the process of converting the pipeline for water would continue in the meantime.

The company continues to take advantage of the California drought to fuel a project that experts have long viewed as a useless drought control measure.

After state water authorities told Central Valley farmers last week that they shouldn’t expect water from the state water project next year, Cadiz issued a statement identifying the pipeline plan as an “immediate opportunity” to address “supply inequalities and infrastructure challenges.” to tackle.

It doesn’t matter that completion of the pipeline is probably years away, if it ever happens. The company admits that building the water project will require additional capital that it is not certain to procure.

The Cadiz plan likely never worked out, and despite the company’s claims about the current drought, it is sillier today than ever. It’s time to bury it in the desert grave where it belongs, and with luck, the BLM’s new court record will end a long overdue job.

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