Thursday, March 23, 2023

A commercial water grab?


A few weeks ago I wrote about the declining availability of water in the western and southwestern states.  Now it looks as if Wall Street is getting involved, and trying to prevent locals from realizing what's going on until they've created a fait accompli.

Situated in the Sonoran Desert near the Arizona-California border is the tiny rural town of Cibola -- home to roughly 300 people, depending on the season.

Life here depends almost entirely on the Colorado River, which nourishes thirsty crops like cotton and alfalfa, sustains a nearby wildlife refuge and allows visitors to enjoy boating and other recreation.

It's a place few Americans are likely to have heard of, which made it all the more surprising when investment firm Greenstone Management Partners bought nearly 500 acres of land here. On its website, Greenstone says its "goal is to advance water transactions that benefit both the public good and private enterprise."

But critics accuse Greenstone -- a subsidiary of the East Coast financial services conglomerate MassMutual -- of trying to profit off Cibola's most precious and limited resource: water. And it comes at a time when Arizona's allocation of Colorado River water is being slashed amid a decades-long megadrought.

"These companies aren't buying up plots of land because they want to farm here and be a part of the community, they're buying up land here for the water rights," said Holly Irwin, a Cibola resident and La Paz County district supervisor.

Those water rights could soon benefit Queen Creek, Arizona, a growing Phoenix suburb about 200 miles away. Last September, the town approved the transfer of a $27 million purchase of Colorado River water from Greenstone's properties in Cibola, though the deal is now mired in a lawsuit filed by La Paz, Mohave and Yuma counties against the federal Bureau of Reclamation for signing off on the water transfer.

. . .

"Greenstone is going to make millions at the expense of what it's going to do to our communities in the future and the precedence it's going to set," said Irwin. "We are in the midst of an extreme drought, our communities need this water. At some point, the state has a responsibility to protect the people that are here and to protect our water and not cater to those that are buying property for the water rights to make millions off of it to benefit metropolitan areas."

. . .

In neighboring Mohave County, Supervisor Travis Lingenfelter describes what he sees as a battle for the future of Colorado River communities, adding that a number of East Coast investment firms have been trying to get in on the action.

"These companies are actually pretty savvy in that they come out West, purchase and pick up cheap rural agricultural land, they sit on it for a little while and then they're trying to sell the water," Lingenfelter said. "I don't think that they should be allowed to profiteer off of Arizona's finite resources ... If they're coming after a portion of our only water supply on the river for many of our communities, we have to fight it."

It's not just Arizona. East Coast firms have bought up thousands of acres of irrigated land across the Southwest, local officials told CNN. Water Asset Management, a New York-based investment firm, has become one of the biggest players in the field, with purchases in Arizona, California, Colorado and Nevada as well as pending deals in New Mexico and Texas.

. . .

"Water Asset Management has engaged in a number of different purchase methods to keep their transactions unknown to many of the local jurisdictions," Mueller said. "It's a very unpopular move to come from New York and invest in irrigated agriculture with the intent to dry it up and watch it blow away."

There's more at the link.

The companies involved will, of course, argue that what they're doing is entirely legal.  Trouble is, just because something is legal doesn't mean that it's morally right.  As the famous dictum reminds us:

The companies will, again, doubtless argue that morals are an abstract, a value rather than a commodity that can be quantified in gallons, or dollars and cents.  They deal in the latter, and leave the former to religion and philosophy - knowing that there's so much dissent and disagreement in both disciplines that they'll almost certainly never have to answer for the rights and/or wrongs of what they've done.

That's what the makers of Thalidomide relied on when trying to weasel out of the catastrophic damage their drug had caused.  It's what Pfizer, Moderna and others will almost certainly rely upon when confronted with the equally grave (if not worse) damage caused by their mRNA COVID-19 vaccines.  "We were following the science and the law.  That's all anyone can ask of us!"  That's their attitude.  Sadly, they never think of another well-known maxim:  "It's not just about what you can do, but also whether or not you should do it."

I suspect that increasingly, agricultural and riparian communities across the country are going to be confronted by this commercial conundrum.  Their "liquid asset", water, is today liquid in more ways than one.  Water's merely the latest commodity to be "financialized".  However, without it, communities and farms die - and that's a whole new ball game.



Maniac said...

Again, build water desalination plants and make Meh-hee-ko foot the bill.

RSR said...

It's happening in Central Texas as well... The highland lakes/LCRA is already over-permitted, so new water for growth and development is coming from wells. That means existing wells go dry and those residents if lucky only get a few K bill to lower their pump. Otherwise it's a few 10ks to drill a new, deeper well or set up rainwater collection. Yet another tax/fee increase "growth" imposes on current residents.

Hamsterman said...

They might want to get in touch with the people in Owens Valley. There used to be a lake there. Their water has been going to Los Angeles for around 100 years now.

Mind your own business said...

"Forget about it, Jake. It's Chinatown."

That was about water.

Unknown said...

I stand to be corrected by anyone with firsthand experience with Wyoming's water-rights system. But I have relatives in the northwest of that state, where the satellite map is colored green where there is irrigation, and gray where it is not.

They tell me that water rights can't be sold there. They are considered more like a utility. (Imagine selling a property's "electricity rights" or "landline telephone rights.")

When someone buys a property, the water authority sends someone out to review what it needs, assigns an annual allotment, and landowner pays for it each year along with their property taxes and such.

James said...

First you buy the law makers then the laws will suit you.

pyotr said...

One more "point of failure" for big cities in the West: access to water through hostile territory.

Gerry said...

My limited knowledge of water rights in Utah was use them or lose them. If you didn't use the water you were allotted, the allotment was cut by 50% until it matched the use. Plant trees or alfalfa and irrigate with your water or that water was going to some else.

Each state is probably different.

deb harvey said...

the anne frank poster should be in every northam classroom from 5th grade on up

Well Seasoned Fool said...

Colorado specific. Years ago the City of Thornton bought farms North to Ft Collins for the water rights. The fight against a pipeline and reservoir continues today. The farms? Allowed to go fallow and become weed havens. Today, many are being turned into sub divisions (that have no guaranteed water).

Anonymous said...

I don't know Arizona law, but other Western States are like that.
Another twist is that in most states, while water rights can be bought and sold, they are fixed geographically - i.e. they have wbe used near where they were issued, often in the same basin.
However, I have heard that water rights in Arizona are more complex than elsewhere, so their rules are different.
If you want to get more complex, look at the difference between consumptive and non-consumptive water rights.

mobius said...

The more things change..., This is the plot for every third or forth western ever written.

Howard Brewi said...

A few considerations: I have read articles by climate scientists showing with government statistics that the water going into the system is not any more severe than other downturns in the history of the Colorado project. The increase in usage is linked to population increase, for instance Nevada is up over 500% wince 1970. California hasn’t built a new dam in forty years so all this winters rain and snow on the western side of the mountains goes directly to the sea. Meanwhile there is pressure for western farms that must be irrigated to produce crops when farmland in the east goes fallow even though they have forty inches of rain and seldom need irrigation.

E. C. said...

re: Utah water laws, they've been (very) recently amended due to the disappearing of the Great Salt Lake so that if you don't use your water shares, you don't necessarily lose 'em. They're making it possible for any excess water to return to aquifers, groundwater, or reservoirs (see: the Great Salt Lake) so that we still have water in another 50 years. Or even next year. At least our reserves aren't as depleted as California! We also actually manage our forests so we don't end up with mega-fires, which worsens the effects of drought by orders of magnitude.

They're also working on making water catchment legal and encouraged, so that during our rare summer rainstorms, we can collect water off our roofs.
It's not like people haven't been petitioning for this for 50 years, but finally the drought got bad enough that our leaders were like, "Oh, yeah, maybe we should plan ahead a little - make it possible for people to do what people have been doing for literally centuries!"

Is their approach perfect? Heck no, but at least they're trying to do something, and allowing people to keep their water shares without necessarily using them all each year is a start.

dgf said...

Here in Montana the old saying sums it all up:
“Whiskey is for drinkin’, water is for fightin’”

Aesop said...

"Grabbing" it, and keeping it, are two different things.
The L.A. DWP has to pay armed guards to this very day, to keep the locals from dynamiting the Owens Valley aqueduct system.