Water barons will corner market in new 'Chinatown'
Patricia Schifferle
Sacramento Bee
11/08/2012
There is more money in selling water in California than there is in farming.
A one-sentence provision inserted in the 2012 budget bill by U.S. Sen. Dianne Feinstein will allow a handful of powerful San Joaquin Valley water oligarchs to sell federally subsidized agricultural water in a private market for as much as 150 times more than what they pay for it.
This relaxation of publicly owned water supplies for private gain strips out protections approved by Congress in 1992.
They call them "water transfers," and for the last 15 years California has been quietly edging into a very lucrative privatized water sales market that seeks to expedite the movement of cheap agricultural water from Northern California to thirsty Southern California and Bay Area cities.
The cast of characters in this new water wars drama reads like a who's who of California corporate agriculture:
• Westlands Water District, west of Fresno, which is the largest irrigation district in the United States and is controlled by a handful of privately owned agribusiness corporations.
• Beverly Hills billionaire Stewart Resnick, who runs the privately controlled Kern Water Bank, a 19,900-acre underground reservoir capable of holding more than a million acre-feet of water. The reservoir was created by the state before being taken private. Resnick, a longtime backer of Feinstein, owns Paramount Farms and Roll International, key players in California's billion-dollar private water market.
Like derivatives, subprime mortgages and deregulated electricity, the privatization of federally owned water rights is a puzzle palace of complexity. Here are some of the pieces:
Winter and spring runoff from Northern California rivers, which flow through the Sacramento-San Joaquin Delta, are crucial to the ecological health of the Delta, San Francisco Bay and the state's fishing industry. The Feinstein legislation allows high water flows in the Sacramento and San Joaquin rivers to be diverted to a private water market rather than replenishing the Delta and the Bay.
The legislation makes it easier to move federally subsidized $20-an-acre-foot water from growers with federal project water contracts to private interests with water rights. Once in the hands of these buyers, the water can be resold in the open market to the highest bidder.
