Friday, September 19, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

In dry California, water fetching record prices

California Drought Water Auctions

FILE - In this May 1, 2014 photo, irrigation water runs along a dried-up ditch between rice farms in Richvale, Calif. In dry California, water is fetching record high prices. As drought has deepened in the last few months, a handful of special districts in the state's agricultural heartland have made millions through auctions of their private, underground caches that go to the highest bidders. With the unregulated, erratic water market heating up in anticipation of the hot summer months, the price is only going up. In the last five years alone, it has grown tenfold, shooting to as much as $2,200 an acre foot. (AP Photo/Jae C. Hong, FILE)

By
From page A12 | July 02, 2014 |

SAN FRANCISCO — Throughout California’s desperately dry Central Valley, those with water to spare are cashing in.

As a third parched summer forces farmers to fallow fields and lay off workers, two water districts and a pair of landowners in the heart of the state’s farmland are making millions of dollars by auctioning off their private caches.

Nearly 40 others also are seeking to sell their surplus water this year, according to state and federal records.

Economists say it’s been decades since the water market has been this hot. In the last five years alone, the price has grown tenfold to as much as $2,200 an acre-foot — enough to cover a football field with a foot of water.

Unlike the previous drought in 2009, the state has been hands-off, letting the market set the price even though severe shortages prompted a statewide drought emergency declaration this year.

The price spike comes after repeated calls from scientists that global warming will worsen droughts and increase the cost of maintaining California’s strained water supply systems.

Some water economists have called for more regulations to keep aquifers from being depleted and ensure the market is not subject to manipulation such as that seen in the energy crisis of summer 2001, when the state was besieged by rolling blackouts.

“If you have a really scarce natural resource that the state’s economy depends on, it would be nice to have it run efficiently and transparently,” said Richard Howitt, professor emeritus at the University of California, Davis.

Private water sales are becoming more common in states that have been hit by drought, including Texas and Colorado.

In California, the sellers include those who hold claims on water that date back a century, private firms who are extracting groundwater and landowners who stored water when it was plentiful in underground caverns known as water banks.

“This year the market is unbelievable,” said Thomas Grecie, the general manager of the Madera Irrigation District, which recently made nearly $7 million from selling about 3,200 acre-feet. “And this is a way to pay our bills.”

All of the district’s water went to farms; the city of Santa Barbara, which has its own water shortages, was outbid.

The prices are so high in some rural pockets that water auctions have become a spectacle.

One agricultural water district amid the almond orchards and derrick fields northwest of Bakersfield recently announced it would sell off extra water it acquired through a more than century-old right to use flows from the Kern River.

Local TV crews and journalists flocked to the district’s office in February to watch as manager Maurice Etchechury unveiled bids enclosed in about 50 sealed envelopes before the cameras.

“Now everyone’s mad at me saying I increased the price of water. I didn’t do it, the weather did it,” said Etchechury, who manages the Buena Vista Water Storage District, which netted about $13.5 million from the auction of 12,000 acre-feet of water.

Competition for water in California is heightened by the state’s geography: The north has the water resources but the biggest water consumers are to the south, including most of the country’s produce crops.

The amount shipped south through a network of pumps, pipes and aqueducts is limited by the drought and legal restrictions on pumping to save a threatened fish.

During the last drought, the state Department of Water Resources ran a drought water bank, which helped broker deals between those who were short of water and those who had plenty. But several environmental groups sued, alleging the state failed to comply with the California Environmental Quality Act in approving the sales, and won.

This year, the state is standing aside, saying buyers and sellers have not asked for the state’s help. “We think that buyers and sellers can negotiate their own deals better than the state,” said Nancy Quan, a supervising engineer with the department.

Quan’s department, the U.S. Bureau of Reclamation and the State Water Resources Control Board have tracked at least 38 separate sales this year, but the agencies are not aware of all sales, nor do they keep track of the price of water sold, officials said.

The maximum volume that could change hands through the 38 transactions is 730,323 acre-feet, which is about 25 percent of what the State Water Project has delivered to farms and cities in an average year in the last decade.

That figure still doesn’t include the many private water sales that do not require any use of government-run pipes or canals, including the three chronicled by the AP. It’s not clear however how much of this water will be sold via auctions.

Some of those in the best position to sell water this year have been able to store their excess supplies in underground banks, a tool widely embraced in the West for making water supplies reliable and marketable. The area surrounding Bakersfield is home to some of the country’s largest water banks.

The drought is so severe that aggressive pumping of the banked supplies may cause some wells to run dry by year’s end, said Eric Averett, general manager the Rosedale Rio Bravo District, located next to several of the state’s largest underground caches.

Farther north in the long, flat Central Valley, others are drilling new wells to sell off groundwater.

A water district board in Stanislaus County approved a pilot project this month to buy up to 26,000 acre-feet of groundwater pumped over two years from 14 wells on two landowners’ parcels in neighboring Merced County.

Since the district is getting no water from the federal government this year, the extra water will let farmers keep their trees alive, said Anthea Hansen, general manager of the arid Del Puerto Water District.

Hansen estimated growers would ultimately pay $775 to $980 an acre-foot — a total of roughly $20 million to $25.5 million.

“We have to try to keep them alive,” Hansen said. “It’s too much loss in the investment and the local economy to not try.”

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | 5 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • JimboJuly 01, 2014 - 4:18 pm

    In this age of water shortages isn't it time to consider desalination water plants for coastal cities?

    Reply | Report abusive comment
  • Rick WoodJuly 01, 2014 - 5:09 pm

    Not sure what you mean. There are several projects underway.

    Reply | Report abusive comment
  • Rick WoodJuly 01, 2014 - 10:41 pm

    Truly impressive figures, but keep in mind these are "spot market" prices for water for one year under extreme conditions. Still, it show's you what water is worth to someone who really needs it. I'm a bit surprised farmers are paying these prices, but I guess if you have a big investment in a permanent crop such as an orchard or vineyard, it can be worth it. These prices also show why I was surprised Vacaville sold water to Benicia earlier this year for only $200/AF. There has to be more to that story.

    Reply | Report abusive comment
  • patrickJuly 02, 2014 - 1:27 pm

    In the mid seventies local farmers paid $3.00 an acre foot for irrigation.

    Reply | Report abusive comment
  • patrickJuly 02, 2014 - 2:09 pm

    Home owners in ca have no mineral rights. Anything below your grass lawn belongs to the state. The state senate is now considering putting water meters for any property with a well.--------------NO SUPRISE.

    Reply | Report abusive comment
.

Solano News

Missouri Street Theatre set to open ‘Bonnie and Clyde’

By Amy Maginnis-Honey | From Page: B1

 
Shelter uses technology to reunite pets, owners

By Susan Hiland | From Page: A1 | Gallery

 
Weekend full of jazz on tap in Vacaville

By Amy Maginnis-Honey | From Page: B1

Royal Tailor plans high-energy, genre-blending show

By Amy Maginnis-Honey | From Page: B1

 
Fairfield Delicatessen became Joe’s Buffet

By Tony Wade | From Page: A2

Police make child molestation arrest

By Barry Eberling | From Page: A3, 1 Comment | Gallery

 
Dignitaries celebrate opening of $30M courthouse

By Jess Sullivan | From Page: A3, 1 Comment | Gallery

 
Fairfield police arrest 2 in robberies investigation

By Barry Eberling | From Page: A3, 4 Comments | Gallery

 
Police seek help to find missing Fairfield man

By Glen Faison | From Page: A4 | Gallery

Fairfield eyes sale of excess government land

By Ryan McCarthy | From Page: A4

 
Men, again, are seen as missing in Fairfield

By Ryan McCarthy | From Page: A4, 3 Comments | Gallery

Stolen vehicle investigation leads to 3 arrests

By Barry Eberling | From Page: A4, 2 Comments | Gallery

 
Weather for Sept. 19, 2014

By Daily Republic | From Page: B12

Suisun City police log: Sept. 17, 2014

By Susan Hiland | From Page: A12

 
Fairfield police log: Sept. 17, 2014

By Susan Hiland | From Page: A12

.

US / World

Man arrested in fast-growing California wildfire

By The Associated Press | From Page: A1 | Gallery

 
Strong Senate vote for Obama on Syria rebel aid

By The Associated Press | From Page: A1

Scots reject independence in historic vote

By The Associated Press | From Page: A1, 1 Comment | Gallery

 
Passenger says JetBlue plane filled with smoke

By The Associated Press | From Page: A4 | Gallery

Law makes earthquake insurance more understandable

By The Associated Press | From Page: A4

 
GOP pushes diverse candidates, but will it matter?

By The Associated Press | From Page: A4

PG&E emails may have violated rules, judge says

By The Associated Press | From Page: A5

 
500 Berkeley students missed sex abuse classes

By The Associated Press | From Page: A5

Boxer indicates big decision to come next year

By The Associated Press | From Page: A5 | Gallery

 
Father arrested in fatal stabbing of 6-year-old

By The Associated Press | From Page: A5

Health exchange addresses dropped policies

By The Associated Press | From Page: A5

 
UC system plan calls for anti-sex abuse effort

By The Associated Press | From Page: A5

Democratic state lawmaker arraigned on DUI charges

By The Associated Press | From Page: A5, 1 Comment

 
Sheriff: Fla. man kills 6 grandchildren, daughter

By The Associated Press | From Page: A6

Couple in Craigslist slaying sentenced to life

By The Associated Press | From Page: A6

 
In wake of beheadings, Busch Gardens removes props

By The Associated Press | From Page: A6

Trooper ambush suspect added to most wanted list

By The Associated Press | From Page: A6

 
CDC tells healthy adults not to forget flu vaccine

By The Associated Press | From Page: A6 | Gallery

Border Patrol to test wearing cameras

By The Associated Press | From Page: A6 | Gallery

 
Kansas court: Remove Democrat from Senate ballot

By The Associated Press | From Page: A6

Ukraine’s pleas for lethal aid from US go unmet

By The Associated Press | From Page: A6

 
British hostage appears in new video

By The Associated Press | From Page: A10

Witness: 21 killed by Mexico army had surrendered

By The Associated Press | From Page: A10

 
Militant gains illustrate plight of Syrian Kurds

By The Associated Press | From Page: A10

Series of attacks kills at least 36 in Iraq

By The Associated Press | From Page: A10

 
Sierra Leone to shut down for 3 days to slow Ebola

By The Associated Press | From Page: A10 | Gallery

.

Opinion

 
Did the ‘War on Poverty’ fail?

By Ben Boychuk and Joel Mathis | From Page: A11

3 obscure bills show how big policy gets buried

By Dan Walters | From Page: A11

 
Do you feel more secure?

By Bud Stevenson | From Page: A11, 1 Comment

My support for anyone but Moy

By Letter to the Editor | From Page: A11, 5 Comments

 
.

Living

Today in History: Sept. 19, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Sept. 19, 2014

By Susan Hiland | From Page: A2

Horoscopes: Sept. 19, 2014

By Holiday Mathis | From Page: A9

 
Mother-in-law bothers me at work for kid’s minor infractions

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

Week in preview Sept. 19-25, 2014

By Amy Maginnis-Honey | From Page: B1

 
Review: ‘Leave You’ has A-list cast, B-grade result

By The Associated Press | From Page: B2

Adam Driver shifts into hyper drive

By Jake Coyle | From Page: B2

 
‘The Voice’ winner goes to Broadway’s ‘Pippin’

By The Associated Press | From Page: B3

 
TV Guide Network renaming itself POP

By The Associated Press | From Page: B3

Peter Fonda’s ‘Easy Rider’ bike going to auction

By The Associated Press | From Page: B3

 
Entertainment calendar Sept. 19, 2014

By Amy Maginnis-Honey | From Page: B4

Darrell Hammond takes over for Don Pardo on ‘SNL’

By The Associated Press | From Page: B5

 
TVGrid

By Daily Republic Syndicated Content | From Page: B6

The Roosevelt trail, from Maine to North Dakota

By The Associated Press | From Page: B6

 
.

Sports

Vanden volleyball team remains undefeated in SCAC play

By Daily Republic staff | From Page: B7

 
49ers’ Derek Carrier ready to step in at tight end

By The Associated Press | From Page: B7, 1 Comment

Raiders seek ways to get Reece more involved

By The Associated Press | From Page: B7 | Gallery

 
Athletics out of top wild-card spot as Texas sweeps

By The Associated Press | From Page: B7 | Gallery

Nashville new home for Athletics’ Triple-A team

By The Associated Press | From Page: B7

 
 
Falcons romp to 56-14 win over hapless Buccaneers

By The Associated Press | From Page: B8 | Gallery

 
2-time Grand Slam winner Li Na retires from tour

By The Associated Press | From Page: B8

Stacy Lewis, Mi Jung Hur share LPGA lead in Alabama

By The Associated Press | From Page: B8

 
WR Simpson, in more trouble, released by Vikings

By The Associated Press | From Page: B8

Royal & Ancient votes to admit female members

By The Associated Press | From Page: B8

 
MLS says Chivas USA might not play in 2015

By The Associated Press | From Page: B8

Tiger Woods says he might coach himself

By The Associated Press | From Page: B8

 
Police: Cardinals RB Dwyer head-butted wife

By The Associated Press | From Page: B8

Prep football capsules: Week 3

By Paul Farmer | From Page: B10

 
Signups for Friday, Sept. 19, 2014

By Paul Farmer | From Page: B10

Appeals court reconsidering Barry Bonds conviction

By The Associated Press | From Page: B10

 
.

Business

Nissan’s small car excels at affordability

By Ann M. Job | From Page: C1 | Gallery

 
Self-driving cars now need a permit in California

By The Associated Press | From Page: C2 | Gallery

Ellison gives up Oracle CEO role, becomes chairman

By The Associated Press | From Page: B11

 
California bill increases Hollywood tax credits

By The Associated Press | From Page: B11

Fed keeps rates low, but brace for the inevitable

By The Associated Press | From Page: B11

 
Alibaba prices IPO at $68 per share

By The Associated Press | From Page: B11 | Gallery

Home Depot says malware affected 56M payment cards

By The Associated Press | From Page: B11

 
Applications for US jobless benefits fall sharply

By The Associated Press | From Page: B11

Apple locks itself out of devices with passwords

By The Associated Press | From Page: B11

 
Alibaba’s plan: Today, China. Tomorrow, the world.

By The Associated Press | From Page: B11

Chevron meets new, voluntary shale drilling rules

By The Associated Press | From Page: B11

 
.

Obituaries

Margaret King

By Susan Hiland | From Page: A4

 
Mae Frances Jones

By Nancy Green | From Page: A4

.

Comics

Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

Garfield

By Daily Republic Syndicated Content | From Page: A8

 
Blondie

By Daily Republic Syndicated Content | From Page: A8

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

 
Zits

By Daily Republic Syndicated Content | From Page: A8

Baldo

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

 
Pickles

By Daily Republic Syndicated Content | From Page: A8

Baby Blues

By Daily Republic Syndicated Content | From Page: A8

 
B.C.

By Daily Republic Syndicated Content | From Page: A8

Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

 
Dilbert

By Daily Republic Syndicated Content | From Page: A8

Crossword

By Daily Republic Syndicated Content | From Page: A9

 
Bridge

By Daily Republic Syndicated Content | From Page: A9

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A9

Word Sleuth

By Daily Republic Syndicated Content | From Page: A9