Cadiz Inc.'s plans to sell Mojave Desert groundwater to Southern California communities have hit a major federal roadblock.
In a long-awaited decision, the U.S. Bureau of Land Management says Cadiz cannot use an existing railroad right-of-way for a new water pipeline that would carry supplies from the project's proposed well field to the Colorado River Aqueduct.
By using the railroad right-of-way, Cadiz had hoped to escape federal environmental review of the 43-mile pipeline, one of the project's most expensive components.
But in a letter to Cadiz on Friday, BLM's California director informed the company that it needs U.S. approval for a separate pipeline right-of-way over federal land. That would trigger review under federal environmental law, a potentially lengthy and costly process that could impose new conditions on the project.
Cadiz has acknowledged that over the long term, the project will extract more groundwater than is replenished by nature. And federal scientists have expressed concern that the operation could dry up springs vital to wildlife on the nearby Mojave National Preserve and other public lands.
"The BLM has the responsibility to objectively apply the law using the best available information to determine what rights were conveyed to the railroad under a 19th century law," BLM State Director Jim Kenna said in a statement. "Because the proposed pipeline is not within the rights conveyed to the railroad, a separate BLM authorization is necessary."
In a further complication for Cadiz, project opponent Sen. Dianne Feinstein (D-Calif.) has for years added a rider to the federal budget barring the BLM from spending money on anything related to the groundwater project. A spokesman for Feinstein said the provision "will be in there again." As long as the rider is in effect, the BLM won't have the funds to review a pipeline application.
"I remain concerned the Cadiz project could damage the Mojave Desert beyond repair and believe the BLM decision to deny the right-of-way is the right one," Feinstein said in a statement. "I'll continue to work through the Appropriations Committee to block any additional attempts to draw down this aquifer. We need to use water more responsibly, not less, and the Cadiz project is a bad idea."
In a response sent to the BLM director in Washington, Cadiz President Scott Slater on Monday argued that the agency was misinterpreting an Interior Department solicitor's opinion and should rescind the determination.
"We're disappointed the BLM decided to take a political path," Slater said in an interview. "They wholly ignore the solicitor's opinion."
The decision is technically an "administrative determination" that cannot be appealed. But Slater, a well-known water attorney, said the company would "consider all legal remedies," including a federal lawsuit. "We'll press on," he added.
Cadiz, founded by Keith Brackpool, wants to pump enough groundwater from beneath its land in the Mojave Desert to supply 100,000 homes a year and sell it to urban California at prices that could, over the project's 50-year-life, reap $1 billion to $2 billion in revenue.
The project was approved by San Bernardino County and the company has so far prevailed in environmental lawsuits challenging the proposal under state law. But opponents are appealing those rulings. And desert advocates complain the project will profit by mining groundwater that flows from beneath adjacent public lands.
"The company was trying to exploit what amounts to a loophole to avoid having to go through a more rigorous environmental review," said David Lamfrom, California desert program director for the National Parks Conservation Assn., one of a number of conservation groups fighting the project.
The BLM decision was years in the making. It hinges on a 2011 opinion by the Interior Department solicitor that railroads cannot authorize activities in their federal right-of-ways "that bear no relationship to the construction or operation of a railroad."
Cadiz argued that the water pipeline would further the purpose of the Arizona and California Railroad by providing water for fighting trestle fires and for a planned tourist steam train, as well as create additional access to the rail line.
The BLM found otherwise. "Conveyance of water for public consumption is not a railroad purpose because the activity itself is not necessary for the construction or operation of a railroad, and the origin of the activity itself is a non-railroad purpose," the agency stated in a summary document.