In California, water can become opaque. At least in terms of public policy. The layman finds it hard to see through the slippery numbers and obscure jargon, giving immense advantage to insiders. That's why the history of water in California contains so many tales of scandal and manipulation.
Every once in a while, though, we are blessed with a development that allows even us amateurs to see the situation clearly. And to understand how much of our own money rides on the eternal question of where Southern California gets its water. Such a blessing has now occurred.
This situation involves the arrival of one of Texas' richest and most influential families--the Bass brothers of Fort Worth--in our very own Imperial Valley. This valley forms a wide trough between the Salton Sea and the Mexican border. If you don't go to the Imperial Valley on farm business, most likely you don't go there at all. It's hot. It's ugly. The landscape reeks of the sweet, oily perfume from a thousand diesels.
But thanks to the nearby presence of the Colorado River and the wonderfully named All-American Canal, the Imperial Valley has grown into one of the most productive farm regions in the world. In the winter the valley feeds much of America its lettuce and vegetables. The whole enterprise rests on cheap water from the Colorado.
So now come Sid and Lee Bass, two brothers from the famous family that helped turn around Walt Disney studios in the early 1980s and has accumulated a fortune in the billions (that's a B). The Bass brothers' hallmark has been their talent for spotting a financial trend before its time. Over the past several years they have accumulated about 40,000 acres in the valley, roughly 8% of the available farmland.
Have the Bass brothers' steely eyes discerned a trend in broccoli? Not likely. When you buy farmland in the Imperial Valley, the real prize is not the land. It's the water rights that go with it. That water can be sold to the thirsty cities along the coast--in other words, to you and me--for a price far more dear than what the farmers pay. The difference can mean many millions in profits.
Even as we speak, Bass family envoys and the Imperial Irrigation District are talking to San Diego about a major sale that could reach 500,000 acre-feet. That's enough water to supply a million families for a year, and it could cost San Diego somewhere between $100 million and $300 million annually, depending on who you talk to about the price.
Hey, you got a problem with that? Personally I don't, and here's why: If we buy water from the farmers, we get the supplies we need without building dams, reservoirs and canals to augment the dams, reservoirs and canals we've already built. We don't destroy any more free-flowing rivers in the Sierra or suck dry the Sacramento delta with doomsday pumps.
Sure, the Bass family will get a little richer and so will some other farmers if this scheme works. But the deal also exposes the Bass clan to considerable financial risk; some of the shrewder water experts believe their eventual profits will be modest.
In the meantime, the Metropolitan Water District of Southern California does have a problem with the Bass plan and has been using all its considerable muscle to kill it. For those of you not familiar with the bureaucracy of water, the Met is the parent agency of the region, delivering water to cities and individual districts.
Why does the Met want to kill the Bass plan? Because it has bet heavily on another system for bringing new water supplies to Southern California and, as a monopoly, does not like the prospect of a free-market competitor.
In fact, the farmers of Imperial first offered their water deal to the Met before they ever approached San Diego. The Met tossed them out. In a speech late last year, Met general manager John R. "Woody" Wodraska referred to "water future speculators . . . who just can't wait to sell water at $400, $500, $600 an acre-foot" and then described them as losers.
In the place of a free market for water, Wodraska has put his bet on a Soviet-style plan he dubs "Reliability Plus." To put it diplomatically, "Reliability Plus" has produced more bafflement than huzzahs. It proposes a string of intergovernmental agreements that amounts to a new management system for the Colorado River and assumes sweet cooperation among water groups who have been cutting each others' throats for decades. Several of the throat-cutters have already labeled parts of "Reliability Plus" as illegal and unworkable.
In short, "Reliability Plus" seems none too reliable. Even so, the Met is proceeding to spend $1.9 billion on a new reservoir near Hemet and $2 billion on other projects to enhance "Reliability Plus." Who pays the $4-billion bill? Why, you and me, of course, through our water bills. Since 1990, the price charged by the Met has increased more than 100% and promises to keep rising.
The sad truth is, we're going to pay more for water either way. As a commodity, water has grown more scarce and, therefore, more expensive. Either we pay the Bass brothers and their fellow farmers along the Colorado, or we pay for pouring cement for new reservoirs and pipelines. And, of course, for the vast bureaucracy to manage it all.
Why not at least try to make a deal with the farmers? They want $500 an acre-foot? Fine. Offer them $200. Somewhere in between we would probably strike a price. They walk away with the money; we walk away with the water.
Isn't that the American way? It would seem so. But then, I'm just a layman. Water is opaque.