The Abundance Choice (part 13) – The Lords of Scarcity

One of the farmers who supported our attempt to qualify the Water Infrastructure Funding Act for the November 2022 ballot was John Duarte. It was a privilege to speak with Duarte, because his reputation had preceded him. Duarte is the man who had the temerity – and uncommon courage – to sue the U.S. Army Corps of Engineers when they ordered him to stop farming one of his properties. The Corps argued that the rain puddles that formed on Duarte’s 450 acres in Tehama County were vernal pools.

The case was eventually settled in 2017, but only after the government counter-sued and a federal district court rejected Duarte’s claims. Facing the infinite resources of the federal bureaucracy, Duarte decided against filing an appeal and paid the fines. During our first conversation, and subsequently, it was Duarte who coined the phrase the Lords of Scarcity. It is a vividly accurate way to describe the many special interests, public and private, that benefit from regulations and rationing.

This economic fact remains underappreciated: When regulations are imposed on businesses and public agencies that make it almost impossible for them to build something, whatever that something produces becomes more expensive. This fact rests on the law of supply and demand, and only requires a minor intuitive leap from that foundation: When demand exceeds supply, because supplies have been restricted, whoever owns existing supplies makes more profit. These owners are the Lords of Scarcity, and California is their citadel.

One of the profound […] Read More

The Abundance Choice (part 12) – Fighting Scope Insensitivity

Scope insensitivity happens whenever a statistic has huge emotional impact but in reality has little relevance to the issues and challenges it purports to illuminate.

It is scope insensitivity that makes conscientious Californians willing to put a bucket in their shower. They believe that by faithfully capturing some of that shower water that otherwise goes down the drain, and painstakingly reusing that water to fill their toilet tank, or water some houseplants, they’re going to help manage water scarcity in California.

This is well intentioned but ridiculous. Imagine if 40 million Californians saved a gallon of water from their daily shower every day, never missing a day, as if every Californian would ever do such a thing. That would amount to 44,836 acre feet per year, which equates to one-half of one percent of California’s average annual urban water consumption. And water going down the drain in California’s homes is already either reused, or could be with investment in upgraded wastewater treatment plants.

Examples of scope insensitivity abound. On a grander scale, consider the previously mentioned impact of the proposed Huntington Beach desalination plant, which if they ever built it, would release 55 million gallons of brine into the ocean every day. That seems like a terrifying amount of brine, even though desalination brine is merely somewhat saltier seawater. But the California current sweeps an estimated 250 quadrillion gallons per day of ocean water past the west coast. The Huntington Beach desalination plant’s projected 55 million gallons of […] Read More

Towards a Grand Bargain on California Water Policy

When it comes to water policy in California, perhaps the people are more savvy than the special interests. Because the people, or more precisely, the voters, by huge majorities, have approved nine water bonds in the past 25 years, totaling $27.1 billion. It is likely they’re going to approve another one this November for another $8.9 billion.

The message from the people is clear. We want a reliable supply of water, and we’re willing to pay for it. But the special interests – or whatever you want to call the collection of politicians, unelected bureaucrats with immense power, and other stakeholders who actually decide how all this money is going to be spent – cannot agree on policy. A recent article in the Sacramento Bee entitled “Why San Francisco is joining Valley farmers in a fight over precious California water,” says it all. “Precious California water.” But what if water were so abundant in California, it would no longer be necessary to fight over it?

As it is, despite what by this time next year is likely to be $36 billion in water bonds approved by voters for water investments since 1996, the state is nowhere close to solving the challenge of water scarcity. As explained in the Sacramento Bee, at the same time as California’s legislature has just passed long overdue restrictions on unsustainable groundwater withdrawals, the political appointees on the State Water Resources Control Board are about to enact sweeping new restrictions on how much water agricultural […] Read More

How to Make California’s Southland Water Independent for $30 Billion

The megapolis on California’s southern coast stretches from Ventura County on the northern end, through Los Angeles County, Orange County, down to San Diego County on the border with Mexico. It also includes the western portions of Riverside and San Bernardino counties. Altogether these six counties have a population of 20.5 million residents. According to the California Department of Water Resources, urban users consume 3.7 million acre feet of water per year, and the remaining agricultural users in this region consume an additional 700,000 acre feet.

Much of this water is imported. In an average year, 2.6 million acre feet of water is imported by the water districts serving the residents and businesses in these Southland counties. The 701 mile long California Aqueduct, mainly conveying water from the Sacramento River, contributes 1.4 million acre feet. The 242 mile long Colorado River Aqueduct adds another 1.0 million acre feet. Finally, the Owens River on the east side of the Sierras contributes 250,000 acre feet via the 419 mile long Los Angeles Aqueduct.

California’s Plumbing System The major interbasin systems of water conveyance, commonly known as aqueducts

California’s Overall Water Supplies Must Increase

Californians have already made tremendous strides conserving water, and the potential savings from more stringent conservation mandates may not yield significant additional savings. Population growth is likely to offset whatever remaining savings that may be achievable via additional conservation.

Meanwhile, the state mandated water requirements for California’s ecosystems continue to […] Read More

How Much California Water Bond Money is for Storage?

Californians have approved two water bonds in recent years, with another facing voters this November. In 2014 voters approved Prop. 1, allocating $7.1 billion for water projects. This June, voters approved Prop. 68, allocating another $4.0 billion for water projects. And this November, voters are being asked to approve Prop. 3, allocating another $8.9 billion for water projects. This totals $20.0 billion in just four years. But how much of that $20.0 billion is to be invested in water infrastructure and water storage?

Summaries of how these funds are spent, or will be spent, can be found on Ballotpedia for Prop. 1, 2014, Prop. 68, 2018 (June), and the upcoming Prop. 3, 2018 (November). Reviewing the line items for each of these bonds and compiling them into five categories is necessarily subjective. There are several line items that don’t fit into a single category. But overall, the following chart offers a useful view of where the money has gone, or where it is proposed to go. To review the assumptions made, the Excel worksheet used to compile this data can be downloaded here. The five categories are (1) Habitat Restoration, (2) Water Infrastructure, (3) Park Maintenance, (4) Reservoir Storage, and (5) Other Supply/Storage.

California Water Bonds, 2014-2018 – Use of Funds ($=millions)

The Case for More Water Storage

It isn’t hard to endorse the projects funded by these water bonds. If you review the line items, there is a case for […] Read More