Cadiz’s Pipe Dream: Success and Setbacks in the Mojave Desert

Introduction

Last summer, the Santa Margarita Water District (“SMWD”) approved the Environmental Impact Report (“Report”) for an ambitious water pumping plan in the Mojave Desert that was years in the making. For Cadiz Inc. (“Cadiz”), the approval was a monumental step forward for its Cadiz Valley Conservation, Recovery and Storage Project (“Project”). However, many challenges still face the Project.

History

For nearly three decades, Cadiz has had its sights on the Mojave Desert. In 1983, Cadiz began acquiring land in the Cadiz Valley in San Bernardino County. Since then, Cadiz has spearheaded several agricultural and environmental endeavors. Cadiz is now the largest private landowner in the area, with over 45,000 acres. The original idea for the Project started in 1998 and aimed to provide underground storage for the Metropolitan Water District (“Metropolitan”) in order to stabilize Southern California’s water supply, which is primarily imported from the Colorado River Aqueduct. Metropolitan killed the project in 2002 when it backed out.

Project

In 2008, Cadiz revamped the Project with the new goal of diversifying Southern California’s water supply by importing water from the aquifer under Cadiz’s land to Southern California. In the future, Cadiz hopes to provide other importers with water storage in the aquifer, similar to its 1998 storage model. For now, though, Cadiz aims to pump an average of 50,000 acre-feet per year for fifty years from the aquifer and transport it to Southern California wholesale customers via the Colorado River Aqueduct. Cadiz estimated between $1 billion and $2 billion in profits by the end of the Project. To get the water to the Aqueduct, Cadiz will bury a pipeline under a railroad right-of-way. The pipeline will carry water 43 miles from the aquifer to the Colorado River Aqueduct. Cadiz already has a lease to use the right-of-way, but still needs Metropolitan’s permission to use the Colorado River Aqueduct. However, even if Cadiz gets the green light from Metropolitan, water quality issues and environmental challenges still confront the Project.

Water Quality

One such thorn in Cadiz’s side is a naturally occurring toxin and carcinogen. The groundwater Cadiz wants to pump contains ten to sixteen parts-per-billion (“ppb”) of hexavalent chromium, a known carcinogen. The California standard for hexavalent chromium is fifty ppb, and the national standard is 100 ppb. However, in July 2011, the California Environmental Protection Agency enacted a nonbinding Public Health Goal of .02 ppb. Cadiz admitted the public health goal could lead to more stringent California standards, but Cadiz stated that the extra costs of treating or mixing the water prior to conveyance are not prohibitive. Notwithstanding the future legal standard, Metropolitan, if it allows conveyance at all, may force treatment before allowing Cadiz to convey water through the Colorado River Aqueduct.

Environmental Impact Report Approval and Subsequent Lawsuits

The California Environmental Quality Act (“CEQA”) required the Project to undergo a review process that culminated in SMWD approving Cadiz’s Report in July of this year. The approval triggered a spike of hopeful investment in Cadiz, but also sparked several lawsuits that reignited questions about the Project’s future and immediately curtailed investor confidence.

The problem, opponents claim, is that although the water in the aquifer currently evaporates several miles from the Project site, another corporation utilizes the evaporation process and the local ecosystem benefits of the evaporated water when it eventually precipitates back down to the desert.

At the end of July, Tetra Technologies Inc. (“Tetra”) filed two lawsuits in an attempt to protect its salt mining operation downstream from the aquifer. Without replenishment from the aquifer, Cadiz’s project could dry up the brackish water that Tetra relies on to extract salts for the oil and mining industries. In its complaint, Tetra claimed San Bernardino County should have taken the lead role in the CEQA review process, instead of the SMWD, and Tetra publicly questioned the wisdom of depriving the desert ecosystem of evaporation.

Then, at the end of August, Environmental groups added a salvo to the volley of lawsuits. In the latest suit, the Center for Biological Diversity and other groups echoed the alleged procedural violation of the review process, and asked the court for what would essentially be a do-over of the approval process but with San Bernardino County in the position of lead agency. The environmental groups reasoned San Bernardino County was the proper gatekeeper because the SMWD has a conflict of interest as Cadiz’s future customer and is geographically too far removed from any of the potential environmental problems. The complaint asserted that since the Project is within San Bernardino County, the County would be best suited to consider the impacts the Project might have within San Bernardino. On the other hand, Cadiz noted that there are many agencies that could appropriately have taken the lead role, and SMWD was simply the first to apply.

The suit also alleged fundamental problems with the Environmental Impact Report. The petitioners cited evidence indicating that the proposed pumping rate would be unsustainable, and would lead to serious environmental problems to the Cadiz Valley. The complaint insisted the Report did not adequately analyze the Project’s impacts on endangered local flora and fauna that may rely on water from the aquifer that evaporates. However, SMWD conditioned its approval of the Report on the creation of an independent monitoring framework that would oversee the Project’s development and help alleviate environmental concerns. San Bernardino has the prominent role as the enforcer of the monitoring scheme, a position which has not satisfied opponents’ objection to SMWD’s lead agency status.

Conclusion

Although closer to fruition than ever before, Cadiz can expect the lawsuits and water quality considerations to further delay the Project and inhibit funding. Given its protracted development, the successful completion of the Project is far from a foregone conclusion.

Born and raised in Denver, Zander Louden, J.D. Candidate 2015, is just getting his feet wet in the field of environmental law, but plans on immersing himself further in his legal studies.


Sources

  • Bettina Boxall, Board OKs Environmental Plan on Mojave Desert Groundwater Sales, L.A. Times, Aug. 2, 2012, http://articles.latimes.com/2012/aug/02/local/la-me-cadiz-water-20120802.
  • Bettina Boxall, Carcinogen in Mojave Groundwater Could Require Costly Treatment, L.A. Times, July 21, 2012, http://articles.latimes.com/2012/jul/21/local/la-me-cadiz-chromium-20120721.
  • Bettina Boxall, Firm Fights Mojave Water Pumping, L.A. Times, July 13, 2012, http://articles.latimes.com/2012/jul/13/local/la-me-cadiz-tetra-20120713.
  • Jose Luis Jiménez, Plan to Pump Water from Mojave for Southern California Approved by San Bernardino Supervisors, Southern Cal. Public Radio, Oct. 2, 2012, http://www.scpr.org/blogs/news/2012/10/02/10270/san-bernardino-supervisors-approve-plan-pump-water/.
  • Molly Peterson, Cadiz’s Plan to Pump Mojave Groundwater Headed to Court, Southern Cal. Public Radio, Sept. 5, 2012, http://www.scpr.org/blogs/environment/2012/09/05/9727/cadizs-plan-pump-mojave-groundwater-headed-court/.
  • Press Release, Santa Margarita Water District, SMWD Board Votes to Advance Cadiz Project (July 31, 2012) (available at http://www.smwd.com/news/press-releases/2012-07-31.html).
  • Richard Sedman et. al., Pesticide and Envtl. Toxicology Branch, Cal. Envtl. Prot. Agency, Public Health Goal for Hexavalent Chromium (Cr VI) in Drinking Water 1 (2011), available at http://oehha.ca.gov/water/phg/pdf/Cr6PHG072911.pdf.
  • Verified Petition for Writ of Mandate, Center for Biological Diversity v. County of San Bernardino, WL 3875608 (Cal. Super. 2012).
  • Water Project, CadizInc.com, http://cadizinc.com/water-project/ (last visited Oct. 30, 2012).