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).

Background

In 2008, the Vermont legislature substantially revised its groundwater protection laws. Historically, the common law doctrine of absolute ownership governed groundwater. However, in 1985 it was replaced by the more modern correlative rights doctrine. Vermont’s groundwater laws changed again when Vt. Stat. Ann. tit. 10, § 1390(5) (West 2008) was enacted, designating groundwater as a public trust resource. As a result, groundwater now must be managed for the benefit of all Vermont citizens. In 2011 the Vermont Environmental Court (“court”) interpreted this statute for the first time when it examined the final certification of Omya Inc.’s (“Omya”) solid waste facility. While the court did not addresses every question the 2008 statute presents, the court established a baseline context in which to examine groundwater, both quantity and quality needs to be addressed.

Environmental Court’s Interpretation

In Omya Solid Waste Facility Final Certification, No. 69-6-10 Vtec., 2011 WL 1055575, (Vt. Feb. 28, 2011), Omya applied to The Vermont Agency of Natural Resources (“ANR”) for a 5-year, final certification of a lined tailings disposal facility, a solid waste permit. Omya operates a calcium carbonate processing facility and the groundwater within the site has tested for elevated levels of iron, manganese, arsenic, and aminoethylethanolamine. ANR granted Omya’s application for a final certification based on the requirements set forth in its 2005 Groundwater Protection Rule and Strategy (“2005 Rule”). The Appellant, concerned about the disposal facility, appealed the ANR decision to grant the final certification.

The court, in a decision and order on motion for summary judgment, determined whether the final certification issued by ANR took into account the new public trust statute, Vt. Stat. Ann. tit. 10 § 1390(5). The court first examined what the public trust doctrine required for a groundwater analysis. Looking at the plain meaning and relationship to related sections, the court found that the public trust is not limited to solely managing groundwater quantity. The public trust should also manage groundwater quality. Next, the court looked at the 2005 Rule used to issue the final certification to see if ANR took into consideration the public trust doctrine with regards to groundwater quantity and quality. Because the 2005 Rule was created before Vt. Stat. Ann. Tit. 10 § 1390, the court held that use of the 2005 Rule is not sufficient to ensure that ANR is carrying out its public trust responsibilities. The court, however, did not find the 2005 Rule to explicitly violate Vt. Stat. Ann. Tit. 10 § 1390.

After the summary judgment decision issued by the court, the Appellants submitted a motion for clarification, asking if the decision required ANR to develop a new policy for certification. The court clarified its original decision and stated that ANR had the responsibility to develop the process of how to perform a public trust analysis. The court only determined that ANR’s 2005 Rules had not specifically considered groundwater as within public trust and therefore must be revisited. This decision, however, did not require that the final certification result be changed or the 2005 rule be changed.

In July 2011 ANR finalized an interim procedure for implementing the new public trust doctrine for groundwater called the Agency of Natural Resources, Interim Procedure for Implementation of Groundwater Public Trust Principles for Groundwater Quality Summary of Changes (July 20, 2011). The interim procedure recognizes that the ANR needed to protect both quantity and quality of groundwater with a dynamic set of rules designed to react to changes in public needs. Activities are now categorized into two tiers, recognizing that some activities are more harmful to groundwater then others. Tier I activities are high-risk activities that require a more stringent permitting process and a public benefit showing. Tier II activities pose a much lower risk to groundwater and therefore the permitting process is much easier. Tier II activities also include remedial activities directed to contaminated sites. Additionally, ANR set up a public comment process for participation in the permitting process.

Effects

Vermont, by identifying groundwater as within the public trust doctrine, is trying to balance public interest and individual property rights for an ever more important natural resource. The public trust doctrine allows for environmental concerns to be addressed with an eye towards future generations. This type of consideration is necessary for important and vital natural resources like water. Interpreting a broad law like Vt. Stat. Ann. Tit. 10 § 1390, however, has its own unique challenges and it will take years to generate a clear picture of how protecting groundwater, as part of the public trust, will be done through Vermont’s legal system. It took three years from the time the statute was enacted for a court to be faced with a decision where it needed to interpret the statute, and additional administrative action is still needed. While the public trust doctrine may take some time to fully realize the scope of protections, future generations should be better protected.

The extent of a public trust doctrine is determined by a state-to-state basis; therefore, Vermont can serve as a basis for other states that wish to implement similar groundwater policies. Colorado, for example, though a prior appropriation state, could easily work those policies into any public trust statute. Implementing a public trust to protect groundwater will not change groundwater laws overnight as Vermont has shown. Most public trust laws can be worked into a state’s existing legal framework.