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The Fight Over Water: When Business and Politics Collide

Controversial water project is back up for debate.

Opinions expressed by Entrepreneur contributors are their own.

Water, as intrinsic to our lives as the air we breathe, is becoming increasingly rare and valuable. We must stop taking it for granted.

Cadiz Water Project

The water situation in California is dire, and some experts predict that the state -- our largest agricultural producer -- is destined to become a desert. As politicians and businesses fight it out in court over aquifer rights, towns are drying up.

The Cadiz Water Project is smack in the middle of the controversy.

At the heart of the controversy is a California law that allows landowners to tap into an aquifer their land sits upon, even if the aquifer extends under property belonging to others. A handful of investors have made fortunes by investing in the state's most valuable natural resource.

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Cadiz is a private corporation sitting on roughly 70 square miles of property in the Mojave Desert over a deep aquifer. In 2012, the company agreed to sell water to Santa Margarita Water District (SMWD) in Orange County and other local providers. The company proposes to pump enough groundwater from beneath its property to supply 100,000 homes in the heavily drought-impacted Southern California area. California’s eastern Mojave Desert, where the project is located, could see tremendous benefit.

Cadiz CEO Scott Slater told me the project would empower the local community by adding 5,900 new local jobs without harming the environment. “We've studied this issue from every angle, and what we propose will not drain the aquifer or significantly impact the local ecology,” he said. “What it will do is generate approximately $1 billion in economic growth and provide much needed water to an area parched by the long drought.”

Senator Dianne Feinstein (D-CA), strongly opposes the project, citing environmental concerns and long-term sustainability. On June 6, she sent a letter to David Bernhardt, President Trump’s nominee for Deputy Secretary of the Interior, asking him to recuse himself from overseeing the Cadiz water extraction project. Sen. Feinstein cites conflict of interest since his law firm, though not Bernhardt, is paid to lobby for the company.

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Winston Hickox, former California Environmental Protection Agency secretary, disagrees with the Senator. In an op-ed for the Sacramento Bee, Hickox writes, “The project will conserve enough water for 400,000 Californians each year for 50 years without causing a single adverse environmental impact. The best scientists and engineers assured that sustainability and protection of the environment were paramount. The project was approved in accordance with the toughest environmental law in America, the California Environmental Quality Act. It was challenged in court, but judges in 12 separate opinions affirmed the project and its protections and rejected the flawed positions represented by the senator’s op-ed. The desert will not be destroyed, nor will the bighorn sheep, desert tortoises, springs or wildflowers.”

What's at stake?

Why does a company fight the government for 15 years? Could water, a resource most of us take for granted, be that valuable?

Water is big business. The global water industry is predicted to reach $1 trillion by 2020. As massive as the bottled water industry is, its volume pales in comparison to tap water. U.S. public water systems supply more than 1 billion gallons of tap water an hour, every hour of the day. Twelve percent of municipal water is provided by private water systems, and they serve 36 million people in the U.S.

The average American uses 176 gallons of water per day, and municipal water prices have increased 27 percent over the past five years. Advocacy group Food & Water Watch says private companies charge 59 percent more than public utilities, or $185 more per year, per household.

Crisis like the one in Flint, Mich.,, demonstrate that public water sources are not always the best option.

Conservatives like to claim that over-regulation stifles business. Liberals -- including me -- are primarily concerned with environmental impact over profiteering. In the end, this story comes down to evaluating the greater good.

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For the first time in a long time, I'm coming down on the conservative side. Water is still pretty cheap, and most households will pay just $15 more per month from a private source. Given a choice between shortage and rationing that comes with it, and shelling out less than the cost of a cup of Starbucks every week, most people are unlikely to object.

Generally speaking, most municipal water comes from aquifers. What environmental difference does it make if a private or public company pumps it? I'm simply not sure the objections hold water (pardon the pun).

Photo Credit: katkaZV

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