Shell Games

In the byzantine world of environmental policy, names are downright surrealistic. The Bush Administration’s Healthy Forests Initiative plans to keep forests healthy by cutting down trees, and a state and federal plan called the South Delta Improvement Program makes its “improvements” by accelerating the delta’s main cause of environmental degradation: pumping out its water. But now the California state legislature is weighing in with a real prize. Introduced by Assemblymember Lois Wolk (D-Davis), Assembly Bill 1245 seeks to retool and extend the life of a little-known state program called the Environmental Water Account.

Supporters say the program helps save endangered fish. Environmentalists charge that the program is a water-marketing ploy to pay businesses—with taxpayers’ money—to comply with the Endangered Species Act. Created as a four-year experiment in 2000 by the consortium of state and federal agencies known as CALFED, the Environmental Water Account is supposed to protect fish in the Sacramento-San Joaquin Delta from being caught and killed in the gargantuan pumps that lift Delta water 244 feet up and into the California Aqueduct. It has not worked out that way.

Fishy figures

“The Environmental Water Account was the most controversial unit of CALFED,” says Michael Jackson, a water law attorney who has represented environmentalists, rural counties, and fishing groups. “Standing alone it is a nightmare of special interest graft.”

Here’s how the program works. When the massive State Water Project pumps near Tracy are killing too many Delta smelt or other threatened fish, the Department of Fish and Game orders the pumps to be slowed down—not stopped—so that the fish can escape their pull. Money—from state and to a much lesser extent federal tax revenues—from the Environmental Water Account is then used to buy water stored somewhere south of the delta.

I asked Jim White, a staff environmental scientist with the California Department of Fish and Game, if there were any studies on the effectiveness of the Environmental Water Account in protecting fish. “We are continuously monitoring the abundance and distribution of a variety of fish species in the estuary,” White says. “By that measure, considering the fact that the abundance of a number of those species has dropped off in the last few years, if that were our only measure, you’d have to wonder about the results.” Translation: since the Environmental Water Account has been in play more fish have been killed in the delta, and if the purpose of the program is to keep the fish alive, it is not working.

Christina Swanson, a staff scientist with the Bay Institute who has written two reports on the Environmental Water Account, is frustrated by the lack of evidence showing fish benefits. “The agencies have not done what they said they would in terms of collecting and analyzing good information,” she says. “There is no good data supporting the Environmental Water Account giving benefits for fish. There are hypotheses, people saying, ‘Well, I think it works.’ The only thing it has been shown to do is guarantee water supply for south of delta contractors at tremendous cost to the public.”

The Environmental Water Account’s failure can be traced to its early identity crisis. Since the program began in 2000 it has been presented—depending on the audience—as a species protection program or as a “water reliability program” for those thirsting for delta water. Again a translation: “water reliability” means any actions taken to protect threatened species will not result in less water pumped south. Now, with pressure on the state to increase pumping through the South Delta Improvement Program, the Environmental Water Account looks like a publicly funded mitigation plan for even more water to be pulled out of the delta.

Who gets the water?

When the state goes shopping for water, officials keep track of who they buy water from, but they cannot tell you who ends up getting it. This is because the Environmental Water Account uses a water marketing scheme that looks a lot like insider trading, where straight lines between buyers and sellers are a threatened resource. I asked Dean Reynolds of the Department of Water Resources Office of Water Transfers who gets the Environmental Water Account water.

“Water is purchased to make up for curtailments in pumping,” he says, “but then that water becomes part of state water project operations. No one requests Environmental Water Account water. Rather, slowing down the pumps creates debt within the State Water Project. For example, say Kern County Water Agency requests 20,000 acre-feet for a given month, but the project can’t pump that much out of the delta. The water is delivered from San Luis Reservoir. So now there is a debt in San Luis. The Environmental Water Account fills that hole.”

Does this mean that the water is somehow shipped from Bakersfield 200 miles north to the San Luis Reservoir near Gilroy? “The water obviously doesn’t turn around and go the other way,” Reynolds chides. “You can’t turn water around and move it the other direction, well I guess if we reversed the pumps we could, but& What happens is the water ends up getting exchanged. The water is exchanged for other water.”

A curious fact about the Environmental Water Account is that those making the demands for water that the account is meant to fill are the same ones selling the water to the account. In fact, the largest seller to the program south of the delta is none other than the largest privately owned agribusiness in California, Paramount Farming Company.

Privately owned by Los Angeles billionaire Stewart Resnick, Paramount created a paper company in the 1990s through which to buy and sell water. This company, Westside Mutual Water Company, is also the largest single owner—with 48 percent—of a 20,000-acre stretch outside of Bakersfield that overlies a once empty aquifer, formerly owned and developed by the state.

In1996, Paramount helped take over the state land and run its operation as a water bank. Paramount and others pump water into the empty aquifer in years with heavy rainfall and pump it back out again in drier years—the idea behind the state’s development of the area as a drought water bank. Since 2000, Paramount has been profiting from the rain by selling millions of dollars of water to the Environmental Water Account. The first year of the program alone Westside received $8 million in taxpayer funds for water, and the state cannot tell you whose garden hose or coffee mug was filled with that water.

So when the state turns down the pumps to supposedly keep from killing too many fish and then goes shopping south of the delta to make up for the slower water shipments in the California Aqueduct, it seems to be buying water from those who clamor in Sacramento for “water reliability.” This, says Michael Jackson, is essentially taxpayers paying businesses to comply with federal endangered species law. “There will be a day in which environmental laws are enforced again,” Jackson predicts, “and if this mockery that is the Environmental Water Account dies, that day will come a lot faster.” —John Gibler is a policy analyst with Public Citizen.


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