The state is spending billions on water-rationing and tens of billions on a giant tunnel even though far better measures exist to keep faucets flowing.
The state is spending billions on water-rationing and tens of billions on a giant tunnel even though far better measures exist to keep faucets flowing.
C hronic water scarcity in California is indeed the new normal, but it’s not because of climate change. Even if the state is destined to experience lengthier droughts and reduced snowpack, most scenarios also forecast an abundance of years when the state is inundated with a series of so-called atmospheric rivers. That diluvian scenario was experienced by Californians this past winter, and even more so in the winter of 2022–23. Yet water remains scarce.
Water is scarce because Californians have been living off a previous generation’s investment in the State Water Project, a remarkable system of reservoirs and aqueducts built in the 1950s and ’60s that were designed for a state with 20 million people but that is now inhabited by a population nearly twice the size. Instead of completing the State Water Project, Californians decided to rely on conservation, and they have become extremely good at it. The results are impressive: California’s farmers have doubled their productivity per unit of water over the past 30 years while using the same total amount of water. They were using about 30 million acre-feet (MAF) per year back in the ’90s, and they’re still using only that amount. (An acre-foot is the amount of water needed to cover an acre of land a foot deep, about 326,000 gallons.)
The same impressive achievements in conservation have been made in California’s cities, where total water use per year has dropped from 9 MAF in the 1990s to 7.5 MAF today. The last time California’s urban water consumption was only 7.5 MAF was in 1989, when only 29 million people lived there. Today there are 39 million Californians. Conservation, however, only goes so far. Not only does reducing California’s water consumption to its absolute minimum erase all resiliency from the system, putting millions of people at risk if there is a breakdown in supply or an unforeseen mega drought, but the more efficient water use becomes, the greater the expense to save a few more drops. None of this matters to the state legislature, or the bureaucrats at the California State Water Resources Board
California’s water regulators are on the brink of issuing the final rules to enforce Senate Bill 1157, perhaps a textbook case of the concept of diminishing returns. Passed and signed by Governor Gavin Newsom in 2022, S.B. 1157 requires California’s water agencies to limit residential indoor water use from the current average of around 60 gallons per person per day to 47 gallons starting in 2025 and 42 gallons in 2030, with an aim to reduce total urban consumption by 400,000 acre-feet per year.
Put into the perspective of California’s total water withdrawals per year, this is very small potatoes. Along with diversions for agriculture averaging 30 million acre-feet per year, and 7.5 MAF for urban consumption, diversions to maintain ecosystem health (for example, releases from reservoirs to maintain wetlands or increase flow through the delta) range between 20 MAF in dry years to over 60 MAF in wet years. Therefore a 400,000-acre-foot reduction in urban water consumption represents barely more than one-half of 1 percent of the amount of water California diverts and manages even in its driest years. And the cost?
An independent review of the state’s official estimate of the cost to implement S.B. 1157 put the implementation cost at $7 billion. This figure does not include annual enforcement or ongoing costs to maintain, for example, the dual meters that will be required at parcels with outdoor landscaping so that indoor water consumption can be monitored separately from outdoor water consumption.
Imagine the anxiety, as residential-property owners wonder whether they should plant another row of shrubbery, or choose to take a shower while also activating their washer. Water agencies are tasked with individual enforcement but will be fined $10,000 per day if they exceed their collective allotments. Imagine the annoyance, as residents must report to water-agency bureaucrats how many people are living in their home and negotiate an outdoor “water budget.” All this, for 400,000 acre-feet per year.
A simple and revealing way to evaluate the utility of water-infrastructure projects is to compare the capital cost of the project to the amount of water the project is estimated to supply each year. When we use this ratio, California’s latest round of water rationing doesn’t look very good. Spending $7 billion to save 400,000 acre-feet of water per year is a capital-cost-to-yield ratio of $17,500 per acre-foot. And of course, despite the strenuous denials of water activists and water bureaucrats alike, saving water is not the same thing as supplying water. But there are worse ratios in California’s water world.
If rationing to the point of diminishing returns is central to California water policy, the other centerpiece is the so-called Delta Conveyance, a proposed tunnel to transport water from the Sacramento River north of the Sacramento–San Joaquin River Delta safely underneath the fragile delta ecosystems, to flow into aqueducts on the southbound edge of the delta.
The tunnel, according to its own proponents, is projected to deliver only 500,000 acre-feet of water per year to Southern California. Moreover, that is a gross number, since it is likely that use of the existing delta pumps will be further restricted once water starts going through the tunnel. While the official cost estimate for the tunnel is $16 billion, California’s High Speed Rail project ought to provide a cautionary reality check. Does anyone sincerely believe it’s going to be possible to construct a tunnel 45 miles long, with a 36-foot interior diameter, underneath one of the biggest estuaries in the world, for less than $30 billion?
Spending $30 billion to supply 500,000 acre-feet of water per year is a capital-cost yield ratio of $60,000 per acre foot. This is preposterously expensive.
For comparison, consider the proposed Temperance Flat Reservoir, for which the highest construction-cost estimates came in at $3.5 billion. This reservoir would hold 1.3 million acre-feet, and yet its detractors claimed its yield would be only 70,000 acre-feet per year. Estimates vary, but even if that were true, at $50,000 in capital cost per acre-foot of annual yield, it still beats the Delta tunnel. And it would generate hydroelectric power. More recent evidence suggests that these biased estimates of its probable yield were low. Temperance Flat would have been full last year, and again this year. Its yield, in both years, could have been north of 500,000 acre-feet, released slowly to supply farms and massively replenish depleted aquifers.
In any case, Temperance Flat is one of the more expensive examples of surface-storage options, yet it is clearly more cost effective than the Delta tunnel. Consider the proposal to raise the height of the Shasta Dam, for which engineering studies are already complete. Raising it a mere 18 feet would increase storage in that vast lake by over 600,000 acre-feet. And it, too, could have been filled to capacity this year, and last year.
Raising the height of the Shasta Dam attracts the same united chorus of opposition as Temperance Flat, but it makes so much sense that it continues to come up for discussion. A 2012 expert study claimed that “dry year deliveries” from Lake Shasta would increase only by 76,000 acre-feet. That’s not the average, of course — that’s worst-case. But at an estimated cost of $1.8 billion (2024 dollars), that still equates to slightly less than $24,000 of capital cost per acre-foot of annual yield, almost three times more cost-effective than the Delta tunnel. And in wet years, such as this past winter and the winter before, Shasta would have filled up, twice; if the height of the dam had been raised, its “yield” would have been 600,000 acre-feet greater.
Other surface-storage projects fall somewhere in between these estimates. All of them are better returns on investment than the Delta tunnel. So what about desalination? There is no source of water supply with an investment-to-yield ratio higher than desalination. But even desalination makes far more financial sense than the tunnel.
It is likely that if desalination plants were constructed at a larger scale, starting for example at 100,000 acre-feet of annual capacity, which is roughly twice the size of California’s existing plant in Carlsbad, the capital cost per acre-foot of annual yield would be less. But as it is, referencing the inflation-adjusted actual cost to build Carlsbad, and the more recent cost projections for the proposed plant in Huntington Beach, ocean desalination costs around $27,000 of capital cost per acre-foot of annual yield.
I have written before for Capital Matters about the way California ignores the potential of desalination. A $15 billion investment in desalination would yield 550,000 acre-feet per year, at a capital-cost-to-annual-yield ratio that is at least twice as favorable as that of the proposed Delta tunnel. Putting that money into wastewater recycling instead would yield a return comparable to that of desalination. There is no serious water-supply-project option available to Californians that does not beat the Delta tunnel in terms of return on investment.
A proposal with spectacular potential — and that is fish-friendly — is the so-called Environmentally Friendly Diversions project. Until this concept is proven impossible, it ought to be a priority for the California Department of Water Resources and the state legislature. Proponents believe that by allowing water to settle into perforated pipes set in channels cut in an island in the central delta, millions of acre-feet could be withdrawn each year without ever altering the east-to-west flow of the delta. It wouldn’t trap fish and could have surge capacity to take those elusive “big gulps” when winter storms and spring snowmelt swell the flow. Engineering studies indicate a 200-acre filtration channel could safely move up to 15,000 acre-feet per day into southbound aqueducts and into quick-charge aquifers. The cost–benefit ratio? A $5 billion investment would pay for a system designed to harvest 2 million acre-feet per year. That’s a capital yield of $2,500 per acre-foot. Too good to be true? Maybe not. A state water bureaucracy serious about solving California’s chronic water scarcity would be aggressively evaluating this concept.
There’s more. Why are the activists running California’s water bureaucracies and setting the agenda for the state legislature insisting on leaving so much water in the rivers? If it’s to save salmon, why aren’t we raising the limits on bass fishing? Bass, a non-native predator, eat salmon. And if we want to save smelt, why not put smelt hatcheries next to nurseries in managed wetlands that exclude the non-native Mississippi silverside predators, releasing them only once they’re big enough to evade these predators?
So many questions. Why aren’t we planting shade trees along our waterways as a way to get the water temperature down? Why aren’t we upgrading our water-treatment plants so we don’t have to increase the “unimpaired” flow of the rivers just to flush nitrogen out of the San Francisco Bay and elsewhere? Why don’t we recognize that before any dams sullied its tributaries, the San Joaquin River used to dry up during droughts, and releasing water all summer in a year when normally the river should run dry just confuses the anadromous species (saltwater fish that swim up rivers to spawn)? Why don’t we recognize that flood irrigation has its place in modern agriculture, not only because it desalinates the soil, kills rodents, and primes the ground for a winter cover crop, but because the water recharges aquifers, taking pressure off river withdrawals for farm irrigation?
There are even water-supply solutions that would actually generate tax revenues. We’ve reduced our annual timber harvest in California from 6 billion board feet (a board foot is the volume of a one-foot-long, one-foot-wide, one-inch-thick board) per year in the 1990s to around 1.5 billion board feet in recent years. As a result, California’s forests are estimated to have tree densities that are many times what is historically normal. This overcrowding has left California’s forests dried out and unhealthy and is the primary reason for catastrophic wildfires. Why not bring back the timber industry in California? Doing this wouldn’t just restore healthy forests, create jobs, lower the price of lumber, and send tax revenues into the voracious maw of the California Franchise Tax Board. It would also increase the state’s water supply.
A 2011 study by forestry experts from UC Merced and UC Berkeley estimated that 60 percent of the state’s water diversions comes in the form of Sierra runoff, and that when forest cover is reduced by 40 percent, total runoff will increase by an estimated 9 percent. As previously noted, California’s total urban and agricultural water use, but not including diversions to maintain ecosystem health, is around 40 MAF per year. This means that if California’s forests were thinned by 40 percent, 2.2 MAF of water (40 MAF x 60 percent x 9 percent) would be added to California’s water supply in an average year.
These are cost-effective solutions in plain sight. Reservoirs and expansion of existing reservoirs. Desalination, wastewater reuse, and urban-runoff harvesting. Fish-friendly delta diversions. A reassessment of regulations that require year-round flows even in dry years. Better management of predators and hatchery releases. Modern forest management. Every one of these solutions carries with it a competitive cost-benefit ratio.
Instead, California’s water-policy czars are spending billions on water rationing and tens of billions on a giant tunnel. It is time for new management in Sacramento.