California Water Wars: Another Form of Asset Stripping?

In California’s epic drought, wars over water rights continue, while innovative alternatives for increasing the available water supply go untapped.

Wars over California’s limited water supply have been going on for at least a century. Water wars have been the subject of some vintage movies, including the 1958 hit The Big Country starring Gregory Peck, Clint Eastwood’s 1985 Pale Rider, 1995’sWaterworld with Kevin Costner, and the 2005 film Batman Begins. Most acclaimed was the 1975 Academy Award winner Chinatown with Jack Nicholson and Faye Dunaway, involving a plot between a corrupt Los Angeles politician and land speculators to fabricate the 1937 drought in order to force farmers to sell their land at low prices. The plot was rooted in historical fact, reflecting battles between Owens Valley farmers and Los Angeles urbanites over water rights.

Today the water wars continue on a larger scale with new players. It’s no longer just the farmers against the ranchers or the urbanites. It’s the people against the new “water barons” – Goldman Sachs, JPMorgan Chase, Monsanto, the Bush family, and their ilk – who are buying up water all over the world at an unprecedented pace.

A Drought of Epic Proportions

At a news conference on March 19, 2015, California Senate President Pro Tem Kevin de Leon warned, “There is no greater crisis facing our state today than our lack of water.”

Jay Famiglietti, a scientist with NASA’s Jet Propulsion Laboratory in La Cañada Flintridge, California, wrote in the Los Angeles Times on March 12th:


Right now the state has only about one year of water supply left in its reservoirs, and our strategic backup supply, groundwater, is rapidly disappearing. California has no contingency plan for a persistent drought like this one (let alone a 20-plus-year mega-drought), except, apparently, staying in emergency mode and praying for rain.

Maps indicate that the areas of California hardest hit by the mega-drought are those that grow a large percentage of America’s food. California supplies 50% of the nation’s food and more organic food than any other state. Western Growers estimates that last year 500,000 acres of farmland were left unplanted, an amount that could increase by 40% this year. The trade group pegs farm job losses at 17,000 last year and more in 2015.

Farmers with contracts from the Central Valley Project, a large federal irrigation system, will receive no water for the second consecutive year, according to preliminary forecasts. Cities and industries will get 25 percent of their full contract allocation, to ensure sufficient water for human health and safety. Besides shortages, there is the problem of toxic waste dumped into water supplies by oil company fracking.

California officials have been unresponsive to such proposals. Instead, the state has undertaken to regulate underground water. In September, a trio of bills were signed establishing a framework for statewide regulation of California’s underground water sources, marking the first time in the state’s history that groundwater will be managed on a large scale. Water has until now been considered a property right. The Los Angeles Times reported:


[M]any agriculture interests remain staunchly opposed to the bill. Paul Wenger, president of the California Farm Bureau Federation, said the bills “may come to be seen as ‘historic’ for all the wrong reasons” by drastically harming food production.

. . . “There’s really going to be a wrestling match over who’s going to get the water,” [Fresno Assemblyman] Patterson said, predicting the regulation plans will bring a rash of lawsuits.

And so the saga of the water wars continues. The World Bank recently adopted a policy of water privatization and full-cost water pricing. One of its former directors, Ismail Serageldin, stated, “The wars of the 21st century will be fought over water.”

In the movie Chinatown, the corrupt oligarchs won. The message seemed to be that right is no match against might. But armed with that powerful 21st century tool the Internet, which can generate mass awareness and coordinated action, right may yet prevail.

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