Throughout California’s desperately dry Central Valley, those with water to spare are cashing in.
As a third parched summer forces farmers to fallow fields and lay off workers, two water districts and a pair of landowners in the heart of the state’s farmland are making millions of dollars by auctioning off their private caches.
Nearly 40 others also are seeking to sell their surplus water this year, according to state and federal records.
Economists say it’s been decades since the water market has been this hot. In the last five years alone, the price has grown tenfold to as much as $2,200 an acre-foot – enough to cover a football field with a foot of water.
Unlike the previous drought in 2009, the state has been hands-off, letting the market set the price even though severe shortages prompted a statewide drought emergency declaration this year.
The price spike comes after repeated calls from scientists that global warming will worsen droughts and increase the cost of maintaining California’s strained water supply systems.
Some water economists have called for more regulations to keep aquifers from being depleted and ensure the market is not subject to manipulation such as that seen in the energy crisis of summer 2001, when the state was besieged by rolling blackouts.
Competition for water in California is heightened by the state’s geography: The north has the water resources but the biggest water consumers are to the south, including most of the country’s produce crops.
The amount shipped south through a network of pumps, pipes and aqueducts is limited by the drought and legal restrictions on pumping to save a threatened fish.
The drought is so severe that aggressive pumping of the banked supplies may cause some wells to run dry by year’s end, said Eric Averett, general manager the Rosedale Rio Bravo District, located next to several of the state’s largest underground caches.