Dan Walters

Dan Walters
Observations on California and its politics
May 2, 2015

California’s shrill, drought-driven debate over water has become a Hydra Lernaia – a multi-headed aquatic monster.

Who’s getting how much water and at what price? Does it really take a gallon to produce one almond? What does a 25 percent reduction mean? Should corporations buy city water for pennies and resell it for dollars in plastic bottles? Should water-wasters face huge fines?

And so forth.

The high decibel level reflects water’s fundamental-to-life necessity. But underlying it is a question: What is water’s economic value?

Some, particularly farmers and cities holding decades-old rights to take water from rivers, lakes or underground aquifers, pay little or even nothing.

At the other end of the scale, some almond farmers are paying up to $2,000 per acre-foot (325,851 gallons) to keep their trees alive, and that’s just about what water from a soon-to-open desalination plant near San Diego will cost.

Let’s assume that $2,000 per acre-foot is the true market value of water. The average California household, we’re told, uses 360 gallons of water a day, or 131,400 gallons a year. At $2,000, therefore, each of those gallons would cost a bit over a half-cent, which translates into $2.21 a day or about $67 a month.

In other words, even at this maximum price, an average household would be spending less each day for its vital supply of water than one Starbucks latte.

Let’s look at a $2,000 water value another way. If applied to the roughly 40 million acre-feet that California’s humans use each year, including for agriculture, it makes our water worth a total of $80 billion – a lot of money, certainly, but just 4 percent of Californians’ $2 trillion in annual personal income.

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