Thirsty, growing states turn to new sources of water

CADIZ, Calif. -- This is one big, dry state, and Keith Brackpool wants to slake its thirst.

The politically connected British wheeler-dealer is pressing ahead with an ingenious plan to sell billions of gallons of drinking water to Southern California from his company's aquifer, buried here beneath the broiling badlands of the Mojave Desert.

Contentious? They don't call them "water wars" for nothing.

Brackpool has both serious friends and committed opponents. He has steered $250,000 into the campaign coffers of Democratic Gov. Gray Davis and secured the services of former Interior Secretary Bruce Babbitt as a consultant for dealings in Egypt. Former Democratic congressman Tony Coelho serves as a board member. But Brackpool is now battling with the Sierra Club and Sen. Dianne Feinstein, D-Calif., who fears CEO Brackpool's Cadiz Inc. will suck the aquifer dry and damage the fragile ecosystem of her beloved Mojave.

But the thirsty states are booming with growth, and, as one hydrologist put it, "God is not making any more water."

Increasingly limited supply

The challenges aren't limited to California and the West. Water is increasingly seen as a limited commodity worldwide, and now into the breach comes private enterprise: to operate aging municipal water systems (in cities such as Atlanta and Indianapolis) and to sell water outright from farms to cities.

Whether that means consumers will pay more for what comes out of the tap remains to be seen, but entrepreneurs are betting they'll make money.

In Texas, oil man T. Boone Pickens wants to pump not crude but water out of the Ogallala aquifer and then pipeline it to Dallas. Another entrepreneur, Ric Davidge of Alaska Water Exports, envisions siphoning rivers in northern California, filling giant bladders with the runoff and then towing the jumbo balloons with tugboats down the coast to San Diego.

Far-fetched?

Not really, says Ron Gastelum, president and chief executive of Metropolitan Water District of Southern California, the nation's largest wholesale water supplier, which provides drinking water to 17 million customers in Southern California through a network of local municipal systems.

Perpetual search

The district is engaged in an almost perpetual search for new sources of drinking water and has agreed to a preliminary deal with Cadiz that could produce as much as $1 billion in revenue for Brackpool's company over the 50-year life of the project.

Gastelum says that farmers increasingly will sell water to city taps, and private companies will play new roles in storing, managing and transferring water.

Coastal cities, too, will likely begin to invest in costly desalination plants to turn seawater into tap water, he says, and recycled gray water will be employed to green lawns and agricultural lands. But this move toward privatization of water, naturally, has its critics.

"Water is too important to be left entirely in private hands," said hydrologist Peter Gleick, president of the Pacific Institute for Studies in Development, Environment and Security, based in Oakland.

Gleick sees a role for the private sector but says its drive for profits must be balanced against society's need to protect the environment and "third parties," such as the tractor salesman or the lettuce picker, or the endangered species left high and dry when farmers abandon crops to instead sell their water.

'It's a boondoggle'

John Earl, with the group Public Citizen, which opposes privatization, is even more emphatic: "It's a boondoggle." Water is a basic human right, like air, Earl says, and it should be provided for the public good -- not for profits for stockholders.

Indeed, the trend toward privatization runs counter to the national mood that companies are the last entities to be trusted.

The three largest water companies in the nation -- USFilter, United Water and American Water Works -- are now owned by French and German conglomerates, by Vivendi, Suez and RWE. It doesn't help the boosters that one of the big players, until recently, was the water development company Azurix, a subsidiary of Enron.

Yet there is no reason privatization cannot work, advocates say. France has distributed water through private companies for a century. The United Kingdom privatized its water delivery in 1989 under free-marketeer Margaret Thatcher, and the improved services have won high marks.

The battle over the Cadiz project comes as California is growing by a million people every 18 months. The state has long overdrawn its allocation from the Colorado River, which feeds seven states and Mexico. The federal government is threatening to turn off the tap at the end of the year and deny Southern California any extra water.