thanks to a persistent drought, water prices in California have reached an all time high. Private well owners have been taking advantage of the dry spell by selling off their excess water. Apparently the profits are in the millions.
Only two water districts and about forty private well owners have found themselves in the fortunate circumstance of having excess water. According to the Associated Press economists reported that water has not been this lucrative in decades. In the past five years, water prices have risen to approximately $2,200 an acre-foot. This equates to the approximate volume of a football field a foot under water.
While the state involved itself in water pricing during the 2009 drought, it has refrained from doing so this time around. Instead, they have elected to allow water prices to regulate themselves, even when levels dropped so low that a statewide emergency was declared.
Water economists have urged for greater protection of the state’s aquifers, which they fear will become depleted without rest. They also fear that without regulations, water prices will soar to a manipulative level not seen since the 2001 energy crisis.
“If you have a really scarce natural resource that the state’s economy depends on, it would be nice to have it run efficiently and transparently,” said Richard Howitt, professor emeritus at the University of California, as reported by the Associated Press.
Thomas Greci, the general manager of the Madera Irrigation District, has reported that the district has made $7 million dollars during the drought. He estimates that they have sold approximately 3,200 acre-feet of water. Though Santa Barbara had originally requested the water, a collection of farms outbid the dry city.
California is not the only state to turn to private water sales. Both Texas and Colorado have also used the practice in times of drought. Some areas of California have gotten so bad though, that water auctions have become a necessity. Many growers feel that they are being extorted. Without the government intervening though, they will have to negotiate for themselves and pay the price, or they risk losing their harvests.
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