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Executive Summary for September 25th

For an overview of the latest news on the California drought, we’ve organized the most recent developments in a curated summary.

Published on Sep. 25, 2015 Read time Approx. 4 minutes

Hollywood: A Microcosm of the Drought’s Economic Divide

We’ve all seen recent stories like the one in which Tom Selleck was caught stealing water from fire hydrants to keep his elaborate personal gardens from dying. What it indicates is yet another measure of the increasingly deep divide between the haves and have-nots in California.

Now comes the Hollywood Reporter, which lays it bare for us in a new article that quotes a number of celebs on how they are dealing with the drought.

“I emptied my swimming pool in 1972,” actress Jamie Lee Curtis says of her Santa Monica home, “and we ripped up everything that takes water and planted natives that don’t need much … I also have these washing-up rubber tubs from Normann Copenhagen in every bathtub, every bathroom. So when you run the shower to get it to hot, that gallon is collected and that’s what I water my garden with.”

That’s one extreme. At the other extreme you have this film producer, who declined to be named, discussing his Bel Air home, which is described as a “mega-estate.”

“We have kept watering, just watering less. I wish we were more virtuous. This is a huge problem for our state, but we haven’t let our grass die. Feel guilty, but there you have it!”

What are we to make of this? Only that the wealthy aren’t any different from the rest of us. Some simply refuse to change their ways. Others are willing to make sacrifices for the common good.

Except that they have the means to sacrifice in style. Jamie Lee’s rubber washing tubs by Normann Copenhagen? Those are a cool $87.50. Each.

New Drought Bond About to be Unveiled

Environmental groups are expected next week to submit a new water bond measure to the California Secretary of State for inclusion on the November 2016 ballot. The exact amount of the bond has not been decided, but organizers promise it will be less than $5 billion.

The objective is to generate more money for projects that the groups believe were underfunded by the last bond, Proposition 1, which was approved by voters only one year ago.

The new bond would fund storm water systems to catch rainfall, wastewater recycling facilities and efforts aimed at desalting groundwater and brackish water. It would also provide funds for seismic upgrades and fix other problems at flood control dams.

“We believe the voters understand the very serious nature of the drought and would be willing to invest in a water bond that produces actual water to help meet their needs,” said Jerry Meral, director of water programs at the Natural Heritage Institute.

Many readers will recall that Meral is the former deputy secretary of the California Natural Resources Agency who, for several years, was the lead reindeer on Gov. Jerry Brown’s giant water diversion project in the Sacramento-San Joaquin Delta. The project, now bearing the awkward new name California Water Fix, involves building two giant tunnels to divert a portion of Sacramento River flows underneath the imperiled estuary and directly to existing government water diversion pumps near Tracy. At an estimated cost of at least $16 billion, it is not expected to generate any additional water supplies.

Investing in Water: Risks Not Bringing Much Reward

The California drought has ginned up a lot of interest in water as an arena for investment. Scarcity, of course, always suggests opportunity. But as the New York Times reports, it hasn’t resulted in much payoff for investors yet.

“There has been a dramatic increase in real and potential investor appetite,” says Simon Gottelier of the investment firm Impax. However, he adds, “We don’t want to make investments in companies that become a subject of ire from farmers or generate headlines.”

The Cadiz project in the Mojave Desert is one example. For decades, the company has sought to tap ancient reserves of groundwater in the Mojave Desert and sell it via pipeline to the Los Angeles metropolis. It keeps racking up debt and has yet to sell a drop.

Poseidon Water’s Carlsbad desalination project expects to begin delivering water this fall after a $1 billion investment. This will mean steeper water rates for residents of the San Diego region. And after 15 years of regulatory and legal battles, Poseidon’s investors have yet to see any benefit, even as they company moves to begin a similar investment up the coast in Huntington Beach.

Such experiences have a chilling effect on investors, who see lots of risk in water.

“It’s a tough game,” said John Dickerson, chief executive of Summit Global Management, a 20-year-old San Diego firm that invests in water infrastructure companies, local water suppliers and water rights, both in the United States and overseas.

Top image: The Normann Copenhagen Washing Up Bowl that Jamie Lee Curtis uses to collect excess water in the bathrooms of her Santa Monica home. Price: $87.50 each. (Normann Copenhagen.)

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