Sunday, July 26, 2015

Additional thoughts and information regarding my Delta Tunnels op-ed in the Sunday Sacramento Bee

Today, the Sacramento Bee published an op-ed by me on the economic benefits and costs of the Delta Tunnels.  As always, word constraints limit what you can see in an op-ed.  This post expands and clarifies a few things.

Financing the Tunnels. The op-ed focuses on economic benefits and costs, and doesn't discuss some of the serious problems with financing the tunnels.  Without going into details, these are myriad and deserve a separate op-ed of their own.  Most notably, farmers would have to pay the majority of the tunnels' cost because they receive the majority of water exported from the Delta.  It is highly unlikely that the agricultural agencies can pay their share, meaning costs will have to be shifted to urban agencies or general taxpayers.  Even if the agencies could somehow make the payments in an average year, how would they do it in a drought when they are receiving no water from these tunnels?  The plan quotes costs on households in Southern California at $5 a month - that calculation is a few years old but assumes that farmers are paying as much as 75% of the Tunnels' cost.  That's not going to happen.  You can count on costs being shifted to urban ratepayers, local property taxes or general taxes because it simply won't fly any other way.

Water Supply:  I hope no one thinks I am advocating a bunch of desalination plants is the best alternative to the tunnels by choosing this comparison to a current, very high cost source.  And yes, I know that energy costs are high with desal, but the energy requirements aren't much different than pumping Delta water hundreds of miles and over mountains to LA and San Diego.

I also could have compared them to new reservoirs.  The much criticized Temperance Flat has a projected water yield of about 70,000 af for a capital cost of at least $2.5 billion.  Yes, even these dams have a better water yield bang for the buck than the Delta Tunnels, but nobody pretends that water users could pay for them.  In fact, there are serious financial viability questions about these Dams even if general taxpayers pay the majority of the costs through the Water Bond and various sources.

Finally, I could point to Rod Smith's old blog that calculated the cost per acre foot per water yield.  Without the regulatory assurance in the Tunnels plan, it is pretty clear that the estimated water yield is only 257,000 af.  Using Rod's handy table, you can see the water cost of the tunnels is about $3,000 af assuming no risk premium.  That's almost 50% more than desal, for less reliable supply.  And the cost is orders of magnitude higher than other alternatives like recycling, conservation, and stormwater capture, and is also orders of magnitude higher than what farmers could afford to pay (their profit per acre foot).

Seismic Risk:  The Mark Cowin comment about weeks and months, not years, was a direct quote from his prepared statement for a media call as transcribed by the remarkable Maven.  It would be nice if the Governor would be so careful in his remarks on this subject.  The fact that the outage would not be as long as claimed seems to be one of those things that "everyone knows".  But this isn't my area, so the only reference I have is this presentation from a BDCP meeting a few years ago that Bob Pyke conveniently posted for the benefit of people like me.  Previous BDCP analysis shows exports from the Tunnels would be about 3 maf per year if the south Delta pumps were disabled, so that would be the benefits to the water exporters in the very unlikely case an outage lasted a full year.  So the loss the State's surface water supply would be about 1/4 the current drought (more in some areas very dependent on Delta exports), but it is not something that would destroy the economy the way the Tunnel advocates rhetoric claims.  The current drought shows the State's economy can do just fine in the face of more severe shortages. 

The loss of life and only 20% of economic damage from loss of water exports comes from the State's DRMS studies.  You won't find it in the executive summary of those studies, you have to compile the data from their consequences analysis the way we did in the Economic Sustainability Plan.  That finding was thoroughly vetted.  It's also common sense.  The Delta is not urbanized, but there is a lot of important stuff out there - including inter-regional highways, gas wells and storage, pipelines, inter-regional power lines, farmland, and people's homes. If we need to reroute the water canals around the Delta due to flood risk, what about the highways and power infrastructure.  Rerouting and elevating these would cost billions more even if we could figure out a route.  Fixing the levees to protect everything together makes a lot more sense. 

And I haven't even mentioned public safety.  I am not one to make moral arguments, but I think this constant discussion of a Delta flood without even mentioning the catastrophic impacts in the Delta itself - including significant life loss - is disgraceful.

The value of regulatory assurance:  The Governor calls it a "technical change" but it is a very big deal to the economics.  Here is my very first post on the subject written when the BDCP rolled out the argument that regulatory assurance was the reason water agencies should pay tens of billions of dollars on a project with such minimal water yield.  One thing to note in the post is that all of the science experts I consulted on this theory at the time told me the regulatory assurance claim was fictional as it would never get regulatory approval.  It is now clear that my sources were right about that.

On the media call, Mark Cowin mentioned that they might have some new economic analysis coming out next month.  It will be interesting to see if they come up with anything new to find more benefits.  I don't think they can, and I expect people to be very skeptical of any new benefits that miraculously emerge at this late point in the process.


  1. Despite the word limit, I think you made the definitive case against the tunnels in your op-ed piece. Also, "morally outrageous" is succinct and powerful.

    You may not be aware of a new drought news aggregator called Water Deeply. Matt Weiser is writing for them. They issue a weekly summary, and the summary for July 25 includes an article about Santa Barbara reviving its desal plant. Santa Barbara's water resource manager says they've done as much as they can to conserve. He says that they use about 3,200 kilowatt hours per acre foot to move SWP water, while they expect the "new" desal plant to use 2,400 kilowatt hours per acre foot. They have an interesting way of dealing with the brine, also. It's a thought-provoking interview.

    Jane Wagner-Tyack

  2. Jane,

    Thanks, I had not seen this article about Santa Barbara in Water Deeply. Here is a reference and a quote:

    "We currently have state water from the (Sacramento-San Joaquin) Delta. A small portion of our supply comes from there and that uses about 3,200 kilowatt-hours per acre-foot. When looking at desal, it used to use, back in the '90s, a little over 7,000 kilowatt-hours per acre-foot, and the new plant that we are looking at will use 2,400 kilowatt-hours per acre foot."

    I wasn't expecting the Bee to do a "call out" with the morally outrageous line. In retrospect, maybe the language is too strong, and I am sure I will get some flak for it. But maybe it is necessary to use strong words to call out this point that is rather surprisingly ignored in the water-focused debate. I think most people have never really contemplated the full impacts of an earthquake that would flood 20-30 islands without warning, because the only impact they ever hear about is salt water spoiling the water supply. Most Delta folks don't believe the earthquake scenario, so they don't make this argument and prefer to attack the predictions. They may be right about the risk being overblown, but I think it is important for those hyping the earthquake to address its full impacts.

    The Delta earthquake nightmare flood scenario so often invoked by the Governor and other tunnel proponents would be a mass casualty event. The DRMS study from the late 2000's estimated hundreds dead - which I believe would make it the deadliest natural disaster in California since the 1906 SF earthquake.

  3. Hi Jeff, wonderful article, thanks for such a thoughtful read. I have seen you speak on many occasions at the San Joaquin Hispanic Chamber mixers, and I always enjoy your insight.

    Have you heard about the Alaska pipeline proposal from 1980's Alaskan governor Wally Hickel?

    The original plan called for four 14-foot diameter pipes running at least 1,400 miles from the mouth of one of southeast Alaska’s monster rivers to one of California’s reservoirs. These would deliver about 1.3 trillion gallons of water a year.

    In your estimation, would this be feasible?

    If yes, let's have Jerry commit the $100+ Billion earmarked for the bullet train and build these Alaskan pipes. No more drought. Sound good! :-)


  4. Greg, thanks for your comments. I have never heard of the Alaska water pipeline proposal, but it doesn't sound very feasible, even in a drought - the difference in value between a gallon of oil and a gallon of water is vast - and I can't see how a long-distance pipeline would make sense. I have heard people advocate floating water bags, which sounds like better technology if we were really going to transport water from Alaska. But I don't think any of these extreme ideas for long-distance transport are necessary.