The “New Oil”, or just the Same Old Water?

Well, unfortunately I''m laid up with a bum knee this week which has limited by ability to get around. This has resulted in me missing yesterday's City/County Water Study meeting (this week was mostly about population projections and available water resources to serve that population) and a brown bag at the Water Resources Research Center discussing policy updates at the Central Arizona Groundwater Replenishment District. Instead I have been lounging around the house thinking about water supplies and economics as evidenced below.

Seems like every time I turn around someone else is proclaiming that water is the “new oil” – implying it is the next vital natural resource coming under ever greater supply constraints due to population and economic growth. The latest example is found in last week’s Economist in the first article in their business section – “Running dry” (can be found at www.economist.com ). There may be some truth to that statement – limitations on the availability of water, just like oil, can result in limits on growth and higher prices to sustain the standard of living we are accustomed to. Competition between water-rich and water-scarce areas is likely to increase in the future. But there are some significant differences between oil and water that make the comparison inapt.

First of all, oil is completely consumed when it is extracted and used – once used it cannot be recovered in any form (except by removing CO2 from the atmosphere or waiting for that CO2 to be taken up by plants, then geologically buried, compressed, and heated to form more oil – an admittedly time-consuming process). Water is not typically used consumptively, although it may no longer be available for use in the same location if used in a way that results in evaporation, transportation, or transformation (i.e. into corn or beef). It can also be lost by flowing downstream to another state or country or ultimately into the ocean. But water is never truly lost because it merely reenters the hydrosphere, or water cycle, to be later returned as rain or snow to a surface or groundwater reservoir where it will once again be available for consumption.

Secondly, and perhaps more importantly, water is almost never priced as a scarce resource – even in areas where it truly is a scarce and irreplaceable resource (such as where it is produced by mining groundwater reservoirs). While recent history has shown that oil is relatively price inelastic – demand is not significantly curbed by modest rises in price – it is nonetheless priced as a finite commodity, with price rising significantly as supply constraints become ever greater. Water is almost never priced to reflect its true value to the consumer (bottled water is one exception). Most domestically supplied water is priced in a way that reflects the delivery costs but there is no cost for the water itself – water is in most cases completely valueless. But consumers clearly place value on the availability of clean water – just look at what we’re willing to pay for bottled water.

People who live in water-scarce environments have always appreciated the value of water to society. Just look at the wealthy trading communities that clustered around water sources in the Middle-east or the American Southwest 1000s of years ago. For people in these areas water is not the “new oil,” its just the same old water. For people in the Eastern U.S. or parts of Western Europe that are facing water supply constraints for perhaps the first time ever – sure water may seem like the new oil. But it’s important to remember the differences between those two valuable liquids and develop appropriate responses to scarcity of each. Oil is destructible but also replaceable. Water is indestructible but irreplaceable. That makes a big difference in how you respond to crisis.

Getting back to local

OK, I have been straying from my local focus so far this week. Time to bring it all back home. The next city-county water study meeting is next Wed. at the Randolph Golf Course Clubhouse. This is another 7:00 am meeting (like the one I missed back in late June because I showed up at 6:00 pm). The main topic of this meeting is financial aspects of water and wastewater planning. While it all sounds quite fascinating - I think that rather than sit in a room and listen to people talk to me about project financing, I'll just read the documents posted on the website [http://www.tucsonpimawaterstudy.com/] to get the gist of the presentations. The other key bit of business for this meeting is to go over their proposed August progress report. That is also available on the website.
In short, what I'm trying to say is that I'm not planning to go to the meeting. I know - this will make 3 consecutive meetings that I've missed. The thing is ... most of these meetings so far are just inventorying. The speakers are giving the committee members the lowdown on what water and wastewater assets we have. After a few more meetings they should start talking about what we are going to need in the future and what that future might entail. That will be the really interesting stuff. Hope to see some new faces out for those topics. Until then ...

Things must be pretty desperate in Nebraska

Here's a rather amusing bit of news that was posted this week on the US Water News Website - http://www.uswaternews.com - about a couple of wiseguy water lawyers in Nebraska who filed an application to appropriate water recently discovered on Mars.

What would H.G. Wells think? Two veterans of the Great Plains water wars staked a legal claim recently to a new source of water — on Mars. "It's the best $10 we've ever spent," said attorney Don Blankenau of Lincoln. Blankenau and colleague Tom Wilmoth filed their permit application for Martian water with the Nebraska Department of Natural Resources, paid a $10 filing fee and went back to work. Mischief accomplished. The Phoenix Mars Lander this week touched and tasted Martian water for the first time. "We saw the story in the newspaper, looked at each other and said, 'Let's file an application to claim the water,'" Blankenau said. The men seek to tap water flowing in Martian rivers, not in reservoirs, and deliver it to Earth via an interplanetary pipeline. The eventual use of the water — domestic, irrigation or manufacturing — would be figured out later. Blankenau and Wilmoth noted that it could take 1,000 years to build the pipeline. Water might be delivered to Earth by Jan. 1, 3010, they said. They anticipate significant capital, operating and maintenance costs. "A private, state, federal funding partnership is likely," they wrote. Wilmoth said they made the claim during a summer lull in Nebraska's water wars.

Too bad Tucson Water didn't think of this.

LA musings

OK time to do a little catching up. The bar exam is finally over, hopefully I passed and a job is soon to follow. But enough about my troubles. Today I’d like to share an example of poor growth planning that was in the LA Times on Monday, Aug. 4. What makes people think they can stop or slow growth by just telling it to stop is beyond me. This kind of ham-fisted approach to growth never works and always has unexpected and adverse consequences. Here’s what the Times had to say:

November is shaping up to be a pivotal month for cities grappling with growth and traffic … "These [initiatives] are examples of people frustrated with the consequences and trade-offs forced by economic prosperity," said Randall Crane, a professor at UCLA's School of Public Affairs … The constant search for revenue, prosperity and jobs -- in other words, growth -- explains in large part why Southern California looks the way it does: sprawly, congested and polluted (if you’re familiar with Prop. 13, this should make sense to you. I don’t want to spend time on that here but if you’re curious, check out http://en.wikipedia.org/wiki/California_Proposition_13_(1978) or http://www.caltax.org/research/prop13/prop13.htm) … Ballot measures intended to control or manage growth typically encounter stiff opposition from the building industry and chambers of commerce. Even when measures succeed, Pincetl said, they are "virtually futile" given the region's multiple jurisdictions and varying needs. Communities "can't control what's going on next door," she said … But community activists are determined to have a voice in matters that they say affect their quality of life … "Developers and their friends at City Hall want you to believe that runaway commercial development is good for our city," the measure's backers say in their arguments for the measure. "Big developers make huge profits in our city, while residents get stuck with -- and pay for -- the huge traffic mess they create" … Opponents -- including an odd-bedfellows alliance of businesses, developers, renters' rights advocates, environmentalists, preservationists and the school board president -- kicked off a campaign against the initiative at a rally Wednesday. They say it would limit the city's ability to collect revenue for schools, fire and police departments and other social services and to promote mixed-use projects and transit-oriented development with housing and shopping … The measure would limit new development of offices, hotels and stores to 75,000 square feet a year, about half the current rate. The Santa Monica Coalition for a Livable City, the group behind the measure, said schools, hospitals, low-income housing and other vital community-serving projects would be exempt … Although the measure's supporters invoke traffic as their key motivator, the initiative does not directly propose solutions to existing traffic problems. Rather, it aims to curb future commercial development that proponents say would exacerbate conditions on the city's already congested streets … Jeffrey Tumlin, a transportation consultant to the city, said many of the streets are filled to capacity at peak periods. At the city's eastern edge, freeway ramps have become bottlenecks … For four years, Santa Monica has studied its land use and traffic circulation as part of revamping its general plan, as required by state law every 20 years. In the last year, the city has held more than two dozen workshops and hearings to review proposals and get input from the public … On Thursday, the City Council endorsed the plan that emerged from the public process. It calls for "no net new trips" -- in other words, no increases in traffic … The council agreed that most future development should be concentrated around transit centers … Tumlin, the transportation consultant, said neither the ballot measure nor the city's land use and traffic plan could solve the traffic problem on its own … "To address traffic congestion," he said, "we have to do a lot of things and all at once. . . . The important thing is to put any new development where people can get around without a car."

As the quote at the end of the story indicates, managing growth is a complicated business, not amenable to quick and easy solutions. And especially not measures intended to shut it down completely. I know there are many people in Tucson who wish the city would remain the way they remember it always, but the simple fact is – a stagnant city is a dying city. There must be some growth to maintain a vibrant, livable community – but too much growth (what we often see here) can result in a vibrant, unlivable community. Not to mention local governments heavily reliant on growth for tax revenues, that have to deal with cyclical fiscal crises whenever growth slows down. Here in Tucson we often express a desire to not become another LA (or even Phoenix for that matter), but its important that we try to learn from what LA does wrong - and right - if we really want a better future for our community.